**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, D.C.  20549**

____________________________________________________________

**FORM 10-Q**

þ   QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

 

For the quarter ended:  June 30, 2017

 

OR

 

o TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from __________ to

 

Commission file number: 000-1514888

 

EXPERIENCE ART AND DESIGN, INC.

(Exact Name of Registrant as Specified in Charter)

 
| Nevada                                         |   | 81-1082861                        |
|------------------------------------------------|--------|-----------------------------------|
| (State or other jurisdiction of incorporation) |   | (IRS Employer Identification No.) |

 

 
| 7260 W. Azure Drive, Suite 140-952, Las Vegas, NV |   | 89130      |
|---------------------------------------------------|--------|------------|
| (Address of principal executive offices)          |   | (Zip Code) |

 

702-347-8521

Registrant’s telephone number, including area code:

 

 

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 þ      No o 

 

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 (§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 þ      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  o  |   | Accelerated filer  o           |
|--------------------------------------------|--------|-----------------------------------------------|
| Non-accelerated filer  o    |   | Smaller reporting company  þ   |

 

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

 

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date:

 

Common Stock: 339,909,600 shares outstanding as of August 21, 2017.

 

----

 

 

 

**TABLE OF CONTENTS**

 

PART I – FINANCIAL INFORMATION

 
|   | Item 1. Unaudited Financial Statements                                                        | 3      |
|--------|-----------------------------------------------------------------------------------------------|--------|
|   |                                                                                          |   |
|   | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations | 11     |
|   |                                                                                          |   |
|   | Item 3. Quantitative and Qualitative Analysis About Market Risk                               | 13     |
|   |                                                                                          |   |
|   | Item 4. Controls and Procedures                                                               | 13     |

 

PART II – OTHER INFORMATION

 
|   | Item 1. Legal Proceedings                                           | 13     |
|--------|---------------------------------------------------------------------|--------|
|   |                                                                |   |
|   | Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | 13     |
|   |                                                                |   |
|   | Item 3. Defaults Upon Senior Securities                             | 13     |
|   |                                                                |   |
|   | Item 5. Other Information                                           | 14     |
|   |                                                                |   |
|   | Item 6. Exhibits                                                    | 14     |

 

 

 

 

 

 

 

 

 

 

 

----

 

 

**PART I - FINANCIAL INFORMATION**

 

**Item 1.** **FINANCIAL STATEMENTS (UNAUDITED)** 

 

The accompanying unaudited consolidated financial statements of Experience Art and Design, Inc. (the “Company”) have been prepared in accordance with generally accepted accounting principles in the United States for interim financial reporting and pursuant to the rules and regulations of the Securities and Exchange Commission (“Commission” or “SEC”). While these statements reflect all normal recurring adjustments which are, in the opinion of management, necessary in order to make the consolidated financial statements not misleading and for fair presentation of the results of the interim period, they do not include all of the information and footnotes required by generally accepted accounting principles for complete consolidated financial statements.

 

 

