UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q10-Q/A - Amendment 2

ý

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


For the quarterly period ended May 31,February 28, 2015

r

Transition report pursuant section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from ________________ to ________________

Commission file number 000-53157


Telco Cuba Inc.


(Exact name of small business issuer as specified in its charter)


Nevada

(State of Incorporation)

98-0546544

(I.R.S. Employer Identification No.)


2001 Hollywood Blvd, Suite 211,202, Hollywood, FL 33020

Tel: (305) 747-7647 305-747-7647

(Address and telephone number of Registrant's principal

executive offices)


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

 

None

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

 

Common Stock, par value $0.001
(Title of Class)


CaerVision Global, Inc

N.A 

(Former Name, Former Address and Former Fiscal Year, if changed since last report)

 

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [  ]

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

 

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

 



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


The number of shares of Common Stock held by non-affiliates, as of June 24,December 17, 2015 was 40,438,136123,106,039 shares, all of one class of common stock, $0.001 par value, having an aggregate market value of $416,513$320,075.70 based on the closing price of the Registrant's common stock of $0.0103$0.0026 on June 24,November 23, 2015 as quoted on the Electronic Over-the-Counter Bulletin Board ("OTCPK").

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

 

Class: common stock - $0.001 par value

 

Outstanding at June 24,December 17, 2015: 40,438,136123,106,039

 



DOCUMENTS INCORPORATED BY REFERENCE

 

None.

EXPLANATORY NOTE

Telco Cuba, Inc. (the “Company”)  is filingThe purpose of this Amendment No. 12 to our Quarterly Report on Form 10-Q10-K for the quarteryear ended May 31,February 28, 2015 (the “Amended Filing”"Form 10Q") for two reasons: 1) to disclose its  unaudited condensed consolidated financial statements and notes thereto included, originally filed with the Company’s Form 10-Q for the period ended May 31, 2015 (the “Financial Statements”), which was filedU.S. Securities and Exchange Commission on June 26, 2015 (the “Original 10-Q Filing”) were not reviewed by the Company’s independent registered public accounting firm as required by SEC Rule 10-1 (d) of Regulation S-X; and 2) is to correct the Balance Sheetfinancial statements and accompany notes to reflect changes in opening balances resulting from the audits of the financial statements for the years ended November 30, 2014, 2013 and 2012, which was created as part of pro-forma statements provided to Amgentech, Inc. to assist them in analyzing the Company’s financial structure during negotiations related to the Share Exchange Agreement consummatedhave been filed on June 15, 2015. The statements incorrectly eliminated assets held for sale rather than listing at fair market value in accordance with Generally Accepted Accounting Practices.Form 10-K/A.

Aside from correcting these schedules,this statement, some minor wording corrections regarding the oil & gas operations, and attachingcorrecting the Interactive Data Files (XBRL), no other changes have been made to the Form 10-K. This Form 10-K/A speaks as of the original filing date of the Form 10-K, it does not reflect events that may have occurred subsequent to the original filing date.10-Q. 











 





Part I – FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS

 

TELCO CUBA, INC

(FORMERLY CAERVISION GLOBAL, INC AND AMERICAN MINERAL GROUP, INC)


 

(Unaudited)



Table of Contents

 

Table of Contents

Pages

 

 

 

Unaudited Condensed Balance Sheets

 

2 - 3F-1

 

 

 

Unaudited Condensed Statements of Operations

 

4F-2

 

 

 

Unaudited Condensed Statement of Cash Flows

 

5F-3

 

 

 

Notes to Unaudited Condensed Financial Statements

 

6F-4 - 14F-9







 

 

 

 

TELCO CUBA, INC.

 

CONDENSED BALANCE SHEETS

 

 

 

 

 

ASSETS

 

 

 

 

February 28, 2015

 

November 30, 2014

 

(Unaudited)

(Restated)

 

(Restated)

CURRENT ASSETS:

 

 

 

Cash

$

 

$

 

 

 

 

TOTAL CURRENT ASSETS

 

 

 

 

 

ASSETS HELD FOR SALE

 

 

 

            Working Interest in Grand Chenier oil & gas prospect

 

            Oil field equipment

 

TOTAL ASSETS HELD FOR SALE

 

 

 

 

 

TOTAL ASSETS

$

 

$

 

 

 

 

LIABILITIES AND STOCKHOLDERS' DEFICIT

 

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

Accounts payable

$

99,909 

 

$

101,390 

Accrued expenses

498,170 

 

447,402 

Accrued payroll

1,297,949 

 

1,297,949 

Convertible debentures (net of debt discount of $0 and $0)

350,260 

 

375,925 

Notes payable (net of debt discount of $0 and $0)

2,233,332 

 

2,233,332 

Other payables

15,946 

 

17,476 

Due to officers

1,384 

 

1,384 

Derivative liability

737,114 

 

498,942 

TOTAL CURRENT LIABILITIES

5,234,064 

 

4,973,800 

 

 

 

 

STOCKHOLDERS' DEFICIT:

 

 

 

Series A Preferred Stock, $.001 par value; authorized shares - 100,000 shares; 3,000 issued and outstanding

 

Series B Preferred Stock, $.001 par value; authorized shares - 100,000 shares; 85,968 and 87,500 issued and outstanding

86 

 

88 

Common stock, $.001 par value; authorized shares - 500,000,000 shares; 29,285,565 and 15,885,259 shares issued and outstanding

29,286 

 

15,885 

Additional paid-in capital

12,397,251 

 

12,384,985 

Deficit accumulated

(17,660,688)

 

(17,374,759)

TOTAL STOCKHOLDERS' DEFICIT

(5,234,062)

 

(4,973,798)

 

 

 

 

 

$

 

$

 

 

 

 

See notes to unaudited condensed financial statements

F-1

 

 

 

 

 






TELCO CUBA, INC.

 

CONDENSED STATEMENTS OF OPERATIONS

Unaudited

 

 

 

 

 

For the three months ended

 

February 28, 2015

 

February 28, 2014

 

 (Restated)

 

 (Restated)

OPERATING EXPENSES:

 

 

 

General and administrative

$

 

$

92,202 

Foreign exchange (gain) loss

(3,011)

 

(1,536)

TOTAL OPERATING (INCOME) EXPENSES

(3,011)

 

90,666 

 

 

 

 

OPERATING LOSS

(3,011)

 

(90,666)


OTHER EXPENSE:

 

 

 

Interest Expense

50,769 

 

45,714 

     Change in fair value of derivative liability

238,172 

 

194,344 

NET LOSS

$

(285,930)

 

$

(330,724)

 

 

 

 

 

 

 

 

BASIC AND DILUTED - LOSS PER SHARE

$

(0.02)

 

$

(0.02)

 

 

 

 

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING

 

 

 

Basic and Diluted

18,336,663 

 

15,885,259 

 

 

 

 

See notes to unaudited condensed financial statements

F-2


TELCO CUBA, INC.

(Formerly CaerVision Global, Inc. and American Mineral Group, Inc)

BALANCE SHEETS

(Unaudited)

 

 

 

 

ASSETS

 

 

 

 

May 31, 2015

 

November 30, 2014

 

 

 

 

CURRENT ASSETS:

 

 

 

Cash

$

 

$

Prepaid expenses

 

TOTAL CURRENT ASSETS

 

ASSETS HELD FOR RESALE

          Working Interest in Grand Chenier oil & gas prospect

800,000         

 

800,000         

             Oil field equipment

1,200,000            

1,200,000            

TOTAL ASSETS HELD FOR RESALE

2,000,000            

2,000,000            

TOTAL ASSETS

$

2,000,002 

 

$

2,000,002 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' DEFICIT

 

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

Accounts payable

$

99,982 

 

$

101,390 

Accrued expenses

291,364 

 

271,596 

Accrued payroll

1,319,194 

 

1,319,194 

Convertible debentures (net of debt discount of $0 and $0)

202,555 

 

241,925 

Notes payable (net of debt discount of $0 and $0)

283,332 

 

283,332 

Due to former CEO

16,022 

 

17,476 

Due to officers

1,384 

 

1,384 

Derivative liability

192,123 

 

192,123 

TOTAL CURRENT LIABILITIES

2,405,956 

 

2,428,420 

 

 

 

 

STOCKHOLDERS' DEFICIT:

 

 

 

Series A Preferred Stock, $.001 par value; authorized shares - 100,000 shares; 3,000 and 3,000 issued and outstanding

 

Series B Preferred Stock, $.001 par value; authorized shares - 100,000 shares; 84,500 and 87,500 issued and outstanding

85 

 

88 

Series C Preferred Stock, $.001 par value; authorized shares - 100,000 shares; 250,000 to be issued

250 

 

250 

Common stock, $.001 par value; authorized shares - 500,000,000 shares; 40,438,136 and 15,135,231 shares issued and outstanding

40,438 

 

15,135 

Additional paid-in capital

12,896,105 

 

12,381,235 

Cumulative Foreign Currency Translation Adjustment

7,475 

 

4,612 

Deficit accumulated during the exploration stage

(14,850,560)

 

(14,829,491)

TOTAL STOCKHOLDERS' DEFICIT

(1,905,954)

 

(2,428,418)

 

 

 

 

 

$

2,000,002 

 

$

2,000,002 

 

 

 

 

See notes to unaudited financial statements









 

 

 

 

TELCO CUBA, INC.

 

CONDENSED STATEMENTS OF CASH FLOWS

Unaudited

 

 

 

 

 

For the three months ended

 

February 28,

 

February 28,

 

2015

 

2014

 

(Restated)

 

(Restated)

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

Net loss

$

(285,930)

 

$

(330,724)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

    Change in fair value of derivative liability

238,172 

 

194,344 

Change in operation assets and liabilities:

 

 

 

        Decrease in accounts payable and accrued expenses

47,758 

 

136,380 

NET CASH USED IN OPERATING ACTIVITIES

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

NET INCREASE (DECREASE) IN CASH

 

 

 

 

 

CASH - BEGINNING OF PERIOD

 

 

 

 

 

CASH - END OF PERIOD

$

 

$

 

 

 

 

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

 

 

Cash paid for interest

$

 

$

          Cash paid for taxes

$

 

$

NON-CASH INVESTING AND FINANCING ACTIVITIES:

 

 

Stock issued in conversion of debentures

$

25,665 

 

$

 

 

 

 

See notes to unaudited condensed financial statements

F-3



TELCO CUBA, Inc.

