ITEM 1:
BUSINESS
On April 17, 2012, Mr. Vagner Gomes Tome, our former president and sole director, incorporated the Company in the State of Nevada and established a fiscal year end of April 30th. On May 23, 2013 the Company accepted the resignation of Vagner Gomes Tome as the sole director and officer of the Company and accepted the appointment of Joelyn Alcantara to serve in his stead. The objective of this corporation remains to introduce advertisement in nightclub line-ups.
We are a development-stage Company that intends to provide TVs streaming advertisements for the customers lining up on the outside of the nightclubs. The idea is to showcase pictures of that particular club scene, special events, deals on drink specials and advertisements from local businesses and other companies. We plan on providing the TV at no cost to the club and generate revenue through the sale of advertisements from local restaurants, cigarette companies, alcohol companies, clothing companies, ads for sports and entertainment events, etc.
On December 13, 2013, Vagner Gomes Tome surrendered for cancellation 7,000,000 shares of common stock of the Company. On March 10, 2014, Ms. Alcantara, our current president, acquired the remaining 500,000 shares of common stock of the company formely owned by Vagner Gomes Tome, our former president, for a purchase price of $0.05 per share. Ms. Alcantara is currently the holder of 65.7% of the issued and outstanding shares of common stock of the Company and is the majority shareholder of the Company.
As of the date of this annual filing, we have not yet contacted any possible client. Furthermore, we have not yet developed our systems and services. We have not yet implemented its business model and to date has generated no revenues.
We have not been involved in any bankruptcy, receivership or similar proceedings since our incorporation nor has we been involved in any reclassifications, mergers or consolidations. We have no plans to change our business activities.
Our president and director has invested $7,500 in the Company. A total of 32 other investors have invested a further $5,200 in the Company through the purchase of common shares. At the present time, we have not made any arrangements to raise additional cash. We will need additional cash and if we are unable to raise it, we will either suspend marketing operations until we do raise the cash necessary to continue our business plan, or we cease operations entirely.
Plan of Operation
After we have raised enough funds to start our plan of operations, we plan to accomplish the following steps:
Estimated time frame for completion of each step of our Plan of Operations.
- Market research
We plan to have a detailed ‘map’ of night clubs locations and possible local businesses that could benefit from our services. We expect to understand the demographic of the clubs and we also plan to interview patrons who attend and frequent the club, to have an idea of how long they believe they usually stand in line and the usual time frame that people stand outside on particular evenings of operation. Gathering this information is essential to the Company so we can make the proper decisions and outline the best strategies for our business. The Company’s president will be responsible for conducting market research and/or hire a third party to perform this task if finances allow.
We expect to spend between $550 and $25,000 in market research.
- Equipment purchase
The company estimates that the cost for each outdoor weather proof TV case will range from $1,000 to $6,000; depending on the manufacturer and TV size.
TV’s are widely available and they range in price, depending on the brand and size, from $500 to $3,000.
The Company’s president will be responsible for the equipment purchase.
The Company expects to invest between $1,000 and $32,000 for the purchase of equipment.
- Tests and website development
After we acquire the initial necessary equipment, we plan on running tests simulating actual situations, such as visibility of the TV in different positions, finding the best possible placement for the TV. We may also consider weather conditions, lighting among other factors that may arise.
After we have successfully tested our systems, we intend to finalize our website (www.lineupad.com), currently under construction, including a detailed explanation of our systems with pictures and videos.
We plan on hiring third party technicians and/or engineers to help with the tests and a third party web developer to finalize our website. The president will be responsible for hiring third party personnel and she will oversee all development. The president may be responsible for running all the tests, depending on the funds available to the Company.
We intend to allocate between $504 and $6,500 for testing and website development.
- Secure contracts with nightclub owners
After we decide on a pre-set system and standards for our services and products, we believe that we will have a better understanding of the functionality of our business. At that time, we may be able to present our idea in a more organized manner, and instruct how it will work. These factors would give us a better chance to secure contracts with club owners and managers.
The Company’s president will deal with all negotiations and she may decide to hire sub-contracted sales personnel, if finances allow.
We expect to allocate $450 and $6,000 to cover costs related to securing contracts with nightclub owners.
- Search for local businesses for initial advertisement
After securing our initial club contract and setting our first TV(s) up, we plan on finding advertisements from local businesses, such as after hour stores, late night eateries, taxi companies, etc. We estimate that a video to be used for our TV’s can be produced and edited in no more than 7 days.
We believe that our cost to produce the video advertisements will be very low, because we could use existing material from the advertising client’s website or simply use pictures and or videos to be provided by the client (nowadays, digital pictures and videos are very accessible).
The Company’s president will deal with all the negotiations and she may decide to hire sub-contracted sales personnel, if finances allow. Initially, the Company's president will be responsible for editing the videos.
We plan on investing between $400 and $7,300 to search for local businesses for initial advertisement.
- Office supplies, Stationery, Telephones, Internet
We intend to allocate between $60 and $1,164 to cover these costs, at the president’s discretion.
After successfully completing the above described steps, we believe we will start generating revenue.
As of the date of this filing, the Company has generated no revenues and has not entered into any agreement, arrangement or understanding with any third party. The Company has raised $12,700 in cash to initiate its business plan through the sale of its common stock. The amount raised from our stock offering is insufficient and we will need additional cash to continue to implement our business plan. Failure to raise funds will require the Company to cease operations. Other than as described in this paragraph, we have no other financing plans.
Management does not plan to hire additional employees at this time. Our President will be responsible for the initial product sourcing. We intend to hire sales representatives initially on a commission only basis to keep administrative overhead to a minimum. We will use third party web designers to build and maintain our website.
ITEM 1A.
ITEM 1A.
RISK FACTORS
Please consider the following risk factors relating to our business and prospects before deciding to invest in our common stock.
Any investment in our common stock involves a high degree of risk. You should carefully consider the risks described below and all of the information contained in this Annual Report on Form 10-K before deciding whether to purchase our common stock. If any of the following risks actually occur, our business, financial condition and results of operations could be harmed. The trading price of our common stock could decline due to any of these risks, and you may lose all or part of your investment.
The Company should be viewed as a high-risk investment and speculative in nature. An investment in our common stock may result in a complete loss of the invested amount. Please consider the following risk factors before deciding to invest in our common stock.
Risks Associated with Our Financial Condition
Our auditors have issued a going concern opinion and we may not be able to achieve our objectives, since we do not have adequate capital and may have to suspend or cease operations.
