EPTI Environmental Packaging Technologies Holdings Inc (CE)

 

 

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 September 30, 2014

 

or

 

¨	Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the transition period from __________ to __________

 

Commission File Number: 333-182629

 

INTERNATIONAL METALS STREAMING CORP.

(Exact name of registrant as specified in its charter)

 

Nevada		45-5634033
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

 

12303 Airport Way, Suite 200 Broomfield, Colorado		80021
(Address of principal executive offices)		(Zip Code)

 

(303) 327-1497

(Registrant’s telephone number, including area code)

 

N/A

(Former name, former address and former fiscal year, if changed since last report)

 

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. Yes ¨ No x

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every, Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Sec.232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ¨ No ¨

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large Accelerated Filer	¨	Accelerated Filer	¨
Non-accelerated filer	¨	Smaller reporting company	x
(Do not check if a smaller reporting company)

 

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

 

As of April 15, 2015, the registrant had 13,626,920 shares of common stock, par value $0.0001 per share, outstanding.

 

 

 

TABLE OF CONTENTS

 

TO QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTER ENDED SEPTEMBER 30, 2014

 

			Page
PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements		3
	Condensed Consolidated Balance Sheets as of September 30, 2014 (unaudited) and December 31, 2013			3
	Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2014 and 2013 (unaudited)			4
	Condensed Consolidated Statements of Changes in Stockholders’ (Deficit) Equity for the three and nine months ended September 30, 2014 (unaudited)			5
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2014 and 2013 (unaudited)			6
	Notes to Unaudited Condensed Consolidated Financial Statements			7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations			15
Item 3.	Quantitative and Qualitative Disclosures about Market Risk			18
Item 4.	Controls and Procedures			19
PART II	OTHER INFORMATION
Item 1.	Legal Proceedings			20
Item 1A.	Risk Factors			20
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds			20
Item 3.	Defaults upon Senior Securities			20
Item 4.	Mine Safety Disclosures			20
Item 5.	Other Information			20
Item 6.	Exhibits			21
Signatures				22

 

2

 

PART I - FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS

 

INTERNATIONAL METALS STREAMING CORP.

(FORMERLY GS VALET, INC.)

CONDENSED CONSOLIDATED BALANCE SHEETS

 

		As of
		September 30, 2014				December 31, 2013
		(Unaudited)				(Restated)
ASSETS
Cash		$	16,927			$	-
Cash held in trust			-				7,503,808
Total Current Assets			16,927				7,503,808
TOTAL ASSETS		$	16,927			$	7,503,808
LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY
CURRENT LIABILITIES
Accrued expenses		$	59,274			$	38,214
Notes payable			57,039				-
Total current liabilities			116,313				38,214
TOTAL LIABILITIES			116,313				38,214
COMMITMENTS AND CONTINGENCIES			-				-
STOCKHOLDERS' (DEFICIT) EQUITY
Preferred stock, $0.0001 par value, 10,000,000 shares authorized, none issued and outstanding			-				-
Common stock, $0.0001 par value, 50,000,000 shares authorized; 13,626,920 and 15,502,081 shares issued and outstanding at September 30, 2014 and December 31, 2013, respectively			1,362				1,550
Additional paid-in-capital			660,819				8,049,815
Accumulated deficit			(761,567	)			(585,771	)
Total stockholders' (deficit) equity			(99,386	)			7,465,594
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY		$	16,927			$	7,503,808

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

 

3

 

INTERNATIONAL METALS STREAMING CORP.

(FORMERLY GS VALET, INC.)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

		For the Three Months Ended September 30, 2014				For the Three Months Ended September 30, 2013				For the Nine Months Ended September 30, 2014				For the Nine Months Ended September 30, 2013
						(Restated)								(Restated)
Revenue		$	-			$	-			$	-			$	-
General and administrative expenses			21,002				410,258				173,558				410,258
Loss from operations			(21,002	)			(410,258	)			(173,558	)			(410,258	)
Other income (expense)
Interest			(1,150	)			-				(2,238	)			-
Loss on cancellation of common stock							(164	)							(164	)
Loss from continuing operations before income taxes			(22,152	)			(410,422	)			(175,796	)			(410,422	)
Income tax expense (benefit)			-				-				-				-
Net loss from continuing operations			(22,152	)			(410,422	)			(175,796	)			(410,422	)
Net loss from discontinued operations			-				(6,643	)			-				(18,708	)
Net loss		$	(22,152	)		$	(417,065	)		$	(175,796	)		$	(429,130	)
Weighted average loss per share - basic and dilutive
Continuing operations		$	-			$	(0.03	)		$	(0.01	)		$	(0.03	)
Discontinued operations		$	-			$	-			$	-			$	-
		$	-			$	(0.03	)		$	(0.01	)		$	(0.03	)
Weighted average shares outstanding - basic and dilutive			13,626,920				14,668,530				14,107,731				15,675,613

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

 

4

 

INTERNATIONAL METALS STREAMING CORP.