----

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| EXPERIENCE ART AND DESIGN, INC.                             |
|-------------------------------------------------------------|
| CONSOLIDATED BALANCE SHEETS                                 |
|                                                        |   |   |   |   |   |   |
|                                                        |   |   |   | June 30, 2017 |   | December 31, 2016 |
|                                                        |   | Assets |   |   |   |   |
|                                                        |   |   |   |   |   |   |
|                                                        | *Current Assets* |   |   |   |   |
|                                                        |   | Cash and Cash Equivalents | $ | - | $ | - |
|                                                        |   | Accounts Receivable, net of Allowance for Doubtful Accounts |   | - |   | - |
|                                                        |   | Inventories |   | - |   | - |
|                                                        |   | Other Current Assets |   | 77,050 |   | 77,050 |
|                                                        |   | Total Current Assets |   | 77,050 |   | 77,050 |
|                                                        |   |   |   |   |   |   |
|                                                        | *Long-Term Assets* |   |   |   |   |
|                                                        |   | Property, Plant and Equipment, net of Accumulated Depreciation |   | - |   | - |
|                                                        |   | Intangibles, net of Accumulated Amortization |   | - |   | - |
|                                                        |   | Other Non-Current Assets |   | - |   | - |
|                                                        |   | Total Long-Term Assets |   | - |   | - |
|                                                        | Total Assets | $ | 77,050 | $ | 77,050 |
|                                                        |   |   |   |   |   |   |
|                                                        |   | Total Liabilities and Shareholders' Equity |   |   |   |   |
|                                                        |   |   |   |   |   |   |
|      Liabilities                   |   |   |   |   |
|                                                        | *Current Liabilities* |   |   |   |   |
|                                                        |   | Short-Term Borrowings – Non-Related Party | $ | 17,196 | $ | 14,223 |
|                                                        |   | Accounts Payable and Accrued Liabilities |   | 14,000 |   | 19,666 |
|                                                        |   | Due to Related Party |   | 13,350 |   | 1,081 |
|                                                        |   | Stock Payable |   | - |   | 60,000 |
|                                                        |   | Accrued Salary |   | 40,000 |   | 130,600 |
|                                                        |   | Long-Term Debt - Current Portion |   | 23,250 |   | 113,250 |
|                                                        |   | Total Current Liabilities |   | 107,796 |   | 338,820 |
|                                                        |   |   |   |   |   |   |
|                                                        | *Long-Term Liabilities* |   |   |   |   |
|                                                        |   | Long-Term Debt - Net of Current Portion |   | - |   | - |
|                                                        |   | Other Liabilities |   | - |   | - |
|                                                        |   | Total Long-Term Liabilities |   | - |   | - |
|                                                        | Total Liabilities |   | 107,796 |   | 338,820 |
|                                                        |   |   |   |   |   |   |
|      Commitments and Contingencies |   |   |   |   |
|                                                        |   |   |   |   |   |   |
|      Shareholders' Equity          |   |   |   |   |
|                                                        |   | Preferred Stock, par value $0.001, 15,000,000 shares |   |   |   |   |
|                                                        |   | authorized, 5,000,000 issued and outstanding

  |   | 5,000 |   | 5,000 |
|                                                        |   | Common Stock, par value $0.001, 325,000,000 shares authorized, |   |   |   |   |
|                                                        |   | 284,909,600 issued |   | 284,909 |   | 194,909 |
|                                                        |   | Additional Paid-in Capital |   | 967,713     |   | 924,212 |
|                                                        |   | Accumulated Deficit |   | (1,309,014) |   | (1,406,537) |
|                                                        |   | Accumulated Other Comprehensive Income (Loss) |   | 20,646 |   | 20,646 |
|                                                        | Total Shareholders' Equity |   | (30,746) |   | (261,770) |
|                                                        | Total Liabilities and Shareholders' Equity | $ | 77,050 | $ | 77,050 |
|                                                        |   |   |   |   |   |   |
|                                                        |   |   |   |   |   |   |
|                                                        |   | *See Accompanying Notes to Consolidated Financial Statements.* |

----

| EXPERIENCE ART AND DESIGN, INC.                              |
|--------------------------------------------------------------|
| CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS |
| (Unaudited)                                                  |
|                                                         |   |   |   |   |   |   |   |
|                                                         |   |   |   | Period Ended |   |
|                                                         |   |   |   | June 30 |   | December 31 |   |
|                                                         |   |   |   | 2017 |   | 2016 |   |
|                                                         |   |   |   |   |   |   |   |
| Revenues                                                     | $ | - | $ | - |   |
|                                                         |   |   |   |   |   |   |   |
| Operating Costs:                                             |   |   |   |   |   |
|                                                         | Cost of Goods Sold |   | - |   | - |   |
|                                                         | General and Administrative Expenses |   | 79,504 |   | 110,226 |   |
|                                                         |   | Total Operating Costs |   | 79,504 |   | 110,226 |   |
|                                                         |   |   |   |   |   |   |   |
| Net Operating Loss                                           |   | (79,504) |   | (110,226) |   |
|                                                         |   |   |   |   |   |   |   |
| Other Income (Expense)                                       |   |   |   |   |   |
|                                                         | Other Income |   | 80,000 |   | - |   |
|                                                         | Interest Expense |   | - |   | - |   |
|                                                         | Loss on Settlement of Note Payable |   | - |   | - |   |
|                                                         |   | Total Other Income (Expense) |   | - |   | - |   |
|                                                         |   |   |   |   |   |   |   |
|                                                         | Net Income (Loss) Before Income Taxes |   | 496 |   | (110,226) |   |
|                                                         |   | Provision for Income Taxes |   | - |   | - |   |
| Net Income                                                   |   | 496 |   | (110,226) |   |
|                                                         |   |   |   |   |   |   |   |
| Other Comprehensive Loss                                     |   |   |   |   |   |
|                                                         | Foreign Currency Translation Adjustment |   |   |   |   |   |
| Total Comprehensive (Loss)                                   | $ | 496 | $ | (110,226) |   |
|                                                         |   |   |   |   |   |   |   |
|                                                         |   |   |   |   |   |   |   |
|                                                         |   |   |   |   |   |   |   |
| Basic and Diluted Loss Per Common Share                      | $ | (0.00) | $ | (0.00) |   |
|                                                         |   |   |   |   |   |   |   |
| Basic and Diluted Weighted Average                           |   |   |   |   |   |
|                                                         | Number of Common Shares Outstanding |   | 284,909,600 |   | 194,909,600 |   |
|                                                         |   |   |   |   |   |   |   |
|                                                         |   |   |   |   |   |   |   |
|                                                         |   | *See Accompanying Notes to Consolidated Financial Statements.* |