Our auditors have issued a going concern opinion. This means that there is doubt that we can continue as an ongoing business for the next twelve months. Our ability to raise additional financing is unknown. If we do not raise additional capital through private placements of our common stock and/or through debt financing, we believe we will not be able to run our business.
We have incurred losses since inception, and we expect to continue to incur substantial losses for theforeseeable future.
We have a limited operating history and have incurred only losses in the fiscal year that ended April 30, 2016. We anticipate that our business will generate operating losses until we successfully implement our business development strategy and start generating significant additional revenues to support our level of operating expenses. Because of the numerous risks and uncertainties associated with our business development, we are unable to predict certainly when we become profitable, and we may never become profitable. Even if we do achieve profitability, we may not be able to sustain or increase our business.
Risks Related to Investing in Our Company
Because we have a very limited operating history, it is difficult to evaluate your investment in our stock.
Evaluation of our business will be difficult because we have a very limited operating history. We are in the development stage of our business and have yet to begin offering our services. To date, we have no revenues to maintain us without additional capital injection. We can’t pursue a growth strategy before significant revenues are generated. We face a number of risks encountered by early-stage companies, including our need to develop infrastructure to support growth and expansion; our need to obtain long-term sources of financing; our need to disseminate our brand and establish our marketing, sales and support organizations. Our business strategy may not be successful, and we may not successfully address any risk. If we are unable to sustain profitable operations, investors may lose their entire investment.
Investing in the Company is a highly speculative investment and could result in the entire loss of your investment.
An investment in our common stock is highly speculative and involves significant risks. Our common stock should not be purchased by any person who cannot afford the loss of their entire investment. The business objectives of the company are also speculative, and it is possible that we could be unable to satisfy them. The company’s shareholders may be unable to realize a substantial return, or any return whatsoever, and may lose their entire investment.
Because we are small and do not have much capital, our marketing campaign may not be enough to attract sufficient clients to operate profitably. If we do not make a profit, we may have to suspend or cease operations.
Due to the fact we are small and do not have much capital, we must limit our marketing activities and may not be able to make our brand and services known to potential customers. Because we will be limiting our marketing activities, we may not be able to attract enough customers to operate profitably. If we cannot operate profitably, we may have to suspend or cease operations.
Risks Related to the Company’s Market and Strategy
If we are unable to successfully manage growth, our operations could be adversely affected.
Our progress is expected to require the full utilization of our management, financial and other resources, which to date has occurred with limited working capital. Our ability to manage growth effectively will depend on our ability to improve and expand operations, including our financial condition and to identify potential partners. There can be no absolute assurance that management will be able to manage growth effectively.
If we are unable to continue in the development our services, our business will fail.
If we are unable to continue with our services in order to keep up with the possible changes within our industry, we will not be able to be competitive and our business will fail. There can be no assurance that we will be able to successfully adapt to any possible market change and maintain a competitive position in the market.
We may be unable to scale our operations successfully.
Our plan is to grow rapidly. Our growth will place significant demands on our management and technology development, as well as our financial, administrative and other resources. We cannot guarantee that any of the systems, procedures and controls we put in place will be adequate to support the commercialization of our operations. Our operating results will depend substantially on the ability of our officers and key employees to manage changing business conditions and to implement and improve our financial, administrative and other resources. If we are unable to respond to and manage changing business conditions, or the scale of our products, services and operations, then the quality of our services, our ability to retain key personnel and our business could be harmed.
Risks Associated with Our Business Model
Because we are not established, our services and name have no recognition and we may be prevented from generating revenues, which will reduce the value of your investment.
Because we are a new company with new services and we have not conducted advertising, there is little or no recognition of our name. As a result, consumers may search services other than ours that have brand recognition in the market and we may be unable to generate sufficient revenues to meet our expenses or meet our business plan objectives, which will reduce the value of your investment.
Failure to anticipate or respond to changes in consumer tastes and fashion trends in a timely manner could result in a decrease in future sales, earnings and cash flows.
The nightclub environment is changing rapidly. To be aware of the trends in this market is an important component of the competitive nature of this industry, to which anticipating or responding to changes in a timely manner is imperative. In addition, we may not be able to ensure this new service will gain initial market acceptance or that interest in our services will be sustained. We also may be unable to differentiate our services through styling and other technological equipment due to the possible establishments of new competitors in the advertising market. If we misjudge the market for our services or are unable to differentiate our service offerings, we may lose the market share gained and it may result in a decrease in our gross profit.
A decrease in business from one or more of our significant partners could reduce our sales and earnings and impair our financial condition.
The substantial decrease in the investments from partner agreements, such as restaurants, clothing companies and entertainment events, could reduce our earnings and impair our financial condition, which could affect our business. In the future, these partners may consolidate their business with us.
Existing and future laws or regulations can affect our business.
As with any new service, changes to laws and regulations are often times unpredictable and out of our control. In the case of cigarettes, alcohol and other products and business advertisements, there may be current regulations that the Company must be aware of. As our services grow, governments may begin to enforce stricter regulations - which could ultimately vary from state to state and country to country. Our Company could be directly affected by these new regulations to the point of possibly having to reformat or lose all the business.
In addition, we may not be able to comply with all current and future government regulations which are applicable to our business. Our business operations are subject to all government regulations normally incident to conducting business as well as to governmental laws and regulations applicable to small public companies and their capital formation efforts.
If we cannot provide quality technical support, we could lose customers and our operating results could suffer.
The maintenance of our equipment to provide TVs streaming advertisements may be complex. Accordingly, we need highly trained technical support personnel. Hiring capable and reliable technical support personnel may be difficult due to some factors such as: the limited number of people available with a trained background and ability to understand our systems at a technical level and enough cash flow. If we are unable to attract, train or retain a highly qualified technical services personnel that our business may need, our business and results will suffer.
Our operating results may prove unpredictable.
Our operating results are likely to fluctuate significantly in the future due to a variety of factors, many of which we have no control. Factors that may cause our operating results to fluctuate significantly include: risk of equipment damage done by vandalism or weather. In those cases, any of these risks could have a material adverse effect on our business, financial condition and operating results.
Because we have no agreement in place with any possible client and/or night club owner, there is no guarantee that our business will succeed.
The success of our business depends on the authorization of the night clubs management to install our TV’s on the outside of their business. Our revenue will be generated from the sale of advertisements. Because we have not yet contacted any night club or possible client, there is absolutely no guarantee that our services will be accepted.
