Item 7. Management’s Discussion and Analysis of Financial
Condition and Results of Operation.
Overview of our Business
Parasol Investments Corporation was incorporated
in the State of Delaware on May 13, 2020. Since inception, the Company has been engaged in organizational efforts and obtaining
initial financing. The Company was formed as a vehicle to pursue a business combination. The Company filed a registration statement
on Form 10 with the SEC on July 13, 2020, and since its effectiveness, the Company has focused its efforts to identify a possible
business combination.
The Company is currently considered to
be a “blank check” company. The SEC defines those companies as “any development stage company that is issuing
a penny stock, within the meaning of Section 3(a)(51) of the Exchange Act, and that has no specific business plan or purpose, or
has indicated that its business plan is to merge with an unidentified company or companies.” Many states have enacted statutes,
rules and regulations limiting the sale of securities of “blank check” companies in their respective jurisdictions.
The Company is also a “shell company,” defined in Rule 12b-2 under the Exchange Act as a company with no or nominal
assets (other than cash) and no or nominal operations. Management does not intend to undertake any efforts to cause a market to
develop in our securities, either debt or equity, until we have successfully concluded a business combination. The Company intends
to comply with the periodic reporting requirements of the Exchange Act for so long as we are subject to those requirements.
In addition, the Company is an “emerging
growth company,” as defined in the JOBS Act, and may take advantage of certain exemptions from various reporting requirements
that are applicable to other public companies that are not “emerging growth companies” including, but not limited to,
not being required to comply with the auditor attestation requirements of section 404(b) of the Sarbanes-Oxley Act, and exemptions
from the requirements of Sections 14A(a) and (b) of the Exchange Act to hold a nonbinding advisory vote of shareholders on executive
compensation and any golden parachute payments not previously approved.
The Company has also elected to use the
extended transition period for complying with new or revised accounting standards under Section 102(b)(1) of the JOBS Act. This
election allows us to delay the adoption of new or revised accounting standards that have different effective dates for public
and private companies until those standards apply to private companies. As a result of this election, our financial statements
may not be comparable to companies that comply with public company effective dates.
We will remain an “emerging growth
company” until the earliest of (1) the last day of the fiscal year during which our revenues equal $1.07 billion or more,
(2) the date on which we issue more than $1 billion in non-convertible debt in a three year period, (3) the last day of the fiscal
year following the fifth anniversary of the date of the first sale of our common equity securities pursuant to an effective registration
statement filed pursuant to the Securities Act, or (4) when the market value of our common stock that is held by non-affiliates
exceeds $700 million as of the last business day of our most recently completed second fiscal quarter. To the extent that we continue
to qualify as a “smaller reporting company,” as such term is defined in Rule 12b-2 under the Exchange Act, after we
cease to qualify as an emerging growth company, certain of the exemptions available to us as an emerging growth company may continue
to be available to us as a smaller reporting company, including: (1) not being required to comply with the auditor attestation
requirements of Section 404(b) of the Sarbanes Oxley Act; (2) scaled executive compensation disclosures; and (3) the requirement
to provide only two years of audited financial statements, instead of three years.
8
The Company has not conducted any active
operations since inception, except for its efforts to locate suitable acquisition candidates. No revenue has been generated by
the Company since inception. It is unlikely the Company will have any revenues unless it is able to effect an acquisition or merger
with an operating company, of which there can be no assurance. The Company’s plan of operation for the remainder of the fiscal
year shall be to continue its efforts to locate suitable acquisition candidates. Our principal business objective for the next
12 months and beyond such time will be to achieve long-term growth potential through a combination with a business rather than
immediate, short-term earnings. The Company will not restrict our potential candidate target companies to any specific business,
industry or geographical location and, thus, may acquire any type of business.
The Company does not currently engage in
any business activities that provide cash flow. The costs of investigating and analyzing business combinations for the next 12
months and beyond such time will be paid with funds to be loaned to or invested in us by our stockholders, management or other
investors.
The Company currently does not engage in
any business activities that provide cash flow. During the next twelve months, we anticipate incurring costs related to:
(i) filing Exchange Act reports, and
(ii) investigating, analyzing and consummating an acquisition.
