falsefalsefalsefalsetruefalsePauli AndersenÅrsrapport25578198KPMGDampfaergevej 28DK-2100 Copenhagen2017-01-012017-12-312016-01-012016-12-312018-06-042018-06-0436729236Smartgurlz A/SDiplomvej 3812800Kgs. LyngbyDKDenmark2015-04-2941 12 25 77KPMG25578198Jon Beckmne32169statsaut. revisorDampfaergevej282100CopenhagenDKDenmark45707077602018-06-04Regnskabsklasse BfalsefalseRevisionspåtegningThe Board of Directors and the Executive Board have today discussed and approved the annual report of Smartgurlz A/S for the financial year 1 January – 31 December 2017.The annual report has been prepared in accordance with the Danish Financial Statements Act.We recommend that the annual report be approved at the annual general meeting.Sharmila Rani AlbrechtsenJesper NissenPauli AndersenChairmanSharmila Rani AlbrechtsenGert Erik RigetJesper NissenTo the shareholders of Smartgurlz A/SWe conducted our audit in accordance with International Standards on Auditing (ISAs) and the additional requirements applicable in Denmark. Our responsibilities under those standards and requirements are further described in the "Auditor's responsibilities for the audit of the financial statements" section of our report. We are independent of the Company in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants (IESBA Code) and the additional requirements applicable in Denmark, and we have fulfilled our other ethical responsibilities in accordance with these rules and requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.Copenhagen,-1251400-2393117135732127963910970352119-2718424-272487575948111279100215343-2733478-2729091-3336420-2399836-2729091-2399836-2729091156356260593370143912219337029971547256130914725613091240626312806720750298632720750298632011515931519300750000157087585541599704882779237137469733554512837241557890152435018706963850000693071-5324598232166-14745989252372424841000033976847698241669688776129989489454592998948945459152435018706963850000-29247620-23998363850000-5324598Depreciation The accounting policies used in the preparation of the financial statements are consistent with those of last year. The depreciation contains the years deåreciation of intangible and tangible assets. Profit/loss of sales or retirement is incorporated in the Financial Statement under depreciation and impairment losses.32In our opinion, the financial statements give a true and fair view of the Company's assets, liabilities and financial position at 31 December 2017 and of the results of the Company's operations for the financial year 1 January – 31 December 2017. Further, in our opinion, the Management's review gives a fair review of the matters discussed in the Management's review.We have audited the financial statements of Smartgurlz A/S for the financial year 1 January – 31 December 2017 comprising income statement, balance sheet, statement of changes in equity and notes, including accounting policies. The financial statements are prepared in accordance with the Danish Financial Statements Act. In our opinion, the financial statements give a true and fair view of the Company's assets, liabilities and financial position at 31 December 2017 and of the results of the Company's operations for the financial year 1 January – 31 December 2017 in accordance with the Danish Financial Statements Act.We draw attention to Note 2 in the financial statements, which described that the Company is dependent upon additional capital resources to continue its planned activities. If the group is no successful in raising sufficient additional capital there is a significant risk that the Company will not be able to continue as a going concern. Our opinion is not modified in respect of this matter.Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the Danish Financial Statements Act and for such internal control that Management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, Management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting in preparing the financial statements unless Management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.Our objectives are to obtain reasonable assurance as to whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs and the additional requirements in Denmark will always detect a material misstatement when it exists. Misstatements may arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users made on the basis of these financial statements. As part of an audit conducted in accordance with ISAs and the additional requirements applicable in Denmark, we exercise professional judgement and maintain professional scepticism throughout the audit. We also identify and assess the risks of material misstatement of the company financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error as fraud may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal control. obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by Management. conclude on the appropriateness of Management's use of the going concern basis of accounting in preparing the financial statements and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern. evaluate the overall presentation, structure and contents of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that gives a true and fair view. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.Management is responsible for the Management's review. Our opinion on the financial statements does not cover the Management's review, and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the Management's review and, in doing so, consider whether the Management's review is materially inconsistent with the financial statements or our knowledge obtained during the audit, or otherwise appears to be materially misstated. Moreover, it is our responsibility to consider whether the Management's review provides the information required under the Danish Financial Statements Act. Based on the work we have performed, we conclude that the Management's review is in accordance with the financial statements and has been prepared in accordance with the requirements of the Danish Financial Statements Act. We did not identify any material misstatement of the Management's review.The company's purpose is to develop, manufacture and market STEM products (Science, Technology, Engineering and Math) for girls from 6 years of age to teenage years and related business, cf. www.smartgurlz.com.In 2017, the company also continued its focus on product development, optimization of the production equipment and sales development. The finished product was launched in Copenhagen in mid-November 2016 and the company has hereafter participated in the majority of the large toy fairs worldwide, shark-tank in the USA and signed significant distributor contracts. In the last half of 2017 the company has realised significant sales in the US though Amazon and Shoppify. In the last half of 2017 the company has realised significant sales in the US though Amazon and Shoppify. In 2017, the company realised significant reductions in the costs of production, so it become more competitive in the toy market. In order to strengthen the company's capital resources for production, product, sales and market development, capital has been added in February 2017. In 2017 a new group structure was established, resulting in that Smartgulz Inc. become the parent company for Smartgurlz A/S. All sales to the North American market is conducted through the new US entity. The Company's activities have been financed by capital contributions and shareholder loans. Due to that the Company's start-up nature that results in significant investments in product development and sales activities, the Company is dependent upon additional capital resources to continue its planned activities. The parent company is currently working on raising additional capital, so that the Smartgurlz groups planned activities can go forward as planned. If the group is no successful in raising sufficient additional capital there is a significant risk that the Company will not be able to continue as a going concern.The annual report of Smartgurlz A/S for 2017 has been prepared in accordance with the provisions applying to reporting class B entities under the Danish Financial Statements Act.Pursuant to Section 32 of the Danish Financial Statements Act, the Company has decided only to disclose gross profit.Income from the sale of goods, is recognised in revenue when delivery and transfer of risk to the buyer have taken place, and the income may be measured reliably and is expected to be received. The date of transfer of the most significant benefits and risks is determined using standard Incoterms ® 2015. Revenue from the sale of goods where delivery has been postponed at the buyer's request is recognised as revenue when ownership of the goods has been transferred to the buyer. Revenue is measured at the fair value of the agreed consideration excluding VAT and taxes charged on behalf of third parties. All discounts granted are recognised in revenue.Other external costs comprise distribution costs and costs related to sales, sales campaigns, administration, office premises, operating leases, etc.Financial income and expenses comprise interest income and expense, financial costs regarding finance leases, gains and losses on securities, payables and transactions denominated in foreign currencies, amortisation of financial assets and liabilities as well as surcharges and refunds under the on-account tax scheme, etc.Tax for the year comprises current corporation tax for the year and changes in deferred tax, including changes in tax rates. The tax expense relating to the profit/loss for the year is recognised in the income statement, and the tax expense relating to amounts directly recognised in equity is recognised directly in equity.Plant and machinery and fixtures and fittings, tools and equipment are measured at cost less accumulated depreciation and impairment losses.  Cost comprises the purchase price and any costs directly attributable to the acquisition until the date on which the asset is available for use. Indirect production overheads and borrowing costs are not recognised in cost. Where individual components of an item of property, plant and equipment have different useful lives, they are accounted for as separate items, which are depreciated separately. The depreciable amount, which is calculated as cost less any projected residual values after the end of the useful life, is depreciated on a straight-line basis over the estimated useful life. The estimated useful lives are as follows: The useful life and residual value are reassessed annually. Changes are treated as accounting estimates, and the effect on depreciation is recognised prospectively. Fixed assets under construction are recognised and measured at cost at the balance sheet date. Upon entry into service, the cost is transferred to the relevant group of property, plant and equipment. Gains and losses on the disposal of property, plant and equipment are stated as the difference between the selling price less selling costs and the carrying amount at the date of disposal. Gains and losses are recognised in the income statement as other operating income or other operating costs, respectively.Machinery and equipment 3 years Fixtures and fittings, tools and equipment 5 yearsThe