The dependence on hiring the appropriate third parties to perform essential services could result in a material adverse effect on the company’s potential future operations and, consequently, on the company’s business, operating results and financial condition. Further, such third party contractors have no fiduciary duty to our shareholders and may not perform these services as expected. The capacity of certain third parties for these services may be limited for economic or other reasons.
Risks Related to our Common Stock and our Status as a Public Company
We will be required to incur significant costs and require significant management resources to evaluate our internal control over financial reporting as required under Section 404 of the Sarbanes-Oxley Act, and any failure to comply or any adverse result from such evaluation may have an adverse effect on our stock price.
As a smaller reporting company as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended, we are required to evaluate our internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act of 2002 (“Section 404”). Section 404 requires us to include an internal control report with the Annual Report on Form 10-K. This report must include management’s assessment of the effectiveness of our internal control over financial reporting as of the end of the fiscal year. This report must also include disclosure of any material weaknesses in internal control over financial reporting that we have identified. Failure to comply, or any adverse results from such evaluation could result in a loss of investor confidence in our financial reports and have an adverse effect on the trading price of our equity securities. Management believes that its internal controls and procedures are currently not effective to detect the inappropriate application of U.S. GAAP rules. Management realize there are deficiencies in the design or operation of our internal control that adversely affect our internal controls which management considers to be material weaknesses including those described below:
1. Lack of formal policies and procedures necessary to adequately review significant accounting transactions. The Company utilizes a third party independent contractor for the preparation of its financial statements. Although the financial statements and footnotes are reviewed by our management, we do not have a formal policy to review significant accounting transactions and the accounting treatment of such transactions. The third party independent contractor is not involved in the day to day operations of the Company and may not be provided information from management on a timely basis to allow for adequate reporting/consideration of certain transactions.
2. Audit Committee and Financial Expert. The Company does not have a formal audit committee with a financial expert, and thus the Company lacks the board oversight role within the financial reporting process.
Achieving continued compliance with Section 404 may require us to incur significant costs and expend significant time and management resources. We cannot assure you that we will be able to fully comply with Section 404 or that we and our independent registered public accounting firm would be able to conclude that our internal control over financial reporting is effective at fiscal year end. As a result, investors could lose confidence in our reported financial information, which could have an adverse effect on the trading price of our securities, as well as subject us to civil or criminal investigations and penalties.
In addition, our independent registered public accounting firm may not agree with our management’s assessment or conclude that our internal control over financial reporting is operating effectively.
Our stock is categorized as a penny stock. Trading of our stock may be restricted by the SEC’s penny stock regulations which may limit a shareholder’s ability to buy and sell our stock.
Our stock is categorized as a “penny stock”. The SEC has adopted Rule 15g-9 which generally defines “penny stock” to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and accredited investors. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the SEC which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer’s account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer’s confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our common stock.
FINRA sales practice requirements may also limit a shareholder’s ability to buy and sell our stock.
In addition to the “penny stock” rules described above, the Financial Industry Regulatory Authority (“FINRA”) has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. The FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our shares.
Our common stock is not listed on any stock exchange and there is no established market for shares of our common stock. Even if a market for our common stock develops, our common stock could be subject to wide fluctuations.
Our common stock is not listed on any stock exchange. Although our common stock is quoted on the OTC Pink marketplace, operated by OTC Market Group, Inc., there is no established public market for shares of our common stock, and no trades of our common stock have taken place on OTC Pink. The liquidity and price of our common stock is expected to be more limited than if such securities were quoted or listed on a national exchange. No assurances can be given that an active public trading market for our common stock will develop or be sustained. The trading volume we will develop may be limited by the fact that many major institutional investment funds, including mutual funds, as well as individual investors follow a policy of not investing in OTC stocks and certain major brokerage firms restrict their brokers from recommending OTC stocks because they are considered speculative, volatile and thinly traded. Lack of liquidity will limit the price at which shareholders may be able to sell our common stock.
The price of such common stock could be subject to wide fluctuations, in response to quarterly variations in our operating results, announcements by us or others, developments affecting us, and other events or factors. In addition, the stock market has experienced extreme price and volume fluctuations in recent years. These fluctuations have had a substantial effect on the market prices for many companies, often unrelated to the operating performance of such companies, and may adversely affect the market prices of the securities. Such risks could have an adverse affect on the stock’s future liquidity.
We expect to experience volatility in our stock price, which could negatively affect shareholders’ investments.
The market price for shares of our common stock may be volatile and may fluctuate based upon a number of factors, including, without limitation, business performance, news announcements or changes in general market conditions.
Other factors, in addition to the those risks included in this section, that may have a significant impact on the market price of our common stock include, but are not limited to:
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quality deficiencies in services;
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international developments, such as technology mandates, political developments or changes in economic policies;
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changes in recommendations of securities analysts;
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government regulations, including stock option accounting and tax regulations;
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energy blackouts;
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acts of terrorism and war;
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widespread illness;
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proprietary rights or patent litigation;
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strategic transactions, such as acquisitions and divestitures; or
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rumors or allegations regarding our financial disclosures or practices.
In the past, securities class action litigation has often been brought against a company following periods of volatility in the market price of its securities. If our stock price is volatile, we may be the target of securities litigation in the future. Securities litigation could result in substantial costs and divert management’s attention and resources.
Shareholders should also be aware that, according to SEC Release No. 34-29093, the market for “penny stock,” such as our common stock, has suffered in recent years from patterns of fraud and abuse. Such patterns include (1) control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer; (2) manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases; (3) boiler room practices involving high-pressure sales tactics and unrealistic price projections by inexperienced sales persons; (4) excessive and undisclosed bid-ask differential and markups by selling broker-dealers; and (5) the wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, along with the resulting inevitable collapse of those prices and with consequent investor losses. Our management is aware of the abuses that have occurred historically in the penny stock market. Although we do not expect to be in a position to dictate the behavior of the market or of broker-dealers who participate in the market, management will strive within the confines of practical limitations to prevent the described patterns from being established with respect to our securities. The occurrence of these patterns or practices could increase the future volatility of our share price.
To date, we have not paid any cash dividends and no cash dividends will be paid in the foreseeable future.
We do not anticipate paying cash dividends on our common stock in the foreseeable future and we may not have sufficient funds legally available to pay dividends. Even if the funds are legally available for distribution, we may nevertheless decide not to pay any dividends. We presently intend to retain all earnings for our operations.
ITEM 1B.
ITEM 1B.
UNRESOLVED STAFF COMMENTS
We are a smaller reporting company as defined in Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.
ITEM 2.
ITEM 2.
PROPERTIES
We do not own any real estate or other properties. The company has no rent or leased office. Such work is done at the directors home, free of charge.