We believe we will be able to meet these
costs through use of funds to be loaned by or invested in us by our stockholders, management or other investors. There are no assurances
that such funds will be advanced or that the Company will be able to secure any additional funding as needed. On May 14, 2020,
in connection with advances made in connection with costs incurred by the Company, the Company issued a promissory note to Mark
Tompkins, a stockholder and director of the Company, pursuant to which the Company agreed to repay Mr. Tompkins the sum of any
and all amounts that Mr. Tompkins may advance to the Company on or before the date that the Company consummates a business combination
with a private company or reverse takeover transaction or other transaction after which the Company would cease to be a shell company
(as defined in Rule 12b-2 under the Exchange Act). The Company has used the proceeds from the note to cover its expenses. Although
Mr. Tompkins has no obligation to advance funds to the Company under the terms of the note, it is anticipated that he may advance
funds to the Company as fees and expenses are incurred in the future. As a result, the Company issued the note in anticipation
of such advances. Interest shall not accrue on the outstanding principal amount of the note except if an Event of Default (as defined
in the note) has occurred. In the event of an Event of Default, the entire note shall automatically become due and payable (the
“Default Date”), and starting from five (5) days after the Default Date, the interest rate on the note shall accrue
at the rate of eighteen percent (18%) per annum. As of December 31, 2020, the total amount due under the note was $20,000. We currently
have no other agreements or specific arrangements in place with our stockholders, management or other investors.
Our ability to continue as a going concern
is dependent upon our ability to generate future profitable operations and/or to obtain the necessary financing to meet our obligations
and repay our liabilities arising from normal business operations when they come due. Our ability to continue as a going concern
is also dependent on our ability to find a suitable target company and enter into a possible reverse merger with such company.
Management’s plan includes obtaining additional funds by equity financing through a reverse merger transaction and/or related
party advances, however there is no assurance of additional funding being available.
9
The Company, as of December 31, 2020, had
$8,441 in cash and has not earned any revenues from operations to date. In the next 12 months, we expect to incur expenses equal
to approximately $40,000 related to legal, accounting, audit, and other professional service fees incurred in relation to the Company’s
Exchange Act filing requirements. The costs related to the acquisition of a business combination target company vary widely and
are dependent on a variety of factors including, but not limited to, the amount of time it takes to complete a business combination,
the location of the target company, the size and complexity of the business of the target company, whether stockholders of the
Company prior to the transaction will retain equity in the Company, the scope of the due diligence investigation required, the
involvement of the Company’s auditors in the transaction, possible changes in the Company’s capital structure in connection
with the transaction, and whether funds may be raised contemporaneously with the transaction. Therefore, we believe such costs
are unascertainable until the Company identifies a business combination target. These conditions raise substantial doubt about
our ability to continue as a going concern. The Company is currently devoting its efforts to locating merger candidates. The Company’s
ability to continue as a going concern is dependent upon our ability to develop additional sources of capital, locate and complete
a merger with another company, and ultimately, achieve profitable operations.
The Company may consider acquiring a business
which has recently commenced operations, is a developing company in need of additional funds for expansion into new products or
markets, is seeking to develop a new product or service, or is an established business which may be experiencing financial or operating
difficulties and is in need of additional capital. Our management believes that the public company status that results from a combination
with the Company will provide such company greater access to the capital markets, increase its visibility in the investment community,
and offer the opportunity to utilize its stock to make acquisitions. There is no assurance that we will in fact have access to
additional capital or financing as a public company. In the alternative, a business combination may involve the acquisition of,
or merger with, a company which does not need substantial additional capital, but which desires to establish a public trading market
for its shares, while avoiding, among other things, the time delays, significant expense, and loss of voting control which may
occur in a public offering.
Any target business we select for a potential
business combination may be a financially unstable company or an entity in its early stages of development or growth, including
entities without established records of sales or earnings. In that event, we will be subject to numerous risks inherent in the
business and operations of financially unstable and early stage or potential emerging growth companies. In addition, we may effect
a business combination with an entity in an industry characterized by a high level of risk, and, although our management will endeavor
to evaluate the risks inherent in a particular target business, there can be no assurance that we will properly ascertain or assess
all significant risks.
Our management anticipates that it will
likely be able to effect only one business combination, due primarily to our limited financing and the dilution of interest for
present and prospective stockholders, which is likely to occur as a result of our management’s plan to offer a controlling
interest to a target business in order to achieve a tax-free reorganization. This lack of diversification should be considered
a substantial risk in investing in us, because it will not permit us to offset potential losses from one venture against gains
from another.