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| **EXPERIENCE ART AND DESIGN, INC.**                          |
|--------------------------------------------------------------|
| **CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIT)** |
| (Unaudited)                                                  |
|                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   | **Accumulated** |
|                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   | **Other** |
|                                                         |   |   | **Preferred Stock** |   | **Common Stock** |   | **Additional** |   | **Accumulated** |   | **Comprehensive** |
|                                                         |   |   | **Shares** |   | **Amount** |   | **Shares** |   | **Amount** |   | **Paid-in Capital** |   | **Deficit** |   | **Income (Loss)** |
|                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance at December 31, 2015                                 | - |   | - |   | 25,409,600 |   | 25,409 |   | 924,212 |   | (1,296,311) |   | 20,646 |
|                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for services                                   | - |   | - |   | 45,000,000 |   | 45,000 |   | - |   | - |   | - |
|                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for assets                                     | - |   | - |   | 55,000,000 |   | 55,000 |   | - |   | - |   | - |
|                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for debt cancelation                           | - |   | - |   | 43,500,000 |   | 43,500 |   |   |   | - |   | - |
|                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |
| services                                                     |   |   |   |   | 50,000,000 |   | 50,000 |   |   |   |   |   |   |
|                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |
| debt cancelation                                             |   |   |   |   | 131,000,000 |   | 131,000 |   |   |   |   |   |   |
|                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares Canceled                                              |   |   |   |   | (55,000,000) |   | (55,000) |   |   |   |   |   |   |
|                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares exchanged                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| for Preferred                                                | 5,000,000 |   | 5,000 |   | (100,000,000) |   | (100,000) |   |   |   |   |   |   |
|                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for debt cancelation                           | - |   | - |   | 90,000,000 |   | 90,000 |   | 43,501 |   | - |   | - |
|                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net Income (loss)                                            |   |   |   |   | - |   | - |   | - |   | 496 |   | - |
|                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance at June 

30, 2017                                   | 5,000,000 | $ | 5,000 |   | 284,909,600 | $ | 284,909 | $ | 967,713 | $ | (1,309,014) | $ | 20,646 |
|                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| See Accompanying Notes to Consolidated Financial Statements. |