ITEM 3.
ITEM 3.
LEGAL PROCEEDINGS
There are no legal proceedings pending or threatened against us.
ITEM 4.
ITEM 4.
(REMOVED AND RESERVED)
PART II
ITEM 5.
ITEM 5.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Market for Registrant’s Common Equity
Our common stock is not listed on any stock exchange. Although our common stock is currently quoted on the OTC Pink marketplace operated by OTC Markets Group, Inc., under the symbol “LUAD,” there is no established public market for shares of our common stock, and no trades of our common stock have taken place on the OTC Pink marketplace. Any quotations reflect interdealer prices, without retail mark-up, mark-down or commission, and may not represent actual transactions.
Approximate Number of Holders of Common Stock
As of April 30, 2016 the Company had sixteen (16) active shareholders of record. The company has not paid cash dividends and has no outstanding options.
Dividends
We have not declared any cash dividends in the two most recent fiscal years. The declaration of future cash dividends, if any, will be at the discretion of the Board of Directors and will depend on our earnings, if any, capital requirements and financial position, general economic conditions and other pertinent conditions. It is our present intention not to pay any cash dividends in the near future.
Securities Authorized for Issuance Under Equity Compensation Plans
There are no options, warrants or convertible securities outstanding pursuant to an equity compensation plan.
Recent Sales of Unregistered Securities
None.
ITEM 6.
ITEM 6.
SELECTED FINANCIAL DATA
We are a smaller reporting company as defined in Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.
ITEM 7.
ITEM 7.
MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and related notes included elsewhere in this report.
This annual report contains forward looking statements relating to our Company's future economic performance, plans and objectives of management for future operations, projections of revenue mix and other financial items that are based on the beliefs of, as well as assumptions made by and information currently known to, our management. The words "expects”, “intends”, “believes”, “anticipates”, “may”, “could”, “should" and similar expressions and variations thereof are intended to identify forward-looking statements. The cautionary statements set forth in this section are intended to emphasize that actual results may differ materially from those contained in any forward looking statement.
Overview
On April 17, 2012, Mr. Vagner Gomes Tome, our former president and sole director, incorporated the Company in the State of Nevada and established a fiscal year end of April 30th. On May 23, 2013, the Company accepted the resignation of Vagner Gomes Tome as the sole director and officer of the Company and accepted the appointment of Joelyn Alcantara to serve in his stead. The objective of this corporation remains to introduce advertisement in nightclub line-ups.
We are a development-stage company that intends to provide TVs streaming advertisements for the customers lining up on the outside of the nightclubs. The idea is to showcase pictures of that particular club scene, special events, deals on drink specials and advertisements from local businesses and other companies. We plan on providing the TV at no cost to the club and generate revenue through the sale of advertisements from local restaurants, cigarette companies, alcohol companies, clothing companies, ads for sports and entertainment events, etc.
On December 13, 2013, Vagner Gomes Tome surrendered for cancellation 7,000,000 shares of common stock of the Company. On March 10, 2014, Ms. Alcantara, our current president, acquired the remaining 500,000 shares of common stock of the company formely owned by Mr. Vagner Gomes Tome for a purchase price of $0.05 per share. Ms. Alcantara is currently the holder of 65.7% of the issued and outstanding shares of common stock of the Company and is the majority shareholder of the Company.
As of the date of this annual filing, we have not yet contacted any possible clients. Furthermore, we have not yet developed our systems and services. The Company has not yet implemented its business model and to date has generated no revenues. The company has been unable to pursue the business plan due to lack of funds. The company is looking for investors so that the company can proceed with the business plan. The company plans to continue to raise money so that the business plan can be executed. The Company has not been involved in any bankruptcy, receivership or similar proceedings since its incorporation nor has it been involved in any reclassification, merger or consolidation. We have no plans to change our business activities.
Plan of Operations
After we have raised enough funds to start this plan of operations, we plan to accomplish the following steps:
Estimated time frame for completion of each step of our Plan of Operations.
- Market research
We plan to have a detailed ‘map’ of night clubs locations and possible local businesses that could benefit from our services. We expect to understand the demographic of the clubs and we also plan to interview patrons who attend and frequent the club, to have an idea of how long they believe they usually stand in line and the usual time frame that people stand outside on particular evenings of operation. Gathering this information is essential to the Company so we can make the proper decisions and outline the best strategies for our business. The Company’s president will be responsible for conducting market research and/or hire a third party to perform this task if finances allow.
We expect to spend between $550 and $25,000 in market research.
- Equipment purchase
We estimates that the cost for each outdoor weather proof TV case will range from $1,000 to $6,000; depending on the manufacturer and TV size.
TV’s are widely available and they range in price, depending on the brand and size, from $500 to $3,000.
The Company’s president will be responsible for the equipment purchase.
The Company expects to invest between $1,000 and $32,000 for purchase of equipment.
- Tests and website development
After we acquire the initial necessary equipment, we plan on running tests simulating actual situations, such as visibility of the TV in different positions, finding the best possible placement for the TV. We may also consider weather conditions, lighting among other factors that may arise.
After we have successfully tested our systems, we intend to finalize our website (www.lineupad.com), currently under construction, including a detailed explanation of our systems with pictures and videos.
We plan on hiring third party technicians and/or engineers to help with the tests and a third party web developer to finalize our website. The president will be responsible to hire the third party personnel and she will oversee all the development. The president may be responsible for running all the tests, depending on the funds available to the Company.
We intend to allocate between $504 and $6,500 for testing and website development.
- Secure contracts with nightclub owners
After we decide on a pre-set system and standards for our services and products, we believe that we will have a better understanding of the functionality of our business. At that time, we may be able to present our idea in a more organized manner, and instruct how it will work. These factors would give us a better chance to secure contracts with club owners and managers.
The Company’s president will deal with all negotiations and she may decide to hire sub-contracted sales personnel, if finances allow.
We expect to allocate $450 and $6,000 to cover costs related to securing contracts with nightclub owners.
- Search for local businesses for initial advertisement
After securing our initial club contract and setting our first TV(s) up, we plan on finding advertisements from local businesses, such as after hour stores, late night eateries, taxi companies, etc. We estimate that a video to be used for our TV’s can be produced and edited in no more than 7 days.
We believe that our cost to produce the video advertisements will be very low, because we could use existing material from the advertising client’s website or simply use pictures and or videos to be provided by the client (nowadays, digital pictures and videos are very accessible).
