UNITED STATES

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington,

WASHINGTON, D.C. 20549


FORM 10-Q


Quarterly Report Pursuant to Section

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 orOR 15(d) of

The Securities Exchange Act ofOF THE SECURITIES EXCHANGE ACT OF 1934

for

For the quarter ended Julyquarterly period ended: October 31, 2010


2020

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______to _______

Commission file number File Number 033-20966

Finotec Group, Inc.

(Exact name of registrant as specified in Itsits charter)


Nevada Nevada76-0251547
 (State(State or other jurisdiction of
Incorporation or organization)		(IRS Employer
Incorporation or Organization)
Identification No.)

3445 Lawrence Ave


228 East 45 Street, Suite 1801,Oceanside, New York, NY 10017
11572

(646) 768-8417

(Address of principal executive offices)


Registrant'sIssuer’s telephone number including area code 718-513-3620

Indicate by check markcode)

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

Securities registered pursuant to Section 12(b) of the Act:

Title of each classTrading Symbol(s)Name of each exchange on
which registered
NoneN/AN/A

Check whether the registrantissuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the precedingpast 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 x☒ 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 o      No o
☐

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“large accelerated filer,” “accelerated filer” and “smaller“smaller reporting company” in Rule 12b-2 of the Exchange Act.

(Check one):

Large accelerated filero ☐Accelerated filero ☐
Non-accelerated filer
o (Do not check if a smaller reporting company)     
☐		Smaller reporting company ☒
xEmerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

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

State the number of shares outstanding of each of the issuer’s classes of common equity as of the latest practicable date: - Common Series 0.001 par value


Documents incorporated by reference: None.

date. As of November 10, 2020, there were 300,000,000 common shares were outstanding.

 

FINOTEC GROUP, INC.
INDEX


Finotec Group, Inc.

CONTENTS

PART I.I – FINANCIAL INFORMATION 
  
Item 1. – Financial Statements:Statements 
  
Consolidated Balance Sheets1
 
Consolidated Balance SheetsStatements of Operations (unaudited)2
 
July 31, 2010 (Unaudited) and January 31, 2010Consolidated Statements of Cash Flows (unaudited)3
  
Consolidated Statements of Operations
Three Months and Six Months ended
July 31, 2010 (Unaudited) and 2009Stockholders’ Deficit (unaudited)4
  
Notes to Consolidated Financial Statements of Cash Flows – Six Months Ended July 31, 2010
and 2009(unaudited)5
  
Notes to Consolidated Financial Statements .6
Item 2.Management's – Management’s Discussion and Analysis of Financial
Condition andAnd Results of Operations.Operations8
  
Item 3T3. – Quantitative and Qualitative Disclosures about Market RiskControls and Procedures168
  
Item 4. – Controls and Procedures8
  
PART II.II - OTHER INFORMATION10
  
Item 1.1A. – Risk FactorsLegal Proceedings.1810
  
Item 2.3. – Defaults Upon Senior SecuritiesChanges in Securities and Use of Proceeds.1810
  
Item 3.6. – ExhibitsSubmission of Matters to a Vote of Security Holders.1810
  
Item 4.SIGNATURESExhibits and Reports on Form 8-K.18
Signature.1811

i



2

FINOTEC GROUP, INC.

CONSOLIDATED

BALANCE SHEETS



  U.S Dollars 
  
July 31 ,
2010
  
January
31 , 2010
 
  (Unaudited)  (Audited) 
ASSETS      
       
Current Assets      
Cash and cash equivalents  1,332,261   4,803,767 
Cash and cash equivalents held for customers  9,693,916   2,904,900 
Prepaid and other current assets  1,169,847   228,311 
Total Current Assets  12,196,024   7,936,978 
Property and Equipment, Net  789,794   377,717 
         
Total Assets  12,985,817   8,314,695 
         
LIABILITIES AND STOCKHOLDERS' EQUITY     
         
Current Liabilities        
Accounts payable and accrued expenses       1,271,290   1,051,354 
Customers deposits  9,693,916   2,904,900 
Provision for severance  287,241   291,483 
Total current Liabilities  11,252,447   4,247,737 
         
Stockholders' Equity        
Common stock, $0.001 par value, 300,000,000 shares authorized,     
121,030,936 shares issued and outstanding  121,031   121,031 
         
Additional paid-in capital  13,223,250   13,223,250 
Foreign currency translation adjustment  (474,095)  (678,876)
Accumulated Deficit  (11,136,815)  (8,598,447)
         
Total Stockholders' Equity  1,733,370   4,066,958 
Total Liabilities and Stockholders' Equity  12,985,817   8,314,695 

See

(Unaudited)

  October 31,  January 31, 
  2020  2020 
       
ASSETS      
Total Assets $-  $- 
         
LIABILITIES & STOCKHOLDERS’ DEFICIT        
         
Accounts payable $620  $- 
Note payable related parties  23,306   2,675 
Total liabilities  23,926   2,675 
         
Commitments and Contingencies  -   - 
         
Stockholders’ Equity        
Preferred Series A stock, $0.001 par value, 10,000,000 shares authorized,        
10,000,000 shares issued and outstanding, October 31, 2020 and January 31,2020      10,000 
Common stock, $0.001 par value; 300,000,000 shares authorized,        
300,000,000 shares issued and outstanding October 31, 2020 and January 31, 2020  300,000   300,000 
Additional paid in capital  13,851,548   13,261,548 
Retained earnings (deficit)  (14,185,474)  (13,564,223)
Total Stockholders’ (Deficit)  (23,926)  (2,675)
Total Liabilities and Stockholders’ (Equity) $-  $- 

The accompanying notes to consolidatedare an integral part of these financial statements.

3


FINOTEC GROUP, INC.

CONSOLIDATED

STATEMENTS OF OPERATIONS


  Six months ended  Three months ended 
  July 31  July 31  July 31  July 31 
  2010  2009  2010  2009 
  U.S Dollars  U.S Dollars 
  (Unaudited)  (Unaudited)  (Unaudited)  (Unaudited) 
             
Net Trading Revenue  1,265,757   1,288,471   710,027   601,645 
                 
Operating Expenses                
General and Administrative  17,469   440,130   8,938   329,363 
Salaries  1,530,961   1,475,340   770,813   958,358 
Rent and office  252,990   0   130,333   0 
Research and development  200,622   68,640   84,872   16,949 
Technology and computer  122,195   168,914   6,925   13,906 
Marketing  97,369   296,561   51,596   171,511 
Professional fees  463,587   331,727   156,370   274,142 
Financial data fees  267,191   79,716   220,309   60,458 
Depreciation  171,207   118,282   88,926   61,248 
Commodity set up costs  149,834   0   (17,656)  0 
Other expense  147,726   34,843   49,571   (16,608)
Total Operating Expenses  3,421,151   3,014,152   1,550,997   1,869,326 
                 
Operating Loss  (2,155,393)  (1,725,682)  (840,969)  (1,267,681)
                 