The Company anticipates that the selection
of a business combination will be complex and extremely risky. While the Company is in a competitive market with a small number
of business opportunities, through information obtained from industry professionals including attorneys, investment bankers, and
other consultants with experience in the reverse merger industry, our management believes that there are opportunities for a business
combination with firms seeking the perceived benefits of becoming a publicly traded corporation. Such perceived benefits of becoming
a publicly traded corporation include, among other things, facilitating or improving the terms on which additional equity financing
may be obtained, providing liquidity for the principals of and investors in a business, creating a means for providing incentive
stock options or similar benefits to key employees, and offering greater flexibility in structuring acquisitions, joint ventures
and the like through the issuance of stock. Potentially available business combinations may occur in many different industries
and at various stages of development, all of which will make the task of comparative investigation and analysis of such business
opportunities extremely difficult and complex.
10
We do not currently intend to retain any
entity to act as a “finder” to identify and analyze the merits of potential target businesses. However, we contemplate
that Montrose Capital may introduce business combination opportunities to us. There are currently no agreements or preliminary
agreements between us and Montrose Capital.
We have not established a specific timeline
nor have we created a specific plan to identify an acquisition target and consummate a business combination. We expect that our
management and the Company, through its various contacts and affiliations with other entities, including Montrose Capital, will
locate a business combination target. We expect that funds in the amount of approximately $40,000 will be required in order for
the Company to satisfy its Exchange Act reporting requirements during the next 12 months, in addition to any other funds that will
be required in order to complete a business combination. Such funds can only be estimated upon identifying a business combination
target. Our management and stockholders have indicated an intent to advance funds on behalf of the Company as needed in order to
accomplish its business plan and comply with its Exchange Act reporting requirements, however, there are no agreements in effect
between the Company and our management or stockholders specifically requiring they provide any funds to the Company. Therefore,
there are no assurances that the Company will be able to obtain the required financing as needed in order to consummate a business
combination transaction.
COVID-19
On March 11, 2020, the World Health Organization
officially declared the outbreak of the novel coronavirus COVID-19 a “pandemic.” A significant outbreak of COVID-19
and other infectious diseases has resulted in a widespread health crisis that has significantly adversely affected businesses of
all types, economies and financial markets worldwide. The business of any potential target business with which we consummate a
business combination could be materially and adversely affected. Furthermore, we may be unable to complete a business combination
if continued concerns relating to COVID-19 restrict travel, limit the ability to have meetings with potential investors or the
target company’s personnel, vendors and services providers are unavailable to negotiate and consummate a transaction in a
timely manner. The extent to which COVID-19 impacts our search for a business combination will depend on future developments, which
are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19 and
the actions to contain COVID-19 or treat its impact, among others. If the disruptions posed by COVID-19 or other matters of global
concern continue for an extended period of time, our ability to consummate a business combination, or the operations of a target
business with which we ultimately consummate a business combination, may be materially adversely affected.
Liquidity and Capital Resources
As of December 31, 2020, the Company had
total assets equal to $8,441 comprised exclusively of cash. The Company’s current liabilities as of December 31, 2020, totaled
$29,000 comprised of accounts payable and accrued expenses and amounts due under a note payable to a shareholder. The Company can
provide no assurance that it can continue to satisfy its cash requirements for at least the next twelve months.
The following is a summary of the Company’s
cash flows provided by (used in) operating and financing activities for the period May 13, 2020 (inception) to December 31, 2020:
Net Cash (Used In) Operating Activities $ (11,584 )
Net Cash Provided by Financing Activities $ 20,025
Net Change in Cash $ 8,441
The Company has only cash assets and has
generated no revenues since inception. The Company is also dependent upon the receipt of capital investment or other financing
to fund its ongoing operations and to execute its business plan of seeking a combination with a private operating company. In addition,
the Company is dependent upon certain related parties to provide continued funding and capital resources. If continued funding
and capital resources are unavailable at reasonable terms, the Company may not be able to implement its plan of operations.