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| EXPERIENCE ART AND DESIGN, INC.                                            |
|----------------------------------------------------------------------------|
| CONSOLIDATED STATEMENTS OF CASH FLOWS                                      |
|                                                                       |
|                                                                       |   |   |   | Period Ended |
| June 30                                                                    | December 31 |
|                                                                       |   |   |   | 2017 |   | 2016 |
|                                                                       |   |   |   |   |   |   |
| *Operating Activities*                                                     |   |   |   |   |
| Net Gain (Loss)                                                            | $ | 496 | $ | (16,044) |
| *Adjustments to reconcile net loss to net cash from operating activities:* |   |   |   |   |
| Depreciation and Amortization                                              |   | - |   | - |
| Loss on Settlement of Note Payable                                         |   | - |   | - |
| *Changes In Operating Assets and Liabilities:*                             |   |   |   |   |
|                                                                       | Accounts Receivable |   | - |   | - |
|                                                                       | Inventories |   | - |   | - |
|                                                                       | Prepaid Expenses and Other Assets |   | - |   | - |
|                                                                       | Accounts Payable and Accrued Liabilities |   | 14,000 |   | 40,000 |
|                                                                       | Advance from Customers |   | - |   | - |
|                                                                       | Tax Payable |   |   |   | - |
|                                                                       | Other Liabilities |   |   |   | - |
|                                                                       |   | Net Cash Used in Operating Activities |   | 12,269 |   | 40,000 |
|                                                                       |   |   |   |   |   |   |
| *Investing Activities*                                                     |   | - |   |   |
|                                                                       | Capital Expenditures for Property, Plant, and Equipment |   | - |   | - |
|                                                                       |   | Net Cash Used in Investing Activities |   | - |   | - |
|                                                                       |   |   |   |   |   |   |
| *Financing Activities*                                                     |   |   |   |   |
|                                                                       | Proceeds from Issuance of Common Shares |   | - |   | - |
|                                                                       | Proceeds from Short-Term Borrowings |   | 12,269 |   | 40,000 |
|                                                                       | Proceeds from Borrowings on Debt-Related Parties |   |   |   | - |
|                                                                       | Payments on Short-Term Borrowings-Related Parties |   |   |   | - |
|                                                                       | Principal Payments on Long-Term Debt |   | - |   | - |
|                                                                       |   | Net Cash Provided by Financing Activities |   | 12,269 |   | 40,000 |
|                                                                       |   |   |   |   |   |   |
| *Net Effect of Exchange Rate Changes*                                      |   | - |   | - |
|                                                                       |   |   |   |   |   |   |
|                                                                       | Net increase (decrease) in cash and cash equivalents |   | (12,269) |   | (40,000) |
|                                                                       | Cash at the beginning of the period |   | - |   | - |
|                                                                       | Cash at the end of the period | $ | - | $ | - |
|                                                                       |   |   |   |   |   |   |
| Supplemental cash flow data                                                |   |   |   |   |
|                                                                       | Cash paid during the period for: |   |   |   |   |
|                                                                       |   | Interest | $ | - | $ | - |
|                                                                       |   |   |   |   |   |   |
|                                                                       |   | Income Taxes | $ | - | $ | - |
|                                                                       | Noncash investing and financing activities: |   |   |   |   |
|                                                                       |   | Related party forgiveness of debt | $ | - | $ | - |
|                                                                       |   | Common shares issued to settle related party debt | $ | - | $ | - |
|                                                                       |   | Note issued to purchase assets from related party | $ | - | $ | - |
|                                                                       |   |   |   |   |   |   |
|                                                                       |   | *See Accompanying Notes to Consolidated Financial Statements.* |

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**EXPERIENCE ART AND DESIGN, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

 

**Note 1** **Description of Business** 

 

Since December 16, 2015, the Company has been focused on two primary business models: the re-work of existing oil wells and dry cleaners, through two wholly owned subsidiary companies: TransAmerican Oil and Metropolitan Dry Cleaners (Metro) respectively.  TransAmerican Oil never moved past its signed LOI, a transaction was never consummated, and the Company has differed its plans to enter the Oil and Gas sector.

 

Metropolitan Dry Cleaners was going to be a roll-up of existing enterprises with a multi-year history of revenues and profits in a variety of primarily East Coast States. The Company would have provided dry cleaning, laundry, and garment alterations as offered by the existing target businesses along with regular home pick-up and delivery services.  The Company was to have both production facilities and retail storefronts to complement its pick-up and delivery service.  The LOI entered between Metro and a seven-unit operation located on the Cape in Massachusetts was terminated.

The Company is in the process of acquiring select operating assets of Bahamas Development Corporation OTCPink: “BDCI”.  These assets will be acquired in two separate transactions; the first will be a Triangular Reverse Merger to acquire Incite Performance Wear “IPW”.  IPW is a full package cut and sew with dye sublimation printing company that manufactures custom private-branded 100% moisture wicking polyester performance wear shirts with UPF 40 Sun Protection. The Company’s manufacturing process is very unique and distinct from other apparel companies as well as Made in the USA. What makes the company different from others is the way that it manufactures their performance shirts. Incite sources fabric in from its supplier mills, cuts it to size followed by dying the sublimate prints on individual pieces of material before the shirt is sewn together. This enables the company to deliver very high quality seamless, ‘Made in the USA’ performance shirts featuring competitive pricing. IPW manufactures private branded performance apparel for many industries that include: Fishing, Marine, Agricultural, Hospitality, Team Sports, Outdoor Activewear, Military and many Non-Profit Organizations and Charities. More information on the company’s products and services may be found at: www.IncitePerformanceWear.com.  EXAD plans to acquire the Native Outfitters brand as an asset sale in the near future.

 

 

**Note 2** **Basis of Presentation and Summary of Significant Accounting Policies** 

 

The accompanying unaudited consolidated financial statement have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”), regarding interim financial reporting.  Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations.  As such, the information included in this quarterly report on Form 10-K should be read in conjunction with recent company filings with the SEC.

