UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

FORM 10-Q

 

[X]

Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

 

For the quarterly period ended December 31, 2019

 

 

[   ]

Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934

 

 

Commission File Number: 000-55591

 

Interlink Plus, Inc.

(Exact name of registrant as specified in its charter)

 

Nevada

47-3975872

(State or other jurisdiction of

incorporation or organization)

(IRS Employer Identification No.)

 

4952 S Rainbow Blvd, Suite 326

Las Vegas, NV 89118

(Address of principal executive offices)

 

702-824-7047

(Registrant’s telephone number)

 

Securities registered pursuant to Section 12(b) of the Act:  None

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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 every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  [X] Yes [   ] No

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company.

 

[   ]  Large accelerated filer

[   ]  Accelerated filer

[   ]  Non-accelerated filer

[X]  Smaller reporting company

 

[X]  Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [   ]

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  [  ] Yes [X] No

 

Number of shares of common stock outstanding as of February 14, 2020:  7,753,397.

 


 


 

 

 

 

 

TABLE OF CONTENTS

 

 

PART I - FINANCIAL INFORMATION

3

Item 1. Financial Statements

3

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

4

Item 3. Quantitative and Qualitative Disclosures About Market Risk

7

Item 4. Controls and Procedures

7

PART II - OTHER INFORMATION

9

Item 1. Legal Proceedings

9

Item 1A. Risk Factors

9

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

9

Item 3. Defaults upon Senior Securities

9

Item 4. Mine Safety Disclosures

9

Item 5. Other Information

9

Item 6. Exhibits

9

SIGNATURES

10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


2


 

PART I - FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

Our financial statements included in this Form 10-Q are as follows:

 

F-1

Balance Sheets as of December 31, 2019 (unaudited) and June 30, 2019;

F-2

Statement of Operations for the three and six months ended December 31, 2019 and 2018 (unaudited);

F-3

Statement of Stockholders’ Equity for the three and six months ended December 31, 2019 and 2018 (unaudited);

F-4

Statement of Cash Flows for the six months ended December 31, 2019 and 2018 (unaudited); and

F-5

Notes to Financial Statements.

 

These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the SEC instructions to Form 10-Q. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the interim period ended December 31, 2019 are not necessarily indicative of the results that can be expected for the full year.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


3


INTERLINK PLUS, INC.

CONDENSED BALANCE SHEETS

 

 

 

 

December 31,

2019

 

June 30,

2019

 

 

(unaudited)

 

 

ASSETS

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 Cash

 

$

6,564

 

$

4,845

 Accounts receivable

 

 

-

 

 

4,316

 Prepaid expenses

 

 

2,768

 

 

1,750

   Total current assets

 

 

9,332

 

 

10,911

 

 

 

 

 

 

 

Other assets:

 

 

 

 

 

 

 Fixed assets, net

 

 

294

 

 

490

 Website, net

 

 

35

 

 

368

   Total other assets

 

 

329

 

 

858

 

 

 

 

 

 

 

Total assets

 

$

9,661

 

$

11,769

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' DEFICIT

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 Accounts payable

 

$

649

 

$

14,473

 Accounts payable - related party

 

 

64,056

 

 

46,056

 Notes payable

 

 

180,000

 

 

150,000

 Accrued interest payable

 

 

2,071

 

 

18,926

 Convertible debt, net

 

 

-

 

 

10,000

   Total current liabilities

 

 

246,776

 

 

239,455

 

 

 

 

 

 

 

     Total liabilities

 

 

246,776

 

 

239,455

 

 

 

 

 

 

 

Commitments and contingencies - See Note 8

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' deficit:

 

 

 

 

 

 

 Series A Convertible Preferred stock, $0.0001 par value, 25,000,000

   shares authorized, 2,700,000 and 2,700,000 shares issued and

   outstanding as of December 31, 2019 and June 30, 2019, respectively

 

 

270

 

 

270

 Common stock, $0.0001 par value, 475,000,000 shares

   authorized, 69,753,397 and 67,373,008 shares issued and outstanding

   as of December 31, 2019 and June 30, 2019, respectively

 

 

6,975

 

 

6,737

 Additional paid-in capital

 

 

81,843

 

 

70,179

 Stock Payable

 

 

-

 

 

11,902

 Accumulated deficit

 

 

(326,203)

 

 

(316,774)

   Total stockholders' deficit

 

 

(237,115)

 

 

(227,686)

 

 

 

 

 

 

 

Total liabilities and stockholders' deficit

 

$

9,661

 

$

11,769

 

 

See accompanying condensed notes to financial statements.


F-1


 

INTERLINK PLUS, INC.

CONDENSED STATEMENTS OF OPERATIONS

(unaudited)

 

 

 

 

For the

three months

ended

December 31,

2019

 

For the

three months

ended

December 31,

2018

 

For the

six months

ended

December 31,

2019

 

For the

six months

ended

December 31,

2018

 

 

 

 

 

 

 

 

 

Revenue

 

$

6,502

 

$

30,106

 

$

17,784

 

$

40,682

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 General and administrative

 

 

912

 

 

1,476

 

 

1,130

 

 

3,925

 Depreciation and amortization

 

 

264

 

 

265

 

 

529

 

 

696

 Professional fees

 

 

10,676

 

 

9,012

 

 

24,409

 

 

26,823

 Professional fees - related party

 

 

9,000

 

 

9,000

 

 

18,000

 

 

18,000

 

 

 

 

 

 

 

 

 

 

 

 

 

   Total costs and expenses

 

 

20,852

 

 

19,753

 

 

44,068

 

 

49,444

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating loss

 

 

(14,350)

 

 

10,353

 

 

(26,284)

 

 

(8,762)

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expenses):

 

 

 

 

 

 

 

 

 

 

 

 

 Interest expense

 

 

(4,350)

 

 

(4,306)

 

 

(8,427)

 

 

(8,612)

 Gain on settlement of debt

 

 

25,282

 

 

-

 

 

25,282

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Total other income (expenses)

 

 

20,932

 

 

(4,306)

 

 

16,855

 

 

(8,612)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) before provision

 for income taxes

 

 

6,582

 

 

6,047

 

 

(9,429)

 

 

(17,374)

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax expense

 

 

-

 

 

-

 

 

-

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

6,582

 

$

6,047

 

$

(9,429)

 

$

(17,374)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per common share

- basic

 

$

0.00

 

$

0.00

 

$

(0.00)

 

$

(0.00)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per common share

- diluted

 

$

0.00

 

$

0.00

 

$

(0.00)

 

$

(0.00)

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common

 shares outstanding - basic

 

 

69,753,397

 

 

67,373,008

 

 

69,015,994

 

 

67,373,008

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common

 shares outstanding - diluted

 

 

339,753,397

 

 

342,225,675

 

 

69,015,994

 

 

67,373,008

 

 

 

 

 

See accompanying condensed notes to financial statements.