11
Issuance of Promissory Note to a Stockholder and Director
On May 14, 2020, in connection with advances
made in connection with costs incurred by the Company, the Company issued a promissory note to Mark Tompkins, a stockholder and
director of the Company, pursuant to which the Company agreed to repay Mr. Tompkins the sum of any and all amounts that Mr. Tompkins
may advance to the Company on or before the date that the Company consummates a business combination with a private company or
reverse takeover transaction or other transaction after which the Company would cease to be a shell company (as defined in Rule
12b-2 under the Exchange Act). The Company has used the proceeds from the note to cover its expenses. Although Mr. Tompkins has
no obligation to advance funds to the Company under the terms of the note, it is anticipated that he may advance funds to the Company
as fees and expenses are incurred in the future. As a result, the Company issued the note in anticipation of such advances. Interest
shall not accrue on the outstanding principal amount of the note except if an Event of Default (as defined in the note) has occurred.
In the event of an Event of Default, the entire note shall automatically become due and payable (the “Default Date”),
and starting from five (5) days after the Default Date, the interest rate on the note shall accrue at the rate of eighteen percent
(18%) per annum. As of December 31, 2020, the total amount due under the note was $20,000.
Results of Operations
The Company has not conducted any active
operations since inception, except for its efforts to locate suitable acquisition candidates. No revenue has been generated by
the Company from May 13, 2020 (Inception) through December 31, 2020. It is unlikely the Company will have any revenues unless it
is able to effect an acquisition or merger with an operating company, of which there can be no assurance. It is management’s
assertion that these circumstances may hinder the Company’s ability to continue as a going concern. The Company’s plan
of operations for the next twelve months shall be to continue its efforts to locate suitable acquisition candidates.
For the period May 13, 2020 (inception)
to December 31, 2020, the Company had a net loss of $21,059 comprised of accounting, audit and other professional service fees
incurred in relation to the preparation and filing of the Company’s SEC filings and general and administrative expenses.
Off-Balance Sheet Arrangements
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 is material to investors.
Contractual Obligations
As a “smaller reporting company”
as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.
Emerging Growth Company
As an “emerging growth company”
under the JOBS Act, the Company has elected to use the extended transition period for complying with new or revised accounting
standards under Section 102(b)(1) of the JOBS Act. This election allows us to delay the adoption of new or revised accounting standards
that have different effective dates for public and private companies until those standards apply to private companies. As a result
of this election, our financial statements may not be comparable to companies that comply with public company effective dates.
Fiscal Year
Our fiscal year ends on December 31.
12
Item 7A. Quantitative and Qualitative
Disclosures about Market Risk.
As a “smaller reporting company”
defined by Item 10 of Regulation S-K, the Company is not required to provide the information required by this Item.
Item 8. Financial Statements and Supplementary Data.
Please see the financial statements beginning
on page F-1 located in this Annual Report on Form 10-K and incorporated herein by reference.
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure.
There are not and have not been any disagreements
between the Company and its accountants on any matter of accounting principles, practices or financial statement disclosure.
Item 9A. Controls and Procedures.
Disclosure Controls and Procedures
Disclosure controls are procedures that
are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act,
such as this Form 10-K, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules
and forms. Disclosure controls are also designed with the objective of ensuring that such information is accumulated and communicated
to our management, including the Principal Executive Officer and Principal Financial Officer, as appropriate to allow timely decisions
regarding required disclosure. As the Company is a shell company with no or nominal business operations, Mr. Jacobs would immediately
become aware of matters that would require disclosure under the Exchange Act.
In connection with the preparation of this
Form 10-K, management, with the participation of our Principal Executive Officer and Principal Financial Officer, has evaluated
the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)
and 15d-15(e)). Based on that evaluation, our Principal Executive and Financial Officer concluded that our disclosure controls
and procedures were effective, as of the end of the period covered by this Form 10-K.
Management’s Annual Report on Internal Control over
Financial Reporting
Our management is responsible for establishing
and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) of
the Exchange Act. Our internal control system was designed 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.
Because of inherent limitations, a system of internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
due to change in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Our management conducted an evaluation
of the effectiveness of our internal control over financial reporting as of December 31, 2020, using the criteria set forth by
the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework version
2013. Based on its evaluation, our management concluded that our internal control over financial reporting was effective as of
December 31, 2020.