Financing Expenses  (147,587)  292,666   (173,572)  425,177 
                 
Net Loss  (2,302,980)  (1,433,016)  (1,014,542)  (842,504)
                 
                 
Weighted average number of shares outstanding  121,030,936   103,812,936   121,030,936   121,030,936 
                 
Net Loss per common share $-0.02  $-0.01  $-0.01  $-0.01 
See

(Unaudited)

  Three months  Three months  Nine months  Nine months 
  ended  ended  ended  ended 
  October 31,  October 31,  October 31,  October 31, 
  2020  2019  2020  2019 
Revenue $-  $-  $-  $- 
                 
Operating Expenses:                
Administrative expenses -related party  6,737   -   621,251   - 
Total operating expenses  6,737   -   621,251   - 
(Loss) from operations  (6,737)  -   (621,251)  - 
Other expense                
Other (expense) net  -   -   -   - 
Income (loss) before provision for income taxes  (6,737)  -   (621,251)  - 
Provision for income taxes  -   -   -   - 
Net (Loss) $(6,737) $-  $(621,251) $- 
                 
Basic and diluted earnings(loss) per common share $(0.00) $-  $(0.00) $- 
                 
Weighted average number of shares outstanding  300,000,000   300,000,000   300,000,000   300,000,000 

The accompanying notes to consolidatedare an integral part of these financial statements.


4

FINOTEC GROUP, INC.

CONSOLIDATED

STATEMENTS OF CASH FLOWS (UNAUDITED)

(Unaudited)

  Nine months  Nine months 
  ended  ended 
  October 31,  October 31, 
  2020  2019 
Cash Flows From Operating Activities:      
Net loss $(621,251) $         - 
Adjustments to reconcile net income to net cash provided by (used for) operating activities        
Stock-based compensation  600,000     
Changes in operating assets and liabilities:        
Accounts payable  620     
Net cash provided by (used for) operating activities  (20,631)  - 
         
Cash Flows From Investing Activities:        
Net cash provided by (used for) investing activities  -   - 
         
Cash Flows From Financing Activities:        
Proceeds from related party loans  20,631     
Net cash provided by (used for) financing activities  20,631   - 
         
Net Increase (Decrease) In Cash  -   - 
Cash At The Beginning Of The Period  -   - 
Cash At The End Of The Period $-  $- 
         
Supplemental disclosure of cash flow information:        
Cash paid for interest $-  $- 

The accompanying notes are an integral part of these financial statements.


FINOTEC GROUP, INC

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(Unaudited)

              Additional     Total 
  Preferred Stock  Common Stock  Paid-in  Accumulated  Stockholders’ 
  Shares  Value  Shares  Value  Capital  Deficit  Equity 
Balance, January 31, 2019  -  $-   300,000,000  $300,000  $13,261,548  $(13,561,548) $      - 
                             
Net loss                      -   - 
                             
Balance, April 30, 2019  -  $-   300,000,000  $300,000  $13,261,548  $(13,561,548) $- 
                             
Net loss                      -   - 
                             
Balance, July 31,2019  -  $-   300,000,000  $300,000  $13,261,548  $(13,561,548) $- 
                             
Net loss                            
                             
Balance, October 31, 2020  -  $-   300,000,000  $300,000  $13,261,548  $(13,561,548) $- 
                             
              Additional     Total 
  Preferred Stock  Common Stock  Paid-in  Accumulated  Stockholders’ 
  Shares  Value  Shares  Value  Capital  Deficit  Equity 
Balance, January 31, 2020  -  $-   300,000,000  $300,000  $13,261,548  $(13,564,223) $(2,675)
                             
Net loss                      (607,790)  (607,790)
                             
Issuance of preferred stock  10,000,000   10,000           590,000       600,000 
                             
Balance , April 30, 2020  10,000,000  $10,000   300,000,000  $300,000  $13,851,548  $(14,172,013) $(10,465)
                             
Net loss                      (6,725)  (6,725)
                             
Balance July 31, 2020  10,000,000  $10,000   300,000,000  $300,000  $13,851,548  $(14,178,738) $(17,190)
                             
Net loss                      (6,737)  (6,737)
                             
Balance, August 31, 2020  10,000,000  $10,000   300,000,000  $300,000  $13,851,548  $(14,185,474) $(23,926)

The accompanying notes are an integral part of the financial statements.


4

  U.S Dollars 
For the six months ended July 31  July 31 
  2010  2009 
  (Unaudited)  (Unaudited) 
Cash Flows from Operating Activities      
Net Loss  (2,302,980)  (1,836,725)
         
Adjustment to reconcile Net Loss to        
  Net cash provided by Operating Activities        
Depreciation  172,541   170,657 
         
Changes in Operating Assets and Liabilities        
Decrease (increase) in prepaid and other current assets  (941,536)  (2,667,491)
Increase in accrued expenses  219,935   (56,135)
Increase in accrued severance payable  (4,242)  (0)
Increase (decrease) in customers deposits  6,789,016   (1,329,096)
Net cash provided by (used in) Operating Activities  3,932,734   (5,641,237)
         
Cash Flows from Investing Activities        
Purchase of fixed Assets  (584,618)  (98,295)
Selling of fixed Assets        
Net cash used in Investing Activities  (584,618)  (98,295)
         
         
Effect of Foreign Currency Translation  (30,609)  404,706 
         
Net increase in Cash and Cash Equivalent  3,317,509   (2,240,041)
         
Cash and Cash Equivalents- beginning of year  7,708,667   5,108,144 
         
Cash and Cash Equivalents- Ending  11,026,176   2,868,103 


5

FINOTEC GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1.    Summary

FOR THE THREE-MONTH PERIODS ENDED OCTOBER 31, 2020 AND 2019

(Unaudited)

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

The Finotec Group Inc. (“Finotec”, “the Company”, “we”, “us”) has been dormant since November 2011. On March 16, 2020, as a result of Significanta custodianship in Clark County, Nevada, Case Number: A-20-809716-B, Custodian Ventures LLC (“Custodian”) was appointed custodian of the Company.

On March 17, 2020, Custodian appointed David Lazar as the Company’s Chief Executive Officer, President, Secretary, Chief Financial Officer, Chief Executive Officer, and Chairman of the Board of Directors.

David Lazar, 30, has been CEO and Chairman of the Company since May 16, 2018. David Lazar is a private investor. Mr. Lazar has been a partner at Zenith Partners International since 2013, where he specializes in research and development, sales, and marketing. From 2014 through 2015, David was the Chief Executive Officer of Dico, Inc., which was then sold to Peekay Boutiques. Since February of 2018, Mr. Lazar has been the managing member of Custodian Ventures LLC, where he specializes in assisting distressed public companies. Since March 2018, David has acted as the managing member of Activist Investing LLC, which specializes in active investing in distressed public companies. David has a diverse knowledge of financial, legal, and operations management; public company management, accounting, audit preparation, due diligence reviews, and SEC regulations.