 

**Management's Estimates and Assumptions**

 

The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses.  Actual results could differ from these estimates.

 

**Cash and Equivalents**

 

The Company’s cash and cash equivalents consist of cash, as well as interest and non-interest bearing balances due from banks both foreign and domestic with an original maturity of three months or less.  Amounts in depository accounts fluctuate on a daily basis due to activity and liquidity needs.  It is the Company’s policy not to deposit large sums of cash within foreign operational deposit accounts due to financial instability in the region and the Company fund operations on an as needed basis.  The Company maintains cash in bank deposit accounts domestically, which at times may exceed the federally insured limits throughout the course of operations.

 

**Accounts Receivable**

 

Accounts receivable consist primarily of trade receivables, net of a valuation allowance for doubtful accounts.

----

The Company attempts to limit its exposure to losses on accounts receivable by monitoring the size and economic strength of its receivables, and whenever appropriate reflect a reserve for accounts that have been deemed potentially uncollectable.  Monitoring occurs on a regular basis and exposure is limited by the vetting process for customers.

 

**Allowance for Doubtful Accounts**

 

The Company extends credit to customers and other parties in the normal course of business. The Company regularly reviews outstanding receivables and provides for estimated losses through an allowance for doubtful accounts.  In evaluating the level of established reserves, the Company makes judgments regarding its customers' ability to make required payments, economic events and other factors.  As the financial condition of these parties change, circumstances develop or additional information becomes available, adjustments to the allowance for doubtful accounts may be required. When the Company determines that a customer may not be able to make required payments, the Company increases the allowance through a charge to income in the period in which that determination is made.

 

**Property, Plant and Equipment**

 

The Company accounts for property, plant and equipment at historical cost less accumulated depreciation. Historical cost includes all expenditures that are directly attributable to the acquisition of fixed assets. Subsequent costs are included in the asset's carrying amount and are recognized as a separate asset, as appropriate, only when there is the probability of future economic benefits. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred. Depreciation is calculated using the straight-line method to allocate their cost to their residual values over their estimated useful lives, as follows:

 

Plant and machinery 10 to 20 years 

Furniture and fixtures 10 to 17 years 

 

The assets' residual values and useful lives are reviewed, and adjusted as appropriate at least once a year. An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing proceeds with carrying amount.

 

**Revenue Recognition**

 

Revenue is recognized when the earning process is completed, the risks and rewards of ownership have transferred to the customer, which is generally the same day as delivery or shipment of the product, the price to the buyer is fixed or determinable, and collection is reasonably assured. Taxes assessed by a governmental authority that are incurred as a result of a revenue transaction are not included in revenues. The Company has no significant sales returns or allowances.

 

**Income Taxes**

 

The Company is a taxable entity and recognizes deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis.  Deferred tax assets and liabilities are measured using enacted tax rates expected to be in effect when the temporary differences reverse. The effect on the deferred tax assets and liabilities of a change in tax rates is recognized in income in the year that includes the enactment date of the rate change.  A valuation allowance is used to reduce deferred tax assets to the amount that is more likely than not to be realized. Interest and penalties associated with income taxes are included in selling, general and administrative expense.

 

A tax benefit from an uncertain position may be recognized if it is "more likely than not" that the position is sustainable, based upon its technical merits. The tax benefit of a qualifying position is the largest amount of tax benefit that is greater than 50 percent likely of being realized upon ultimate settlement with a taxing authority having full knowledge of all relevant information. As of June 30, 2017, the Company had not recorded any tax benefits from uncertain tax positions.

 

**Net Income (Loss) Per Common Share**

 

The basic net income (loss) per common share is computed by dividing the net income (loss) by the weighted average number of shares outstanding during a period. Diluted net income (loss) per common share is computed by dividing the net income (loss), adjusted on an as if converted basis, by the weighted average number of common shares outstanding plus potential dilutive securities. There was $23,250 in dilutive securities that were outstanding as of June 30, 2017.

----

**Stock-Based Compensation**

 

The Company sometimes grants shares of stock for goods and services and in conjunction with certain agreements. These grants are accounted for based on the grant date fair values.

 

**Subsequent Events**

 

On July 5, 2017, the Company filed an 8k announcing new management.  Eugene Caiazzo was elected to serve as the Company’s sole Officer and as a Director.  Gary Brown was elected to serve as a Director of the Company.  Both Mr. Caiazzo and Mr. Brown serve in the same positions in Bahamas Development Corporation.  Mr. Dwyer resigned from all positions and returned 5 million shares of Series A Preferred stock back to the Company, which all 5 million shares of Series A where issued to Mr. Caiazzo.