(FORMERLY GS VALET, INC.)

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' (DEFICIT) EQUITY

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2014

(Unaudited)

 

		Common Stock $0.0001 par value
										Additional				Accumulated
		Shares				Amount				Paid in Capital				(Deficit)				Total
Balance at December 31, 2013 (Restated)			15,502,081			$	1,550			$	8,049,815			$	(585,771	)		$	7,465,594
March 11, 2014 - Return of net proceeds from the sale of common stock			(1,875,161	)			(188	)			(7,388,996	)			-				(7,389,184	)
Net loss for the nine months ended September 30, 2014			-				-				-				(175,796	)			(175,796	)
Balance at September 30, 2014 (Unaudited)			13,626,920			$	1,362			$	660,819			$	(761,567	)		$	(99,386	)

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

 

5

  

INTERNATIONAL METALS STREAMING CORP.

(FORMERLY GS VALET, INC.)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2014 AND 2013

(Unaudited)

 

		For the Nine Months Ended				For the Nine Months Ended
		September 30, 2014				September 30, 2013
						(Restated)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss		$	(175,796	)		$	(429,130	)
Loss from discontinued operations			-				18,708
Loss from continuing operations			(175,796	)			(410,422	)
Adjustments to reconcile loss from continuing operations to net cash used in operating activities:
Loss on cancellation of common stock							164
Changes in operating assets and liabilities:
Accrued expenses			21,060				102,249
Net cash used in operating activities of continuing operations			(154,736	)			(308,009	)
Net cash used in operating activities of discontinued operations			-				(21,695	)
Net cash used in operating activities			(154,736	)			(329,704	)
CASH FLOWS FROM INVESTING ACTIVITIES
Change in cash held in trust			7,503,808				(7,688,296	)
Net cash provided by (used in) investing activities			7,503,808				(7,688,296	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Return of net proceeds from the sale of common stock			(7,389,184	)			-
Proceeds from notes payable			57,039				-
Proceeds from the sale of common stock			-				6,000,000
Proceeds on notes receivable			-				5,000,000
Repayments of notes receivable			-				(5,000,000	)
Proceeds from the sale of common stock to be issued			-				2,000,000
Net cash (used in) provided by financing activities of continuing operations			(7,332,145	)			8,000,000
Net cash provided by financing activities of discontinued operations			-				18,000
Net cash (used in) provided by financing activities			(7,332,145	)			8,018,000
INCREASE IN CASH			16,927				-
CASH, BEGINNING OF PERIOD			-				-
CASH, END OF PERIOD		$	16,927			$	-
Noncash financing activities:
Settlement of notes payable and accrued expenses		$	49,537			$	-
Supplemental Information:
Cash paid for interest - discontinued operations		$	-			$	1,848
Cash paid for taxes		$	-			$	-

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

 

6

 

INTERNATIONAL METALS STREAMING CORP.

(FORMERLY GS VALET, INC.)

Notes to Unaudited Condensed Consolidated Financial Statements

September 30, 2014

 

NOTE 1 – BASIS OF PRESENTATION

 

The accompanying unaudited condensed consolidated financial statements as of September 30, 2014 and for the nine months ended September 30, 2014 and 2013 have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission, including Form 10-Q and Regulation S-K. The information furnished herein reflects all adjustments (consisting of normal recurring accruals and adjustments), which are, in the opinion of management, necessary to fairly present the operating results for the respective periods. Certain information and footnote disclosures normally present in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to such rules and regulations. The Company believes that the disclosures provided are adequate to make the information presented not misleading.

 

The results of operations for the nine months ended September 30, 2014 are not necessarily indicative of the results to be expected for the year ending December 31, 2014.The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and explanatory notes for the year ended December 31, 2013 as disclosed in the Company’s Form 10-K/A for that year as filed with the Securities and Exchange Commission on January 20, 2015.

 

NOTE 2 – NATURE OF BUSINESS

 

Overview of Organization

 

International Metals Streaming Corp. (the “Company”) was incorporated in the state of Nevada on November 17, 2011, under the name “GS Valet, Inc.” On December 1, 2011, the Company entered into an agreement with Garden State Valet, LLC, a New Jersey limited liability company (“Garden State Valet”), and the unit-holders of Garden State Valet (the “Unit-holders”) to purchase all of the outstanding units of Garden State Valet. Garden State Valet was formed on June 15, 2011.

 

Until October 1, 2013, the Company, through Garden State Valet, provided valet parking management services for hotels, restaurants, country clubs, retail centers and private events in New Jersey. The operations of Garden State Valet ceased on October 1, 2013. The Company then planned to pursue a metals streaming business by acquiring and managing precious metals streams, royalties and other similar interests. As of December 31, 2013, however, the Company had not entered into any definitive agreement in connection with such business. In March 2014, the Company determined that the metals streaming business was no longer desirable, and have ceased pursuing such business. As of September 30, 2014, the Company currently has nominal operations and minimal assets. As such, the Company is considered to be a shell company under the Securities Exchange Act of 1934, as amended.