COVID-19

On March 11, 2020, the World Health Organization (“WHO”) declared the Covid-19 outbreak to be a global pandemic. In addition to the devastating effects on human life, the pandemic is having a negative ripple effect on the global economy, leading to disruptions and volatility in the global financial markets. Most US states and many countries have issued policies intended to stop or slow the further spread of the disease.

Covid-19 and the U.S’s response to the pandemic are significantly affecting the economy. There are no comparable events that provide guidance as to the effect the Covid-19 pandemic may have, and, as a result, the ultimate effect of the pandemic is highly uncertain and subject to change. We do not yet know the full extent of the effects on the economy, the markets we serve, our business, or our operations.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying financial statements have been prepared in accordance with the Financial Accounting Policies


Standards Board (“FASB”) “FASB Accounting Standard Codification™” (the “Codification”) which is the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with generally accepted accounting principles (“GAAP”) in the United States. 

Management’s Representation of Interim Financial Information


Statements

The accompanying un-auditedunaudited consolidated financial statements ofhave been prepared by the Company (as defined below) should be read in conjunction withwithout audit pursuant to the consolidated financial statementsrules and notes thereto filed withregulations of the U.S. Securities and Exchange Commission (“SEC”). Certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the Company’s Annual Report on Form 10-KSB forUnited States (“GAAP”) have been condensed or omitted as allowed by such rules and regulations, and management believes that the fiscal year ended January 31, 2010.  Indisclosures are adequate to make the information presented not misleading. These consolidated financial statements include all of the adjustments, which in the opinion of management the accompanying consolidatedare necessary to a fair presentation of financial statements reflect allposition and results of operations. All such adjustments are of a normal and recurring nature considered necessary to present fairly the financial position of the Company and its consolidated subsidiaries at July 31, 2010, and thenature. Interim results of their operations and their cash flows for the six months ended July 31, 2010 and July 31, 2009.  The results of interim periods are not necessarily indicative of the results that may be expected for t he year ending December 31, 2010.


      Description of Business
Finotec Group, Inc. (“Finotec, Inc.), a Nevada corporation, is principally engaged, through its wholly-owned subsidiaries, in offering foreign currency market trading to professionals and retail clients over its web-based trading system and other professional trading systems.
Shares in Finotec began trading on the Over the Counter Bulletin Board listings. (OTCBB: FTGI).
Finotec Group's United Kingdom subsidiary, Finotec Trading UK, Limited(:”FTUK”), has been authorized by the UK’s Financial Services Authority (FSA) to act as a Market Maker, as defined by the FSA, in the United Kingdom. As of November 9, 2007, Finotec Trading UK, Limited, is approved by the FSA as a Market Maker and Principal, and thus Finotec Trading UK, Limited, may now offer UK clients certain regulated investment instruments such as Commodity Futures, Commodity options and options on commodity futures, Contract for Differences, Futures, Options, Rights to or interests in investments, Rolling spot Forex contracts, and Spread Bets.  As of February 2010, FTUK is approved by the FSA whereby FTUK is licensed and approved to carry out Fund Management Activities.
Risk Management
These Finotec Group activities give rise to risks which are monitored and managed as follows:
Credit Risk
Clients are required to deposit cleared funds as margin before they can trade. If the client margin falls below the minimum required to maintain a position, they will be notified that they are on margin call and can only reduce their positions or provide additional funds. At any time the client is on margin call, the company may, at its discretion, liquidate some or all of that client's positions in order to bring them back into line with their margin requirements.

The company also has potential credit risk exposure to market counterparties with which it hedges and with banks. The company has a defined risk appetite for exposure to each market counterparty and bank to which it has credit exposure.
The Company provides credit to selected Institutional Clients.
6

FINOTEC GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Liquidity risk

The company has significant net cash balances as at the balance sheet date and continually monitors its capital adequacy.
Foreign currency risk

The company has financial instruments which are denominated predominantly in US dollars. The gains and losses arising from the company's exposure are recognised in the profit and loss account.

Market price risk

Market risk arises from open contracts with customers and counterparties. Exposure to market risk is closely monitored in accordance with limits and reduced through hedging.

Principles of Consolidation
The consolidated financial statements include the accounts of Finotec Inc. and its wholly owned subsidiaries, Finotec Trading, Inc. (“Finotec Trading”) and its owned subsidiary, Finotec USA Inc., Fino Consulting Ltd, Finotec Trading UK Ltd, and Finotec Ltd’s 99.7% owned subsidiary, FinoLogic Ltd (formerly Forexcash Global Trading Ltd). (“Forexcash”) (collectively referred to as the “Company”, unless otherwiseindicated).  All material inter company transactions and balances have been eliminated in consolidation.

Since the liabilities of FinoLogic Ltd exceed its assets, and the owner of the 0.3% minority interest has no obligation to supply additional capital, no minority interest has been recorded in the consolidated financial statements.
2.  Property and Equipment

Property and equipment consist of the following:

  
Estimated
Useful
Life
  
July 31,
 2010
  
January 31,
2010
 
  years  (un-audited)  (audited) 
          
Computer equipment  3  $797,053  $771,703 
Purchased software  3  $491,168  $184,951 
Office furniture and equipment  7  $613,337  $518,844 
Leasehold improvements  10  $119,553  $0 
             
Total Property and Equipment at Cost     $2,021,111  $1,475,498 
             
Less accumulated depreciation and amortization     $1,231,317  $1,097,781 
             
Property and Equipment - Net  $789,794  $377,717 
7
FINOTEC GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

3.Legal Proceedings

In the normal course of business, a few Finotec clients have claims for alleged trading profits or losses that these clients are considered to due to them.  The current amounts in question are in no more than US$ 200,000. Finotec’s view is that there is in-sufficient basis for these claims

Management does not expect any of these claims to have a material effect on the Company's financial position or results of operations.
ISSUANCES OF EQUITY SECURITIES
On September 2, 2009, the Company entered into a definitive agreements for the sale of 17,218,000 Common Shares at a price of $0.25 per share. The shares of Common Stock sold in the private placement offering have not been registered under the Act and may not be offered or sold absent registration or an applicable exemption from such registration requirements. All such shares are subject as well to a registration rights agreement. The summary description of the financing described above does not purport to be complete and is qualified in its entirety by reference to the Stock Purchase Agreement filed as an Exhibit hereto.
On July 31st 2009, the Company entered into a definitive agreement for the sale of 11,111,111 Common Shares at a price of $0.18 per share as well as 2,780,000 Common Shares at a price of $0.25 per share. The shares of Common Stock sold in the private placement offering have not been registered under the Act and may not be offered or sold absent registration or an applicable exemption from such registration requirements. All such shares are subject as well to a registration rights agreement. The transaction closed on July 31st 2009.


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

This discussion should be read in conjunction with the Consolidated Financial Statements and the Notes to Consolidated Financial Statements of Finotec Group, Inc. and its subsidiaries contained herein. The results of operations for an interim period are not necessarily indicative of results for a full year.