(Formerly CaerVision Global, Inc., and American Mineral Group, Inc.)

STATEMENTS OF OPERATIONS

Unaudited

 

 

 

 

 

 

 

 

 

For the three months ended

 

For the six months ended

 

May 31, 2015

 

May 31, 2014

 

May 31, 2015

 

May 31, 2014

 

 

 

 

 

 

 

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

General and administrative

$

 

96,101 

 

 

190,787 

Bank charges and interest

 

 

 

TOTAL OPERATING EXPENSES

 

96,101 

 

 

190,787 

 

 

 

 

 

 

 

 

OPERATING LOSS

 

(96,101)

 

 

(190,787)

 

 

 

 

 

 

 

 

INTEREST EXPENSE

4,283 

 

46,316 

 

21,068 

 

92,030 

 

 

 

 

 

 

 

 

NET LOSS

$

(4,283)

 

(142,417)

 

(21,068)

 

(282,817)

 

 

 

 

 

 

 

 

NET LOSS, ADJUSTED

       Other Comprehensive Income (Loss):

 

 

 

 

 

 

 

       Foreign Currency Translation Gain/(Loss)

(148)

 

(748)

 

2,863 

 

788 

 

 

 

 

 

 

 

 

COMPREHENSIVE LOSS

(4,431)

 

(143,165)

 

(18,205)

 

(282,029)

 

 

 

 

 

 

 

 

BASIC AND DILUTED - LOSS PER SHARE

$

(0.00)

 

(0.01)

 

(0.00)

 

(0.02)

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING

 

 

 

 

 

 

 

Basic and Diluted

36,450,778 

 

15,135,231 

 

27,717,344 

 

15,135,231 

 

 

 

 

 

 

 

 

See notes to unaudited financial statements







TELCO CUBA, INC.

(Formerly CaerVision Global, Inc. and American Mineral Group, Inc.)

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

 

 

 

For the six months ended

 

May 31,

 

May 31,

 

2015

 

2014

 

 (unaudited)

 

 (unaudited)

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

Net loss

$

(18,205)

 

$

(282,029)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

Changes in assets and liabilities:

 

 

 

Prepaid expenses

 

Accounts payable and accrued expenses

18,205 

 

282,029 

NET CASH USED IN OPERATING ACTIVITIES

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

Acquisition of additional claims

 

NET CASH USED IN INVESTING ACTIVITIES

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

Proceeds from notes payable

 

Proceeds from convertible debentures

 

NET CASH PROVIDED BY FINANCING ACTIVITIES

 

 

 

 

 

NET INCREASE (DECREASE) IN CASH

 

 

 

 

 

CASH - BEGINNING OF PERIOD

 

 

 

 

 

CASH - END OF PERIOD

$

 

$

 

 

 

 

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

 

 

Cash paid for interest

$

 

$

 

 

 

 

NON-CASH INVESTING AND FINANCING ACTIVITIES:

 

 

Stock issued in conversion of debentures

$

40,670 

 

$

 

 

 

 

See notes to unaudited financial statements









Telco Cuba, Inc.

(Formerly CaerVision Global, Inc. andNOTES TO CONDENSED FINANCIAL STATEMENTS (Restated)

American Mineral Group, Inc.)

Notes toFor the Unaudited Financial Statements
May 31,periods Ended February 28, 2015 and 2014

(Unaudited)



1.



Note 1 - Nature of Operations and Going Concern


General


The accompanying unaudited condensed financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and note disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading.


In the opinion of management, the unaudited condensed financial statements have been prepared on the same basis as the annual financial statements and reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the financial position as of February 28, 2015 and the results of operations and cash flows for the three month periods ended February 28, 2015 and 2014. The financial data and other information disclosed in the notes to the interim condensed financial statements related to these periods are unaudited. The results for the three-month period ended February 28, 2015 are not necessarily indicative of the results to be expected for any subsequent quarter or the entire year ending November 30, 2015.


These unaudited condensed financial statements should be read in conjunction with our audited financial statements and the notes thereto for the year ended November 30, 2014, included in the Company’s annual report on Form 10-K/A filed with the SEC on November 30, 2015.


The condensed financial statements as of November 30, 2014 have been derived from the audited financial statements at that date but do not include all disclosures required by the accounting principles generally accepted in the United States of America.


Nature of Operations


Telco Cuba Inc., (Formerly CaerVision Global, Inc. fka American Mineral Group Minerals Inc.) (the "Company") was incorporated in the State of Nevada on August 10, 2007.2007 under the name American Mineral Group, Inc. On January 9, 2015, the outstanding shareholders of the Company voted to change the name of the Company from American Mineral Group, Inc. to CaerVision Global, Inc. in order to better reflect the planned change in the Company’s future operations.


On January 26, 2015, the Company entered into a stock purchase definitive agreement with Vitall, Inc., a Delaware corporation, whereby the Company willagreed to issue 15,000,000 shares of common stock for 100% of the issued and outstanding capital of Vitall, Inc. On March 17, 2015, Vitall, Inc. terminated the merger agreement due to non-performance on the part of the Company.  As a result, the name CaerVision Global, Inc. will bewas surrendered back to its original owner.


In the fiscal yearyears ended November 30, 2014 and 2013, and for the quarters ended February 28, 2015 and 2014, the Company was engaged in the exploration, development, and acquisition of mineral properties. As a subsequent event to these financial statements, herein, on June 12, 2015 the Company consummated a share exchange agreementShare Exchange with Amgentech, Inc./Telco Cuba, Inc., a Florida corporation, wherebycorporation.  Under the Company will issue 75,000,000terms of the Share Exchange, the holders of Amgentech received 50,888 shares of common stockCaerVision Series B Preferred Stock that had been previously issued to third parties in exchange for 100% of the issued and outstanding capital of Amgentech. Each shares of Series B preferred stock is convertible into 5,000 shares of common stock (254,440,000 shares total) and has voting rights of 5,000 per share (254,440,000 votes). As a result of this transaction, Amgentech Inc./became a wholly-owned subsidiary of the Company with control transferring to the previous owners of Amgentech.  Amgentech elected to be treated as the successor issuer for SEC reporting and accounting purposes.  The Share Exchange was accounted for as a reverse acquisition and re-capitalization. The Amgentech Shareholders obtained approximately 60% of voting control on the date of Share Exchange. Amgentech was the acquirer for financial reporting purposes and the Company was the acquired company. The Company filed an amendment to its articles of incorporation and changed its name to Telco Cuba, Inc.  Amgentech Inc./Telco Cuba, Inc. will be the surviving entity and focus on opportunities in the Cuban telecommunications market.


On June 15, 2015, the Company effectuated an amendment to its articles of incorporation to change its name from CaerVision Global, Inc. to Telco Cuba, Inc.


On June 15, 2015, the Company effectuated an amendment to its articles of incorporation to appointappointed William Sanchez to the position of CEO, CFO, President, Treasurer and Secretary. InAt the same amendment to our articles of incorporation,time, Erwin Vahlsing Jr., Thomas J Craft Jr. and Frederick J PucilloPuccillo Jr., resigned their positions as officers and directors of the Company.


Going Concern


The accompanying unaudited condensed financial statements have been prepared on the basis of accounting principles applicable to a going concern; accordingly, they do not give effect to adjustment that would be necessary should the Company be unable to continue as a going concern and therefore be required to realize its assets and retire its liabilities in other than the normal course of business and at amounts different from those in the accompanying financial statements. As shown in the accompanying unaudited condensed financial statements, the Company incurred a net loss of $21,068$285,930 for the sixthree months ended May 31,February 28, 2015, and has an accumulated deficit of $14,850,560. $17,660,688.


Management plans to raise cash from public or private debt or equity financing, on an as needed basis and in the longer term, to generate revenues from the acquisition, exploration and development of mineral interests, if found. The Company's ability to continue as a going concern is dependent upon achieving profitable operations and/or upon obtaining additional financing. The outcome of these matters cannot be predicted at this time.

2.

The accompanying unaudited condensed financial statements do not include any adjustments related to the recoverability or classification of asset-carrying amounts or the amounts and classification of liabilities that may result should the Company be unable to continue as a going concern.

Note 2 - Significant Accounting Policies

a)   Accounting Principles

The accounting and reporting policies of the Company conform to United States generally accepted accounting principles applicable to exploration stage enterprises.principles.

b)    Basic and Diluted Loss Per Share


Basic and diluted loss per share is based on the weighted average number of shares outstanding. Potential common shares includable in the computation of fully diluted per share results are not presented in the financial statements as their effect would be anti-dilutive.

At May 31stFebruary 28, 2015, the Company has convertible notes outstanding totaling $202,555$350,260 which if converted at current market prices would result in 162,044,000155,763,603 new dilutive common shares. The Company also has 3,000 shares of Preferred A and 84,50085,968 shares of Preferred B which if converted would result in 425,500,000432,840,000 new dilutive common shares.


c)   Fair Value Measurements

Valuation Hierarchy

ASC 820 establishes a valuation hierarchy for disclosure of the inputs to valuation used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. Level 3 inputs are unobservable inputs based on the Company’s own assumptions used to measure assets and liabilities at fair value. A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement.

F-4



Telco Cuba, Inc.