The Company’s president will deal with all the negotiations and she may decide to hire sub-contracted sales personnel, if finances allow. Initially, the Company's president will be responsible for editing the videos.
We plan on investing between $400 and $7,300 to search for local businesses for initial advertisement.
- Office supplies, Stationery, Telephones, Internet
We intend to allocate between $60 and $1,164 to cover these costs, at the president’s discretion.
After successfully completing the above described steps, we believe we will start generating revenue.
As of the date of this filing, the Company has generated no revenues and has not entered into any agreement, arrangement or understanding with any third party Company. The Company has raised $12,700 in cash to initiate its business plan through the sale of its common stock. The amount raised from our stock offering is insufficient and we will need additional cash to continue to implement our business plan. Failure to raise funds will require the Company to cease operations. Other than as described in this paragraph, we have no other financing plans.
Our auditors have issued a “going concern” opinion, meaning that there is substantial doubt if we can continue as an on-going business for the next twelve months unless we obtain additional capital. No substantial revenues are anticipated until we have completed the financing from this offering and implemented our plan of operations. Our only source for cash at this time is investments by others in this offering. We must raise cash to implement our strategy and stay in business.
Results of Operations for the Fiscal Years Ended April 30, 2016 and 2015
Revenue
We did not generate any revenue during the fiscal years ended April 30, 2016 and 2015.
Expenses
We incurred operating expenses in the amount of $30,588 and $25,060 during the fiscal years ended April 30, 2016 and 2015 respectively. These operating expenses were comprised of professional fees and office and general expenses. The increase in expenses related to increase legal costs associated with filing quarterly and annual reports.
Net Loss
We incurred a net loss of $30,588 and $25,060 during the fiscal years ended April 30, 2016 and 2015 respectively.
Liquidity and Capital Resources
As of the fiscal year ended April 30, 2016 we had no cash on hand in the bank compared to $0 at the fiscal year ended April 30, 2015.
Net cash used in operating activities for the fiscal year ended April 30, 2016 was $0 as compared to $0 for fiscal year ended April 30, 2015. Net cash provided by financing activities for the fiscal year ended April 30, 2016 was $0 as compared to $0 for the fiscal year ended April 30, 2015. Our current cash holdings will not satisfy our liquidity requirements and we will require additional financing to pursue our planned business activities.
Our officer and director has committed to advancing funds (up to $25,000) for the next twelve months to cover expenses to maintain the reporting status current with the SEC. Ms. Joelyn Alcantara is willing to lend the full amount of these funds to the Company as the expenses are incurred, if necessary or if no other proceeds are obtained by the Company. However, there is no contract in place or written agreement with Ms. Alcantara and the funds expressed in the above president’s verbal commitment, would be in the form of a non-secured loan and would have no interest and no fixed repayment date.
Management believes that if subsequent private placements are successful, we will generate sales revenue within the following thirty six months thereof. However, additional equity financing may not be available to us on acceptable terms or at all, and thus we could fail to satisfy our future cash requirements. The failure to secure additional equity financing would result in need to seek capital from other resources such as debt financing, which may not be available to the Company. However, if such financing were available, because we are a development stage Company with no operations to date, it would likely have to pay additional costs associated with high risk loans and be subject to an above market interest rate. At such time these funds are required, management would evaluate the terms of such debt financing. If the Company cannot raise additional proceeds via a private placement of its common stock or secure debt financing, it would be required to cease business operations. As a result, investors may lose all of their investment.
Off Balance Sheet Arrangements
As of the date of this Annual Report, the current funds available to the Company will not be sufficient to continue operations. The cost to establish the Company and begin operations is estimated to be approximately $100,000 over the next twelve months and the cost of maintaining our reporting status is estimated to be $25,000 over this same period. The officer and director, Joelyn Alcantara has undertaken to provide the Company with operating capital to sustain our business over the next twelve month period as the expenses are incurred in the form of a non-secured loan. However, there is no contract in place or written agreement securing this agreement. Management believes that if the Company cannot raise sufficient revenues or maintain its reporting status with the SEC it will have to cease all efforts directed towards the Company. As such, any investment previously made would be lost in its entirety.
Other than the above described situation the Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company's financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
ITEM 7A.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are a smaller reporting company as defined in Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.
LINE UP ADVERTISEMENT, INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
April 30, 2016
Audited
BALANCE SHEETS
STATEMENTS OF OPERATIONS
STATEMENTS OF CASH FLOWS
NOTES TO AUDITED FINANCIAL STATEMENTS
PCAOB Registered Auditors - www.sealebeers.com
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
Line Up Advertisement, Inc.
We have audited the accompanying balance sheets of Line Up Advertisement, Inc. as of April 30, 2015 and 2016 and the related statements of income, stockholders’ equity (deficit), and cash flows for each of the years in the two-year period ended April 30, 2016. Line Up Advertisement, Inc.’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Line Up Advertisement, Inc. as of April 30, 2015 and 2016, and the related statements of income, stockholders’ equity (deficit), and cash flows for each of the years in the two-year period ended April 30, 2016 in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company has no revenues, has negative working capital at April 30, 2016, has incurred recurring losses and recurring negative cash flow from operating activities, and has an accumulated deficit which raises substantial doubt about its ability to continue as a going concern. Management’s plans concerning these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ Seale and Beers, CPAs
Seale and Beers, CPAs
Las Vegas, Nevada
August 10, 2016
LINE UP ADVERTISEMENT, INC.
STATEMENTS OF OPERATIONS
Audited
The accompanying notes are an integral part of these financial statements
LINE UP ADVERTISEMENT, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
From inception (April 17, 2012) to April 30, 2016
Audited
The accompanying notes are an integral part of these financial statements
LINE UP ADVERTISEMENT, INC.
STATEMENTS OF CASH FLOWS
Audited
Year
Year
ended
ended
April 30, 2016
April 30, 2015
OPERATING ACTIVITIES
Net loss $
(30,588)
$ (25,060)
Adjustment to reconcile net loss to net cash used in operating activities:
Expenses paid on company's behalf by related party 25,900
28,334
Increase (decrease) in accrued expenses 4,688
(3,274)
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES $
-
$ -
NET INCREASE (DECREASE) IN CASH $
-
$ -
CASH, BEGINNING OF PERIOD $ - $ -
CASH, END OF PERIOD $ - $ -
Supplemental cash flow information and noncash financing activities:
Cash paid for:
Interest $ - $ -
Income taxes $ - $ -
The accompanying notes are an integral part of these financial statements
LINE UP ADVERTISEMENT, INC.