This Annual Report on Form 10-K does not
include an attestation report of our independent registered public accounting firm, regarding internal controls over financial
reporting. Our internal control over financial reporting was not subject to such attestation as we are a “smaller reporting
company” as defined by Item 10 of Regulation S-K.
Changes in Internal Controls over Financial Reporting
There have been no changes in our internal
control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rule 13a-15 or 15d-15
under the Exchange Act that occurred during the period covered by this 10-K that has materially affected, or is reasonably likely
to materially affect, our internal control over financial reporting.
Limitations of the Effectiveness of Control
A control system, no matter how well conceived
and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of
the inherent limitations of any control system, no evaluation of controls can provide absolute assurance that all control issues,
if any, within a company have been detected.
Item 9B. Other Information.
None.
13
PART III
Item 10. Directors, Executive Officers and Corporate Governance.
Our officers and directors and additional information concerning
them are as follows:
Name Age Position(s)
Mark Tompkins 57 Director
Ian Jacobs has served as
the Company’s President, Secretary, Chief Executive Officer, Chief Financial Officer and Director since inception. Mr. Jacobs
has also served as President, Secretary, Chief Executive Officer, Chief Financial Officer and a Director of Parc Investments, Inc.,
since August 21, 2020, and of Laffin Acquisition Corp. and of Patricia Acquisition Corp since November 9, 2020. Mr. Jacobs previously
served as the President, Secretary, Chief Executive Officer, Chief Financial Officer and Director of Max-1 Acquisition Corporation,
now known as Exicure, Inc., from February 2017 until September 2017, of Lola One Acquisition Corporation, now known as Amesite
Inc., from April 2017 until April 2018, of Peninsula Acquisition Corporation, now known as Transphorm, Inc., from June 2017 to
February 2020, of Olivia Ventures, Inc., now known as Compass Therapeutics, Inc., from March 2018 to June 2020, and of Malo Holdings
Corporation, now known as Augmedix, Inc., from December 2018 to October 2020. Mr. Jacobs has also been an associate of Montrose
Capital Partners Limited, or Montrose Capital, since 2008. Montrose Capital is a privately held company, which focuses on identifying
public markets venture capital investment opportunities in high growth early stage companies. Montrose Capital is a sector agnostic
privately held firm which has identified and invested, through its principal owners, in a wide spectrum of global industries, including
in biotechnology, specialty pharmaceuticals, medical devices, robotics, and technology. Mr. Jacobs received a B.S. in Finance from
the University of South Florida. Mr. Jacobs’ past experience identifying investment opportunities and investing in early
stage companies will be beneficial to the Company as it seeks to identify a business combination target which led to the conclusion
that he should serve as a director of the Company.
Mark Tompkins has served
as a director of the Company since inception. Mr. Tompkins has also served as a Director of Parc Investments, Inc., since August
21, 2020, and of Laffin Acquisition Corp. and of Patricia Acquisition Corp since November 9, 2020. Mr. Tompkins previously served
as a Director of Max-1 Acquisition Corporation, now known as Exicure, Inc., from February 2017 until September 2017, of Lola One
Acquisition Corporation, now known as Amesite Inc., from April 2017 until April 2018, of Peninsula Acquisition Corporation, now
known as Transphorm, Inc., from June 2017 to February 2020, of Olivia Ventures, Inc., now known as Compass Therapeutics, Inc.,
from March 2018 to June 2020, and of Malo Holdings Corporation, now known as Augmedix, Inc., from December 2018 to October 2020.
Mr. Tompkins is a founder of Montrose Capital and has served as its President since its inception in 2001. Montrose Capital is
a privately held company, which focuses on identifying public markets venture capital investment opportunities in high growth early
stage companies. Montrose Capital is a sector agnostic privately held firm which has identified and invested, through its principal
owners, in a wide spectrum of global industries, including in biotechnology, specialty pharmaceuticals, medical devices, robotics,
and technology. Mr. Tompkins’ past experience identifying investment opportunities and investing in early stage companies
will be beneficial to the Company as it seeks to identify a business combination target which led to the conclusion that he should
serve as a director of the Company.
14
Significant Employees
None.
Family Relationships
None.
Involvement in Certain Legal Proceedings.
There have been no events under any bankruptcy
act, no criminal proceedings and no judgments, injunctions, orders or decrees material to the evaluation of the ability and integrity
of any director, executive officer, promoter or control person of the Company during the past ten years.