NOTES TO CONDENSED FINANCIAL STATEMENTS (Restated)

For the periods Ended February 28, 2015 and 2014

(Unaudited)



The following table provides the assets and liabilities carried at fair value measured on a recurring and non-recurring basis as of May 31,February 28, 2015 and November 30, 2014:


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair Value Measurements at February 28, 2015

 

  

 

Total Carrying Valued at February 28, 2015

 

 

Quoted prices in active markets (Level 1)

 

 

Significant other observable inputs (Level 2)

 

 


Significant unobservable inputs

(Level 3)

 

Derivative liabilities

$

737,114

 

$

-

 

$

-

 

$

737,114

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair Value Measurements at May 31, 2015

 

  

 

  

 

 

Quoted prices

 

 

Significant

 

 

  

 

  

 

Total Carrying

 

 

in active

 

 

other

 

 

Significant

 

  

 

Value at

 

 

markets

 

 

observable

 

 

unobservable

 

  

 

May 31, 2014

 

 

(Level 1)

 

 

inputs (Level 2)

 

 

inputs (Level 3)

 

  

 

  

 

 

  

 

 

  

 

 

  

 

Derivative liabilities

$

192,123

 

$

 -

 

$

 -

 

$

192,123

 



 

 

 

 

 

Fair Value Measurements at November 30, 2014

 

  

 

Total Carrying Value at November 30, 2014

 

 

Quoted prices in active markets (Level 1)

 

 

Significant other observable inputs (Level 2)

 

 


Significant unobservable inputs

(Level 3)

 

Derivative liabilities

$

498,942

 

$

-

 

$

-

 

$

498,942

 

 

 

 

 

 

Fair Value Measurements at November 30, 2014

 

  

 

  

 

 

Quoted prices

 

 

Significant

 

 

  

 

  

 

Total Carrying

 

 

in active

 

 

other

 

 

Significant

 

  

 

Value at

 

 

markets

 

 

observable

 

 

unobservable

 

  

 

November 30, 2014

 

 

(Level 1)

 

 

inputs (Level 2)

 

 

inputs (Level 3)

 

  

 

  

 

 

  

 

 

  

 

 

  

 

Derivative liabilities

$

192,123

 

$

 -

 

$

 -

 

$

192,123

 

The derivative liabilities are measured at fair value using quoted market prices and estimated volatility factors based on historical quoted market prices for the Company’s common stock, and are classified within Level 3 of the valuation hierarchy.

Telco Cuba Inc.

(Formerly CaerVision Global, Inc. and

American Mineral Group, Inc.)

Notes to the Unaudited Financial Statements
May 31, 2015 and 2014

2.   Significant Accounting Policies (continued)

c)   Fair Value Measurements (continued)

The following is a reconciliation of the beginning and ending balances for assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3):


May 31,

2015

 

November 30, 2014

February 28,

2015

 

November 30, 2014

Beginning balance

$

192,123

 

$

192,123

$

498,942

 

$

802,153 

Derivative liabilities recorded

 

-

 

-

-

 

Derivative liabilities converted

 

-

 

-

-

 

Unrealized gain attributable to the change in liabilities still held

 

-

 

 

-

Unrealized loss (gain) attributable to the change in liabilities still held

238,172

 

(303,211)

Ending balance

$

192,123

 

$

192,123

$

737,114

 

$

498,942 

The fair value of the derivative liability at May 31,February 28, 2015 and November 30, 2014, totaling $192,123,$737,114 and $498,942, respectively, was calculated using the Black-Scholes Option Pricing model. Gains and losses (realized and unrealized) included in earnings (to change in fair value of derivative liability) for the three months ended May 31,February 28, 2015 and 2014, are reported in other expenses as follows:


 

February 28,

2015

 

February 28,

2014

(Gain) Loss on derivative liabilities recorded during the period

$

-

 

$

-

Debt discount attributable to derivative liabilities recorded

-

 

-

Derivative liabilities converted during the period

-

 

-

Unrealized loss (gain) attributable to the change in liabilities still held

238,172

 

194,344

Net unrealized loss (gain) included in earnings

$

238,172

 

$

194,344

May 31,

2015

November 28,

2014

(Gain) Loss on derivative liabilities recorded during the period

$

-

$

-

Debt discount attributable to derivative liabilities recorded

-

-

Derivative liabilities converted during the period

-

-

Unrealized gain attributable to the change in liabilities still held

-

-

Net unrealized (gain) loss included in earnings

$

-

$

-

The Company did not have any Level 1 or Level 2 assets or liabilities as of November 30, 2014 and 2013, and had Level 3 liabilities consisting of notes payable.  The carrying amount of the notes payable at May 31,February 28, 2015 and November 30, 2014, approximate their respective fair value based on the Company’s incremental borrowing rate.


Cash and cash equivalents include money market securities that are considered to be highly liquid and easily tradable as of May 31,February 28, 2015 and November 30, 2014, respectively. These securities are valued using inputs observable in active markets for identical securities and are therefore classified as Level 1 within our fair value hierarchy.

In addition, FASB ASC 825-10-25 Fair Value Option was effective at the time of adoption. ASC 825-10-25 expands opportunities to use fair value measurements in financial reporting and permits entities to choose to measure many financial instruments and certain other items at fair value. The Company did not elect the fair value options for any of its qualifying financial instruments.

d)   Income Taxes

Income

The Company accounts for income taxes are accounted for in accordance with the provisions of FASBunder ASC Topic 740, formerly SFAS No. 109, Accounting for Income Taxes.Taxes, as clarified by ASC Topic 740, formerly FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, (“FIN No. 48”). Deferred tax assets and liabilities are recognized for the future tax consequences attributable todetermined based upon differences between the financial statement carrying amountsreporting and tax bases of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable incomeand laws that will be in effect when the years in which those temporary differences are expected to be recoveredreverse. A valuation allowance is provided when it is more likely than not that some portion or settled. The effect onall of a deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amounts expected toasset will not be realized.

 

The Company adopted the provisions of ASC Topic 740, formerly FIN No. 48 on January 1, 2007. Previously, the Company had accounted for tax contingencies in accordance with Statement of Financial Accounting Standards No. 5, Accounting for Contingencies. As required by ASC Topic 450, formerly FIN No. 48, the Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. At the adoption date, the Company applied ASC Topic 740, formerly FIN No. 48 to all tax positions for which the statute of limitations remained open. As a result of the implementation of ASC Topic 740, formerly FIN No. 48, the Company did not recognize any change in the liability for unrecognized tax benefits.

The Company is subject to income taxes in the U.S. federal jurisdiction and that of South Africa. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. With few exceptions, the Company is no longer subject to U.S. federal, state and local income tax examinations by tax authorities for the years before April 1, 2007.

The Company is not currently under examination by any federal or state jurisdiction.

The Company’s policy is to record tax-related interest and penalties as a component of operating expenses.

F-5

Telco Cuba, Inc.

NOTES TO CONDENSED FINANCIAL STATEMENTS (Restated)

For the periods Ended February 28, 2015 and 2014

(Unaudited)

e)    Cash and Cash Equivalents

For purposes of the statement of cash flows, cash includes demand deposits, saving accounts and money market accounts. The Company considers all highly liquid instruments with maturities of three months or less when purchased to be cash equivalents.

f)    Revenue Recognition


The Companies follow the guidance of the FASB ASC 605-10-S99 “Revenue Recognition Overall – SEC Materials”. The Companies record revenue when persuasive evidence of an arrangement exists, product delivery has occurred, the sales price to the customer is fixed or determinable, and collectability is reasonably assured. Revenues consist primarily of product sales.

As at May 31,Through February 28, 2015, the Company had no revenues to report.

g)   Estimates

The preparation of financial statements in conformity with US generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of revenues and expenditures during the reporting period. Actual results could differ from those reported.


h) Foreign Currency Transaction Gains and Losses


The Company’s principle operations are located in the United States through it has some prior liabilities in Canadian dollars.  Accordingly, the Company has used the balance sheet conversion rate to adjust the foreign currency liability and therefor has recorded a foreign currency translationtransaction gain or loss. Cumulative differences resulting from the fluctuation in the exchange rate are recorded as an offset to equity in the balance sheet and recorded as a component of comprehensive loss on the income statement.


i)   Accounts receivable and concentration of credit risk


The Company currently has no accounts receivable, no customers, and therefore, does not currently foresee a concentrated credit risk associated with trade receivables.  If and when the Company commences operations that generate revenue, the Company will evaluate the receivable in light of the collectability in the normal course of business.  

j)   Reclassifications

Certain prior year financial statement balances have been reclassified to conform to the current year presentation. These reclassifications had no effect on the recorded net loss.

k)    Recently Adopted Accounting Pronouncements

Management does not believe that any recently issued but not yet effective accounting pronouncements if currently adopted would have a material effect on the accompanying financial statements.

m)Restatement of Previously Issued Financial Statements


The Company has restated its un-audited financial statement for the quarters ended February 28, 2015 and 2014, respectively.  The table below highlights the material changes to the financial statements:


For the quarter ended February 28, 2015 –


 

Balance Per Adjusted Statements

 

Adjustments

 

 

Balance Previously Reported

Total Other Assets

$

 

$

2,000,000

(8)

 

$

2,000,000

Total Current Liabilities

$

5,234,064 

 

$

1,317,535

(1)

 

$

3,916,529

Common Stock

$

29,286 

 

$

5,850

(2)

 

$

23,436

Additional Paid-in Capital

$

12,397,251 

 

$

501,099

(3)

 

$

12,898,350

Accumulated Deficit

$

17,660,688 

 

$

2,814,412

(4)

 

$

14,846,276

Operating Expenses

$

(3,011)

 

$

3,011

(5)

 

$

-

Interest Expense

$

50,769 

 

$

33,984

(6)

 

$

16,785

Change in Fair Value of Derivative Liability

$

238,172 

 

$

238,172

(7)

 

$

-

Net Loss

$

285,930 

 

$

269,145

 

 

$

16,785


1)

  1. Change in current liabilities represents an increase in accrued liabilities of $209,789, a decrease in accrued payroll of $21,245, an increase in convertible debentures of $134,000, an increase in notes payable of $450,000, and an increase in derivative liability of $544,991. 
  2. Common stock adjustment reflects adjustment to record a change in the number of shares issued on the conversion of debentures. 
  3. Change in additional paid-in capital reflects the reclassification of preferred stock issuable as note payable.  
  4. Change in accumulated deficit reflects the combination of changes in the quarter ended February 28, 2015, the year ended November 30, 2014 plus changes of $2,545,267. 
  5. Change in operating expenses reflects the reclassification of foreign exchange loss to general and administrative expenses.  
  6. Change in interest expense results from an increase in the amount of recorded debt outstanding during the year.  
  7. Change in derivative liability results from properly recording derivative liability expense for the year. 
  8. Change in other current assets results from an impairment on the value of the oil and gas lease.

F-6

 

Telco Cuba, Inc.

(Formerly CaerVision Global, Inc. andNOTES TO CONDENSED FINANCIAL STATEMENTS (Restated)

American Mineral Group, Inc.)