 

On July 10, 2017, the Company filed an 8k announcing it had entered into a Management Services Agreement with Bahamas Development Corporation to manage the day to day operations of Native Outfitters.  

 

On August 8, 2017, the Company filed an 8k announce it had filed an Amendment with the State of Nevada to increase its Authorized shares by Fifty (50) million shares.  The Company went to state it believed no more then 25 million would be needed to clean up the balance sheet from the predecessor companies.

 

On August 15, 2017, the Company filed an 8k announcing it had secured a $200,000 non-dilutive bridge loan to close the acquisition of IPW by August 31, 2017.  This loan would be repaid from the financing agreement being acquired from Wells Fargo for the acquisition of IPW.

 

**New Accounting Pronouncements**

 

There were various accounting standards and interpretations issued recently, none of which are expected to a have a material impact on our consolidated financial position, operations or cash flows.

 

**Commitments and Contingencies**

  

The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. 

  

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed. 

  

Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon information available at this time that these matters will have a material adverse effect on the Company’s financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows.  

  

**Risk and Uncertainties**

  

The Company is subject to risks common to companies in the technology industries, including, but not limited to, litigation, development of new technological innovations and dependence on key personnel. 

 

**Note 3** **Going Concern and Liquidity Considerations** 

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. For the quarter ended June 30, 2017, the Company had a gain from operations of $496 and had an accumulated deficit of 

----

$1,309,014.  The Company intends to fund operations through equity financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements for the year ending December 31, 2017.

 

These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

**Note 4** **Intangibles** 

 

The $77,050 in Intangible (“Other assets”) consist primarily of tradenames, logos, LOI, and Business Development activities, which were acquired in the fourth quarter of 2015 from a related-party, Derrick Lefcoe.  The Company acquired a shell with a market value of $20,000 during the fourth quarter of 2016.

 

**Note 5** **Short-Term Borrowings** 

 

The Company has received funding from our sole officer and director and a non-related 3rd party, which has been used to fund the ongoing operations in the interim until permanent financing can be arranged.  As of June 30, 2017, the total amount borrowed was $30,546

 

**Note 6** **Long-Term Debt** 

 

**None**

 

**Note 7** **Income Taxes** 

 

During the quarter ending 2017, The Company has been operating at a net operational loss the federal tax rates on income range 15% to 35% stagger at different income brackets.  Since the Company had a net operation loss, no tax provision for U.S. tax purposes was deemed necessary at this time.

 

**Note 8               Equity**

 

During the quarter ending June 30, 2017 the Company exchanged $45,000 for 45,000,000 shares of its Common stock. 

 

**Note 9              Related Party Transactions**

 

The Company has entered into a series of Agreements to acquire assets from Bahamas Development Corporation.  Both of our Directors and our Sole Officer serve in the same capacity at Bahamas Development Corporation.   

 

**Item 2.** **MANAGEMENT’S DISCUSSION AND ANALYSIS OF** 

**FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

 

*You should read the following description of our financial condition and results of operations in conjunction with the financial statements and accompanying notes included in this report.*

 

This Management Discussion and Analysis (MD&A) contains “forward-looking statements”, which represent our projections, estimates, expectations or beliefs concerning among other things, financial items that relate to management’s future plans or objectives or to our future economic and financial performance. In some cases, you can identify these statements by terminology such as “may”, “should”, “plans”, “believe”, “will”, “anticipate”, “estimate”, “expect” “project”, or “intend”, including their opposites or similar phrases or expressions. You should be aware that these statements are projections or estimates as to future events and are subject to a number of factors that may tend to influence the accuracy of the statements. These forward-looking statements should not be regarded as a representation by the Company or any other person that the events or plans of the Company will be achieved. You should not unduly rely on these forward-looking statements, which speak only as of the date of this MD&A. Except as may be required under applicable securities laws, we undertake no obligation to publicly revise any forward-looking statement to reflect circumstances or events after the date of this MD&A or to reflect the occurrence of unanticipated events.

 

**Results of Operations**

 

**Overview**

 

The Company had made significant progress with its planned dry cleaning operations under the brand name Metropolitan Dry Cleaners in the North Eastern United States. The decision, based on the size of the prospective operation, was to abandon the two smaller opportunities being explored in Florida, and devote all resources to this transaction.