Going Concern

The accompanying financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business for the twelve months following the date of these financial statements. The Company has incurred operating losses since inception. As of October 31, 2020, the Company had a working capital deficit of $23,926 and negative retained earnings of 14,185,747.

Because the Company does not expect that existing operational cash flow will be sufficient to fund presently anticipated operations, this raises substantial doubt about the Company’s ability to continue as a going concern. Therefore, the Company will need to raise additional funds and is currently exploring alternative sources of financing. The Company is currently being funded by David Lazar who is extending interest-free demand loans to the Company. Historically, the Company has raised capital through private placements, as an interim measure to finance working capital needs and may continue to raise additional capital through the sale of common stock or other securities and obtaining some short-term loans. The Company will be required to continue to so until its operations become profitable. Also, the Company has, in the past, paid for consulting services with its common stock to maximize working capital, and intends to continue this practice where feasible.

5

Use of Estimates

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of liabilities, the liability for the excess share issuance, and disclosure of contingent assets and liabilities at the date of the financial statements. The most significant estimates relate to income taxes and contingencies. The Company bases its estimates on historical experience, known or expected trends, and various other assumptions that are believed to be reasonable given the quality of information available as of the date of these financial statements. The results of these assumptions provide the basis for making estimates about the carrying amounts of assets and liabilities that are not readily apparent from other sources. Actual results could differ from these estimates.

Revenue Recognition

On July 1, 2018, the Company adopted Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”). Results for reporting periods beginning after April 1, 2018, are presented under ASC 606. As of and for the year or for any subsequent period.



RESULTS OF OPERATIONS

THREE MONTHS ENDED JULYended October 31, 2010 AND 2009


NET TRADING REVENUE

Net trading revenue are comprised primarily of spread-based brokerage fees earned from our clients' brokerage transactions. Total net revenue from operations was $710,028 for2020, the three months ended July 31, 2010, as compared to a net gain from operations of $601,645 for the three months ended July 31, 2009. This increase is attributable to a variety of factors, including the commencement of the institutional FX activities.

The Company had net losses of $1,014,542 for the three months ended July 31, 2010, as compared to a net loss of $842,504 for the three months ended July 31, 2009.
8

FINOTEC GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

OPERATING EXPENSES

Operating expensesfinancial statements were $1,550,997 for the three months ended July 31, 2010, as compared to $1,869,326 for the three months ended July 31, 2009. This decrease wasnot impacted due to the company’s continued effortapplication of Topic 606 because the Company had no revenues.

Cash and cash equivalents

The Company considers all highly liquid temporary cash investments with an original maturity of three months or less to reduce its overhead costs.


LIQUIDITY AND CAPITAL RESOURCES

Thebe cash equivalents. On October 31, 2020, and January 31, 2020, the Company’s cash balance increase by $3,317,509 from a cash balance as of January 31, 2010 of
$ 7,708,667 to $11.026.175 as of July 31, 2010. This increase is primarily due increased customer deposits less trading losses.

Net cash provided by operating activities amounted to $3.932,734equivalents totaled $-0- and $-0- respectively.

Income taxes

The Company accounts for income taxes under FASB ASC 740, “Accounting for Income Taxes”. Under FASB ASC 740, deferred tax assets and liabilities are recognized for the six months ended July 31, 2010. This is due to an increase in customer deposits less trading losses.  It is noted that Market conditions remain difficult – mainlyfuture tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under FASB ASC 740, the effect on deferred tax assets and liabilities of a varietychange in tax rates is recognized in income in the period that includes the enactment date. FASB ASC 740-10-05, “Accounting for Uncertainty in Income Taxes” prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of factors.tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities.

The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. The Company assesses the validity of its conclusions regarding uncertain tax positions quarterly to determine if facts or circumstances have arisen that might cause it to change its judgment regarding the likelihood of a tax position’s sustainability under audit.

Stock-based Compensation

The Company accounts for stock-based compensation using the fair value method following the guidance outlined in Section 718-10 of the FASB Accounting Standards Codification for disclosure about Stock-Based Compensation. This section requires a public entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award- the requisite service period (usually the vesting period). No compensation cost is recognized for equity instruments for which employees do not render the requisite service.

Net Loss per Share

Net loss per common share is computed by dividing net loss by the weighted average common shares outstanding during the period as defined by Financial Accounting Standards, ASC Topic 260, “Earnings per Share.” Basic earnings per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding.

6


Future capital requirements

Recent Accounting Pronouncements

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which establishes a new lease accounting model for lessees. The updated guidance requires an entity to recognize assets and liabilities arising from financing and operating leases, along with additional qualitative and quantitative disclosures. The amended guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, with early adoption permitted. In March 2019, the adequacyFASB issued ASU 2019-01, Codification Improvements, which clarifies certain aspects of available funds will depend on numerous factors, increased revenues - including the successful commercialization of our the new business divisions , successful technology upgradeslease standard. The FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases in July 2018. Also in 2018, the FASB issued ASU 2018-11, Leases (Topic 842) Targeted Improvements, which provides an optional transition method whereby the new lease standard is applied at the adoption date and recognized as an adjustment to retained earnings. The amendments have the same effective date and transition requirements as the new lease standard.

We intend to adopt ASC 842 on July 1, 2020. The adoption of this guidance is not expected to have any impact on our systems, products, competing technological and market developments, and the development of strategic alliances for the development and marketing of our products.


financial statements.

Stockholders’ Equity

The Company has successfully launched its Institutional Forex Businessauthorized 300,000,000 shares of Common Stock with a par value of $0.001. As of October 31, 2020, and set up the infrastructure for the Institutional Commodity Business. More Information can be obtained on the web site www.finotrade.com Following the launchJanuary 31, 2020, respectively, there were 300,000,000 shares of these businesses;Common Stock issued and outstanding, respectively. On April 27, 2020, the Company willfiled a Certificate of Designation with the State of Nevada to authorize 10,000,000 shares of Series A Preferred Stock (“Series A”). Each share of Series A is convertible into 20 shares of Common Stock. April 28, 2020, the Company awarded 10,000,000 shares of Series A to Custodian Ventures, LLC. managed by David Lazar in return for services provided. As a result, the Company recorded a stock-based compensation expense of $600,000.

NOTE 4 – COMMITMENTS AND CONTINGENCIES

The Company did not have sufficient funds to satisfy their cash requirements until July 2011 assuming monthly expensesany contractual commitments as of October 31, 2020, and January 30, 2020.

NOTE 5 –NOTES PAYABLE-RELATED PARY

Mr. Lazar, the principal member of the Company at $500,000 and basic revenue generationCompany’s Court-appointed custodian is considered a related party. During the year ended October 31, 2020, has extended $ 20,631 in the amount of US$ 300,000 byinterest-free demand loans to the Company. The company expects to be in a break even positionThese management services provided by 1q ’2011.