F-2


 

INTERLINK PLUS, INC.

CONDENSED STATEMENT OF STOCKHOLDERS' DEFICIT

For the three and six months ended December 31, 2019

(unaudited)

 

 

 

Preferred Shares

 

Common Shares

 

 

 

 

 

 

 

 

 

Shares

 

Amount

 

Shares

 

Amount

 

Additional

Paid-In

Capital

 

Stock

Payable

 

Accumulated

Deficit

 

Total

Stockholders'

Deficit

Balance,

June 30, 2019

2,700,000

 

$

270

 

67,373,008

 

$

6,737

 

$

70,179

 

$

11,902

 

$

(316,775)

 

$

(227,687)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock payable

-

 

 

-

 

2,380,389

 

 

238

 

 

11,664

 

 

(11,902)

 

 

-

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

-

 

 

-

 

-

 

 

-

 

 

-

 

 

-

 

 

(16,011)

 

 

(16,011)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance,

September 30, 2019

2,700,000

 

$

270

 

69,753,397

 

$

6,975

 

$

81,843

 

$

-

 

$

(332,786)

 

$

(243,698)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

-

 

 

-

 

-

 

 

-

 

 

-

 

 

-

 

 

6,582

 

 

6,582

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance,

December, 2019

2,700,000

 

$

270

 

69,753,397

 

$

6,975

 

$

81,843

 

$

-

 

$

(326,203)

 

$

(237,115)

 

 

 

 

 

INTERLINK PLUS, INC.

CONDENSED STATEMENT OF STOCKHOLDERS' DEFICIT

For the three and six months ended December 31, 2018

(unaudited)

 

 

 

Preferred Shares

 

Common Shares

 

 

 

 

 

 

 

Shares

 

Amount

 

Shares

 

Amount

 

Additional

Paid-In

Capital

 

Accumulated

Deficit

 

Total

Stockholders'

Deficit

Balance,

June 30, 2018

2,700,000

 

$

270

 

67,373,008

 

$

6,737

 

$

70,179

 

$

(259,727)

 

$

(182,541)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

-

 

 

-

 

-

 

 

-

 

 

-

 

 

(23,421)

 

 

(23,421)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance,

September 30, 2018

2,700,000

 

$

270

 

67,373,008

 

$

6,737

 

$

70,179

 

$

(283,148)

 

$

(205,962)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

-

 

 

-

 

-

 

 

-

 

 

-

 

 

6,047

 

 

6,047

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance,

December 31, 2018

2,700,000

 

$

270

 

67,373,008

 

$

6,737

 

$

70,179

 

$

(277,101)

 

$

(199,915)

 

 

 

 

 

 

 

 

See accompanying condensed notes to financial statements.


F-3


 

INTERLINK PLUS, INC.

CONDENSED STATEMENTS OF CASH FLOWS

(unaudited)

 

 

 

 

For the

six months

ended

December 31,

2019

 

For the

six months

ended

December 31,

2018

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 Net loss

 

$

(9,429)

 

$

(17,374)

 Adjustments to reconcile to net loss to net cash used in

   operating activities:

 

 

 

 

 

 

     Depreciation and amortization

 

 

529

 

 

697

     Gain on settlement of debt

 

 

(25,282)

 

 

-

 Changes in operating assets and liabilities:

 

 

 

 

 

 

     (Increase) decrease in accounts receivable

 

 

4,316

 

 

(749)

     (Increase) decrease in prepaid expenses

 

 

(1,018)

 

 

6,702

     (Increase) decrease in prepaid expenses - related party

 

 

-

 

 

3,500

     Increase (decrease) in accounts payable

 

 

(13,824)

 

 

(10,340)

     Increase (decrease) in accounts payable - related party

 

 

18,000

 

 

16,327

     Increase (decrease) in accrued interest payable

 

 

8,427

 

 

8,612

     Increase (decrease) in customer deposits

 

 

-

 

 

(3,320)

 

 

 

 

 

 

 

 Net cash used in / provided by operating activities

 

 

(18,281)

 

 

4,055

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

 

 

 Net cash used in operating activities

 

 

-

 

 

-

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

 

   Proceeds from notes payable

 

 

180,000

 

 

-

   Repayments to notes payable

 

 

(150,000)

 

 

-

   Repayments to convertible debt

 

 

(10,000)

 

 

-

 

 

 

 

 

 

 

 Net cash provided by financing activities

 

 

20,000

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET CHANGE IN CASH

 

 

1,719

 

 

4,055

 

 

 

 

 

 

 

CASH AT BEGINNING OF PERIOD

 

 

4,845

 

 

11,494

 

 

 

 

 

 

 

CASH AT END OF PERIOD

 

$

6,564

 

$

15,549

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SUPPLEMENTAL INFORMATION:

 

 

 

 

 

 

 Interest paid

 

$

-

 

$

-

 Income taxes paid

 

$

-

 

$

-

 

 

 

 

 

 

 

Non-cash investing and financing activities:

 

 

 

 

 

 

 Amortization of debt discount

 

$

-

 

$

-

 

 

See accompanying condensed notes to financial statements.


F-4


 

INTERLINK PLUS, INC.

NOTES TO FINANCIAL STATEMENTS

(unaudited)

 

 

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of presentation

The interim financial statements included herein, presented in accordance with United States generally accepted accounting principles and stated in US dollars, have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading.

 

These statements reflect all adjustments, consisting of normal recurring adjustments, which in the opinion of management, are necessary for fair presentation of the information contained therein. It is suggested that these interim financial statements be read in conjunction with the financial statements of the Company for the year ended June 30, 2019 and notes thereto included in the Company’s annual report. The Company follows the same accounting policies in the preparation of interim reports.