NOTES TO THE AUDITED FINANCIAL STATEMENTS
April 30, 2016
NOTE 1 - NATURE OF OPERATIONS AND BASIS OF PRESENTATION
The Company was incorporated in the State of Nevada as a for-profit Company on April 17, 2012 and established a fiscal year end
of April 30. The Company intends to provide televisions that will stream advertisements for patrons outside the nightclub line ups.
The Company presently has no products. All activities of the Company relate to its organization, initial funding, and share issuances.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
In the opinion of management, the accompanying balance sheets, statements of operations, stockholders' equity (deficit) and cash flows
include all adjustments, consisting only of normal recurring items, for their fair presentation in conformity with accounting principles
generally accepted in the United States. These financial statements are presented in United States dollars.
Advertising
Advertising costs are expensed as incurred. As of April 30, 2016 and 2015, no advertising costs have been incurred.
Property
The Company does not own or rent any property. The office space is provided by the president at no charge.
Revenue and Cost Recognition
The Company has no current source of revenue; therefore the Company has not yet adopted any policy regarding the recognition of revenue or cost.
Cash and Cash Equivalents
The Company considers all highly liquid investments with maturity of three months or less to be cash equivalents.
Use of Estimates and Assumptions
Preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
Income Taxes
The Company follows the liability method of accounting for income taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax balances. Deferred tax assets and liabilities are measured using enacted or substantially enacted tax rates expected to apply to the taxable income in the years in which those differences are expected to be recovered or settled. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the date of enactment or substantive enactment.
Net Loss per Share
Basic loss per share includes no dilution and is computed by dividing loss available to common stockholders by the weighted average number of common shares outstanding for the period. Dilutive loss per share reflects the potential dilution of securities that could share in the losses of the Company. Because the Company does not have any potentially dilutive securities, the accompanying presentation is only of basic loss per share.
Recent Accounting Pronouncements
The company has evaluated all the recent accounting pronouncements and believes that none of them will have a material effect on the company’s financial statement.
NOTE 3 - GOING CONCERN
The Company’s financial statements are prepared in accordance with generally accepted accounting principles applicable to a going concern. This contemplates the realization of assets and the liquidation of liabilities in the normal course of business. Currently, the Company has a working capital deficit of $92,676, an accumulated deficit of $120,091 and net loss from operations since inception of $120,091. The Company does not have a source of revenue sufficient to cover its operation costs giving substantial doubt for it to continue as a going concern. The Company will be dependent upon the raising of additional capital through placement of our common stock in order to implement its business plan, or merge with an operating company. There can be no assurance that the Company will be successful in either situation in order to continue as a going concern. The Company funded its initial operations by way of issuing Founder’s shares.
The officers and directors have committed to advancing certain operating costs of the Company, including Legal, Audit, Transfer Agency and Edgarizing costs.
NOTE 4 - FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company has determined the estimated fair value of financial instruments using available market information and appropriate valuation methodologies. The fair value of financial instruments classified as current assets or liabilities approximate their carrying value due to the short-term maturity of the instruments.
NOTE 5 - CAPITAL STOCK
The Company’s capitalization is 75,000,000 common shares with a par value of $0.001 per share. No preferred shares have been authorized or issued.
As of April 30, 2016, the Company has not granted any stock options and has not recorded any stock-based compensation.
On April 25, 2012 the Company issued 7,500,000 Founder's shares for cash at $0.001 per share. In September 2012 the Company issued 260,000 common shares for cash at $0.02 per share.
On April 30, 2016 and on April 30, 2015, the Company had 760,000 and 760,000 common shares issued and outstanding respectively.
NOTE 6 - RELATED PARTY TRANSACTIONS
As of April 30, 2016 and 2015, the Company has received $82,318 and $56,418, respectively, in loans and payment of expenses from a related party. The loans are payable on demand and without interest.
NOTE 7 - INCOME TAXES
We did not provide any current or deferred U.S. federal income tax provision or benefit for any of the periods presented because we have experienced operating losses since inception. Accounting for Uncertainty in Income Taxes when it is more likely than not that a tax asset cannot be realized through future income the Company must allow for this future tax benefit. We provided a full valuation allowance on the net deferred tax asset, consisting of net operating loss carry forwards, because management has determined that it is more likely than not that we will not earn income sufficient to realize the deferred tax assets during the carry forward period.
The components of the Company’s deferred tax asset and reconciliation of income taxes computed at the statutory rate to the income tax amount recorded as of April 30, 2016 and 2015 are as follows:
April 30, 2016 April 30, 2015
Net operating loss carry forward
120,091 89,503
Effective Tax rate
35% 35%
Deferred Tax Assets
31,326
Less: Valuation Allowance
(31,326)
Net deferred tax asset
$ 0 $ 0 .
The net federal operating loss carry forward will expire between 2034 and 2035. This carry forward may be limited upon the consummation of a business combination under IRC Section 381.
NOTE 8 - SUBSEQUENT EVENTS
The Company has evaluated subsequent events from the balance sheet date through the date the financial statements were issued and has determined that there are no events to disclose.
ITEM 9.
ITEM 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 9A.
ITEM 9A.
CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
We carried out an evaluation, under the supervision and with the participation of our management, including our sole executive officer (who is our Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer), of the effectiveness of the design of our disclosure controls and procedures (as defined by Exchange Act Rules 13a-15(e) or 15d-15(e)) as of April 30, 2016 pursuant to Exchange Act Rule 13a-15. Based upon that evaluation, our Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were not effective as of April 30, 2016 in ensuring that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s (the “SEC”) rules and forms. This conclusion is based on findings that constituted material weaknesses. A material weakness is a deficiency, or a combination of control deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s interim financial statements will not be prevented or detected on a timely basis.
Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Under the supervision and with the participation of our management, which currently consists of our sole executive officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on criteria established in the framework in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and SEC guidance on conducting such assessments. Our management concluded, as of April 30, 2016, that our internal control over financial reporting was not effective. Management realized there were deficiencies in the design or operation of the Company’s internal control that adversely affected the Company’s internal controls which management considers to be material weaknesses.
In performing the above-referenced assessment, management had concluded that as of April 30, 2016, there were deficiencies in the design or operation of our internal control that adversely affected our internal controls which management considers to be material weaknesses including those described below:
i)
Lack of Formal Policies and Procedures. The Company utilizes a third party independent contractor for the preparation of its financial statements. Although the financial statements and footnotes are reviewed by our management, we do not have a formal policy to review significant accounting transactions and the accounting treatment of such transactions. The third party independent contractor is not involved in the day to day operations of the Company and may not be provided information from management on a timely basis to allow for adequate reporting/consideration of certain transactions.
ii)
Audit Committee and Financial Expert. The Company does not have a formal audit committee with a financial expert, and thus the Company lacks the board oversight role within the financial reporting process.