Committees
The Company does not have any standing
committees.
Conflicts of Interest
There are no binding guidelines or procedures
for resolving potential conflicts of interest. Failure by management to resolve conflicts of interest in favor of the Company could
result in liability of management to the Company. However, any attempt by stockholders to enforce a liability of management to
the Company would most likely be prohibitively expensive and time consuming.
Code of Ethics
The Company has not at this time adopted
a Code of Ethics pursuant to rules described in Regulation S-K. The Company has two persons who are the only stockholders and who
serve as the directors and officers. The Company has no operations or business and does not receive any revenues or investment
capital. The adoption of a Code of Ethics at this time would not serve the primary purpose of such a code to provide a manner of
conduct as the development, execution and enforcement of such a code would be by the same persons and only persons to whom such
code applied. Furthermore, because the Company does not have any activities, there are no activities or transactions which would
be subject to this code. At the time the Company enters into a business combination, the current officers and directors will recommend
to any new management that such a code be adopted. The Company does not maintain an Internet website on which to post a code of
ethics.
Corporate Governance
For reasons similar to those described
above, the Company does not have a nominating nor audit committee of the board of directors. At this time, the Company consists
of two stockholders who serve as the corporate directors and officers. The Company has no activities, and receives no revenues.
At such time that the Company enters into a business combination and/or has additional stockholders and a larger board of directors
and commences activities, the Company will propose creating committees of its board of directors, including both a nominating and
an audit committee. Because there are only two stockholders of the Company, there is no established process by which stockholders
to the Company can nominate members to the Company’s board of directors. Similarly, however, at such time as the Company
has more stockholders and an expanded board of directors, the new management of the Company may review and implement, as necessary,
procedures for stockholder nomination of members to the Company’s board of directors.
15
Item 11. Executive Compensation.
The following table sets forth the cash
and other compensation paid by the Company to its named executive officer and directors during the period from inception (May 13,
2020) through the date of this filing.
Name and Position Year Salary Bonus Option Awards All other Compensation Total
Ian Jacobs(1) 2021 None None None None None
Mark Tompkins(2) 2021 None None None None None
Director 2020 None None None None None
The following compensation discussion addresses
all compensation awarded to, earned by, or paid to the Company’s named executive officers. The Company’s officer and
directors have not received any cash or other compensation since inception through the date of this filing. No compensation of
any nature has been paid for on account of services rendered by a director in such capacity.
It is possible that, after the Company
successfully consummates a business combination with an unaffiliated entity, that entity may desire to employ or retain members
of our management for the purposes of providing services to the surviving entity.
No retirement, pension, profit sharing,
stock option or insurance programs or other similar programs have been adopted by the Company for the benefit of its employees.
Except as otherwise disclosed herein, there
are currently no understandings or agreements regarding compensation our management will receive after a business combination.
Compensation Committee
The Company does not have a standing compensation
committee or a committee performing similar functions.
Item 12. Security Ownership of Certain Beneficial Owners
and Management and Related Stockholder Matters.
The following table sets forth, as of the
date of this filing, the number of shares of Common Stock owned of record and beneficially by (i) each person known by us to be
the beneficial owner of more than 5% of our outstanding shares of Common Stock, (ii) each director and named executive officer
of the Company and (iii) all executive officers and directors as a group.
Name and Address Amount and Nature of Beneficial Ownership Percentage of Class
Directors and Named Executive Officers:
All Directors and Officers as a Group (2 individuals) 5,000,000 100 %
Other More than 5% Stockholders:
N/A - -
(1) Mark Tompkins serves as a director of the Company.
16
Securities Authorized for Issuance Under Equity Compensation
Plans
The Company has not authorized any securities for issuance under
an equity incentive plan.
Item 13. Certain Relationships and Related Transactions,
and Director Independence.
On
May 14, 2020, the Company issued (i) an aggregate of 4,750,000
shares of Common Stock to Mark Tompkins, a director of the Company, for an aggregate purchase price equal to $475 representing
amounts advanced by Mr. Tompkins to counsel for the Company in connection with the formation and organization of the Company and
(ii) an aggregate of 250,000 shares of Common Stock to Ian Jacobs, an officer and director of the Company, for an aggregate cash
purchase price equal to $25, pursuant to the terms and conditions set forth in the Common Stock Purchase Agreement with each person.