 

Results of operations for the interim period are not indicative of annual results.

 

Organization

The Company was incorporated on May 11, 2015 under the laws of the State of Nevada, as Interlink Plus, Inc.

 

Nature of operations

The Company provides services for overseas travel agents on hotel price quotation and negotiation, contract reviewing, detailed guests’ arrangements, hotel check-in assistance, as well as tradeshow services to domestic and international businesses.  Additionally, the Company offers marketing materials and other products for the tradeshows.

 

Year end

The Company’s year-end is June 30.

 

Cash and cash equivalents

For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. The carrying value of these investments approximates fair value. As of December 31, 2019, the Company had no cash equivalents.

 

Accounts receivable

The allowance for uncollectible accounts receivables is determined principally on the basis of past collection experience as well as consideration of current economic conditions and changes in our customer collection trends.  Since the inception of the Company through today, the Company has had no material bad debt write offs and believes its current policy is reasonable.

 

Fixed assets

The Company records all property and equipment at cost less accumulated depreciation.  Improvements are capitalized while repairs and maintenance costs are expensed as incurred.  Depreciation is calculated using the straight-line method over the estimated useful life of the assets or the lease term, whichever is shorter.  Leasehold improvements include the cost of the Company’s internal development and construction department.  Depreciation periods are as follows:

 

Computer equipment

3 years

 

 


F-5


 

INTERLINK PLUS, INC.

NOTES TO FINANCIAL STATEMENTS

(unaudited)

 

 

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 

Website

The Company capitalizes the costs associated with the development of the Company’s website pursuant to ASC Topic 350.  Other costs related to the maintenance of the website are expensed as incurred.  Amortization is provided over the estimated useful lives of 3 years using the straight-line method for financial statement purposes.   The Company commenced amortization upon completion and release of the Company’s fully operational website.

 

Revenue recognition

The Company recognizes revenue in accordance with generally accepted accounting principles as outlined in the Financial Accounting Standard Board’s (“FASB”) Accounting Standards Codification (“ASC”) 606, Revenue From Contracts with Customers, which requires that five steps to evaluate revenue recognition: (i) identify the contract with the customer; (ii) identity the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price; and (v) recognize revenue when or as the entity satisfied a performance obligation.

 

Revenue recognition occurs as the services are rendered to customers and upon completion of the hotel stay, when control transfers to customers, provided there are no material remaining performance obligations required of the Company or any matters of customer acceptance. We only record revenue when collectability is reasonably assured.

 

The Company provides travelers access to book hotel room reservations through our contracts with lodging suppliers, which provide the Company with rates and availability information for rooms but for which we have no control over the rooms and do not bear inventory risk. The customers pay the Company for merchant hotel transactions prior to departing on their trip, generally when they book the reservation. The payment is recorded in customer deposits until the stayed night occurs, at which point the Company recognize the revenue, net of amounts paid to suppliers, as this is when our performance obligation is satisfied.

 

Fair value of financial instruments

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of December 31, 2019. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash, prepaid expenses and accounts payable. Fair values were assumed to approximate carrying values for cash and payables because they are short term in nature and their carrying amounts approximate fair values or they are payable on demand.

 

Level 1: The preferred inputs to valuation efforts are “quoted prices in active markets for identical assets or liabilities,” with the caveat that the reporting entity must have access to that market.  Information at this level is based on direct observations of transactions involving the same assets and liabilities, not assumptions, and thus offers superior reliability. However, relatively few items, especially physical assets, actually trade in active markets.

 

Level 2: FASB acknowledged that active markets for identical assets and liabilities are relatively uncommon and, even when they do exist, they may be too thin to provide reliable information. To deal with this shortage of direct data, the board provided a second level of inputs that can be applied in three situations.

 

Level 3: If inputs from levels 1 and 2 are not available, FASB acknowledges that fair value measures of many assets and liabilities are less precise. The board describes Level 3 inputs as “unobservable,” and limits their use by saying they “shall be used to measure fair value to the extent that observable inputs are not available.” This category allows “for situations in which there is little, if any, market activity for the asset or liability at the measurement date”. Earlier in the standard, FASB explains that “observable inputs” are gathered from sources other than the reporting company and that they are expected to reflect assumptions made by market participants.

 

The Company did not have level 1 - 3 estimates of fair value during the six months ended December 31, 2019.


F-6


 

INTERLINK PLUS, INC.

NOTES TO FINANCIAL STATEMENTS

(unaudited)

 

 

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 

Earnings per share

The Company follows ASC Topic 260 to account for the earnings per share. Basic earning per common share (“EPS”) calculations are determined by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the year. Diluted earning per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. During periods when common stock equivalents, if any, are anti-dilutive they are not considered in the computation. For the six months ended December 31, 2019 and 2018, 270,000,000 and 274,755,844 dilutive shares were excluded from the calculation of diluted loss per common share.

 

Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ significantly from those estimates.

 

Concentration of credit risk

The Company maintains its cash accounts with banks located in Nevada. The total cash balances are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 per bank. The Company had cash balances on deposit at December 31, 2019 and 2018 that did not exceed the balance insured by the FDIC. Accounts receivable are typically unsecured and are derived from revenue earned from customers primarily located in North America and Asia.

 

Recent pronouncements

ASU 2016-02 - In February 2016, the FASB issued ASU No. 2016-02, "Leases", ("ASC 842") which amended the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. ASC 842 is effective for public companies during interim and annual reporting periods beginning after December 15, 2018, with early adoption permitted. In July 2018, the FASB issued ASU No. 2018-11, which permits entities to record the right-of-use asset and lease liability on the date of adoption, with no requirement to recast comparative periods.

 

We adopted early ASC 842 effective January 1, 2019 using the optional transition method of recognizing a cumulative-effect adjustment to the opening balance of retained earnings on January 1, 2019. Therefore, comparative financial information was not adjusted and continues to be reported under the prior lease accounting guidance in ASC 840. We elected the transition relief package of practical expedients, and as a result, we did not assess 1) whether existing or expired contracts contain embedded leases, 2) lease classification for any existing or expired leases, and 3) whether lease origination costs qualified as initial direct costs. We elected the short-term lease practical expedient by establishing an accounting policy to exclude leases with a term of 12 months or less, as well as the land easement practical expedient for maintaining our current accounting policy for existing or expired land easements.  No material impact to the condensed financial statements as we do not have and leases greater than one year.