carrying amount of property, plant and equipment is subject to an annual test for indications of impairment other than the decrease in value reflected by depreciation or amortisation. Impairment tests are conducted of individual assets or groups of assets when there is an indication that they may be impaired. Write-down is made to the recoverable amount if this is lower than the carrying amount. The recoverable amount is the higher of an asset's net selling price and its value in use. The value in use is determined as the present value of the forecast net cash flows from the use of the asset or the group of assets, including forecast net cash flows from the disposal of the asset or the group of assets after the end of the useful life.Receivables are measured at amortised cost. Write-down is made for bad debt losses where there is an objective indication that a receivable or a portfolio of receivables has been impaired. If there is an objective indication that an individual receivable has been impaired, write-down is made on an individual basis. Write-downs are calculated as the difference between the carrying amount of receivables and the present value of forecast cash flows, including the realisable value of any collateral received. The effective interest rate for the individual receivable or portfolio is used as discount rate.The expected dividends payment for the year is disclosed as a separate item under equity.Warranties comprise obligations to make good any defects within the warranty period. Provisions are recognised based on the Company's experience with warranties. Provisions expected to be maintained for more than one year from the balance sheet date are discounted at a rate reflecting risk and the due date for payment.Financial liabilities are recognised at cost at the date of borrowing, corresponding to the proceeds received less transaction costs paid. In subsequent periods, the financial liabilities are measured at amortised cost using the effective interest method. Accordingly, the difference between cost and the nominal value is recognised in the income statement over the term of the loan together with interest expenses. Finance lease obligation comprise the capitalised residual lease obligation of finance leases. Other liabilities are measured at net realisable value.Current tax payable and receivable is recognised in the balance sheet as tax computed on the taxable income for the year, adjusted for tax on the taxable income of prior years and for tax paid on account. Deferred tax is measured using the balance sheet liability method on all temporary differences between the carrying amount and the tax value of assets and liabilities based on the planned use of the asset or settlement of the liability. However, deferred tax is not recognised on temporary differences relating to goodwill non-deductible for tax purposes and on office premises and other items where the temporary differences arise at the date of acquisition without affecting either profit/loss or taxable income. Deferred tax assets, including the tax value of tax loss carryforwards, are recognised at the expected value of their utilisation within the foreseeable future; either as a set-off against tax on future income or as a set-off against deferred tax liabilities in the same legal tax entity. Any deferred net assets are measured at net realisable value. Deferred tax is measured in accordance with the tax rules and at the tax rates applicable at the balance sheet date when the deferred tax is expected to crystallise as current tax. Changes in deferred tax as a result of changes in tax rates are recognised in the income statement or equity, respectively.Prepayments comprise prepayment of costs incurred relating to subsequent financial years.The Company's activities have been financed by capital contributions and shareholder loans. Due to that the Company's start-up nature that results in significant investments in product development and sales activities, the Company is dependent upon additional capital resources to continue its planned activities. The parent company is currently working on raising additional capital, so that the Smartgulz groups planned activities can go forward as planned. If the group is no successful in raising sufficient additional capital there is a significant risk that the Company will not be able to continue as a going concern.DKK 2017 2016 Wages and salaries 1,252,705 272,257 Pensions 10,697 5,583 Other social security costs 93,919 1,799 1,357,321 279,639 Average number of full-time employees 3 2DKK 2017 2016 Interest to related parties 90,510 0 Other financial expenses 492 15,343 91,002 15,343The company leases office space. The lease requires monthly payments of DKK 5,346 and terminates on June 30, 2019. Smartgurlz A/S is part of the consolidated financial statements of Smartgurlz Inc, Delaware USA, which is the smallest group in which the Company is included as a subsidiary.367292362017-01-012017-12-31367292362017-01-012017-12-311367292362017-01-012017-12-311367292362017-01-012017-12-312367292362017-01-012017-12-311367292362017-01-012017-12-312367292362017-01-012017-12-313367292362017-01-012017-12-3110367292362016-01-012016-12-31367292362017-01-012017-12-31d:RetainedEarningsMember367292362016-01-012016-12-31d:RetainedEarningsMember367292362017-12-31367292362016-12-31367292362017-01-012017-12-31d:ContributedCapitalMember367292362017-01-01d:ContributedCapitalMember367292362017-12-31d:ContributedCapitalMember367292362017-01-012017-12-31d:RetainedEarningsMember367292362017-01-01d:RetainedEarningsMember367292362017-12-31d:RetainedEarningsMemberiso4217:DKKxbrli:pure