 

NOTE 2A – RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

 

September 30, 2013

 

Subsequent to the filing on November 19, 2013, of the Quarterly Report on Form 10-Q for the period ended September 30, 2013 (the “Quarterly Report”), the Company reviewed its accounting methodology relating to the proceeds of $2.0 million from the sale of shares of common stock (the “Shares”) received on July 11, 2013. The Company had, in the Quarterly Report, not recorded in counsel's Trust account the proceeds from the sale of the Shares due to the shares not being issued until December 9, 2013 at which time they were included in the consolidated financial statements. In addition, the Company did not properly reflect in the consolidated financial statements the effect of discontinued operations and some other minor corrections.

 

7

 

INTERNATIONAL METALS STREAMING CORP.

(FORMERLY GS VALET, INC.)

Notes to Unaudited Condensed Consolidated Financial Statements

September 30, 2014

 

The effects of the adjustments on the Company’s previously issued financial statements for the period ended September 30, 2013, are summarized as follows:

 

Selected Consolidated Balance Sheet information as of September 30, 2013

 

		Previously Reported				Impact of Restatement				Restated
Cash		$	8,790			$	(8,790	)		$	-
Cash held in trust		$	5,688,296			$	2,000,000			$	7,688,296
Current assets of discontinued operations		$	-			$	8,790			$	8,790
Common stock to be issued		$	-			$	(2,000,000	)		$	(2,000,000	)
Additional paid-in-capital		$	(6,058,488	)		$	(164	)		$	(6,058,652	)
Accumulated deficit		$	465,501			$	164			$	465,665

 

Selected Consolidated Statements of Operations information for the nine months ended September 30, 2013

 

		Previously Reported				Impact of Restatement				Restated
Revenue		$	34,659			$	(34,659	)		$	-
General and administrative expense		$	(461,777	)		$	51,519			$	(410,258	)
Loss from operations		$	(427,118	)		$	16,860			$	(410,258	)
Other (expense)
Interest		$	(1,848	)		$	1,848			$	0
Loss on cancellation of common stock			-			$	(164	)		$	(164	)
Net loss from continuing operations		$	(428,966	)		$	18,544			$	(410,422	)
Net loss from discontinued operations		$	-			$	(18,708	)		$	(18,708	)
Net loss		$	(428,966	)		$	(164	)		$	(429,130	)

 

8

 

Selected Consolidation Statements of Cash Flows information for the nine months ended September 30, 2013

 

		Previously Reported				Impact of Restatement				Restated
CASH FLOWS FROM OPERATIONS
Net loss		$	(428,966	)		$	(164	)		$	(429,130	)
Loss from discontinued operations		$	-			$	18,708			$	18,708
Loss from continuing operations		$	(428,966	)		$	18,544			$	(410,422	)
Adjustments to reconcile net loss to net cash used in operating activities
Loss on cancellation of common stock		$	-			$	164			$	164
Changes in operating assets and liabilities		$	100,402			$	1,847			$	102,249
Net cash used in operating activities of continuing operations		$	(328,564	)		$	20,555			$	(308,009	)
Net cash used in operating activities of discontinued operations		$	-			$	(21,695	)		$	(21,695	)
Net cash used in operating activities		$	(328,564	)		$	(1,140	)		$	(329,704	)
CASH FLOWS FROM INVESTING
Change in cash held in trust		$	-			$	(7,688,296	)		$	(7,688,296	)
Net cash used in investing activities		$	-			$	(7,688,296	)		$	(7,688,296	)
CASH FLOWS FROM FINANCING
Proceeds from the sale of common stock		$	311,705			$	5,688,295			$	6,000,000
Proceeds on notes receivable		$	18,000			$	4,982,000			$	5,000,000
Repayments of notes receivable		$	-			$	(5,000,000	)		$	(5,000,000	)
Proceeds from the sale of common stock to be issued		$	-			$	2,000,000			$	2,000,000
Net cash provided by financing activities of continuing operations		$	329,705			$	7,670,295			$	8,000,000
Net cash provided by financing activities of discontinued operations		$	-			$	18,000			$	18,000
Net cash provided by financing activities		$	329,705			$	7,688,295			$	8,018,000
Increase in cash		$	1,141			$	(1,141	)		$	-
Cash, beginning of period		$	7,649			$	(7,649	)		$	-
Cash, end of period		$	8,790			$	(8,790	)		$	-

 

In addition, the Company believes that the presentation of cash on the previously issued balance sheets did not fully disclose that the funds were in counsel's trust account. The description has been revised on the face of the consolidated balance sheets to indicate that the funds were held in attorney trust account.

 

9

 

INTERNATIONAL METALS STREAMING CORP.

(FORMERLY GS VALET, INC.)