Notes toFor the Unaudited Financial Statements
May 31,periods Ended February 28, 2015 and 2014

(Unaudited)


For the quarter ended February 28, 2014 –

 

Adjusted Balance

 

Adjustments

 

 

Previously Reported

Total Other Assets

  $                -

 

$  2,000,000 

(3)

 

$   2,000,000

Total Current Liabilities

  $  5,079,313

 

$  1,359,219 

(7)

 

$   3,720,094

Common Stock

  $       15,885

 

$            750 

(6)

 

$        15,135

Additional Paid-in Capital

  $12,384,985

 

$   (496,000)

(4)

 

$12,880,985

Accumulated Deficit

  $17,480,272

 

$  2,863,719 

(5)

 

$14,616,553

Operating Expenses

  $       92,202

 

$         2,485 

(1)

 

$        94,687

Change in Fair Value of Derivative Liability

  $     194,344

 

$     194,344 

(2)

 

$                 -

Net Loss

  $     330,724

 

$     191,859 

 

 

$      138,865

1)       Change in operating expenses reflects the reclassification of foreign exchange loss to general and administrative expenses.

2)       Change in derivative liability results from properly recording derivative liability expense for the year.

3)       Change in other current assets results from an impairment on the value of the oil and gas lease.

4)       Change in additional paid-in capital reflects the reclassification of preferred stock issuable as note payable.

5)       Change in accumulated deficit reflects the combination of changes in the quarter ended February 28, 2014, the year plus changes of $2,005,554 in 2013 and $666,306 in 2012.

6)       Common stock adjustment reflects adjustment to record a change in the number of shares issued on the conversion of debentures.

7)       Change in current liabilities represents an increase in accrued liabilities, an increase in notes payable, and an increase in derivative liability.

n) Material Equity Instruments

3.The Company evaluates preferred stock series A, B & C and other contracts (convertible promissory note payable) to determine if those contracts or embedded components of those contracts qualify as derivative financial instruments to be separately accounted for under the relevant sections of ASC 815-40, Derivative Instruments and Hedging: Contracts in Entity’s Own Equity (“ASC 815”).  The result of this accounting treatment could be that the fair value of a financial instrument is classified as a derivative financial instrument and is marked-to-market at each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the statement of operations as other income or other expense. Upon conversion or exercise of a derivative financial instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. Financial instruments that are initially classified as equity that become subject to reclassification under ASC 815 are reclassified to a liability account at the fair value of the instrument on the reclassification date.

Certain of the Company’s embedded conversion features on debt are treated as derivative liabilities for accounting purposes under ASC 815-40 due to insufficient authorized shares to settle these outstanding contracts.  SEC staff guidance permits a sequencing approach based on the use of ASC 840-15-25 which provides guidance for contracts that permit partial net share settlement. The sequencing approach may be applied in one of several ways: contracts may be evaluated based on (1) earliest issuance date (2) earliest maturity date, (3) latest issuance date, (4) latest maturity date or (2) equally to all instruments on a pro-rata basis. In the case of insufficient authorized share capital available to fully settle outstanding contracts, the Company utilizes the earliest issuance date sequencing method to reclassify outstanding contracts as derivative instruments. These contracts are recognized currently in earnings until such time as the convertible notes or preferred stock are exercised, expire, the related rights have been waived and/or the authorized share capital has been amended to accommodate settlement of these contracts. These instruments do not trade in an active securities market.

As of February 28, 2015 and 2014, the Company has recorded a charge for the derivative liability of $238,172 and $194,344, respectively. This derivative liability is a result of the embedded conversion features of the $350,260 in debt to convert into 155,763,603 shares, at fixed prices ranging from $0.00166 to $0.00220 per share. The liability was recorded at the fair market value, which estimated value, was based upon the remaining contractual life of the convertible notes payable (the host instrument), using the Black-Sholes pricing model, and since these earlier notes had reached maturity and were now due on demand, the intrinsic value was also considered. The conversion exceeded the market price accordingly the intrinsic value was also zero. Accordingly, the reclassification of the value of these derivatives had no impact on the Company’s financial statements.

In addition, the Company has issued and outstanding a total of 3,000 shares of Series A Preferred, which are convertible into Common Stock at 1,000:1 and 85,968 shares of Series B Preferred, which are convertible into Common Stock at 5,000:1. Combined, these Preferred Shares could be converted into 432,840,000 shares of Common Stock.  However, 50,888 shares of Series B preferred are held by the Company’s chief executive and are subject to a lock up agreement that precludes their conversion. Upon analysis, there was no additional adjustment of the derivative liability required regarding these potential conversions.

Note 3 - Mineral Property

In August 2009, the Company entered into an agreement to acquire the mineral rights to 331 unpatented lode mining claims known as the Conglomerate Mesa, located in Inyo County, California.  In March 2011, the Company added an additional 217 unpatented lode mining claims.  In fiscal year 2012, the Company determined that the effort and cost of developing these claims required more resources that could be more effectively used on other opportunities, and abandoned the Conglomerate Mesa project.

In February 2013, the Company acquired a 28% Working Interest in the Grand Chenier oil and gas prospect in Louisiana.  The property contains an estimate 9.0 million barrels of oil and was in production until approximately 2009 when the then operator failed to manage the interests and certain repairs were not made leading to the cessation of production.  The Company believes that with approximately $2.0 million in capital, the field can be returned to production and additional wells within the prospect can then be brought online increasing production to a profitable level.

As a result of the share exchange agreement with Telco Cuba in June 2015, the Company has determined that the oil and gas assets no longer fit with the long-term business strategy and the Company is, accordingly, seeking a suitable buyer for these assets.  In prior years, the Company recorded a 100% reserve against the value of the mineral assets given the probability of being able to bring these assets into production.


4.



F-7



Telco Cuba, Inc.

NOTES TO CONDENSED FINANCIAL STATEMENTS (Restated)

For the periods Ended February 28, 2015 and 2014

(Unaudited)



Note 4 -  Capital Stock

a)   Authorized

Authorized capital stock consists of:

500,000,000 common shares with a par value of $0.001 per share; and

1,000,000 preferred shares with a par value of $0.001 per share. On January 25, 2013, the Company filed an amendment to its articles of incorporation to designation 100,000 preferred shares as Series A preferred stock which have a conversion rate to common shares of 1 for 1,000. The amendment also designated 100,000 shares of preferred stock as Series B preferred stock which have a conversion rate to common shares of 1 for 5,000.

b)   Share Issuances

In December 2012, the Company issued 78,333,333 common shares in connection with the conversion of $4,700 of convertible debentures and accrued interest.  The conversions had an average price of $0.00006 per share.

In January 2013, the Company issued 78,333,333 common shares in connection with the conversion of $4,700 of convertible debentures and accrued interest.  The conversions had an average price of $0.00006 per share.

In January 2013, the Company issued 85,000,000 common shares in connection with the conversion of $2,125 of convertible debentures and accrued interest.  The conversions had an average price of $0.00003 per share.


There were no share issuances in the fiscal year ended November 30, 2014.


In Januarythe three months ended February 28, 2015, the Company issued 791,176a total of 13,400,306 shares of common stock, as follows:

·

5,740,306 common shares in connection with the conversion of $1,345$25,665 of convertible debentures and accrued interest.  The conversions had an average price of $0.0017 per share.debentures.  

In January 2015, the Company issued 791,593

·

7,660,000 common shares in connection with the conversion of $4,280 of convertible debentures and accrued interest.  The conversions had an average price of $0.0054 per share.

In January 2015, the Company issued 831,481 common shares in connection with the conversion of $4,490 of convertible debentures and accrued interest.  The conversions had an average price of $0.0054 per share.

In January 2015, the Company issued 831,481 common shares in connection with the conversion of $4,490 of convertible debentures and accrued interest.  The conversions had an average price of $0.0054 per share.


In February 2015, the Company issued 832,075 common shares in connection with the conversion of $4,490 of convertible debentures and accrued interest.  The conversions had an average price of $0.0053 per share.

In February 2015, the Company issued 832,250 common shares in connection with the conversion of $3,325 of convertible debentures and accrued interest.  The conversions had an average price of $0.0040 per share.

In February 2015, the Company issued 832,250 common shares in connection with the conversion of $3,325 of convertible debentures and accrued interest.  The conversions had an average price of $0.0040 per share.

In February 2015, the Company issued 2,560,000 common shares in connection with the conversion of 5121,532 shares of PreferredSeries B Shares.preferred stock.  

In March 2015, the Company issued 831,633 common shares in connection with the conversion of $4,075 of convertible debentures and accrued interest.  The conversions had an average price of $0.0049 per share.

In March 2015, the Company issued 832,075 common shares in connection with the conversion of $4,660 of convertible debentures and accrued interest.  The conversions had an average price of $0.0056 per share.

In March 2015, the Company issued 328,182 common shares in connection with the conversion of $1,805 of convertible debentures and accrued interest.  The conversions had an average price of $0.0055 per share.

In March 2015, the Company issued 503,636 common shares in connection with the conversion of $4,575 of convertible debentures and accrued interest.  The conversions had an average price of $0.0055 per share.

In March 2015, the Company issued 2,545,000 common shares in connection with the conversion of 509 shares of Preferred B Shares.

In March 2015, the Company issued 3,730,000 common shares in connection with the conversion of 746 shares of Preferred B Shares.

In April 2015, the Company issued 3,395,000 common shares in connection with the conversion of 679 shares of Preferred B Shares.

In April 2015, the Company issued 2,067,073 common shares in connection with the conversion of $1,695 of convertible debentures and accrued interest.  The conversions had an average price of $0.0008 per share.

In April 2015, the Company issued 2,770,000 common shares in connection with the conversion of 554 shares of Preferred B Shares.

In the six months ended May 31, 2015, the Company issued 17,002,599 shares of common stock.


Telco Cuba Inc.

(Formerly CaerVision Global, Inc. and

American Mineral Group, Inc.)

Notes to the Unaudited Financial Statements
May 31, 2015 and 2014


5.Note 5 - Convertible Debentures

There were no new convertible debentures issued in the sixthree months ended May 31,February 28, 2015 or in the fiscal year ended November 30, 2014.