Furthermore, The Company is continuing its efforts to increase revenues will are centered onMr. Lazar, the following activities.

oExpansion of  our market share in our retail FX, CFD activities
oExpansion of the Institutional brokerage trading activity for the same products which was launched in April 2010.
o.
On the technology side, the activities have been re-branded as under the FinoLogic Brand Name and the proposed activitiesCompany’s only employee, are to “
oContinue to improve the platform and solutions offered – Sky trader and Sky mobile
oContinue to improve on the easy white label version of our retail margin trading solutions
oIncorporate other trading platforms such as MT4 into its suite of products with intention on offering clients the choice of a selection of trading platforms


Finotec expectsmanage the day to day operations of the Company; and take the necessary actions to enable the Company to become a viable operating entity. As of October 31, 2020, and January 31, 2020, the amounts due to notes payable, related parties amounted to $23,306 and $2,675, respectively.

NOTE 6 – SUBSEQUENT EVENTS

In accordance with FASB ASC 855-10, Subsequent Events, the Company has analyzed its operations subsequent to October 31, 2020, to the date these consolidated financial statements were issued, and has determined that it will take 3-6 months before the effect of the will show a positive impact on its cash flow and operations.


9
does not have any material subsequent events to disclose in these consolidated financial statements.


FINOTEC GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

ISSUES, UNCERTAINTIES AND RISK FACTORS

The Consolidated Financial Statements and Management's

Item 2 Management’s Discussion and Analysis of Financial Condition and Results of OperationsOperations.

Overview

Our financial statements accompanying this Report have been prepared assuming that we will continue as a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The financial statements do not include any adjustments that might result from the outcome of this report shoulduncertainty. We have a minimal operating history and minimal revenues or earnings from operations. We have no significant assets or financial resources. We will, in all likelihood, sustain operating expenses without corresponding revenues for the immediate future.

Plan of Operation

We have been dormant since May 2005. As of the date of this Report, we intend to engage in what we believe to be read and evaluated togethersynergistic acquisitions or joint ventures with the issues, uncertainties and risk factors relating toa company or companies that we believe will enhance our business described below. Whileplan. There are no assurances we have beenwill be able to consummate any acquisitions using our securities as consideration, or at all. Numerous things will need to occur to allow us to implement this aspect of our business plan and continue tothere are no assurances that any of these developments will occur, or if they do occur, that we will be confidentsuccessful in fully implementing our plan.

Limited Operating History; Need for Additional Capital

We cannot guarantee we will be successful in our business andoperations. We have not generated any revenue since inception. Our business prospects, we believe it is very important that anyone who reads this report consider the issues, uncertainties and risk factors described below, which include business risks relevant both to our industry and to us in particular. These issues, uncertainties and risk factors are not intended to be exclusive. This report also contains statements that are forward-looking within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1 934, as amended.


These forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. When used in this report, the words "believes," "plans," "estimates," "expects," "intends," "designed," "anticipates," "may," "will," "should," "could," "become," "upcoming," "potential," "pending," and similar expressions, if and to the extent used, are intended to identify the forward-looking statements. All forward-looking statements are based on current expectations and beliefs concerning future events that are subject to risks inherent in the establishment of a new business enterprise, including limited capital resources and uncertainties. Actual results may differ materially from the results suggested in this report. Factors that may cause or contribute to such differences, and our business risks and uncertainties generally, include, but are not limitedpossible cost overruns due to the items described below, as w ell asprice and cost increases in other sections of this reportsupplies and in our other public filings and our press releases.


THERE ARE SEVERAL FACTORS THAT MAY CAUSE FLUCTUATIONS IN OUR QUARTERLY OPERATING RESULTS, WHICH WOULD LIKELY RESULT IN SIGNIFICANT VOLATILITY IN OUR STOCK PRICE

Causes of such significant fluctuations may include, but are not limited to:

·cash flow problems that may occur;
·the quality and success of, and potential continuous changes in, sales or marketing strategies (which have undergone significant changes recently and are expected to continue to evolve) and the costs allocated to marketing campaigns and the timing of those campaigns;
·the timing, completion, cost and effect of our development and launch of planned enhancements to the Finotec trading platform;
·the size and frequency of any trading errors for which we ultimately suffer the economic burden, in whole or in part;
·changes in demand for our products and services due to the rapid pace in which new technology is offered to customers in our industry;
·demand of customers to transact business on our platform;
·actions taken by our competitors, including new product introductions, fee schedules, pricing policies and enhancements;
·costs or adverse financial consequences that may occur with respect to regulatory compliance or other regulatory issues, particularly relating to laws, rules or regulations that may be enacted with a   focus on the active trader market; and
·General economic and market factors that affect active trading, including changes in the securities and financial markets.

10

FINOTEC GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

OUR SUCCESS IS DEPENDENT UPON OUR RECEIPT AND MAINTENANCE OF REGULATORY APPROVALS IN THE MAJOR CUSTOMER MARKETS AROUND THE WORLD.

The Company believes that its success, in large part, depends upon its ability to receive and retain regulatory approvals in the major markets around the world.  Such approvals both expand the variety of services which the Company can offer and bolster the Company’s reputation among potential customers.

In November 2007, Finotec UK received authorization from the FSA to offer certain financial services in the UK. In connection therewith, Finotec has received regulatory approval to offer cross border investment services in the various European countries, from its UK office. In order to retain its FSA authorization, the Company must comply with numerous requirements, including financial covenants as well as those related to its ongoing operations.  The Company’s failure to meet these ongoing obligations could lead to the loss of its FSA authorization which would have a material adverse effect on the Company and its operations.

WE MUST MAINTAIN POSITIVE BRAND NAME AWARENESS.

We believe that establishing and maintaining our brand names is essential to expanding business. We also believe that the importance of brand name recognition will increase in the future because of the growing number of online companies that will need to differentiate themselves. Promotion and enhancement of our brand names will depend largely on our ability to provide consistently high quality software and related technology. services.

If we are unable to provide software and technology of comparablemeet our needs for cash from either our operations, or superior quality to those of our competition, the value of our brand name may suffer.


THE INTERNATIONAL NATURE OF OUR BUSINESS ADDS ADDITIONAL COMPLEXITY AND RISKS TO OUR BUSINESS.

The nature of the foreign currency business brings us into contact with different countries and markets. We hope to expand further in international markets. Our international business may be subject to a variety of risks, including:

·         market risk or loss of uncovered transactions;
·         governmental regulation and political instability;
·         collecting international accounts receivable and income;
·         the imposition of barriers to trade and taxes; and
·         difficulties associated with enforcing contractual obligations and intellectual property rights.

     These factors may have a negative effect on any future international operations and may adversely affect our business and operations.

11

FINOTEC GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
OUR INDUSTRY IS INTENSELY COMPETITIVE, WHICH MAKES IT DIFFICULT TO ATTRACT AND RETAIN CUSTOMERS

The markets for online brokerage services, client software and Internet-based trading tools, and real-time market data services are intensely competitive and rapidly evolving, and there has been substantial consolidation of those three products and services occurring in the industry. We believe that competition from large online brokerage firms and smaller brokerage firms focused on active traders, as well as consolidation, will substantially increase and intensify in the future. Competition may be further intensified by the size of the active trader market, We believe our ability to compete will depend upon many factors both within and outside our control. These include: price pressure; the timing and market acceptance of new products and services and enhancements developed by us and our competitors; the development and support of eff icient, materially error-free Internet-based systems; product and service functionality; data availability and cost; clearing costs; ease of use; reliability; customer service and support; and sales and marketing decisions and efforts.