 

 

 

 

 


F-7


 

INTERLINK PLUS, INC.

NOTES TO FINANCIAL STATEMENTS

(unaudited)

 

 

NOTE 2 - GOING CONCERN

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business. There is substantial doubt in the Company’s ability to continue as a going concern within one year from the date of filing. Since its inception, the Company has been engaged substantially in financing activities and developing its business plan and incurring start up costs and expenses. As a result, the Company had an accumulated deficit as of December 31, 2019 of $326,203. In addition, the Company’s activities since inception have been financially sustained through debt and equity financing. The management’s plans to raise capital through debt and equity financing and to continue to generate additional revenue to continue operations. Additionally, the Company completed a reverse merger in February 2020.

 

The ability of the Company to continue as a going concern is dependent upon its ability to raise additional capital from the sale of common stock and, ultimately, the achievement of significant operating revenues. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty.

 

 

NOTE 3 - PREPAID EXPENSES

 

As of December 31, 2019, the Company had prepaid transfer agent expenses totaling $2,768, The prepaid professional fees will be expensed on a straight-line basis over the remaining life of the service period.

 

 

NOTE 4 - FIXED ASSETS

 

The following is a summary of fixed asset costs:

 

 

 

December 31, 2019

Fixed asset

 

$

1,176

Less: accumulated amortization

 

 

(882)

Fixed asset, net

 

$

294

 

Depreciation expense for the six months ended December 31, 2019 was $196.

 

 

NOTE 5 - WEBSITE

 

The following is a summary of website costs:

 

 

 

December 31, 2019

Website

 

$

3,500

Less: accumulated amortization

 

 

(3,465)

Website, net

 

$

35

 

Amortization expense for the six months ended December 31, 2019 was $333.

 

 

 


F-8


 

INTERLINK PLUS, INC.

NOTES TO FINANCIAL STATEMENTS

(unaudited)

 

 

NOTE 6 - NOTES PAYABLE

 

On June 15, 2018, the Company executed a promissory note with an entity for $150,000. The unsecured note bears interest at 10% per annum and is due in two business days after demand for payment. During the three months ended December 31, 2019, the Company settled the convertible promissory note and paid off the principal balance of $150,000 with the holder waiving the accrued interest of $21,781. The Company recognized the $21,781 as a gain on debt settlement.

 

On November 20, 2019, the Company executed a promissory note with an entity for $180,000. The note bears interest at 10% per annum and is due on May 20, 2020. The Company used the principal amount of the note for the following purposes in this order: 1) pay off in full of the promissory note dated June 15, 2018; 2) pay off in full of the 10% convertible promissory note dated April 25, 2016; 3) pay off in full of the 10% convertible promissory note dated July 15, 2016; 4) pay for services provided by the Company’s accountant and transfer agent; 5) any remaining funds were used for working capital purposes.

 

As of December 31, 2019, the balance of accrued interest was $2,071. The interest expense for the six months ended December 31, 2019 was $8,030.

 

 

NOTE 7 - CONVERTIBLE DEBT

 

On May 22, 2015, the Company executed a convertible promissory note with a related party for $4,000. The unsecured note bears interest at 10% per annum and is due on May 22, 2017. This note is convertible at $0.005 per share and can be converted on or before the maturity date of May 22, 2017. During July 2017, the party agreed to extend the maturity date to July 31, 2018. On December 22, 2017, the note was sold to an unrelated third party. On March 14, 2018, the note was sold to another unrelated third party. During September 2018, the party agreed to extend the maturity date to September 30, 2019. During the year ended June 30, 2019, the note holder converted the entire balance of principal and accrued interest into 1,114,000 shares of common stock. During the six months ended December 31, 2019, the Company issued the shares and reduced the stock payable by $5,570.

 

On April 25, 2016, the Company executed a convertible promissory note with an entity for $5,000. The unsecured note bears interest at 10% per annum and is due on April 25, 2017. This note is convertible at $0.005 per share and can be converted on or before the maturity date of April 25, 2017. During July 2017, the party agreed to extend the maturity date to July 31, 2018. On December 22, 2017, the note was sold to an unrelated third party. On March 14, 2018, the note was sold to another unrelated third party.  During September 2018, the party agreed to extend the maturity date to September 30, 2019. Additionally, in October 2019, the party agreed to extend the maturity date to October 30, 2020. During the three months ended December 31, 2019, the Company settled the convertible promissory note and paid off the principal balance of $5,000 with the holder waiving the accrued interest of $1,807. The Company recognized the $1,807 as a gain on debt settlement.

 

On July 15, 2016, the Company executed a convertible promissory note with an entity for $5,000. The unsecured note bears interest at 10% per annum and is due on July 15, 2017. This note is convertible at $0.005 per share and can be converted on or before the maturity date of July 15, 2017. During July 2017, the party agreed to extend the maturity date to July 31, 2018. On December 22, 2017, the note was sold to an unrelated third party. On March 14, 2018, the note was sold to another unrelated third party. During September 2018, the party agreed to extend the maturity date to September 30, 2019. Additionally, in October 2019, the party agreed to extend the maturity date to October 30, 2020. During the three months ended December 31, 2019, the Company settled the convertible promissory note and paid off the principal balance of $5,000 with the holder waiving the accrued interest of $1,695. The Company recognized the $1,695 as a gain on debt settlement.


F-9


 

INTERLINK PLUS, INC.

NOTES TO FINANCIAL STATEMENTS

(unaudited)

 

 

NOTE 7 - CONVERTIBLE DEBT (continued)

 

On August 18, 2016, the Company executed a convertible promissory note with an entity for $5,000.  The unsecured note bears interest at 10% per annum and is due on August 18, 2017.  This note is convertible at $0.005 per share and can be converted on or before the maturity date of September 27, 2018.  On December 22, 2017, the note was sold to an unrelated third party.  On March 14, 2018, the note was sold to another unrelated third party. During September 2018, the party agreed to extend the maturity date to September 30, 2019.  During the year ended June 30, 2019, the note holder converted the entire balance of principal and accrued interest into 1,266,389 shares of common stock.  During the six months ended December 31, 2019, the Company issued the shares and reduced the stock payable by $6,332.