As of February 28, 2015, these debts were all due on demand, bear interest at the rates between 8% and 12%per annum, and are convertible at a discount to the stocks market price of between 15% and 55%, based on a look back period of between 10 and 30 days prior to conversion.  Combined, these convertible instruments can be converted into 155,763,603 and 166,457,353 shares of common stock as of February 28, 2015 and November 30, 2014, respectively. In the sixthree months ended May 31,February 28, 2015, Asher Enterprises, a holder of convertible debentures, converted $40,670$25,665 of principle and interest into 9,471,6555,740,306 shares of our common stock.


As of May 31,February 28, 2015 and November 30, 2014, the Company has convertible debenture balances of $202,555$350,260 and $241,925.$375,925.

Note 6 - Derivative Liabilities

In June 2008, the FASB finalized ASC 815, “Determining Whether an Instrument (or Embedded Feature) is indexed to an Entity’s Own Stock.” Under ASC 815, instruments which do not have fixed settlement provisions are deemed to be derivative instruments. The Company has determined that it needs to account for convertible debentures issued for its shares of common stock, as derivative liabilities, and apply the provisions of ASC 815. The instruments have a ratchet provision that adjust either the exercise price and/or quantity of the shares as the conversion price equals to variable % of the "market price" at the time of conversion, as a result, the instruments need to be accounted for as derivative liabilities. In accordance with ASC 815, these convertible debentures have been re-characterized as derivative liabilities. ASC 815, “Accounting for Derivative Instruments and Hedging Activities” (“ASC 815”) requires that the fair value of these liabilities be re-measured at the end of every reporting period with the change in fair value reported in the statement of operations.

As of February 28, 2015, the Company had convertible preferred stock and notes with embedded conversion features and the Company did not, at the date of valuation of these instruments, have a sufficient number of authorized and available shares of common stock to settle the outstanding contracts which triggered the requirement to account for these instruments as derivative financial instruments until such time as the Company has sufficient authorized shares.

At February 28, 2015 and November 30, 2014, the fair value of the embedded derivatives was determined using Binomial Option Pricing Model based on the following assumptions:


6.

 

February 28, 2015

 

November 30, 2014

(1) dividend yield

0%

 

0%

(2) expected volatility

423.25%

 

377.67%

(3) weighted average risk-free interest rate

2%

 

4%

(4) expected life

0.25 year

 

0.25 year

(5) the Company’s common stock price per share

$

0.011  

 

$

0.004  

Derivative Liabilities

There were no new convertible debentures issued in the three months ended February 28, 2015 or in the fiscal year ended November 30, 2014. The fair value of the derivative liabilities was measured using the Black-Scholes option pricing model and the following assumptions:

 

May 31,

 

November 30,

 

Date of

 

2015

 

2014

 

issuance

 

 

 

 

 

 

   $32,500 Debenture:

  

 

  

 

  

Discount Rate – Bond Equivalent Yield

0.30%

 

0.30%

 

0.30%

Annual rate of dividends

-

 

-

 

-

Volatility

347.18%

 

347.18%

 

319.58%

Weighted Average life (months)

0

 

0

 

9

 

 

 

 

 

 

   $40,000 Debenture:

  

 

  

 

  

Discount Rate – Bond Equivalent Yield

0.30%

 

0.30%

 

0.30%

Annual rate of dividends

-

 

-

 

-

Volatility

347.18%

 

347.18%

 

319.58%

Weighted Average life (months)

0

 

0

 

9

 

 

 

 

 

 

   $35,000 Debenture:

  

 

  

 

  

Discount Rate – Bond Equivalent Yield

0.30%

 

0.30%

 

0.30%

Annual rate of dividends

-

 

-

 

-

Volatility

347.18%

 

347.18%

 

262.42%

Weighted Average life (months)

0

 

0

 

9

 

 

 

 

 

 

   $174,530 Debenture:

  

 

  

 

  

Discount Rate – Bond Equivalent Yield

0.30%

 

0.30%

 

0.30%

Annual rate of dividends

-

 

-

 

-

Volatility

347.18%

 

347.18%

 

262.42%

Weighted Average life (months)

0

 

0

 

6

 

 

 

 

 

 

Fair Value

$            192,123

 

$          192,123

 

 


There were no new convertible debentures issued in the six months ended May 31, 2015 or in the fiscal year ended November 30, 2014.model.

At May 31,February 28, 2015, the Company reevaluated the derivative liability based on the fair value assumptions for the convertible debt that it had entered into in previous years.  As of May 31,February 28, 2015, the derivative liability remained the same during the year then ended due to the conversion threshold being equivalent at this reporting date as compared to the previous fiscal year end.was $737,114.  


The following table represents the Company’s debt derivative liability activity for the periods presented:


7.

 

February 28, 2015

 

November 30, 2014

Beginning balance

$

498,942

 

$

802,153 

Derivative liabilities recorded

-

 

Derivative liabilities converted

-

 

Unrealized loss (gain) attributable to change in liabilities

238,172

 

(303,211)

Ending balance

$

737,114

 

$

498,942 

The derivative liability results from the embedded conversion features of the debt to convert into 155,763,603 shares at fixed prices ranging from $0.00166 to $0.00220 per share. The liability was recorded at the fair market value, which estimated value, was based upon the remaining contractual life of the convertible notes payable (the host instrument), using the Black-Sholes pricing model, and since these earlier notes had reached maturity and were now due on demand the intrinsic value was also considered. The conversion exceeded the market price accordingly the intrinsic value was also zero. Accordingly, the reclassification of the value of these derivatives had no impact on the Company’s financial statements.

Note 7 - Notes Payable

For the years ended November 30, 2014 and 2013,As of February 28, 2015 the Company borrowed $200 and $21,888, respectively, from a non-affiliated accredited investor.investor of $233,331.  The Notes carry interest at a rate of 15% per yearannum and are due on demand.  

The Company raised $0also issued a note on April 27, 2013 in the amount of $1,500,000 associated with the purchase of the Grand Chenier lease. The note was issued to the seller of the asset, bears interest at 8% per annum and $359 in demand notes tois due five years from its CFO during the fiscal years ended November 30, 2014 and 2013, respectively.

Between December 2011 and November 2012,date of issuance. As of February 28, 2015 the Company borrowed $108,700 from a non-affiliated accredited investor.outstanding balance was $1,500,000.  The Notes carry interest at a rate of 15%8% per yearannum and areis due on demand.  five years from the date of issuance.  Further, the company also had accrued payable of $500,000 associated with the purchase of the Grand Chenier lease.

As of May 31,February 28, 2015 and November 30, 2014, the Company had atotal notes payable balance of $283,332$2,233,332 and $2,333,332 outstanding, respectively, which was owed to unrelated third parties.  


8.

F-8





Telco Cuba, Inc.

NOTES TO CONDENSED FINANCIAL STATEMENTS (Restated)

For the periods Ended February 28, 2015 and 2014

(Unaudited)



Note 8 -Related party transactions


Due to Officers


FromOur officers have from time to time our former CEO, Mal Bains loanedlent money to the Company. At May 31, 2015 and November 30, 2014, the balance owed was $16,022 and $17,476 respectively.  The balance does not bear interest and is due on demand.


Our CEO and CFO have from time to time loaned money to the Company.  At May 31,both February 28, 2015 and November 30, 2014, they had a balance owed to them of $1,384 respectively.collectively.  The balances do not bear interest and are due on demand.


Employment Contracts with Officers

In September 2010, the Company entered into five year Employment Contracts with its three former officers of the Company. The three former officers of the Company have recently resigned, see subsequent events footnote. As of May 31, 2015 and November 30, 2014, the Company had an accrued payroll liability balance of $1,319,194.

Telco Cuba Inc.

(Formerly CaerVision Global, Inc. and

American Mineral Group, Inc.)
Notes to the Unaudited Financial Statements
May 31, 2015 and 2014


9.

Commitments and Contingencies

In August, 2009, trading in the Company’s stock was temporarily suspended in British Columbia, Canada by the British Columbia Securities Commission (BCSC).  The temporary suspension was the result of what the BCSC termed “suspicious trading activity” due to a significant increase in the share price of the Company’s stock price.  Various shareholders, and the former CEO and President, Malkeet Bains have been interviewed and several have been either charged with or accepted please in connection with violations of Canadian securities laws.  

The Cease Trade Order is still in effect regarding trading in British Columbia, Canada only, and specifically affects the residents thereof.  

The case outlined above does not involve the Company or any of its current officers or directors.

A consulting agreement between American Mineral Group and Internet Marketing Solutions, Inc. (IMS) provides that IMS will receive a Consulting Fee of ten percent (10%) of the gross value of the project received by American Mineral Group including cash, stock and stock purchase warrants.



10.

Note 9 - Subsequent Events


Management has evaluated subsequent events pursuant to the requirements of ASC Topic 855 and has determined that other than listed below, no material subsequent events exist.exist other than listed below.


On June 2, 2015, the Company consummated an agreement with three former officers of the Company whereby the former officers will transfer a total of 37,500 shares of issued and outstanding Series B Preferred Stock to the newly appointed President of the Company, William Sanchez, in return for 3,500,000 newly issued shares of common stock. In addition, the agreement calls for the cancellation of the former officer’s accrued payroll in the amount of $1,319,194.


On June 12, 2015, the Company consummated a share exchange agreementShare Exchange with Amgentech, Inc./Telco Cuba, Inc., a Florida corporation, wherebycorporation.  Under the Company will issue 75,000,000terms of the Share Exchange, the holders of Amgentech received 50,888 shares of common stockCaerVision Series B Preferred Stock that had been previously issued to third parties in exchange for 100% of the issued and outstanding capital of Amgentech. Each shares of Series B preferred is convertible into 5,000 shares of common stock (254,440,000 shares total) and has voting rights of 5,000 per share (254,440,000 votes). As a result of this transaction, Amgentech Inc./Telco Cuba, Inc.  Amgentech Inc./Telco Cuba, Inc. will be the surviving entity and focus on opportunities in the Cuban telecommunications market.