WE MAY NOT BE ABLE TO ADEQUATELY PROTECT OR PRESERVE OUR RIGHTS IN INTELLECTUAL PROPERTY

Our success is and will continue to be heavily dependent on proprietary technology, including existing trading-tool, Internet, Web-site and order-execution technology, and those types of technology currently in development. We view our technology as proprietary, and rely, and will be relying, on a combination of trade secret and trademark laws, nondisclosure agreements and other contractual provisions and technical measures to protect our proprietary rights. Policing unauthorized use of our products and services is difficult, however, andpossible alternative sources, then we may be unable to prevent,continue, develop, or unsuccessful in attemptsexpand our operations.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to prevent, theft, copying or other unauthorized use or exploitation of our product and service technologies. There can be no assurance that the steps taken by u s to protect (or defend) our proprietary rights will be adequate or that our competitors will not independently develop technologies that are substantially equivalent or superior to our technologies or products and services.


THE NATURE OF OUR BUSINESS RESULTS IN POTENTIAL LIABILITY TO CUSTOMERS

Many aspects of the securities brokerage business, including online trading services, involve substantial risks of liability. In recent years there has been an increasing incidence of litigation involving the securities brokerage industry, including class action and other suits that generally seek substantial damages, including in some cases punitive damages. In particular, our proprietary order routing technology is designed to automatically locate, with immediacy, the best available price in completing execution of a trade triggered by programmed market entry and exit rules.

There are risks that the electronic communications and other systems upon which these products and services rely, and will continue to rely, or our products and services they, as a result of flaws or other imperfections in their designs or performance, may operate too slowly, fail or cause confusion or uncertainty to the user. Major failures of this kind may affect all customers who are online simultaneously. Any such litigation could have a material adversecurrent or future effect on our business, financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that is material to investors.

Critical Accounting Principles

The preparation of consolidated financial statements in accordance with US GAAP requires the Company’s management to make estimates and prospects.

12
FINOTEC GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
CONCERNS REGARDING SECURITY OF TRANSACTIONS AND TRANSMITTING CONFIDENTIAL INFORMATION OVER THE INTERNET MAY ADVERSELY AFFECT OUR E-COMMERCE BUSINESS

assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results can, and in many cases will, differ from those estimates. We believe that concern regardinghave not identified any critical accounting policies.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Market risk is the securitysensitivity of confidential information transmitted over the Internet, including, for example, business requirements, credit card numbersincome or loss to changes in interest rates, foreign exchanges, commodity prices, equity prices, and other forms of payment methods, prevents many potential customers from engagingmarket-driven rates or prices. We are not presently engaged in online trading. Ifany substantive commercial business. Accordingly, the risks associated with foreign exchange rates, commodity prices, and equity prices are not significant. Our debt obligations contain interest rates that are fixed and we do not add sufficient security features to future product releases, our services may not gain market acceptance or we may face additional legal exposure.


Despite the measures we have taken in the areas of encryption and passwordenter into derivatives or other authentication software devices, our infrastructure, like others, is potentially vulnerable to physical or electronic break-ins, computer viruses, hackers or similar problems caused by employees, customers or other Internet users. If a person circumvents our security measures, that person could misappropriate proprietary information or cause interruptions in our operations. Security breaches that result in access to confidential information could damage our reputation and expose us to a risk of loss or liability. These risks may require us to make significant investments and efforts to protect against or remedy security breaches, which would increase the costs of maintaining our websites.

 OUR E-COMMERCE CAPABILITY DEPENDS ON REAL-TIME ACCURATE PRODUCT INFORMATION

 We may be responsible for loading information into our database and categorizing the informationfinancial instruments for trading or speculative purposes. This process entails a number of risks, including dependence on our suppliers both to provide us in a timely manner with accurate, complete

Item 4. Controls and current information and to update this information promptly when it changes. If our suppliers do not provide us in a timely manner with accurate, complete and current information, our database may be less useful to our customers and users and may expose us to liability. We cannot guarantee that the information available in our database will always be accurate, complete and current or comply with governmental regulations either due to third-party or internal errors.


This could expose us to liability or result in decreased acceptance of our products and services, which could have a material and adverse affect on our business and operations. We are aware of cases in which the data provided to us by third parties has not been consistently accurate and, as a result of which, we have experienced customer dissatisfaction and lawsuits by customers.  In addition, our contracts with the third-party data suppliers must be renewed on a regular basis and the costs for such information may increase, with the Company having little or no negotiating influence in such a situation.

OUR MARKET IS CHARACTERIZED BY RAPID TECHNOLOGICAL CHANGE, AND WE MAY NOT BE ABLE TO KEEP UP WITH SUCH CHANGE IN A COST-EFFECTIVE WAY

     The e-commerce market is characterized by rapid technological change and frequent new product announcements. Significant technological changes could render our existing technology obsolete. If we are unable to respond successfully to these developments or do not respond in a cost-effective way, our business and operations will suffer. To be successful, we must adapt to our rapidly changing market by continually improving the responsiveness, services and features of our products and services, by developing or acquiring new features to meet customer needs and by successfully developing and introducing new versions of our Internet-based e-commerce business software on a timely basis. The life cycles of the software used to sup port our e-commerce services are difficult to predict because the market for our e-commerce is new and emerging and is characterized by changing customer needs and industry standards.  The introduction of on-line products employing new technologies and industry standards could render our existing system obsolete and unmarketable. If a new software language becomes the industry standard, we may need to rewrite our software to remain competitive, which we may not successfully accomplish in a timely and cost-effective manner.
13

FINOTEC GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
OUR MARKET IS CHARACTERIZED BY RAPID TECHNOLOGICAL CHANGE, AND WE MAY NOT BE ABLE TO KEEP UP WITH SUCH CHANGE IN A COST-EFFECTIVE WAY (CONTINUED)

In addition, as traffic in our e-commerce business increases, we may need to expand and upgrade our technology, transaction processing systems and network hardware and software. We may not be able to project accurately the rate of growth in our on-line businesses. We also may not be able to expand and upgrade our systems and network hardware and software capabilities to accommodate increased use of our on-line businesses, which would have a material and adverse affect on our business and operations.

An unexpected event, such as a power or telecommunications failure, fire or flood, or physical or electronic break-in at any of our facilities or those of any third parties on which we rely, could cause a loss of critical data and prevent us from offering services. If our hosting and information technology services were interrupted, including from failure of other parties' software that we integrate into our technology, our business and the businesses of our e-commerce marketplaces using these services would be disrupted, which could result in decreased revenues, lost customers and impaired business reputation for us and them. As a result, we could experience greater difficulty attracting new customers. A failure by us or any third parties on which we rely to provide these services satisfactorily would impair our ability to support the operations of our services and could subject us to legal claims.

In addition, to a large extent, the Company’s profits are dependent upon the operation of its internal risk management system.  There is no guarantee that such system will operate successfully in every eventuality.

LIMITED INTERNET INFRASTRUCTURE MAY AFFECT SERVICE.

The accelerated growth and increasing volume of Internet traffic may cause performance problems, slowing the adoption of our Internet-based services. The growth of Internet traffic due to very high volumes of use over a relatively short period of time has caused frequent periods of decreased Internet performance, delays and, in some cases, system outages. This decreased performance is caused by limitations inherent in the technology infrastructure supporting the Internet and the internal networks of Internet users. In addition, recently, there have been several instances of entire countries losing Internet access as a result of natural disasters or accidents. If Internet usage continues to grow rapidly, the infrastructure of the Internet and its users may be unable to support the demands of growing e-commerce usage, and the Internet's performance and reliability may decline. If our existing or potential customers experience frequent or continuing outages or delays on the Internet, the adoption or use of our Internet-based products and services may grow more slowly than we expect or even decline. Our ability to increase the speed and reliability of our Internet-based business model is limited by and depends upon the reliability of both the Internet and the internal networks of our existing and potential customers. As a result, if improvements in the infrastructure supporting both the Internet and the internal networks of our customers and suppliers are not made in a timely fashion, we may have difficulty obtaining new customers, or maintaining our existing customers, either of which could reduce our potential revenues and have a negative impact on our business and operations.

INTERNET GOVERNANCE, REGULATION AND ADMINISTRATION ARE UNCERTAIN AND MAY ADVERSELY AFFECT OUR BUSINESS.

 The future success of our business is dependent on our ability to use the Internet to implement our e-commerce growth strategy. Because the original role of the Internet was to link the government's computers with academic institutions' computers, the Internet was historically administered by organizations that were involved in sponsoring research. Over time, private parties have assumed larger roles in the enhancement and maintenance of the Internet infrastructure. Therefore, it is unclear what organization, if any, will govern the administration of the Internet in the future, including the authorization of domain names.

The lack of an appropriate organization to govern the administration of the Internet infrastructure and the legal uncertainties that may follow pose risks to the commercial Internet industry and our specific website business.
14
FINOTEC GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
INTERNET GOVERNANCE, REGULATION AND ADMINISTRATION ARE UNCERTAIN AND MAY ADVERSELY AFFECT OUR BUSINESS. (CONTINUED)

In addition, the effective operation of the Internet and our business is also dependent on the continued mutual co-operation among several organizations that have widely divergent interests, including the government, Internet service providers and developers of system software and software language. These organizations may find that achieving a consensus may become difficult, impossible, time-consuming and costly.

CHANGES IN THE REGULATORY ENVIRONMENT GOVERNING THE INTERNET, EITHER IN THE US OR ABROAD, COULD HAVE A SIGNIFICANT EFFECT ON OUR BUSINESS

 We cannot predict whether or to what extent any new regulation affecting e-commerce will occur. New regulations could increase our costs or restrict our activities in a materially adverse manner. One or more states or countries may seek to impose sales tax collection obligations on out-of-state/foreign companies like ours that engage in or facilitate e-commerce. A successful assertion by one or more states or any foreign country that we should collect sales and other taxes on our system could increase costs that we could have difficulty recovering from users of our websites.

 Governmental agencies and their designees regulate the acquisition and maintenance of web addresses generally. For example, in the United States, the National Science Foundation had appointed Network Solutions, Inc. as the exclusive registrar for the ".com," ".net" and ".org" generic top-level addresses. Although Network Solutions no longer has exclusivity, it remains the dominant registrar. The regulation of web addresses in the United States and in foreign countries is subject to change. As a result, we may not be able to acquire or maintain relevant web addresses in all countries where we conduct business that are consistent with our brand names and marketing strategy. Furthermore, the relationship between regulations governing website addresses and laws protecting trademarks is unclear.

WE MAY BE SUBJECT TO LEGAL LIABILITY FOR PUBLISHING OR DISTRIBUTING CONTENT OVER THE INTERNET

Our e-commerce businesses may be subject to legal claims relating to the content of our on-line websites, or the distribution of content. Providers of Internet products and services have been sued in the past, sometimes successfully, based on the content of material. The representations as to the origin and ownership of licensed content that we generally obtain may not adequately protect us.

 In addition, we draw some of the content provided in our on-line business communities from data compiled by other parties. This data may have errors. If our content is improperly used or if we supply incorrect information, it could result in unexpected liability. Our insurance may not cover claims of this type or may not provide sufficient coverage. We are aware of cases in which the data provided to us by third parties has not been consistently accurate and, as a result of which, we have experienced customer dissatisfaction and lawsuits by customers.  Costs from these claims could damage our business and limit our financial resources. In addition, there can be no assurance that we will not make internal errors that could result in liability.


15
FINOTEC GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
ITEM 4T                  CONTROLS AND PROCEDURES
(a)     Procedures

Evaluation of Disclosure Controls and Procedures

Management of

Under the Company,supervision and with the participation of theour senior management, including our Chief Executive Officer and the Chief Financial Officer, we evaluated the effectiveness of the design and operation of the Company’sour disclosure controls and procedures, (asas defined in Rules 13a-15(e) and 15d-15(e) ofunder the Exchange Act), as of April 30, 2010.Act. Based uponon this evaluation, theour Chief Executive Officer and s the Chief Financial Officer) hasOfficer concluded as of the Evaluation Date that the Company’sour 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 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. The Company’s former management abandoned all operations for many years, and only recently did the Company appoint new management to make filings with the SEC on behalf of January 31, 2010 due to the material weaknesses in internal control over financial reporting as described below.Company.


There are material weaknesses in internal control over financial reporting as described below.
(b)  

Management’s Annual Report on Internal Control overOver Financial Reporting

Management of the Company

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting as definedis a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in Rule 13a-15(f) ofaccordance with accounting principles generally accepted in the Exchange Act.United States. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projectionsTherefore, even those systems determined to be effective can provide only reasonable assurance of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

A material weakness representsachieving their control objectives. Our Company has been dormant since. As a significant deficiency (as defined in the Public Company Accounting Oversight Board’s Auditing Standard No. 5), or a combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements willresult, our management did not be prevented or detected on a timely basis.
Management conducted an assessment ofevaluate the effectiveness of the Company’sour internal control over financial reporting as of JanuaryOctober 31, 20102020, and October 31, 2020, based on the framework publishedcriteria set forth by the Committee of Sponsoring Organizations of the Tread wayTreadway Commission (“COSO”) in Internal Control — Integrated Framework. Management has identified the following material weaknesses in the Company’sControl-Integrated Framework (2013). without such an evaluation, our management concluded that we did not maintain effective internal control over financial reporting as of JanuaryOctober 31, 2010.


Material weaknesses identified2020, based on the COSO framework criteria, as more fully described below. This was due to deficiencies that existed in Finotec Group, Inc are as follows:

Audit Committee, Internal Auditthe design or operation of our internal controls over financial reporting that adversely affected our internal controls and Entity Level Controls:

·The Audit Committee is not fully active.
·The internal controller /audit function is not fully active.
·Management does perform a periodic check of the access rights of all users to ensure that their access is suitable to their positions and functions. Segregation rights still needthat may be further fine-tuned.

Remediation Plan:
·The Audit Committee will be fully activated.
·The Company has appointed an internal controller / auditor who have commenced a review and enforcement of the required tasks. .
·The CFO will extract from the information system an access list for all employees and ensure that each function, screen and field is suitable to the employee's job description.
·The CFO will ensure that the access rights are adequately segregated.

16
FINOTEC GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
ITEM 4T                  CONTROLS AND PROCEDURES (CONTINUED)


Information Technology:
·The Company does have adequate permission and access right tables specifying group authorizations. Some employees have more authorizations than their role definition. There is an adequate authorization procedure.
·The Company does have password complexity procedure. User passwords require complexity, and there is a requirement for password change.
·No adequate formal system development, acquisition and program change policies and procedures exist for development/acquisitions of new systems and changes to existing systems.
·The developers have access to the production.

Remediation Plan:
·The Company will continue to examine and minimize user rights and will prepare permissions table and access rights that includes group permissions and prepare access to programs and data procedures.
·The Company will update "Access to Programs and Data" procedure. Passwords to the database will be managed.
·The Company will write a methodology for system development, acquisitions and change management.
·The Company will prevent the developers from accessing the production environment.

Information Technology:
·The passwords of accounts with privileged access are not limited or unique.
·The Company does not have permission and access right table specifying group authorizations. Some employees have more authorizations than their role definition. There is no authorization procedure.
·The same read-only password is valid for all the IT employees. There is no requirement to change the password within a limited period of time.
·The Company does not have password complexity procedure. User passwords do not require any complexity, and there is no requirement for password change.
·Segregation of duties is inadequate.
·No Formal system development, acquisition and program change policies and procedures exist for development/acquisitions of new systems and changes to existing systems.
·The developers have access to the production.

Remediation Plan:
·Users and passwords will be unique and limited to all the systems.
·The Company will examine and minimize user rights and will prepare permissions table and access rights that includes group permissions and prepare access to programs and data procedures.
·The Company will apply a different user id/password for every employee. The Company will document each request and authorization. The Company will set an expiration date to each password upon creation.
·The Company will prepare "Access to Programs and Data" procedure. Passwords to the database will be managed and complex.
·The Company will create a formal position for Information Security role. IT manager and IT Security roles will be held by different employees. Development and testing will carried out by different employees. The Company will create a formal position for quality assurance manager is necessary.
·The Company will write a methodology for system development, acquisitions and change management.
·The Company will prevent the developers from accessing the production environment.


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FINOTEC GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

In the normal course of business, a few Finotec clients have claims for alleged trading profits or losses that these clients are considered to duebe material weaknesses.

The matters involving internal controls and procedures that our management considered to them.  The current amounts in question are in no more than US$ 200,000. Finotec’s view is that is in-sufficient basis for these claims


Management does not expect any of these claims to have abe material effect on the Company's financial position or results of operations.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

(A) SALES OF UNREGISTERED SECURITIES

On September 2, 2009, the Company entered into definitive agreements for the sale of 17,218,000 Common Shares at a price of $0.25 per share. The shares of Common Stock sold in the private placement offering have not been registeredweaknesses under the Act and may not be offered or sold absent registration or an applicable exemption from such registration requirements. All such shares are subject as well tostandards of the PCAOB were: (1) lack of a registration rights agreement. The transaction closed on September 2nd 2009.

On July 31st 2009, the Company entered into a definitive agreement for the salefunctioning audit committee, (2) lack of 11,111,111 Common Shares at a price of $0.18 per share as well as 2,780,000 Common Shares at a price of $0.25 per share. The shares of Common Stock sold in the private placement offering have not been registered under the Act and may not be offered or sold absent registration or an applicable exemption from such registration requirements. All such shares are subject as well to a registration rights agreement. The transaction closed on July 31st 2009.

ITEM 3. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

 On July 16, 2008, a majority of outside directors on our Board of Directors, resulting in ineffective oversight in the Company’s shareholders provided their written consentestablishment and monitoring of required internal controls and procedures; (3) inadequate segregation of duties consistent with control objectives; (4) complete lack of management of the company from May 2005 until October 31, 2020; and (5) lack of disclosure controls. The aforementioned material weaknesses were identified by our Chief Executive and Financial Officer in connection with the review of our financial statements as of October 31, 2020.

Management believes that the material weaknesses set forth above did not have an effect on our financial results because the activity during this period was nominal. However, management believes that the lack of a functioning audit committee and the lack of a majority of outside Directors on our Board of Directors results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting that occurred during the periods ended July 3, 2020, and October 31, 2020, that have materially affected or are reasonably likely to increasematerially affect our internal control over financial reporting.


PART II- OTHER INFORMATION

Item 1. Legal Proceedings

There are no pending legal proceedings to which the authorized capitalCompany is a party or in which any director, officer or affiliate of the Company, from 100 million sharesany owner of record or beneficially of more than 5% of any class of voting securities of the Company, or security holder is a party adverse to 300 million sharesthe Company or has a material interest adverse to the Company. The Company’s property is not the subject of Common Stock.

any pending legal proceedings.

Item 1a. Risk Factors

We are a smaller reporting company and are not required to provide the information under this item pursuant to Regulation S-K.

Item 2. Unregistered Sales Of Equity Securities And Use Of Proceeds

During the three months ended October 31, 2020, we did not issue any of our equity securities.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not Applicable.

Item 5. Other Information

None.

Item 6. Exhibits

31.1Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INSXBRL Instance Document
101.SCHXBRL Taxonomy Extension Schema Document
101.CALXBRL Taxonomy Extension Calculation Linkbase Document
101.DEFXBRL Taxonomy Extension Definition Linkbase Document
101.LABXBRL Taxonomy Extension Label Linkbase Document
101.PREXBRL Taxonomy Extension Presentation Linkbase Document


ITEM 4. EXHIBITS AND REPORTS ON FORM 8-K

(A) THE FOLLOWING EXHIBITS ARE FILED AS PART OF THIS REPORT:

     31.1 Section 302 certification
     31.2 Section 302 certification
     32.1 Section 906 certification
     32.2 Section 906 certification

SIGNATURE

Pursuant to

SIGNATURES

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


Finotec Group, Inc., Registrant

Date: October 4, 2010 /s/ Xavier AlexandreFinotec Group, Inc.
(Registrant)
 
Date: November 18, 2020Xavier AlexandreBy:
Chief Executive Officer/s/ David Lazar
  David Lazar, CEO and CFO

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