Notes to Unaudited Condensed Consolidated Financial Statements

September 30, 2014

 

December 31, 2013

 

Subsequent to the filing on August 20, 2014, of the Annual Report on Form 10-K for the year ended December 31, 2013 (the “Annual Report”), the Company reviewed its accounting methodology relating to its sale and issuance of 1,533,166 shares of common stock (the “Shares”) to two investors in December 2013. The Company had, in the Annual Report, recorded a loss of approximately $6.5 million on the sale of the Shares based on a valuing event. In addition, disclosures in the Annual Report characterize the two investors as consultants, although no consulting agreement was entered into between the Company and the investors, and neither of the investors was compelled to perform any services for the Company. In accordance with ASC 855, “Subsequent Event”, management reassessed and determined it was inappropriate to record a $6.5 million loss related to the sale of those common shares to the two investors.

 

The effects of the adjustments on the Company’s previously issued financial statements for the year ended December 31, 2013, are summarized as follows:

 

Selected Consolidated Balance Sheet information as of December 31, 2013

 

		Previously Reported				Impact of Restatement				Restated
Additional paid-in-capital		$	14,590,149			$	(6,540,333	)		$	8,049,815
Accumulated deficit		$	(7,126,104	)		$	6,540,333			$	(585,771	)

 

Selected Consolidated Statements of Operations information for the year ended December 31, 2013

 

		Previously Reported				Impact of Restatement				Restated
Loss on sale and cancellation of common stock		$	(6,540,497	)		$	6,540,333			$	(164	)
Net loss from continuing operations		$	(7,070,861	)		$	6,540,333			$	(530,528	)
Net loss		$	(7,089,569	)		$	6,540,333			$	(549,236	)
Basic and diluted loss per common share -Continuing operations			(0.56	)			0.53				(0.03	)

 

10

 

INTERNATIONAL METALS STREAMING CORP.

(FORMERLY GS VALET, INC.)

Notes to Unaudited Condensed Consolidated Financial Statements

September 30, 2014

 

Selected Consolidation Statements of Cash Flows information for the year ended December 31, 2013

 

		Previously Reported				Impact of Restatement				Restated
Net loss		$	(7,089,569	)		$	6,540,333			$	(549,236	)
Adjustments to reconcile net loss to net cash
Loss on sale and cancellation of common stock		$	6,540,497			$	(6,540,333	)		$	164

 

In addition, the Company believes that the presentation of cash on the previously issued balance sheets did not fully disclose that the funds were in counsel's trust account. The description has been revised on the face of the consolidated balance sheets to indicate that the funds were held in attorney trust account.

 

The foregoing restatement is being made in accordance with ASC 250, “Accounting Changes and Error Corrections.” The disclosure provision of ASC 250 requires a company that corrects an error to disclose that its previously issued financial statements have been restated, to provide a description of the nature of the error, the effect of the correction on each financial statement line item and any per share amount affected for each prior period presented, and the cumulative effect on retained earnings in the statement of financial position as of the beginning of each period presented.

 

NOTE 3 – DISCONTINUED OPERATIONS

 

As a result of Garden State Valet operations ceasing on October 1, 2013, the operations relating to that business are reported as discontinued operations in the accompanying unaudited condensed consolidated financial statements for all periods presented in this report.

 

The primary components of the amounts reported as discontinued operations are as follows:

 

		September 30, 2014				September 30, 2013
		(Unaudited)				(Restated)
Revenue		$	-			$	34,659
Cost of revenue			-				(31,995	)
Gross profit			-				2,664
General and administrative expenses			-				(19,524	)
Loss from operations			-				(16,860	)
Other income (expense)
Interest expense			-				(1,848	)
Net loss		$	-			$	(18,708	)

 

11

 

INTERNATIONAL METALS STREAMING CORP.

(FORMERLY GS VALET, INC.)

Notes to Unaudited Condensed Consolidated Financial Statements

September 30, 2014

 

NOTE 4 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Use of Estimates

 

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. These estimates and assumptions also affect the reported amounts of revenues, costs and expenses during the reporting period. Management evaluates these estimates and assumptions on a regular basis. Actual results could differ from those estimates.

 

Cash

 

The Company presently maintains the remaining proceeds from Notes Payable in an attorney trust account until such time that the Company could establish a bank account.

 

Cash Held in Trust

 

The remaining net proceeds from the sale of common stock during the year ended December 31, 2013 were placed in an attorney trust account. However, on March 11, 2014, the proceeds, less the costs incurred in the pursuit of the metals streaming business, were returned to the investors.

 

Loss Per Share

 

The Company computes basic and diluted earnings per share amounts in accordance with ASC Topic 260, Earnings per Share. Basic earnings per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the reporting period. Diluted earnings per share reflects the potential dilution that could occur if stock options and other commitments to issue common stock were exercised or equity awards vest resulting in the issuance of common stock that could share in the earnings of the Company. During the nine months ended September 30, 2014 and 2013, there were no potentially dilutive debt or equity instruments outstanding.

 

Financial Instruments

 

ASC 820, Fair Value Measurements requires disclosure of the fair value of financial instruments. The Company’s balance sheet includes certain financial instruments. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization.

 

Reclassification

 

Certain prior period amounts have been reclassified to conform to the current period presentation.

 

12

 

INTERNATIONAL METALS STREAMING CORP.

(FORMERLY GS VALET, INC.)

Notes to Unaudited Condensed Consolidated Financial Statements

September 30, 2014

 

Recently Issued Standards

 

In June 2014, the FASB issued ASU 2014-10, “Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation”. The guidance eliminates the definition of a development stage entity thereby removing the incremental financial reporting requirements from U.S. GAAP for development or exploration stage entities, primarily presentation of inception to date financial information. The provisions of the amendments are effective for annual reporting periods beginning after December 15, 2014, and the interim periods therein. However, early adoption is permitted. Accordingly, the Company has adopted this standard as of December 31, 2013 and for the nine months ended September 30, 2014.

 

In August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements – Going Concern (Topic 205-40)”, which requires management to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern for each annual and interim reporting period. If substantial doubt exists, additional disclosure is required. This new standard will be effective for the Company for annual and interim periods beginning after December 15, 2016. Early adoption is permitted. The Company expects to adopt this new standard for the fiscal year ending December 31, 2014 and the Company will continue to assess the impact on its financial statements.

 

There are various other updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company's financial position, results of operations or cash flows.

 

NOTE 5 – GOING CONCERN

 

The Company’s unaudited condensed consolidated financial statements are prepared using US GAAP applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company had incurred net losses of $175,796 and $429,130 for the nine months ended September 30, 2014 and 2013, respectively. The Company has not established an ongoing source of revenues sufficient to cover its operating costs, and requires additional capital to commence its operating plan. The ability of the Company to continue as a going concern is dependent on the sufficiency of its capital or obtaining additional capital to fund operating losses. If the Company requires or is unable to obtain additional capital, it could be forced to cease operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

 

NOTE 6 - NOTES PAYABLE, THIRD PARTY

 

On April 4, 2014, the Company issued a note payable to a third party in the amount of $57,039. The note is due and payable on April 4, 2015 and carries an interest rate of 8% per annum. For the three and nine months ended September 30, 2014, there is $1,150 and 2,238, respectively, in accrued interest related to the notes payable included in accrued expenses.

 

NOTE 7 – COMMITMENTS AND CONTINGENCIES

 

The Company has no commitments or contingencies as of September 30, 2014 and December 31, 2013.

 

From time to time, the Company may become a party to litigation matters involving claims against the Company. Management believes that it is adequately insured for its operations and there are no current matters that would have a material effect on the Company’s financial position or results of operations.

 

13

 

INTERNATIONAL METALS STREAMING CORP.

(FORMERLY GS VALET, INC.)

Notes to Unaudited Condensed Consolidated Financial Statements

September 30, 2014

 

NOTE 8 – RELATED PARTY TRANSACTIONS

 

During the three and nine months ended September 30, 2014, the Company incurred consulting fees of $7,000 and $31,000, respectively, provided by the former and current officer and director of the Company.

 

NOTE 9 – EQUITY

 

Preferred Stock

 

The Company is authorized to issue 10,000,000 shares of preferred stock with a par value of $0.0001 per share (“Preferred Stock”). No Preferred Stock has been issued to date.

 

Common Stock

 

The Company is authorized to issue 50,000,000 shares of common stock with a par value of $0.0001 per share (“Common Stock”). On October 7, 2013, the Company’s board of directors approved a 2.5 for 1 forward stock-split of its issued and outstanding shares of Common Stock (the “Stock Split”). The Stock Split affected all shares of Common Stock outstanding immediately prior to the record date of October 3, 2013, and each stockholder of one share of Common Stock as of such record date received 2.5 shares of Common Stock. The Stock Split did not affect the par value of the Common Stock. No fractional shares were issued. The Stock Split increased the number of issued and outstanding shares of Common Stock from 5,400,035 to 13,500,092. These notes and the accompanying unaudited condensed consolidated financial statements give retroactive effect to the Stock Split. The Company had 13,626,920 and 15,502,081 shares of Common Stock issued and outstanding at September 30, 2014 and December 31, 2013, respectively.

 

On August 9, 2013, the Company sold 1,406,338 shares of Common Stock (the “Initial Shares”) at $4.266 per share to two accredited investors (the “Initial Investors”). The closing thereof occurred on August 9, 2013 with gross proceeds to the Company of $6 million in connection thereof, comprised of $1 million in cash and $5 million in promissory notes issued by Preciosa Streaming Company Inc., a Barbados company (“Preciosa”). Preciosa issued the promissory notes to the Initial Investors, who, in turn, assigned them to the Company at the Closing pursuant to a Note Assignment Agreement entered into by and between Company and each Initial Investor on August 9, 2013. Preciosa repaid these notes in full to the Company on September 20, 2013. Preciosa also reimbursed to the Company $28,263 in legal fees incurred by the Company. The cash proceeds from issuance of the Initial Shares were placed into a trust account maintained by the Company’s counsel until such time that the Company could establish a bank account. However, on March 11, 2014, the proceeds, less the costs incurred in the pursuit of the metals streaming business, were returned to the investors.

 

On August 9, 2013, the Company caused 4,093,746 shares of Common Stock held by a stockholder to be cancelled pursuant to a Cancellation Agreement entered into by and between the Company and such stockholder on August 9, 2013. The Company recognized a loss of $164 on the cancellation of this stock.

 

On December 9, 2013, the Company sold 468,823 shares of Common Stock (with the Initial Shares, collectively the “Shares”) at $4.266 per share to two accredited investors (with the Initial Investors, collectively the “Investors”). The closing thereof occurred on December 9, 2013, with gross proceeds to the Company of $2 million. The cash proceeds from issuance of these shares were placed into a trust account maintained by the Company’s counsel until such time that the Company could establish a bank account. However, on March 11, 2014, the proceeds, less the costs incurred in the pursuit of the metals streaming business, were returned to the investors.

 

On December 9, 2013, the Company sold 1,533,166 shares of Common Stock at $0.0001 per share for gross proceeds of $153.

 

On March 10, 2014, due to its determination that the metals streaming business was no longer desirable, the Company and the Investors rescinded their transactions pertaining to the Shares. In connection with such rescission: (a) each Investor agreed to return that portion of the Shares issued to such Investor, (b) the Company agreed to return the proceeds from the sale of the Shares to the Investors, net of all payments therefrom by the Company as of the date of the rescission, and (c) the Company and the Investors each agreed to release all claims that each of them may have against the other.

 

On March 11, 2014, $7,389,184 of the $8 million proceeds from the sale of 1,875,161 shares of Common Stock, less costs of $610,816, was returned to the Investors. In connection therewith, the certificates representing such shares have been surrendered to the Company for cancellation.

 

14

 

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

 

The following discussion and analysis summarizes the significant factors affecting our condensed consolidated results of operations, financial condition and liquidity position for the three and nine months ended September 30, 2014. These financial statements should be read in conjunction with the financial statements of the Company for the year ended December 31, 2013 and notes thereto contained in the information filed as part of the Company’s Annual Report on Form 10-K/A, which was filed with the Securities and Exchange Commission (“SEC”) on January 20, 2015. The following discussion and analysis contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements.

 

Forward-Looking Statements

 

Forward-looking statements in this Quarterly Report on Form 10-Q, including without limitation, statements related to our plans, strategies, objectives, expectations, intentions and adequacy of resources, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties including without limitation the following: (i) our plans, strategies, objectives, expectations and intentions are subject to change at any time at our discretion; (ii) our plans and results of operations will be affected by our ability to manage growth and competition; and (iii) other risks and uncertainties indicated from time to time in our filings with the SEC.

 

In some cases, you can identify forward-looking statements by terminology such as ‘‘may,’’ ‘‘will,’’ ‘‘should,’’ ‘‘could,’’ ‘‘expects,’’ ‘‘plans,’’ ‘‘intends,’’ ‘‘anticipates,’’ ‘‘believes,’’ ‘‘estimates,’’ ‘‘predicts,’’ ‘‘potential,’’ or ‘‘continue’’ or the negative of such terms or other comparable terminology. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of such statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. We are under no duty to update any of the forward-looking statements after the date of this Quarterly Report.

 

Overview

 

We were incorporated in the state of Nevada on November 17, 2011, under the name “GS Valet, Inc.” In December 2011, we acquired Garden State Valet, LLC, a New Jersey limited liability company (“Garden State Valet”) with the intent of going into the valet parking business. During the year ended December 31, 2013, we raised $8 million in gross proceeds from sales of our common stock to four accredited investors, and intended to pursue a metals streaming business by acquiring and managing precious metals streams, royalties and other similar interests. In connection with such business, we changed our name and our fiscal year end, and the operations of Garden State Valet ceased in October 2013.

 

As of December 31, 2013, however, the Company had not entered into any definitive agreement in connection with such business. In March 2014, the Company determined that the metals streaming business was no longer desirable, and have ceased pursuing such business. As of September 30, 2014, the Company currently has nominal operations and minimal assets.

 

We are not currently engaged in any substantive business activity except the search for potential assets, property or businesses to acquire, and we have no current plans to engage in any other activity in the foreseeable future unless and until we complete any such acquisition. In our present form, we are deemed to be a shell company seeking to acquire or merge with a business or company.

 

15

 

Results of Operations 

 

		For the Nine Months Ended September 30, 2014				For the Nine Months Ended September 30, 2013
		(Unaudited)				(Restated)
Revenue		$	-			$	-
Cost of revenue			-				-
Gross profit			-				-
General and administrative expenses			(173,558	)			(410,258	)
Loss from operations			(173,558	)			(410,258	)
Other income (expense)
Interest expense			(2,238	)			-
Loss on cancellation of common stock			-				(164	)
Net loss from continuing operations			(175,796	)			(410,422	)
Net loss from discontinued operations			-				(18,708	)
Net loss		$	(175,796	)		$	(429,130	)

 

Revenue

 

For the three and nine months ended September 30, 2014 and 2013, we did not have any revenue from continuing operations.

 

General and Administrative Expenses

 

For the three months ended September 30, 2014 and 2013, our general and administrative expenses totaled $21,002 and $410,258, respectively, from continuing operations. This expense is primarily related to professional fees and consulting expenses incurred during the three months ended September 30, 2014 and 2013

 

For the nine months ended September 30, 2014 and 2013, our general and administrative expenses totaled $173,558 and $410,258, respectively, from continuing operations. This expense is primarily related to professional fees and consulting expenses incurred during the nine months ended September 30, 2014 and 2013.

 

Net Loss from Discontinued Operations

 

For the three and nine months ended September 30, 2013, we recorded a net loss from discontinued operations of $6,643 and $18,708. This loss is primarily related to the operations of Garden State Valet prior to that business being discontinued in October 2013.

 

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Net Loss

 

For the three months ended September 30, 2014, our net loss was$22,152, or $(0.00) per common share (basic and diluted), as compared to a net loss of $417,065, or $(0.03) per common share (basic and diluted), for the same period in 2013, a decrease in total net loss of $394,913. Such decrease in net losses was directly attributable to decreased professional fees and consulting expenses.

 

For the nine months ended September 30, 2014, our net loss was$175,796, or $(0.01) per common share (basic and diluted), as compared to a net loss of $429,130, or $(0.03) per common share (basic and diluted), for the same period in 2013, a decrease in total net loss of $253,334. Such decrease in net losses was directly attributable to decreased professional fees and consulting expenses.

 

Liquidity and Capital Resources

 

In summary, our cash flows are as follows:

 

		For the nine months ended September 30,
		2014				2013
		(Unaudited)				(Restated)
Net cash used in operating activities, continuing operations		$	(154,736	)		$	(308,009	)
Net cash used in operating activities, discontinued operations		$	-			$	(21,695	)
Net cash provided by (used in) investing activities, continuing operations		$	7,503,808				(7,688,296	)
Net cash (used in) provided by financing activities, continuing operations		$	(7,332,145	)		$	8,000,000
Net cash provided by financing activities, discontinued operations		$	-			$	18,000

 

As of September 30, 2014, the Company had a stockholders’ deficit of $99,386. For the nine months ended September 30, 2014 and 2013, the Company had a net loss of $175,796 and $429,130, respectively.

 

Net cash used in operating activities for the nine months ended September 30, 2014 was $154,736 as a result of increased costs attributable to professional fees and consulting expenses. Net cash used in operating activities for the same period of 2013 was $329,704 and was mainly attributable to increases in accrued expenses.

 

Net cash provided by investing activities for the nine months ended September 30, 2014 was $7,503,808 consisted primarily of funds disbursed from the trust account maintained by the Company’s counsel (the “Trust”) related to operating expenses including funds being returned to investors from the previous sale of common stock. Net cash used in investing activities for the nine months ended September 30, 2013 was $7,688,296 and consisted of the proceeds from the sale of common stock placed into the Trust account maintained by the Company's counsel less disbursements from that Trust account for operating expenses.

 

Net cash used in financing activities for the nine months ended September 30, 2014 was $7,332,145, related to funds being returned to investors from the Trust offset by $57,039 proceeds from notes payable. Net cash provided by financing activities for the same period of 2013 was $8,018,000 consisted primarily of proceeds from the sale of common stock and notes payable relating to Garden State Valet prior to that business being discontinued in October 2013.

 

As of September 30, 2014, we had $16,927 in cash, total current assets of $16,927 and total current liabilities of $116,313.

 

Going Concern

 

The Company’s unaudited condensed consolidated financial statements are prepared using generally accepted accounting principles in the United States (“U.S. GAAP”) applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company had incurred net losses of $175,796 and $429,130 for the nine months ended September 30, 2014 and 2013, respectively. The Company has not established an ongoing source of revenues sufficient to cover its operating costs, and requires additional capital to commence its operating plan. The ability of the Company to continue as a going concern is dependent on the sufficiency of its capital or obtaining additional capital to fund operating losses. If the Company requires or is unable to obtain additional capital, it could be forced to cease operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

 

17

 

Off-balance Sheet Arrangements

 

We had no off-balance sheet arrangements as at September 30, 2014.

 

Contractual Obligations

 

We had no contractual obligations as at September 30, 2014.

 

Critical Accounting Policies

 

Financial Reporting Release No. 60, published by the SEC, recommends that all companies include a discussion of critical accounting policies used in the preparation of their financial statements. While all these significant accounting policies impact our financial condition and results of operations, we view certain of these policies as critical. Policies determined to be critical are those policies that have the most significant impact on our financial statements and require management to use a greater degree of judgment and estimates. Actual results may differ from those estimates.

 

We believe that given the current facts and circumstances, it is unlikely that applying any other reasonable judgments or estimate methodologies would cause a material effect on our unaudited condensed results of operations, financial position or liquidity for the periods presented in this report. Please refer to Note 4 – Summary of Significant Accounting Policies in the notes to the unaudited condensed financial statements.

 

Recently Issued Standards

 

In June 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-10, “Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation”. The guidance eliminates the definition of a development stage entity thereby removing the incremental financial reporting requirements from U.S. GAAP for development or exploration stage entities, primarily presentation of inception to date financial information. The provisions of the amendments are effective for annual reporting periods beginning after December 15, 2014, and the interim periods therein. However, early adoption is permitted. Accordingly, the Company has adopted this standard as of December 31, 2013 and for the nine months ended September 30, 2014.

 

In August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements – Going Concern (Topic 205-40)”, which requires management to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern for each annual and interim reporting period. If substantial doubt exists, additional disclosure is required. This new standard will be effective for the Company for annual and interim periods beginning after December 15, 2016. Early adoption is permitted. The Company expects to adopt this new standard for the fiscal year ending December 31, 2014 and the Company will continue to assess the impact on its financial statements.

 

There are various other updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company's financial position, results of operations or cash flows.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

 

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, we are not required to provide information required by this Item.

 

18

 

ITEM 4. CONTROLS AND PROCEDURES.

 

Evaluation of Disclosure Controls and Procedures

 

Our sole officer evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Our management does not expect that our disclosure controls and procedures will prevent all error and all fraud. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

 

Based on the evaluation as of September30, 2014, for the reasons set forth below, our sole officer concluded that our disclosure controls and procedures were not effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

 

A material weakness is a deficiency, or 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. In its assessment of the effectiveness of internal control over financial reporting as of September 30, 2014, our sole officer concluded our internal controls over financial reporting were not effective as we lack resources to support full compliance.

 

Changes in Internal Control over Financial Reporting

 

There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) or 15d-15(f) under the Exchange Act) during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

19

 

PART II – OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS.

 

From time to time, we may become involved in various lawsuits and legal proceedings, which arise, in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results.

 

ITEM 1A. RISK FACTORS.

 

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, we are not required to provide information required by this Item.

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

 

None during the nine months ended September 30, 2014 that was not previously reported in a current report on Form 8-K.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

 

None.

 

ITEM 4. MINE SAFETY DISCLOSURES.

 

Not applicable.

 

ITEM 5. OTHER INFORMATION.

 

None. 

 

20

 

ITEM 6. EXHIBITS.

 

EXHIBIT INDEX

 

Exhibit Number		Description
3.1		Articles of Incorporation (1)
3.2		Certificate of Amendment to Articles of Incorporation (2)
3.3		Bylaws (1)
31.1		Section 302 Certification by the Corporation’s Chief Executive Officer and Chief Financial Officer*
32.1		Section 906 Certification by the Corporation’s Chief Executive Officer and Chief Financial Officer*
101.INS		XBRL Instance Document* **
101.SCH		XBRL Taxonomy Extension Schema Document* **
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document* **
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document* **
101.LAB		XBRL Taxonomy Extension Label Linkbase Document* **
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document* **

____________

*

Filed herewith.

**

Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

 

(1)	Incorporated by reference from the registrant’s Registration Statement on Form S-1 filed on July 11, 2012.
(2)	Incorporated by reference from the registrant’s Current Report on Form 8-K filed on September 26, 2013.

 

21

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. 

 

	INTERNATIONAL METALS STREAMING CORP.
	(Registrant)
Date: April 15, 2015	By:	/s/ Michael Hlavsa
		Michael Hlavsa Chief Executive Officer, Chief Financial Officer and Director

 

 

22

---

EXHIBIT 31.1

 

CERTIFICATION

 

I, Michael Hlavsa, certify that:

 

1.	I have reviewed this Quarterly Report on Form 10-Q of International Metals Streaming Corp.;

 

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

a.

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

b.

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

c.

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

d.

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

a.

All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

b.

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

 

Date: April 15, 2015	By:	/s/ Michael Hlavsa
		Michael Hlavsa
		Chief Executive Officer, Chief Financial Officer and Director

 

EXHIBIT 32.1

 

CERTIFICATION

 

In connection with the Quarterly Report of International Metals Streaming Corp. (the “Company”) on Form 10-Q for the quarter ended September 30, 2014, as filed with the Securities and Exchange Commission (the “Report”), I, Michael Hlavsa, Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer of the Company, hereby certify as of the date hereof, solely for purposes of Title 18, Chapter 63, Section 1350 of the United States Code, that to the best of my knowledge:

 

	(1)	The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, and
	(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods indicated.

 

 

Date: April 15, 2015	By:	/s/ Michael Hlavsa
		Michael Hlavsa
		Chief Executive Officer, Chief Financial Officer and Director