On June 15, 2015,became a wholly-owned subsidiary of the Company effectuatedwith control transferring to the previous owners of Amgentech.  Amgentech elected to be treated as the successor issuer for SEC reporting and accounting purposes.  The Share Exchange was accounted for as a reverse acquisition and re-capitalization. The Amgentech Shareholders obtained approximately 60% of voting control on the date of Share Exchange. Amgentech was the acquirer for financial reporting purposes and the Company was the acquired company.  The Company filed an amendment to its articles of incorporation to changeand changed its name from CaerVision Global, Inc. to Telco Cuba, Inc.


On June 15,Subsequent to February 28, 2015, the Company effectuatedconverted a total of $16,920 in convertible debt and accrued interest owed to unaffiliated third party accredited investors into 4,562,599 shares of restricted common stock.

Subsequent to February 28, 2015, the Company issued 73,120,000 common shares to unaffiliated third party accredited investors in connection with the conversion of 14,624 shares of Series B preferred stock.

The Company issued 12,130,729 shares of restricted common stock on the conversion of $19,373 in notes payable held by unaffiliated third parties.

The Company issued 4,007,146 shares of restricted common stock to third parties for services rendered valued at $5,000.

In July 2015, the Company entered into an amendmentagreement with Next Group Holdings pursuant to which Next Group agreed to provide a virtual call processing platform for telecommunications, a web portal and sales portal.  In exchange, the Company agreed to pay $50,000 and use Next Group as its articlesprovider for local and international voice, data, and text services as part of incorporation to appoint William Sanchezits operational platform.

On September 4, 2015, the Company issued 100,000 shares of Series C Preferred Stock to the positionCompany’s CEO in exchange for services rendered to the Company.  The Series C Preferred are non-convertible and have voting rights equal to 10,000 votes of CEO, CFO, President, Treasurer and Secretary. In the same amendment to our articles of incorporation, Erwin Vahlsing Jr., Thomas J Craft Jr. and Frederick J Pucillo Jr., resigned their positions as officers and directors of the Company.common stock per share.





F-9













ITEM 2. Management’s Discussion and Analysis and Results of Operations

 

The following discussion and analysis provides information which management of the Company believes to be relevant to an assessment and understanding of the Company’s results of operations and financial condition. This discussion should be read together with the Company’s financial statements and the notes to the financial statements, which are included in this report.

 

Forward-Looking Statements

 

This Report contains forward-looking statements that relate to future events or our future financial performance. Some discussions in this report may contain forward-looking statements that involve risk and uncertainty. A number of important factors could cause our actual results to differ materially from those expressed in any forward-looking statements made by us in this Report. Forward-looking statements are often identified by words like “believe,” “expect,” “estimate,” “anticipate,” “intend,” “project” and similar words or expressions that, by their nature, refer to future events.

 

In some cases, you can also identify forward-looking statements by terminology such as “may,” “will,” “should,” “plans,” “predicts,” “potential,” or “continue,” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties, and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

 

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, or achievements. You should not place undue certainty on these forward-looking statements, which apply only as of the date of this Report. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or our predictions. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements in an effort to conform these statements to actual results.


Business History


The Company (fka CaerVision Global, Inc. fka American Mineral Group Inc.) (the "Company") was incorporated under the laws of the State of Nevada on August 10, 2007. On June 15, 2015, the Company effectuated an amendment to its articles of incorporation to change its name from CaerVision Global, Inc. to Telco Cuba, Inc.

CaerVision Global, Inc. fka American Mineral Group Inc. (the "Company") was incorporated under the laws of the State of Nevada on August 10, 2007.

Telco Cuba, Inc. (formerly CaerVision Global, Inc. fka American Mineral Group Inc.)The Company was an early stage Mining and Exploration Company throughout the fiscal year ended November 30, 2014 and 2013. We soughtearly 2015, seeking to acquire, develop, and manage various oil, gas, and mineral properties and resources.

In August 2009, the Company entered into an agreement to acquire the mineral rights to 331 unpatented lode mining claims known as the Conglomerate Mesa, located in Inyo County, California.  In March 2011, the Company added an additional 217 unpatented lode mining claims.  In fiscal year 2012, the Company determined that the effort and cost of developing these claims required more resources that could be more effectively used on other opportunities, and abandoned the Conglomerate Mesa project.

In February 2013, the Company acquired a 28% Working Interest in the Grand Chenier oil and gas prospect in Louisiana.  The property contains an estimate 9.0 million barrels of oil and was in production until approximately 2009 when the then operator failed to manage the interests and certain repairs were not made leading to the cessation of production.  The Company believes that with approximately $2.0 million in capital, the field can be returned to production and additional wells within the prospect can then be brought online increasing production to a profitable level. 

In November 2014, the Company entered into negotiations to acquire Vitall, Inc. and was renamed CaerVision Global, Inc., and closed on this deal in January 2015.  The newly renamed Company had 60 days to close on a minimum $500,000 in debt or equity financing to support the new direction.  When this was not achieved, the prior owner invoked a rescission clause and terminated the deal.


On June 12, 2015, the Company consummated a share exchange agreementShare Exchange with Amgentech, Inc./Telco Cuba, Inc., a Florida corporation, wherebycorporation.  Under the Company will issue 75,000,000terms of the Share Exchange, the holders of Amgentech received 50,888 shares of common stockCaerVision Series B Preferred Stock that had been previously issued to third parties in exchange for 100% of the issued and outstanding capital of Amgentech. Each shares of Series B preferred is convertible into 5,000 shares of common stock (254,440,000 shares total) and has voting rights of 5,000 per share (254,440,000 votes). As a result of this transaction, Amgentech Inc./Telco Cuba, Inc.  Amgentech Inc./Telco Cuba, Inc. will be the surviving entity and focus on opportunities in the Cuban telecommunications market.


On June 15, 2015,became a wholly-owned subsidiary of the Company effectuatedwith control transferring to the previous owners of Amgentech.  Amgentech elected to be treated as the successor issuer for SEC reporting and accounting purposes.  The Share Exchange was accounted for as a reverse acquisition and re-capitalization. The Amgentech Shareholders obtained approximately 60% of voting control on the date of Share Exchange. Amgentech was the acquirer for financial reporting purposes and the Company was the acquired company.  The Company filed an amendment to its articles of incorporation to changeand changed its name from CaerVision Global, Inc. to Telco Cuba, Inc.


On June 15, 2015, the Company effectuated an amendment to its articles of incorporation to appoint William Sanchez to the position of CEO, CFO, President, Treasurer and Secretary. In the same amendment to our articles of incorporation, Erwin Vahlsing Jr., Thomas J Craft Jr. and Frederick J Pucillo Jr., resigned their positions as officers and directors of the Company.



Overview


Telco Cuba, Inc. (Formerly CaerVision Global, Inc.) was incorporated in August 10th, 2007 with a Fiscal Year Ending of November 30th. Telco Cuba

Amgentech is a NevadaFlorida based Corporation engaged in the business of Telecommunication.  providing technology solutions, integrating and building technology infrastructure and software and website development.  Amgentech, Inc. also offers managed co-loacted and leased servers.  Orignially fFoundedounded in 2001, Amgentech, -- the parent company of Telco CubaInc. has been providing internetInternet based solutions, VoIP infrastructure and consulting services for over 14 years.years to diverse clients in the United States of America, the countries of El Salvador, Nicaragua, Costa Rica, Panama, Columbia, and Venezuela. Amgentech, has generated over 7 million dollarsInc. continues to provide these same services, in revenue.addition to providing the technical and Internet know how to implement the technological vision that is envisioned for Telco Cuba, is launching best of breed communicationInc., Amgentech will be the sole technical services including, but not limited to VoIP, Calling Cards and direct SMS messaging in the US and between the US and Cuba. For more information visitprovider.   

 

PRINCIPAL PRODUCTSPrincipal Products

 

Telco Cuba, will offerInc. offers telecommunication services and equipment, including mobile phones, mobile voice service, VoIP service, and calling cards.  The services and devices initially offered will be for the US and emergingconsumption solely in The United States of America.  Telco Cuba, market.  Telco CubaInc. has positioned itself to offer low cost mobile cell phone serviceservice/plans in The United States. Telco Cuba, Inc. will offer prepaid service/plans that include predefined minute/unlimited minute plans. Telco Cuba, Inc. is positioning itself to enter the US and Cuba. Service plans include post & prepaid cards as well as minute by minute plans, unlimited plans and unlimited text plans. The Company will also offer two models of smart phones as well.telecommunications market in Cuba once able to.  

  

OUR MARKETOur Market

 

The Company plans to targettargets the US and Cuban markets,markets.


Results of operations for the three and six months ended May 31,February 28, 2015 and 2014


The financial data presented below should be read in conjunction with the more detailed financial statements and related notes, which are included elsewhere in this report. Information discussed herein, as well as elsewhere in this Quarterly Report on Form 10Q, includes forward-looking statements or opinions regarding future events or the future financial performance of the Company, and are subject to a number of risks and other factors which could cause the actual results to differ materially from those contained in forward-looking statements. Among such factors are general business and economic conditions, and risk factors as listed in this Form 10-Q or listed from time to time in documents filed by the Company with the Securities and Exchange Commission.  For all periods presented, the results of operations are those of American Mineral Group exclusive of Amgentech.


Revenue

 

There were no revenues for the three months and six months ended May 31,February 28, 2015, and May 31,February 28, 2014. 

  

Operating Expenses

 

The operatingOperating expenses for the three months ended May 31,February 28, 2015 were $0. This isconsisted of $3,011 in foreign exchange increases compared to operating expense of $96,101$1,536 for the three months ended May 31,February 28, 2014.  In addition, in 2014,

The operating the Company incurred $92,202 in general and administrative expenses for the six months ended May 31, 2015 were $0. This is compared to operating$0 in 2015. There were no General & Administrative expenses in 2015 as the Company’s operations consisted principally of $190,787 for the six months ended May 31, 2014.trying to raise capital.

 

Interest Expense:

 

Interest expense for the three months ended May 31,February 28, 2015, was $4,283, and for the six months ended May 31, 2015 was $21,068,$50,769, and is derived from the convertible debenture debtdebentures and notes payable carried by the Company. For the three months ended May 31,February 28, 2014, the interest expense was $46,316,$45,714 and foris also based on the six months ended May 31, 2014,debt carried by the interest expense was $92,030. The interest expense was derived from our outstanding convertible debenture debt.Company.