----

EXAD established a new LLC, Metropolitan Dry Cleaners LLC. The LLC is designed to house any dry cleaning operations the company acquires or establishes. This continues to be the sole focus of Metropolitan Dry Cleaners LLC.

 

Metropolitan Dry Cleaners was approached by the prospective Seller in the North Eastern United States who was looking to effect an off-market transaction in August of 2016 to acquire a seven-unit environmentally friendly, perc free dry cleaning company that offers a multitude of additional services. Net cash flow from the operation in 2015 was over $250,000. The two companies have negotiated a transaction that would entail the Sellers remaining employed by the Company for a period of up to three years following the closing of the transaction.  A letter of Intent had been executed and the parties acknowledge a transaction of this size will take some to complete. Communication between Metro and the company have ceased and the LOI has expired, there will not be a closing.    

Lawrence Gorman has resigned from both the Company and Metro leaving Matthew Dwyer as the Sole Officer and Director of the Company.

Mr. Dwyer had taken on the task of cleaning up the balance sheet and negotiating a merger with an operating revenue producing company.  In May, the Company retained the services of Island Stock Transfer to assist the Company in entering the DTCC system, the Company became DTC eligible on June 22, 2017 and began settling electronically.  

 

While moving through the corporate cleanup process, the Company entered into discussion with Bahamas Development Corporation to acquire their operating assets in the Performance Wear sector.  The rise in athleisure has given apparel sales a significant boost in the last couple of years. In 2014, US consumers spent $323 billion on apparel, footwear and accessories, according to The NPD Group. This was a $2 billion increase from the prior year, and largely thanks to dramatic growth in sales of activewear. Morgan Stanley predicts that, by 2020, activewear will represent $83 billion in sales, “stealing market share from nonathletic apparel.” According to Stylus, “The athleisure phenomenon looks set to continue into 2016 and beyond, and is now on course to become one of the fastest-growing global apparel product categories in the second half of this decade.”  

 

The Company is in the process of completing a Triangular Reverse Merger to acquire one of the companies from BDCI.  Once completed an asset purchase will be finalized for another company also operating the Performance Wear sector.  The combined companies currently generating approximately $2.7 million on an annualized basis, which 3 projections estimating revenues of $3.3 million.

 

The Company has and will continue to incur one time costs associated with the acquisitions.

 

The Company realized a gain of $80,000 from salary forgiveness for the quarter ending June 30, 2017. 

 

The Company incurred operating expenses of $79,504 for the six months ended June 30, 2017.

 

Our net gain through June 30, 2017 was $0.

 

The following table provides selected financial data about our company for the six months ended June 30, 2017, and the year ended December 31, 2016, respectively.

 
| Balance Sheet Data:   |   | 06/30/17     |   | 12/31/16  |
|-----------------------|--------|--------------|--------|-----------|
|                  |   |         |   |      |
| Cash                  | $      |  -      | $      | -         |
| Total assets          | $      |  77,050 | $      | 77,050    |
| Total liabilities     | $      | 107,796      | $      | 338,820   |
| Stockholders' deficit | $      | 1,309,014    | $      | 1,406,537 |

 

**Limited Operating History; Need for Additional Capital**

 

There is no historical financial information about us upon which to base an evaluation of our performance.  We are a development stage corporation and have not generated any revenues from operations.  We have no assurance that future financing will be available to us on acceptable terms.  If financing is not available on satisfactory terms, we may be unable to continue, develop or expand our operations.  Equity financing could result in additional dilution to existing shareholders.

 

**Liquidity and Capital Resources**

 

We have minimal assets and have not achieved operating revenues since our inception.  We have depended on sales of equity securities to conduct operations.

----

 

Our cash balance at June 30, 2017, was $0.

 

Cash provided by financing activities for the period through June 30, 2017, was $30,546.   We do not have sufficient funds to implement our business plan and will seek alternative sources of funds and business opportunities.

 

**Plan of Operation**

 

The Company is entering the Performance Wear sector via the acquisitions of two separate operating companies.  Upon the completion of these acquisitions, the Company will be seeking to expand product lines while crossing marketing merchandises between both company’s client lists.

 

The Performance Wear sector is anticipated to continue growing and out perform traditional leisure clothing past 2020.  Clothing items once reserved for the gym or yoga studio are now being worn out around town and to dinner.