The Company issued these shares of Common Stock under the exemption from registration provided by Section 4(a)(2) of the Securities
Act.
On
May 14, 2020, in connection with advances made in connection with
costs incurred by the Company, the Company issued a promissory note to Mark Tompkins, a stockholder and director of the Company,
pursuant to which the Company agreed to repay Mr. Tompkins the sum of any and all amounts that Mr. Tompkins may advance to the
Company on or before the date that the Company consummates a business combination with a private company or reverse takeover transaction
or other transaction after which the Company would cease to be a shell company (as defined in Rule 12b-2 under the Exchange Act).
Although Mr. Tompkins has no obligation to advance funds to the Company under the terms of the note, it is anticipated that he
may advance funds to the Company as fees and expenses are incurred in the future. As a result, the Company issued the note in anticipation
of such advances. No interest shall accrue on the outstanding principal amount of the note unless an Event of Default (as defined
in the note) occurs. In the event that an Event of Default has occurred, the entire note shall automatically become due and payable
(the “Default Date”), and starting from five (5) days after the Default Date, the interest rate on the note shall accrue
at the rate of eighteen percent (18%) per annum. As of December 31, 2020, Mr. Tompkins has advanced $20,000 to the Company to cover
expenses incurred by the Company.
The Company currently uses the office space
and equipment of its management at no cost.
Item 14. Principal Accounting Fees and Services.
Raich Ende Malter & Co. LLP is the
Company’s independent registered public accounting firm. Set below are aggregate fees billed by Raich Ende Malter & Co.
LLP for professional services rendered from inception to December 31, 2020.
Audit Fees
The fees for the audit services billed
and to be billed by Raich Ende Malter & Co. LLP from inception to December 31, 2020, amounted to $15,000.
Audit-Related Fees
There were no audit-related fees billed
by Raich Ende Malter & Co. LLP from inception to December 31, 2020.
Tax Fees
The fees for the tax services billed and
to be billed by Raich Ende Malter & Co. LLP for professional services for tax compliance, tax advice, and tax planning from
inception to December 31, 2020, amounted to $0 and $2,000, respectively.
All Other Fees
There were no fees billed by Raich Ende
Malter & Co. LLP for other products and services from inception to December 31, 2020.
Audit Committee’s Pre-Approval Process
The Company does not have a standing audit
committee or a committee performing similar functions.
17
PART IV
Item 15. Exhibits, Financial Statement Schedules.
We have filed the following documents as part of this Form 10-K:
1. Financial Statements:
Page No.
Report of Independent Registered Public Accounting Firm F-2
Balance Sheet as of December 31, 2020 F-3
Notes to Financial Statements F-7
2. Financial Statement Schedules
All schedules have been omitted because
they are not required, not applicable, not present in amounts sufficient to require submission of the schedule, or the required
information is otherwise included.
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3. Exhibits
Exhibit No. Description
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 Labels Linkbase Document
101.PRE* XBRL Taxonomy Extension Presentation Linkbase Document.
* Filed herewith
** Furnished herewith
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SIGNATURES
Pursuant to the requirements of Section
13 or 15(d) 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.
PARASOL INVESTMENTS CORPORATION.
Dated: February 19, 2021 By: /s/ Ian Jacobs
Ian Jacobs
President
Pursuant to the requirements of the Securities
Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities
and on the dates indicated.
Name Title Date
Ian Jacobs Director (Principal Executive Officer, Principal
Financial Officer, and Principal Accounting Officer)
By: /s/ Mark Tompkins Director February 19, 2021
Mark Tompkins
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PARASOL INVESTMENTS
CORPORATION
December 31, 2020
INDEX TO FINANCIAL STATEMENTS
Page
Balance Sheet F-3
Statement of Operations F-4
Statement of Changes in Stockholders’ Deficit F-5
Statement of Cash Flows F-6
Notes to Financial Statements F-7
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
To the Board of Directors and
Stockholders of Parasol Investments Corporation
Opinion on the Financial Statements
We have audited the accompanying balance
sheet of Parasol Investment Corporation (the Company) as of December 31, 2020, and the related statement of operations, changes
in stockholders’ deficit, and cash flows for the period May 13, 2020 (Inception) to December 31, 2020, and the related notes
(collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material
respects, the financial position of the Company as of December 31, 2020, and the results of its operations and its cash flows for
the period May 13, 2020 (Inception) to December 31, 2020, in conformity with accounting principles generally accepted in the United
States of America.