12






Net Loss:


Net Loss from operations for the three months ended May 31,February 28, 2015, was $4,283, which brings the total loss for the six months ended May 31, 2015, to $21,068$285,930 compared to a loss of $143,417$330,724 for the three months ended May 31, 2014, and a six month totalFebruary 28, 2014.  The biggest component of the 2015 loss of $282,817 as of May 31, 2014.Other Comprehensive Income (loss):

Other comprehensive income/(loss) forwas $238,172 resulting from the three months ended May 31 28, 2015 included foreign currency translation loss of $148 which was derived from a liabilitychange in the currencyfair value of the Canadian dollar. Other comprehensive income for the three months ended May 31,derivative liability.  The loss in 2014 included foreign currency translation losswas principally comprised of $748 which was derived from a$92,202 in general and administrative expenses, $194,344 in derivative liability charges, and $45,714 in the currency of the Canadian dollar. Other comprehensive income/(loss) for the sex months ended May 31 28, 2015 included foreign currency translation loss of $2,863 which was derived from a liability in the currency of the Canadian dollar. Other comprehensive income for the six months ended May 31, 2014 included foreign currency translation loss of $788 which was derived from a liability in the currency of the Canadian dollar.interest expense.


Liquidity and Capital Resources


As of May 31,February 28, 2015, Telco Cuba, Inc.the company had total current assets of $2 and total current liabilities of $2,405,956$5,234,064 for a net working capital deficit of $2,405,954.$5,234,062. The Company will need to raise additional money to meet general and administrative expenses, and will need to raise money to achieve the Company’s business objective to pursue telecom opportunities in the newly emerging Cuban market. The additional funding will come from equity financing from the sale of our common stock. If we are successful in completing an equity financing, existing shareholders will experience dilution of their interest. The Company does not have any financing arranged and we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of its common stock.  In the absence of such financing, the Company will fail.


Based on the nature of our business, management anticipates incurring operating losses in the foreseeable future. Management bases this expectation, in part, on the fact that to pursue telecom opportunities in the newly emerging Cuban market will likelymay take several years before we are capable of generating profitable revenues. Our future financial results are also uncertain due to a number of factors, some of which are outside its control. These factors include, but are not limited to:

*·

Our ability to raise additional funding;

*·

Our ability to identify and successfully negotiate the acquisition of potential properties or assets; and

*·

If such opportunities or businesses acquired will be profitable.


Due to the Company’s lack of operating history and present inability to generate revenues, the Company’s independent auditors have added an explanatory paragraph to their audit opinion issued in connection with our financial statements for 20112014 indicating substantial doubt about the Company’s ability to continue as a going concern. This means that there is substantial doubt whether the Company can continue as an ongoing business for the next 12 months unless we obtain additional capital to pay our bills.


The Company’s internal sources of liquidity will be loans that may be available from management. Although the Company has no written arrangements with its management, The Company expects that the officers may provide the Company with nominal liquidity, when and if it is required.

The Company's external sources of liquidity will be private placements for equity and debt financing.

Between December 2012 and November 2013, the Company borrowed $21,888 from a non-affiliated accredited investor.  The Notes carry interest at a rate of 15% per year and are due on demand.

Between December 2013 and November 2014, the Company borrowed $200 from a non-affiliated accredited investor.  The Notes carry interest at a rate of 15% per year and are due on demand.

For the periods ended November 30, 2014 and 2013, the Company borrowed $0 and $359 from its CFO.  The notes are due on demand and carry no interest.  

There are no assurances that the Company will be able to achieve further sales of its common stock or any other form of additional financing. If the Company is unable to achieve the financing necessary, it will fail to execute its future plan of operations which are to pursue telecom opportunities in the newly emerging Cuban market.


Operational Activities

 

The Company had no cash used in operating activities infor the sixthree months ended May 31,February 28, 2015 and May 31, 2014.

 

Investing Activities

 

The Company had no cash used in investing activities infor the sixthree months ended May 31,February 28, 2015 and May 31, 2014.

 

Financing Activities

 

The Company had no cash provided in financing activities infor the sixthree months ended May 31,February 28, 2015 and May 31, 2014.

   

The Company may not have sufficient resources to fully develop or expand itits business unless it is able to raise additional financing. The Company can make no assurances these required funds will be available on favorable terms, if at all. If additional capital is raised through the sale of equity or convertible debt securities, the issuance of such securities would result in dilution to our existing stockholders. Additionally, these conditions may increase costs to raise capital and/or result in further dilution. The failure to raise capital when needed, will adversely affect our business, financial condition and results of operations, and could force the Company to reduce or cease operations.

  

The Company believes that it will be able to meet the costs of growth and public reporting with funds generated from operations and additional amounts generated through debt and equity financing, Although management believes that the required financing to fund its business plan can be secured at terms satisfactory to the Company, there is no guarantee these funds will be made available, and if funds are available, that the terms will be satisfactory to the Company.

 

Impact of Inflation

 

The Company does not expect inflation to be a significant factor in operation of the business.

 

Off-Balance Sheet Arrangements

 

There are no off-balance sheet arrangements between the Company and any other entity that have, or are reasonably likely to have, a current or future effect on financial conditions, changes in financial conditions, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.

  

Going Concern

 

As of May 31, 2015, Telco Cuba, Inc. had total current assets of $2 and total current liabilities of $2,405,956 forThe Company has a net working capital deficiency of $5,234,062 and accumulated deficit of $2,405,954.$17,660,688 as of February 28, 2015. These factors raise substantial doubt about its ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent on the ability to raise additional capital and implement its business plan. The financial statements do not include any adjustments that might be necessary if the company is unable to continue as a going concern.

 

Critical Accounting Policies

 

The discussion and analysis of our financial condition and results of operations are based upon The Company’s financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

 

Management believes that the application of these policies on a consistent basis enables us to provide useful and reliable financial information about our operating results and financial condition. Some of the critical accounting estimates are detailed below.

 




13



Critical Accounting Estimates and New Accounting Pronouncements

 

Critical Accounting Estimates

 

The preparation of financial statements in accordance with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect reported amounts and related disclosures in the financial statements. Management considers an accounting estimate to be critical if:


·

it requires assumptions to be made that were uncertain at the time the estimate was made, and

·

changesChanges in the estimate or different estimates that could have been selected could have a material impact on our results of operations or financial condition.

 

The Company base estimates and judgments on experience, current knowledge, and beliefs of what could occur in the future, observation of trends in the industry, information provided by customers and information available from other sources. Actual results may differ from these estimates under different assumptions or conditions. The Company has identified the following accounting policies and estimates as those that are believed to be the most critical to the financial condition and results of operations and that require management’s most subjective and complex judgments in estimating the effect of inherent uncertainties: share-based compensation expense, income taxes, and derivative financial instruments.

 

Share-Based Compensation Expense. We calculate share-based compensation expense for option awards and warrant issuances (“Share-based Awards”) based on the estimated grant/issue-date fair value using the Black-Scholes-Merton option pricing model (“Black-Scholes Model”), and recognize the expense on a straight-line basis over the vesting period, net of estimated forfeitures. The Black-Scholes Model requires the use of a number of assumptions including volatility of the stock price, the weighted average risk-free interest rate, and the vesting period of the Share-based Award in determining the fair value of Share-based Awards. Although we believe our assumptions used to calculate share-based compensation expense are reasonable, these assumptions can involve complex judgments about future events, which are open to interpretation and inherent uncertainty. In addition, significant changes to our assumptions could significantly impact the amount of expense recorded in a given period.

 

Income Taxes. As part of the process of preparing our consolidated financial statements, we are required to estimate income taxes in each of the jurisdictions in which we operate. Our provision for income taxes is determined using the asset and liability approach to account for income taxes. A current liability is recorded for the estimated taxes payable for the current year. Deferred tax assets and liabilities are recorded for the estimated future 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 the enacted tax rates in effect for the year in which the timing differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of changes in tax rates or tax laws are recognized in the provision for income taxes in the period that includes the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount more-likely-than-not to be realized. Changes in valuation allowances will flow through the statement of operations unless related to deferred tax assets that expire unutilized or are modified through translation, in which case both the deferred tax asset and related valuation allowance are similarly adjusted. Where a valuation allowance was established through purchase accounting for acquired deferred tax assets, any future change will be credited or charged to income tax expense.

The determination of our provision for income taxes requires significant judgment, the use of estimates, and the interpretation and application of complex tax laws. In the ordinary course of our business, there are transactions and calculations for which the ultimate tax determination is uncertain. In spite of our belief that we have appropriate support for all the positions taken on our tax returns, we acknowledge that certain positions may be successfully challenged by the taxing authorities. We determine the tax benefits more likely than not to be recognized with respect to uncertain tax positions. Although we believe our recorded tax assets and liabilities are reasonable, tax laws and regulations are subject to interpretation and inherent uncertainty; therefore, our assessments can involve both a series of complex judgments about future events and rely on estimates and assumptions. Although we believe these estimates and assumptions are reasonable, the final determination could be materially different than that which is reflected in our provision for income taxes and recorded tax assets and liabilities.

 

New Accounting Pronouncements

 

The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

Not required.

 


ITEM 4. CONTROLS AND PROCEDURES.

 

Evaluation of Disclosure Controls and Procedures. We maintain “disclosure controls and procedures” as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934. In designing and evaluating our disclosure controls and procedures, our management recognized that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of disclosure controls and procedures are met. Additionally, in designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

 

The Company’s Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on such evaluation, and as discussed in greater detail below, the Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this report, disclosure controls and procedures were not effective:

 

·

to give reasonable assurance that the information required to be disclosed in reports that are file under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange CommissionsCommission’s rules and forms, and

·

to ensure that information required to be disclosed in the reports that are file or submitted under the Securities Exchange Act of 1934 is accumulated and communicated to management, including our CEO and our Treasurer, to allow timely decisions regarding required disclosure.


This assessment is due in part to the Company’s inability to file its annual and quarterly reports on a timely basis. The Company has, since the share exchange, engaged consultants specializing in financial statement preparation and SEC reporting to assist with preparing and filing the required forms in a timely and accurate manner.  Continued compliance will, in part, depend on the Company having sufficient capital to engage independent auditors to review and audit its financial statement filings.