 

As of December 31, 2019, the balance of accrued interest was $0.  The interest expense for the six months ended December 31, 2019 was $397.

 

 

NOTE 8 - COMMITMENTS AND CONTINGENCIES

 

As of December 31, 2019, we did not have any known commitments or contingencies other than our notes payable.

 

Legal matter contingencies

The Company believes, based on current knowledge and after consultation with counsel, that it is not currently party to any material pending proceedings, individually or in the aggregate, the resolution of which would have a material effect on the Company.  Provisions for losses are established in accordance with ASC 450, “Contingencies” when warranted.  Once established, such provisions are adjusted when there is more information available of when an event occurs requiring a change.

 

 

NOTE 9 - STOCKHOLDERS’ DEFICIT

 

The Company is authorized to issue 475,000,000 shares of its $0.0001 par value common stock and 25,000,000 shares of its $0.0001 par value preferred stock.  The Series A convertible preferred stock have a liquidation preference of $0.10 per share, have super voting rights of 100 votes per share, and each share of Series A may be converted into 100 shares of common stock.

 

Preferred stock

During the six months ended December 31, 2019 there have been no other issuances of preferred stock.

 

Common stock

During the six months ended December 31, 2019 the Company issued a total of 2,380,389 shares of common stock and reduced stock payable by $11,902.

 

Change in control

Effective as of November 19, 2019, Duan Fu gifted 53,000,000 shares of common stock and 1,700,000 shares of Series A Convertible preferred stock that may convert into 170,000,000 shares of common stock, constituting approximately 66% of the Company's issued and outstanding common shares and approximately 63% of the Company's issued and outstanding Series A Convertible preferred shares to Zixiao Chen. After the gift, Mr. Fu no longer owns any shares of the Company's capital stock


F-10


 

INTERLINK PLUS, INC.

NOTES TO FINANCIAL STATEMENTS

(unaudited)

 

 

NOTE 9 - STOCKHOLDERS’ DEFICIT (continued)

 

The Bruce A Cassidy 2013 Irrevocable Trust, of which Bruce A Cassidy, Sr. is sole trustee, acquired control of the Company, effective on November 20, 2019, in a transaction involving the purchase of 60,000,000 shares of common stock and 2,700,000 shares of Series A Convertible Preferred Stock that may convert into 270,000,000 shares of common stock, constituting approximately 98% of the Company's issued and outstanding common shares and 100% of the Company's issued and outstanding Series A Convertible preferred shares from Ms. Chen. The Bruce A Cassidy 2013 Irrevocable Trust paid $250,000 in connection with the transaction to acquire control of the Company. As a result of the gift and sale there was a change of control of the Company.

 

 

NOTE 10 - WARRANTS AND OPTIONS

 

As of December 31, 2019, there were no warrants or options outstanding to acquire any additional shares of common stock.

 

 

NOTE 11 - RELATED PARTY TRANSACTIONS

 

On July 1, 2017, the Company executed a consulting agreement Company owned and controlled with a former officer and director and current shareholder at a rate of $3,000 per month. The Company or entity may terminate with 30 days written notice. During the six months ended December 31, 2019 and 2018, the Company had professional fees - related party totaling $18,000 and $18,000, respectively. As of December 31, 2019, there was prepaid expense - related party of $0 and accounts payable - related party balance was $44,500.

 

On July 11, 2015, the Company executed a consulting agreement for a period of three years with a former officer and director and current shareholder at a rate of $3,000 per month.  The individual can choose her monthly compensation in the form of 300,000 shares of common stock or $3,000 payable at the Company’s discretion. On July 1, 2017, the parties mutually agreed to terminate the agreement. The Company still has amounts outstanding related to this agreement, and as of December 31, 2019, the accounts payable - related party balance was $19,556.

 

 

NOTE 12 - SUBSEQUENT EVENTS

 

On January 3, 2020, the Company, entered into an Agreement and Plan of Merger (the "Merger Agreement") by and among the Company, the Company's wholly owned subsidiary, Loop Media Acquisition, Inc., a Delaware corporation ("Merger Sub"), and Loop Media, Inc., a Delaware corporation ("Loop"). Under the terms of the Merger Agreement, pending Loop stockholder approval of the transaction, Merger Sub will merge with and into Loop with Loop surviving the merger and becoming a wholly-owned subsidiary of Interlink (the "Merger").

 

Subject to the terms of the Merger Agreement, at the effective time of the Merger, Loop stockholders will receive one newly issued share of the Company’s common stock in exchange for each share of Loop common stock. Following the Merger, outstanding warrants and options to acquire a share of Loop common stock will represent the right to acquire one share of common stock of the Company. Following the Merger, securityholders of Loop will become the majority owners and will collectively own approximately 81% and current Company securityholders will collectively own approximately 19% of the combined company on a pro-forma fully diluted basis, not including any dilution that may result from securities sold by Loop for capital raising purposes prior to the closing of the Merger.


F-11


 

INTERLINK PLUS, INC.

NOTES TO FINANCIAL STATEMENTS

(unaudited)

 

 

NOTE 12 - SUBSEQUENT EVENTS (continued)

 

The combined company will be led by Loop's current management team. At the closing, the combined company's Board of Directors is expected to consist of two members, the Company's current sole director, Bruce A. Cassidy, Sr. and Jon Niermann, who is currently Loop's Chief Executive Officer and a member of Loop's Board of Directors. The Merger has been unanimously approved by the Board of Directors of each company. The transaction is expected to close by the end of January 2020, subject to approval by the stockholders of Loop, and other customary closing conditions. In connection with the Merger closing, the Company intends to sell its current business and assets to a current stockholder in exchange for 2,000,000 outstanding shares of common stock of the Company.

 

On February 5, 2020, the Company finalized its merger with Loop Media, Inc. The Merger was treated as a recapitalization and reverse acquisition of the Company for financial accounting purposes. Loop Media, Inc. is considered the acquirer for accounting purposes, and the Company’s historical financial statements before the Merger will be replaced with the historical financial statements of Loop before the Merger in future filings with the SEC. As of the date of this filing the shares have not been issued yet.