 

The Company is an “emerging growth company” (“EGC”), that is exempt from certain financial disclosure and governance requirements for up to five years as defined in the Jumpstart Our Business Start-ups Act (the “JOBS Act”), that eases restrictions on the sale of securities; and increases the number of shareholders a company must have before becoming subject to the U.S. Securities and Exchange Commission’s (“SEC’s”) reporting and disclosure rules.

 

**Off-Balance Sheet Arrangements**

We have never entered into any off-balance sheet financing arrangements and have not formed any special purpose entities.  We have not guaranteed any debt or commitments of other entities or entered into any options on non-financial assets.

 

**ITEM 3.** **QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK** 

 

Not applicable.

 

**ITEM 4.** **CONTROLS AND PROCEDURES** 

 

**Evaluation of Our Disclosure Controls**

 

Under the supervision and with the participation of our senior management, including our chief executive officer and chief financial officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 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 quarterly report (the “Evaluation Date”).  Based on this  evaluation, our chief executive officer and chief financial officer concluded as of the Evaluation Date that our disclosure controls and procedures were not effective such that the information relating to us, required to be disclosed in our Securities and Exchange Commission (“SEC”) reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) 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.

 

**PART II OTHER INFORMATION**

 

**Item 1.** **LEGAL PROCEEDINGS** 

 

None

 

**Item 2.** **UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS** 

 

None

 

**Item 3.** **DEFAULTS UPON SENIOR SECURITIES** 

 

None.

 

**Item 4.** **OTHER INFORMATION** 

 

None

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**Item 5.** **EXHIBITS** 

In reviewing the agreements included as exhibits to this Form 10-Q, please remember that they are included to provide you with information regarding their terms and are not intended to provide any other factual or disclosure information about the Company or the other parties to the agreements.  The agreements may contain representations and warranties by each of the parties to the applicable agreement.  These representations and warranties have been made solely for the benefit of the parties to the applicable agreement and:

 
|   | • | should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate; |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 
|   | • | have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement; |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 
|   | • | may apply standards of materiality in a way that is different from what may be viewed as material to you or other investors; and |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------|

 
|   | • | were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

Accordingly, these representations and warranties may not describe the actual state of affairs as of the date they were made or at any other time. Additional information about the Company may be found elsewhere in this Form 10-Q and the Company’s other public filings, which are available without charge through the SEC’s website at http://www.sec.gov.

 
| **Exhibit No.** |   | **SEC Report**

**Reference No.**                                                                                                                                                                                                          |   | **Description**                                                  |
|----------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------|
|                 |   |                                                                                                                                                                                                                                                 |   |                                                             |
| 3.1                  |   | 3.1                                                                                                                                                                                                                                                  |   | Articles of Incorporation of Registrant (1)                      |
|                 |   |                                                                                                                                                                                                                                                 |   |                                                             |
| 3.2                  |   | 3.2                                                                                                                                                                                                                                                  |   | By-Laws of Registrant (2)                                        |
|                 |   |                                                                                                                                                                                                                                                 |   |                                                             |
| 14.1                 |   |                                                                                                                                                                                                                                                 |   | Code of Ethics (3)                                               |
|                 |   |                                                                                                                                                                                                                                                 |   |                                                             |
| 31.1 and 32.1        |   | *                                                                                                                                                                                                                                                    |   | Rule 1350 Certification of Chief Executive and Financial Officer |
|                 |   |                                                                                                                                                                                                                                                 |   |                                                             |
|                 | (1)    | Filed with the Securities and Exchange Commission on May 12, 2011 as an exhibit, numbered as indicated above, to the Registrant’s registration statement on Form S-1 (file no. 333-174155), which exhibit is incorporated herein by reference. |

The following exhibits are included as part of this report:

 

 
|   | (2) | Filed with the Securities and Exchange Commission on February 3, 2012 as an exhibit, numbered as indicated above, to the Registrant’s Form 8-K (file no. 333-174155), which exhibit is incorporated herein by reference. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 
|   | (3) | Filed with the Securities and Exchange Commission on March 19, 2012 as an exhibit, numbered as indicated above, to the Registrant’s Form 10-K (file no. 333-174155), which exhibit is incorporated herein by reference. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

* Filed herewith.

 

**SIGNATURES**

 

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

 
|                             | EXPERIENCE ART AND DESIGN, INC.                |
|----------------------------------|------------------------------------------------|
|                             | (Registrant)                                   |
|                             |                                           |
| Date:  August 21, 2017 | */s/ Eugene Caiazzo*                           |
|                             | Eugene Caiazzo                                 |
|                             | President, CEO and Principal Financial Officer |