Going Concern
The accompanying financial statements have
been prepared assuming that the Company will continue as a going concern. As discussed in Note 6 to the financial statements, the
Company has incurred losses from inception, has negative working capital, and a stockholders’ deficit that raise substantial
doubt about its ability to continue as a going concern. Management’s plans in regards to these matters are also described
in Note 6. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility
of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based
on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB)
and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with
the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have,
nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required
to obtain an understanding of internal control over financial reporting, 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.
Our audits included performing procedures
to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures
that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures
in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made
by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a
reasonable basis for our opinion.
/s/ Raich Ende Malter & Co. LLP
We have served as the Company’s auditor since 2020.
Melville, New York
F-2
PARASOL INVESTMENTS CORPORATION
BALANCE SHEET
ASSETS
Current assets
Total current assets 8,441
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities
Accounts payable and accrued expenses $ 9,000
Note payable - stockholder 20,000
Total current liabilities 29,000
Commitments and contingencies
Stockholders’ deficit
Preferred stock, $0.0001 par value, authorized 10,000,000 shares, none issued -
Accumulated deficit (21,059 )
Total stockholders’ deficit (20,559 )
Total liabilities and stockholders’ deficit $ 8,441
See accompanying notes to financial statements
F-3
PARASOL INVESTMENTS CORPORATION
STATEMENT OF OPERATIONS
For the Period May 13, 2020 (Inception) to December 31, 2020
Revenue $ -
General and administrative expenses 21,059
Loss from operations (21,059 )
Loss per common share - basic and dilutive net loss $ (0.00 )
Weighted average common shares outstanding - basic and dilutive 5,000,000
See accompanying notes to financial statements
F-4
PARASOL INVESTMENTS CORPORATION
STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIT
For the period May 13, 2020 (Inception) to December 31, 2020
Preferred Stock Common Stock Accumulated Stockholders’
Shares Amount Shares Amount Deficit Deficit
Balance, May 13, 2020 - $ - - $ - $ - $ -
See accompanying notes to financial statements
F-5
PARASOL INVESTMENTS CORPORATION
STATEMENT OF CASH FLOWS
For the period May 13, 2020 (Inception) to December 31, 2020
Cash flows from operating activities:
Adjustments to reconcile net loss to net cash (used in) operating activities:
Increase in accounts payable and accrued expenses 9,000
Net cash (used in) operating activities (11,584 )
Cash flows from financing activities:
Proceeds from the sale of common stock 25
Proceeds from stockholder note 20,000
Net cash provided by financing activities 20,025
Net increase in cash 8,441
Cash, beginning of period -
Cash, end of period $ 8,441
Non-cash investing and financing activities:
See accompanying notes to financial statements
F-6
PARASOL INVESTMENTS CORPORATION
NOTES TO FINANCIAL STATEMENTS
December 31, 2020
Note 1. Nature of Operations
Parasol Investments Corporation (the “Company”)
was incorporated in the State of Delaware on May 13, 2020. The Company’s management has chosen December 31st for
its fiscal year end.
The Company was organized as a vehicle
to investigate and, if such investigation warrants, acquire a target company or business seeking the perceived advantages of being
a publicly traded corporation. The Company’s principal business objective is to achieve long-term growth potential through
a combination with a business, rather than immediate short-term earnings. The Company will not restrict its potential target companies
to any specific business, industry, or geographical location. The analysis of business opportunities will be undertaken by, or
under the supervision of, the officer and directors of the Company.
Note 2. Basis of Presentation
and Summary of Significant Accounting Policies
Basis of Presentation
The accompanying financial statements have
been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
Use of Estimates
The preparation of financial statements
in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue
and expenses during the reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents
Cash and cash equivalents are reported
in the balance sheet at cost, which approximates fair value. For the purpose of the financial statements cash equivalents include
all highly liquid investments with maturity of three months or less. There are no cash equivalents at the balance sheet date.
Income Taxes
The Company adopted ASC 740, “Income
Taxes”, at its inception. Under ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences