U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 orOR 15(d) of
For the quarter ended Julyquarterly period ended: October 31, 2010
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 | 76-0251547 | |||
Incorporation or organization) | (IRS Employer | |||
Identification No.) |
3445 Lawrence Ave
(646) 768-8417
(Address of principal executive offices)
(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 class | Trading Symbol(s) | Name of each exchange on which registered | ||
None | N/A | N/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 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.
Large accelerated filer | Accelerated filer | ||
Non-accelerated filer | Smaller reporting 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
Finotec Group, Inc.
CONTENTS
PART | I – FINANCIAL INFORMATION | |
Item 1. | – Financial | |
Consolidated Balance Sheets | 1 | |
Consolidated | 2 | |
3 | ||
Consolidated Statements of | ||
4 | ||
Notes to Consolidated Financial Statements | ||
5 | ||
Item 2. | ||
Condition | 8 | |
Item | ||
Item 4. – Controls and Procedures | 8 | |
PART | II - OTHER INFORMATION | 10 |
Item | ||
Item | ||
Item | ||
i
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 |
(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.
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 |
(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.
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.
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 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
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
Management’s Representation of Interim Financial Information
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.
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 |
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.
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.
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
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.
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.
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.
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.
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.
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.
Critical Accounting Principles
The preparation of consolidated financial statements in accordance with US GAAP requires the Company’s management to make estimates and prospects.
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.
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.
Evaluation of Disclosure Controls and Procedures
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.
Management’s Annual Report on Internal Control overOver Financial Reporting
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.
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 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.
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.
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.
31.1 | Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
31.2 | Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
32.1 | Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
32.2 | Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
101.INS | XBRL Instance Document | |
101.SCH | XBRL Taxonomy Extension Schema Document | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
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.
(Registrant) | ||
Date: November 18, 2020 | ||
/s/ David Lazar | ||
David Lazar, CEO and CFO |
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