 

Changes in Internal Control over Financial Reporting. There are no changes in internal control over financial reporting during the last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

 

14

PART II - OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

No legal issues

ITEM 1A. RISK FACTORS

 

Not applicable.


ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

The Company had the following issuances of stock during the six month periodquarter ended May 31, 2015;February 28, 2015:

In Januarythe three months ended February 28, 2015, the Company issued 791,176a total of 13,400,306 shares of common stock, as follows:

·

5,740,306 common shares in connection with the conversion of $1,345$25,665 of convertible debentures and accrued interest.  The conversions had an average price of $0.0017 per share.debentures.  

In January 2015, the Company issued 791,593

·

7,660,000 common shares in connection with the conversion of $4,2801,532 shares of convertible debentures and accrued interest.  The conversions had an average price of $0.0054 per share.Series B preferred stock.

In January

Subsequent to February 28, 2015, the Company had the following stock issuances:

·

the Company converted a total of $16,920 in convertible debt and accrued interest owed to unaffiliated third party accredited investors into 4,562,599 shares of restricted common stock.

·

the Company issued 831,48173,120,000 common shares to unaffiliated third party accredited investors in connection with the conversion of $4,49014,624 shares of convertible debentures and accrued interest.  The conversions had an average price of $0.0054 per share.Series B preferred stock.

In January 2015,

·

the Company issued 831,48112,130,729 shares of restricted common shares in connection withstock on the conversion of $4,490 of convertible debentures and accrued interest.  The conversions had an average price of $0.0054 per share.$19,373 in notes payable held by unaffiliated third parties.

In February 2015,

·

the Company issued 832,075 common shares in connection with the conversion of $4,490 of convertible debentures and accrued interest.  The conversions had an average price of $0.0053 per share.

In February 2015, the Company issued 832,250 common shares in connection with the conversion of $3,325 of convertible debentures and accrued interest.  The conversions had an average price of $0.0040 per share.

In February 2015, the Company issued 832,250 common shares in connection with the conversion of $3,325 of convertible debentures and accrued interest.  The conversions had an average price of $0.0040 per share.

In February 2015, the Company issued 2,560,000 common shares in connection with the conversion of 5124,007,146 shares of Preferred B Shares.  

In March 2015, the Company issued 831,633restricted common shares in connection with the conversion of $4,075 of convertible debentures and accrued interest.  The conversions had an average price of $0.0049 per share.

In March 2015, the Company issued 832,075 common shares in connection with the conversion of $4,660 of convertible debentures and accrued interest.  The conversions had an average price of $0.0056 per share.

In March 2015, the Company issued 328,182 common shares in connection with the conversion of $1,805 of convertible debentures and accrued interest.  The conversions had an average price of $0.0055   per share.

In March 2015, the Company issued 503,636 common shares in connection with the conversion of $4,575 of convertible debentures and accrued interest.  The conversions had an average price of $0.0055   per share.

In March 2015, the Company issued 2,545,000 common shares in connection with the conversion of 509 shares of Preferred B Shares.

In April 2015, the Company issued 3,395,000 common shares in connection with the conversion of 679 shares of Preferred B Shares.

In April 2015, the Company issued 2,067,073 common shares in connection with the conversion of $1,695 of convertible debentures and accrued interest.  The conversions had an average price of $0.0008   per share.

In April 2015, the Company issued 2,770,000 common shares in connection with the conversion of 554 shares of Preferred B Shares.stock to third parties for services rendered valued at $5,000.


The Company has not undertaken an offering in which it sold a high number of securities to a high number of investors. In addition, these shareholders had the necessary investment intent as required by Section 4(2) since they agreed to and received share certificates bearing a legend stating that such securities are restricted pursuant to Rule 144 of the Securities Act. This restriction ensures that these securities would not be immediately redistributed into the market and therefore not be part of a “public offering.” Based on an analysis of the above factors, we have met the requirements to qualify for exemption under Section 4(2) of the Securities Act for this transaction.

 

  

ITEM 3. DEFAULTS UPON SENIOR DEBT

 

None

 

ITEM 4. [Removed and Reserved]

 

None

 

ITEM 5. OTHER INFORMATION

On January 9, 2015, the outstanding shareholders of the Company voted to change the name of the Company from American Mineral Group, Inc. to CaerVision Global, Inc. in order to better reflect the planned change in the Company’s future operations.

On January 26, 2015, the Company entered intoacquired Vitall, Inc. a stock purchase definitive agreement with Vitall, Inc.,company which has developed and is marketing a Delaware corporation, wherebySmartwatch dedicated to the burgeoning health and wellness industry which offers a telephone, a blood pressure monitor, a heart rate monitor, fitness application, and has an emergency help button.  Under the terms of the Agreement, the Company will issue 15,000,000 sharesagreed to a share exchange in which:

·

Settlements with various debt holders in which prior officers, directors, preferred shareholders, and current common shareholders would receive twenty-five percent (25%) of common stock for 100% of the post-merger issued and outstanding capital of shares; and

·

Vitall, Inc. shareholders would receive seventy-five percent (75%) of the post-merger issued and outstanding shares.

·

The Company changed its name to CaerVision Global, Inc.


On March 17, 2015, Vitall, Inc. terminated the merger agreement due to non-performance on the part of the Company.  As a result, the name CaerVision Global, Inc. will bewas surrendered back to its original owner.


On June 12, 2015, the Company consummated a share exchange agreementShare Exchange with Amgentech, Inc./Telco Cuba, Inc., a Florida corporation, wherebycorporation.  Under the Company issued 75,000,000terms of the Share Exchange, the holders of Amgentech received 50,888 shares of common stockCaerVision Series B Preferred Stock that had been previously issued to third parties in exchange for 100% of the issued and outstanding capital of Amgentech. Each shares of Series B preferred stock is convertible into 5,000 shares of common stock (254,440,000 shares total) and has voting rights of 5,000 per share (254,440,000 votes). As a result of this transaction, Amgentech Inc./Telco Cuba, Inc.became a wholly-owned subsidiary of the Company with control transferring to the previous owners of Amgentech.  Amgentech Inc./Telco Cuba, Inc. willelected to be treated as the surviving entitysuccessor issuer for SEC reporting and focusaccounting purposes.  The Share Exchange was accounted for as a reverse acquisition and re-capitalization. The Amgentech Shareholders obtained approximately 60% of voting control on opportunities in the Cuban telecommunications market.date of Share Exchange. Amgentech was the acquirer for financial reporting purposes and the Company was the acquired company.  The Company has filed an amendment to its articles of incorporation to changeand changed its name to Telco Cuba, Inc.  On June 15, 2015, the Company effectuated an amendment to its articles of incorporation to change its name from CaerVision Global, Inc. to Telco Cuba, Inc.


On June 15, 2015, the Company effectuated an amendment to its articles of incorporation to appointappointed William Sanchez to the position of CEO, CFO, President, Treasurer and Secretary. In the same amendment to our articles of incorporation,Concurrent therewith, Erwin Vahlsing Jr., Thomas J Craft Jr. and Frederick J PucilloPuccillo Jr., resigned their positions as officers and directors of the Company.

In July 2015, the Company entered into an agreement with Next Group Holdings pursuant to which Next Group agreed to provide a virtual call processing platform for telecommunications, a web portal and sales portal.  In exchange, the Company agreed to pay $50,000 and use Next Group as its provider for local and international voice, data, and text services as part of its operational platform.

On September 4, 2015, the Company issued 100,000 shares of Series C Preferred Stock to the Company’s CEO in exchange for services rendered to the Company.  The Series C Preferred are non-convertible and have voting rights equal to 10,000 votes of common stock per share.


15



ITEM 6. EXHIBITS

Exhibit Listing

 

 

 

 

 

 

 

 

 

Incorporated by reference

Exhibit No.

Description of Exhibit

Filed herewith

Form

Exhibit

Filing date
(mm/dd/yy)

3.1

Articles of Incorporation

 

S-1

3.1

02/22/08

3.2

Certificate of Change dated July 20, 2009

 

8-K

3.1

08/03/09

3.3

Bylaws

 

S-1

3.2

02/22/08

4.1

Specimen Stock Certificate

 

S-1

4.1

02/22/08

14

Code of Ethics

 

S-1

14

02/22/08

31.1

Certifications of Principal Executive Officer and Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

X

 

 

 

32.1

Certifications of Principal Executive Officer and Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

X

 

 

 

 

 

 

Incorporated by reference

Exhibit No.

Description of Exhibit

Filed herewith

Form

Exhibit

Filing date
(mm/dd/yy)

3.1

Articles of Incorporation

 

S-1

3.1

02/22/08

3.2

Certificate of Change dated July 20, 2009

 

8-K

3.1

08/03/09

3.3

Bylaws

 

S-1

3.2

02/22/08

4.1

Specimen Stock Certificate

 

S-1

4.1

02/22/08

10.6

Consulting and Fee Agreement dated July 1, 2009 between Internet Marketing Solutions, Inc. and American Mineral Group

 

10-K

10.6

03/17/10

10.7

Employment Agreement dated September 2, 2010 between Frederick Pucillo, Jr. and American Mineral Group

 

10-K

10.7

 

10.8

Employment Agreement dated September 2, 2010 between Erwin Vahlsing, Jr. and American Mineral Group

 

10-K

10.8

 

14

Code of Ethics

 

S-1

14

02/22/08

31.1

Certifications of Principal Executive Officer and Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

X

 

 

 

32.1

Certifications of Principal Executive Officer and Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

X

 

 

 

 




16





 





SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned; thereunto duly authorized.

 

Telco Cuba Inc.

(Formerly CaerVision Global, Inc. and

American Mineral Group, Inc.)



Date: July 6,December 21, 2015



By:  /s/ William Sanchez                

William Sanchez, Chief Executive Officer and President



Date: December 21, 2015



By:  /s/ William Sanchez

William Sanchez, Chief Financial Officer, Secretary, and Treasurer

 

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of Registrant and in the capacities indicated on the dates indicated.

Date

Signature

Title



Date: July 6,December 21, 2015



/s/ William Sanchez



Director, President, Chief Executive Officer, Chief Financial Officer, Secretary, and Treasurer

William Sanchez

 








17