 

On February 6, 2020, the Company entered into a purchase agreement with Zixiao Chen for the purchase of the assets relating to the Company’s two major business segments, travel agency assistance and convention services.  In consideration for the assets of the business, the Ms. Chen transferred 2,000,000 shares of the Company’s common stock and agreed to assume and discharge any and all liabilities relating to the business accruing up to the effective date of the purchase agreement.  The shares will be retired and restored to the status of authorized and unissued shares.

 

On January 31, 2020, the Company filed a certificate of designation with the Nevada Secretary of State and designated 5,000,000 shares of Series B Convertible Preferred Stock.  The terms of the Series B Convertible Preferred Stock are substantially similar to those of the Series A Convertible Preferred Stock, except that in the event of the liquidation, dissolution or winding up of the affairs of the Company, whether voluntary or involuntary, the holders of the Series B Convertible Preferred Stock then outstanding shall be entitled to receive, out of the assets of the Company available for distribution to its shareholders, an amount equal to $1.00 per share of Series B Convertible Preferred Stock before any payment shall be made or any assets distributed to the holders of common stock or Series A Convertible Preferred Stock.

 

Similar to the Series A Convertible Preferred Stock, the Series B Convertible Preferred Stock is convertible at any time at the discretion of the holder thereof into shares of common stock at a conversion rate of one hundred (100) shares of common stock for every one (1) share of Series B Convertible Preferred Stock. Furthermore, the holders of Series B Convertible Preferred Stock have the right to cast one hundred (100) votes for each one (1) share of Series B Convertible Preferred Stock held of record on all matters submitted to a vote of holders of the common stock, including the election of directors, and all other matters as required by law.

 

On February 5, 2020 the Company sold 300,000 shares of the Company’s Series B preferred stock in exchange for $1,000,000, 60,000,000 shares of the Company’s common stock and 2,654,000 shares of the Company’s Series A preferred stock and cancelling and returning the original promissory note dated December 18, 2019 made between Loop Media, Inc. and ScreenPlay, Inc. and forgiving the $1,000,000 principal and accrued and unpaid interest due thereunder, as well as the corresponding Security Agreement.  The common stock and Series A preferred stock were retired and restored to the status of authorized and unissued shares.

 

 

 

 


F-12


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. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Further information concerning our business, including additional factors that could materially affect our financial results, is included herein and in our other filings with the SEC.

 

Company Overview

 

Since our inception, we have been attempting to raise money to implement our business plan, and have raised some funds, mostly through the sale of convertible debt, but have not been able to secure the funds necessary to fully implement our business plan. The lack of funds has prevented us from growing the business as we had hoped.  In addition, the trade war with China has further complicated matters and we have felt the slowdown in the markets in which we operate as a result. As we have been unable to raise the capital necessary to develop and market our services, and because of the trade war, we have recently been engaged in a search for other business opportunities which may benefit our shareholders and allow us to raise capital and operate. Recent negotiations with what we believe is a more viable business opportunity leads us to believe that we will be revising our business plan and focus over the next quarter. If this opportunity does not develop, however, we will continue to both seek new opportunities and look for capital to further our existing business plan.

 

Our business is divided into two major segments: travel agency assistance services and convention services.

 

We have signed services contracts with multiple travel agents to assist with hotel room price quotation and negotiation and communicating with hotels to ensure that accurate reservations are made with Chinese clientele. Through December 31, 2019, we have generated some revenue from our agreement with our clients. We earned $17,784 and $40,682 in revenues for the six months ended December 31, 2019 and 2018, respectively. We are also hopeful that we will engage in other contracts for the services outlined below.

 

We require additional capital necessary for us to grow our business. Our initial plans include: hiring necessary personnel, marketing our business, maintaining our website, purchasing equipment and software and further developing the service offering. Our business plan calls for capital of approximately $250,000 in the next twelve months. There is no assurance that we will be successful in these endeavors or that if we accomplish all of these steps we will be able to operate profitably. We intend to fulfill the service needs of our potential customers by utilizing resources and employees in the United States, but, as we grow, we believe we can reduce costs and increase margins by utilizing personnel in foreign countries, such as China, to fulfill the services on behalf of our customers.

 

Through our services, we believe that clients will be able to gain the advantage of maintaining their growth goals without the need to sacrifice precious resources to address standard business bottlenecks. Our goal is to allow firms to retain their entrepreneurial speed and agility, advantages they would otherwise sacrifice in dealing with logistics rather than the specific focus of the client’s business. We plan to allow clients to grow at a faster pace as they will be less constrained by large capital expenditures for people, training, equipment, or mistakes made from lack of experience in areas which are unrelated to the client’s specific business purpose.


4


 

Effective as of November 19, 2019, Duan Fu gifted 53,000,000 shares of common stock and 1,700,000 shares of Series A Convertible preferred stock that may convert into 170,000,000 shares of common stock, constituting approximately 66% of the Company's issued and outstanding common shares and approximately 63% of the Company's issued and outstanding Series A Convertible preferred shares to Zixiao Chen. After the gift, Mr. Fu no longer owns any shares of the Company's capital stock.

 

The Bruce A Cassidy 2013 Irrevocable Trust, of which Bruce A Cassidy, Sr. is sole trustee, acquired control of the Company, effective on November 20, 2019, in a transaction involving the purchase of 60,000,000 shares of common stock and 2,700,000 shares of Series A Convertible Preferred Stock that may convert into 270,000,000 shares of common stock, constituting approximately 98% of the Company's issued and outstanding common shares and 100% of the Company's issued and outstanding Series A Convertible preferred shares from Ms. Chen.  The Bruce A Cassidy 2013 Irrevocable Trust paid $250,000 in connection with the transaction to acquire control of the Company.   As a result of the gift and sale there was a change of control of the Company.

 

On January 3, 2020, the Company, entered into an Agreement and Plan of Merger (the "Merger Agreement") by and among the Company, the Company's wholly owned subsidiary, Loop Media Acquisition, Inc., a Delaware corporation ("Merger Sub"), and Loop Media, Inc., a Delaware corporation ("Loop"). Under the terms of the Merger Agreement, pending Loop stockholder approval of the transaction, Merger Sub will merge with and into Loop with Loop surviving the merger and becoming a wholly-owned subsidiary of Interlink (the "Merger").

 

Subject to the terms of the Merger Agreement, at the effective time of the Merger, Loop stockholders will receive one newly issued share of the Company’s common stock in exchange for each share of Loop common stock. Following the Merger, outstanding warrants and options to acquire a share of Loop common stock will represent the right to acquire one share of common stock of the Company. Following the Merger, securityholders of Loop will become the majority owners and will collectively own approximately 81% and current Company securityholders will collectively own approximately 19% of the combined company on a pro-forma fully diluted basis, not including any dilution that may result from securities sold by Loop for capital raising purposes prior to the closing of the Merger.

 

The combined company will be led by Loop's current management team. At the closing, the combined company's Board of Directors is expected to consist of two members, the Company's current sole director, Bruce A. Cassidy, Sr. and Jon Niermann, who is currently Loop's Chief Executive Officer and a member of Loop's Board of Directors. The Merger has been unanimously approved by the Board of Directors of each company. The transaction is expected to close by the end of January 2020, subject to approval by the stockholders of Loop, and other customary closing conditions. In connection with the Merger closing, the Company intends to sell its current business and assets to a current stockholder in exchange for 2,000,000 outstanding shares of common stock of the Company.

 

On February 5, 2020, the Company finalized its merger with Loop Media, Inc. The Merger was treated as a recapitalization and reverse acquisition of the Company for financial accounting purposes. Loop Media, Inc. is considered the acquirer for accounting purposes, and the Company’s historical financial statements before the Merger will be replaced with the historical financial statements of Loop before the Merger in future filings with the SEC.  As of the date of this filing the shares have not been issued yet.

 

On February 6, 2020, the Company entered into a purchase agreement with Zixiao Chen for the purchase of the assets relating to the Company’s two major business segments, travel agency assistance and convention services.  In consideration for the assets of the business, the Ms. Chen transferred 2,000,000 shares of the Company’s common stock and agreed to assume and discharge any and all liabilities relating to the business accruing up to the effective date of the purchase agreement. The shares will be retired and restored to the status of authorized and unissued shares.

 

On January 31, 2020, the Company filed a certificate of designation with the Nevada Secretary of State and designated 5,000,000 shares of Series B Convertible Preferred Stock. The terms of the Series B Convertible Preferred Stock are substantially similar to those of the Series A Convertible Preferred Stock, except that in the event of the liquidation, dissolution or winding up of the affairs of the Company, whether voluntary or involuntary, the holders of the Series B Convertible Preferred Stock then outstanding shall be entitled to receive, out of the assets of the Company available for distribution to its shareholders, an amount equal to $1.00 per share of Series B Convertible Preferred Stock before any payment shall be made or any assets distributed to the holders of common stock or Series A Convertible Preferred Stock.


5


 

Similar to the Series A Convertible Preferred Stock, the Series B Convertible Preferred Stock is convertible at any time at the discretion of the holder thereof into shares of common stock at a conversion rate of one hundred (100) shares of common stock for every one (1) share of Series B Convertible Preferred Stock. Furthermore, the holders of Series B Convertible Preferred Stock have the right to cast one hundred (100) votes for each one (1) share of Series B Convertible Preferred Stock held of record on all matters submitted to a vote of holders of the common stock, including the election of directors, and all other matters as required by law.

 

On February 5, 2020 the Company sold 300,000 shares of the Company’s Series B preferred stock in exchange for $1,000,000, 60,000,000 shares of the Company’s common stock and 2,654,000 shares of the Company’s Series A preferred stock and cancelling and returning the original promissory note dated December 18, 2019 made between Loop Media, Inc. and ScreenPlay, Inc. and forgiving the $1,000,000 principal and accrued and unpaid interest due thereunder, as well as the corresponding Security Agreement. The common stock and Series A preferred stock were retired and restored to the status of authorized and unissued shares.

 

Results of Operations for the Three Months and Six Months Ended December 31, 2019 and 2018

 

We had revenues of $6,502 for the three months ended December 31, 2019, as compared with $30,106 for the same period ended 2018. We have earned revenues of $17,784 for the six months ended December 31, 2019, as compared with $40,682 for the same period ended 2018.

 

To date, we only have 8 travel agencies as our main clients that we contracted to assist with hotel room price quotation and negotiation and communicating with hotels to ensure that accurate reservations are made with Chinese clientele. Our management is actively working to secure additional contracts to grow the business. However, as a result of the hardship in accessing capital and the trade war with China, we are also looking at other business opportunities that would better serve our shareholders.

 

Operating expenses were $20,852 for the three months ended December 31, 2019, as compared with $19,753 for the same period ended 2018. Operating expenses were $ 44,068 for the six months ended December 31, 2019, as compared with $49,444 for the same period ended 2018. Our operating expenses for the three and six months ended December 31, 2019 and 2018 mainly consisted of professional fees and related party professional fees.

 

We expect our operating expenses to remain at these levels in future quarters. If we are able to find other business opportunities, we would expect an increase in operating expenses to facilitate such a transaction.

 

We incurred other income of $20,932 for the three months ended December 31, 2019, compared with other expense of $4,306 for the same period ended December 31, 2018. We incurred other income of $16,855 for the six months ended December 31, 2019, as compared with other expense of $8,612 for the same period ended December 31, 2018.

 

Our other expenses for all periods above consisted of interest expense and gain on settlement of debt. We expect that our other expenses will increase for year of 2020 as a result of our outstanding debt, and any additional debt we take on in our financing efforts. During the three months ended December 31, 2019, we settled the debts and recorded $25,282 as a gain on debt settlement (Notes 6 and 7).

 

We recorded a net income of $6,582 for the three months ended December 31, 2019, as compared with a net income of $6,047 for the same period ended 2018. We recorded a net loss of $9,429 for the six months ended December 31, 2019, as compared with a net loss of $17,374 for the same period ended 2018.

 

Liquidity and Capital Resources

 

As of December 31, 2019, we had current assets of $9,332. Our total current liabilities as of December 31, 2019 were $246,776. As a result, we had working capital deficit of $237,444 as of December 31, 2019.

 

Operating activities used $18,281 in cash for the six months ended December 31, 2019, as compared with cash provided of $4,055 for the same period ended 2018. Our negative operating cash flow for the six months ended December 31, 2019 was mainly the result of our net loss for the period, gain on settlement of debt and a decrease in accounts payable, offset mainly by a decrease in accounts receivable and increase in accrued interest payable. Our positive operating cash flow for the six months ended December 31, 2018 was mainly the result if an increase in


6


customer deposits and related party accounts payable, offset mainly by our net loss for the period, and an increase in prepaid expenses.

 

We had no investing in either period presented in this report.

 

During the three months ended December 31, 2019, we issued a promissory note for $180,000 and used the principal to settle several debts (see Notes 6 and 7).

 

We were incorporated on May 11, 2015. Our operations, to date, have been devoted primarily to startup, development activities and obtaining our first contract. Because of our limited operating history, it is difficult to predict our capital needs on a monthly, quarterly or annual basis. We will have no capital available to us if we are unable to raise money from this offering or find alternate forms of financing, which we do not have in place at this time.

 

There can be no assurance that we will be successful in raising additional funding. If we are not able to secure additional funding, the implementation of our business plan will be impaired. There can be no assurance that such additional financing will be available to us on acceptable terms or at all.

 

On February 5, 2020, we finalized our merger with Loop Media, Inc.  The Merger was treated as a recapitalization and reverse acquisition of the Company for financial accounting purposes. Loop Media, Inc. is considered the acquirer for accounting purposes, and the Company’s historical financial statements before the Merger will be replaced with the historical financial statements of Loop before the Merger in future filings with the SEC.  See 8-K filed on February 7, 2020.

 

Off Balance Sheet Arrangements

 

As of December 31, 2019, there were no off balance sheet arrangements.

 

Going Concern

 

The accompanying financial statements have been prepared assuming that we will continue as a going concern, which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business. As noted above, we are a start-up and, accordingly, have generated slight revenues from operations. Since our inception, we have been engaged substantially in financing activities and developing our business plan and incurring startup costs and expenses. As a result, we incurred accumulated net losses from Inception, May 11, 2015, through the period ended December 31, 2019 of ($326,203). In addition, our development activities since inception have been financially sustained through debt and equity financing. These issues raise substantial doubt in the Company’s ability to continue as a going concern within one year from the date of filing. The management’s plans are to raise capital through debt and equity financing and to continue to generate additional revenue to continue operations.

Our ability to continue as a going concern is dependent upon our ability to raise additional capital from the sale of common stock and, ultimately, the achievement of significant operating revenues. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty.

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

A smaller reporting company is not required to provide the information required by this Item.

 

Item 4. Controls and Procedures

 

Disclosure Controls and Procedures

 

We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of December 31, 2019. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2019, our disclosure controls and procedures were not effective due to the presence of material weaknesses in internal control over financial reporting.


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A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. Management has identified the following deficiencies resulting from material weaknesses which have caused management to conclude that, as of December 31, 2019, our disclosure controls and procedures were not effective: (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 US GAAP and SEC guidelines.

 

Remediation Plan to Address the Material Weaknesses in Internal Control over Financial Reporting

 

Our company plans to take steps to enhance and improve the design of our internal controls over financial reporting. During the period covered by this quarterly report on Form 10-Q, we have not been able to remediate the material weaknesses identified above. To remediate such weaknesses, we plan to implement the following changes during our fiscal year ending June 30, 2020: (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 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.

 

We are unable to remedy our controls related to the inadequate segregation of duties and ineffective risk management until we receive financing to hire additional employees.

 

Changes in Internal Control over Financial Reporting

 

There were no changes in our internal control over financial reporting during the three months ended December 31, 2019 that have materially affected, or are reasonable likely to materially affect, our internal control over financial reporting.

 

Limitations on the Effectiveness of Internal Controls

 

Our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will necessarily prevent all fraud and material error. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the internal control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.

 

 

 

 

 

 

 

 

 

 

 


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PART II - OTHER INFORMATION

 

Item 1. Legal Proceedings

 

We are not a party to any pending legal proceeding. We are not aware of any pending legal proceeding to which any of our officers, directors, or any beneficial holders of 5% or more of our voting securities are adverse to us or have a material interest adverse to us.

 

Item 1A. Risk Factors

 

See risk factors included in our Annual Report on Form 10-K for 2019.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

None

 

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 of Exhibit

3.1

 

Articles of Incorporation (Incorporated by reference to Exhibit 3.1 of our Registration Statement on Form S-1 filed with the SEC on July 31, 2015)

 

 

 

3.2

 

Certificate of Amendment to Articles of Incorporation (Incorporated by reference to Exhibit 3.2 of our Registration Statement on Form S-1/A filed with the SEC on August 27, 2015)

 

 

 

3.3

 

Certificate of Designation for Series A Convertible Preferred Stock (Incorporated by reference to Exhibit 3.1 of our Current Report on Form 8-K filed with the SEC on February 7, 2020)

 

 

 

10.1

 

Promissory Note made by Interlink Plus, Inc. in favor of Bruce Cassidy 2013 Irrevocable Trust, dated November 20, 2019 (Incorporated by reference to Exhibit 99.1 of our Current Report on Form 8-K filed with the SEC on November 25, 2019).

 

 

 

31.1

 

Certification by Principal Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 

 

 

31.2

 

Certification by Principal Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 

 

 

32.1

 

Certification by Chief Executive Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 

 

 

32.2

 

Certification by Chief Financial Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 

 

 

101

 

Interactive data files pursuant to Rule 405 of Regulation S-T of : (i) our Balance Sheets as of December 31, 2019 (unaudited) and June 30, 2019; (ii) our Statement of Operations for the three months ended December 31, 2019 and 2018 (unaudited); (iii) our Statement of Stockholders’ Equity for the three months ended December 31, 2019 and 2018 (unaudited); (iv) our Statement of Cash Flows for the three months ended December 31, 2019 and 2018 (unaudited); and (v) the notes to our Financial Statements.


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SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

Interlink Plus, Inc.

 

Date:  February 19, 2020

 

 

By:  /s/ Jon Niermann

Jon Niermann

Title:  Chief Executive Officer and Director

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


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