Our management feels the weaknesses identified above have not had any material affect on our financial results. However, we are currently reviewing our disclosure controls and procedures related to these material weaknesses and expect to implement changes in the near term, including identifying specific areas within our governance, accounting and financial reporting processes to add adequate resources to potentially mitigate these material weaknesses.
Our management will continue to monitor and evaluate the effectiveness of our internal controls and procedures and our internal controls over financial reporting on an ongoing basis and is committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. 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. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal controls over financial reporting that occurred during the quarterly period ended April 30, 2016 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting. We believe that a control system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the control system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within any company have been detected.
ITEM 9B.
ITEM 9B.
OTHER INFORMATION
None.
PART III
ITEM 10.
ITEM 10.
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Our directors serve until their respective successors are elected and qualified. Our sole officer has been elected by the Board of Directors to a term of one (1) year and serves until her successor is duly elected and qualified, or until she is removed from office. The Board of Directors has no nominating or compensation committees.
The names, addresses, ages and positions of our present sole officer and our directors are set forth below:
Name
Age
Position(s)
Joelyn Alcantara
President, Secretary, Treasurer, Chief Financial Officer and Chairman of the Board of Directors.
Joelyn Alcantara has held her offices since May 23, 2013, after Vagner Gomes Tome’s resignation. Directors receive no compensation for serving on the Board of Directors
Background of officers and Directors
Joelyn Alcantara, has been appointed as the sole director and officer of the Company. Ms. Alcantara holds a Bachelors degree in Commerce and a Masters degree in Finance from University of the Philippines, Manila, Philippines. From 2003 to the present, she has been the senior lender for Esquire Finance, Manila, Philippines, where she has been responsible for administrative matters for small business financing and loans. Prior to this, from 1992-2003, Ms. Alcantara was a lending officer for Crisostomo Lending Agency, based in Quezon City, Philippines, where she was primarily responsible for financing and loan applications for small businesses borrowers. The board of directors believes that Ms. Alcantara’s business experience will be a valuable asset in attaining the Company’s goals.
Ms. Alcantara is not a director of any other reporting company.
Significant Employees
The Company does not, at present, have any employees other than the current officer and director. We have not entered into any employment agreements, as we currently do not have any employees other than the current officer and director.
Family Relations
There are no family relationships among the directors and officers of Line Up Advertisement, Inc.
Involvement in Legal Proceedings
No director, executive officer, significant employee or control person of the Company has been involved in any legal proceeding listed in Item 401(f) of Regulation S-K in the past 10 years.
Committees of the Board
Our Board of Directors held no formal meetings in the prior fiscal year. All proceedings of the Board of Directors were conducted by resolutions consented to in writing by the directors and filed with the minutes of the proceedings of the directors. Such resolutions consented to in writing by the directors entitled to vote on
that resolution at a meeting of the directors are, according to the Nevada Revised Statutes and the bylaws of our Company, as valid and effective as if they had been passed at a meeting of the directors duly called and held. We do not presently have a policy regarding director attendance at meetings.
We do not currently have a standing nominating or compensation committee of the Board of Directors, or any committee performing similar functions. Our Board of Directors performs the functions of nominating and compensation committees.
Audit Committee
The Company’s current Audit Committee consists solely of our sole officer and director.
Audit Committee Financial Expert
We currently have not designated anyone as an “audit committee financial expert,” as defined in Item 407(d)(5) of Regulation S-K.
Code of Ethics
We have not adopted a Code of Ethics.
Section 16(a) of the Securities Exchange Act of 1934
Our officers, directors and beneficial owners of more than 10% of our common stock are not required to file statements of beneficial ownership on SEC Forms 3, 4 and 5 pursuant to Section 16(a) of the Securities Exchange Act of 1934.
Nominations to the Board of Directors
Our Board takes a critical role in guiding our strategic direction and oversees the management of the Company. Board candidates are considered based upon various criteria, such as their broad-based business and professional skills and experiences, a global business and social perspective, concern for the long-term interests of the stockholders, diversity, and personal integrity and judgment.
In addition, directors must have time available to devote to Board activities and to enhance their knowledge in the growing business. Accordingly, we seek to attract and retain highly qualified directors who have sufficient time to attend to their substantial duties and responsibilities to the Company.
In carrying out its responsibilities, the Board will consider candidates suggested by stockholders. If a stockholder wishes to formally place a candidate’s name in nomination, however, he or she must do so in accordance with the provisions of the Company’s Bylaws. Suggestions for candidates to be evaluated by the proposed directors must be sent to the Board of Directors, c/o Line Up Advertisement, Inc. 2108 Santolan St. San Antonio Village, Makati City, Philippines.
Director Nominations
As of April 30, 2016, we did not effect any material changes to the procedures by which our shareholders may recommend nominees to our Board of Directors.
Board Leadership Structure and Role on Risk Oversight
Ms. Alcantara currently serves as our principal executive officer and sole director. We determined this leadership structure was appropriate for us due to our small size and limited operations and resources. The Board of Directors will continue to evaluate our leadership structure and modify as appropriate based on the size, resources and operations of the Company. It is anticipated that the Board of Directors will establish
procedures to determine an appropriate role for the Board of Directors in the Company’s risk oversight function.
Compensation Committee Interlocks and Insider Participation
No interlocking relationship exists between our board of directors and the board of directors or compensation committee of any other company, nor has any interlocking relationship existed in the past.
ITEM 11.
ITEM 11.
EXECUTIVE COMPENSATION.
None of our executive officers and directors have received any compensation and or received any restricted shares awards, options or any other payouts during the past two fiscal years. As such, we have not included a Summary Compensation Table.
There are no current employment agreements between the Company and its executive officer and director. Our executive officer and director has agreed to work without remuneration until such time as we receive revenues that are sufficiently necessary to provide proper salaries to the officer and compensate the director for participation. Our executive officer and director has the responsibility of determining the timing of remuneration programs for key personnel based upon such factors as positive cash flow, shares sales, product sales, estimated cash expenditures, accounts receivable, accounts payable, notes payable, and a cash balances. At this time, management cannot accurately estimate when sufficient revenues will occur to implement this compensation, or the exact amount of compensation.
There are no annuity, pension or retirement benefits proposed to be paid to officers, directors or employees of the corporation in the event of retirement at normal retirement date pursuant to any presently existing plan provided or contributed to by Company. We currently have no compensatory plans or arrangements resulting from the resignation, retirement or any other termination of any of our executive officers, from a change-in-control, or from a change in any executive officer’s responsibilities following a change-in-control.
ITEM 12.
ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table sets forth certain information as of July 19, 2016, with respect to the beneficial ownership of our common stock for (i) each director and officer, (ii) all of our directors and officers as a group, and (iii) each person known to us to own beneficially five percent (5%) or more of the outstanding shares of our common stock. As of July 19, 2016, there were 760,000 shares of common stock outstanding.
To our knowledge, except as indicated in the footnotes to this table or pursuant to applicable community property laws, the persons named in the table have sole voting and investment power with respect to the shares of common stock indicated.
Category of Shareholder
Name and Address of
Beneficial Owner [1]
Amount and Nature of Beneficial Owner
Percent of Class
Directors and Executive Officers
Joelyn Alcantara,
2108 Santolan St. San Antonio Village
Makati City, Philippines
500,000
65.79%
All Directors and Executive Officers
500,000
65.79%
5% Shareholders
Joelyn Alcantara,
2108 Santolan St. San Antonio Village, Makati City, Philippines
500,000
65.79%
Demerson Dos Santos Pereira
Rua Francois Bunel 330, Casa 12, Sao Paulo, Brazil 04193-310
130,000
17.11%
(1)
Beneficial ownership has been determined in accordance with Rule 13d-3 under the Exchange Act. Pursuant to the rules of the SEC, shares of common stock which an individual or group has a right to acquire within 60 days pursuant to the exercise of options or warrants are deemed to be outstanding for the purpose of computing the percentage ownership of such individual or group, but are not deemed to be beneficially owned and outstanding for the purpose of computing the percentage ownership of any other person shown in the table.
Securities Authorized for Issuance Under Equity Compensation Plans
None.
Non-Cumulative Voting
The holders of our shares of common stock do not have cumulative voting rights, which means that the holders of more than 50% of such outstanding shares, voting for the election of Directors, can elect all of the Directors to be elected, if they so choose. In such event, the holders of the remaining shares will not be able to elect any of our Directors.
Transfer Agent
Our transfer agent is Pacific Stock Transfer Company and is located at 4045 South Spencer Street, Suite 430, Las Vegas, CA 89119. Their telephone number is 702-361-3033.
ITEM 13.
ITEM 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Related Party Transactions
As of April 30, 2016 and 2015, the Company has received $82,318 and $56,418, respectively, in loans and payment of expenses from a Shareholder. The loans are payable on demand and without interest.
Review, Approval or Ratification of Transactions with Related Persons
We have not adopted a Code of Ethics and we rely on our Board to review related party transactions on an ongoing basis to prevent conflicts of interest. Our Board reviews a transaction in light of the affiliations of the director, officer or employee and the affiliations of such person’s immediate family. Transactions are presented to our Board for approval before they are entered into or, if this is not possible, for ratification after the
transaction has occurred. If our Board finds that a conflict of interest exists, then it will determine the appropriate remedial action, if any. Our Board approves or ratifies a transaction if it determines that the transaction is consistent with the best interests of the Company.
Director Independence
During the fiscal year ended April 30, 2016, we had no independent directors on our board. We evaluate independence by the standards for director independence established by applicable laws, rules, and listing standards including, without limitation, the standards for independent directors established by The New York Stock Exchange, Inc., the NASDAQ National Market, and the Securities and Exchange Commission.
Subject to some exceptions, these standards generally provide that a director will not be independent if (a) the director is, or in the past three years has been, an employee of ours; (b) a member of the director’s immediate family is, or in the past three years has been, an executive officer of ours; (c) the director or a member of the director’s immediate family has received more than $120,000 per year in direct compensation from us other than for service as a director (or for a family member, as a non-executive employee); (d) the director or a member of the director’s immediate family is, or in the past three years has been, employed in a professional capacity by our independent public accountants, or has worked for such firm in any capacity on our audit; (e) the director or a member of the director’s immediate family is, or in the past three years has been, employed as an executive officer of a company where one of our executive officers serves on the compensation committee; or (f) the director or a member of the director’s immediate family is an executive officer of a company that makes payments to, or receives payments from, us in an amount which, in any twelve-month period during the past three years, exceeds the greater of $1,000,000 or two percent of that other company’s consolidated gross revenues.
ITEM 14.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
The following table shows the fees paid or accrued by us for the audit and other services provided by Seale and Beers, CPAs for the fiscal periods shown.
Audit fees consist of fees billed for professional services rendered for the audit of our financial statements and review of the interim financial statements included in quarterly reports and services that are normally provided by the above auditors in connection with statutory and regulatory fillings or engagements
In the absence of a formal audit committee meeting, the full Board of Directors pre-approves all audit and non-audit services to be performed by the independent registered public accounting firm in accordance with the rules and regulations promulgated under the Securities Exchange Act of 1934, as amended. The Board of Directors pre-approved 100% of the audit, audit-related and tax services performed by the independent registered public accounting firm for the fiscal year ended April 30, 2016. The percentage of hours expended on the principal accountant’s engagement to audit the Company’s financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant’s full-time, permanent employees was 0%.
PART IV
ITEM 15.
ITEM 15.
EXHIBITS
3.1(a)
Articles of Incorporation of Line Up Advertisement, Inc. (incorporated by reference from our Registration Statement on Form S-1 filed on July 06, 2012)
3.1(b)
Amendment to Articles of Incorporation of Line Up Advertisement, Inc. (incorporated by reference from our Current Report on Form 8-K filed on November 11, 2013).
3.2
Bylaws of Line Up Advertisement, Inc. (incorporated by reference from our Registration Statement on Form S-1 filed on July 06, 2012)
21.1
The Company has no subsidiaries.
31.1*
Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002
31.2*
Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002*
32.1*
Section 1350 Certification of Principal Executive Officer
32.2**
Section 1350 Certification of Principal Financial Officer
101.1* Interactive Data Files
* Filed herewith
** Included in Exhibit 32.1
Signatures
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Line Up Advertisement, Inc.
By: /s/ Joelyn Alcantara
-------------------------------------
Joelyn Alcantara
President, Secretary, Treasurer, Chief Financial Officer and Director (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)
Dated: August 15, 2016
Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signatures
Title(s)
Date
/s/ Joelyn Alcantara
President, Secretary, Treasurer, Chief Financial Officer and Director (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)
August 15, 2016
Joelyn Alcantara