Free Flow (FFLO) 10-Q 2024 Q2 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2024

Commission file number 000-54868

 

Free Flow Inc.
(Exact name of registrant as specified in its charter)

Delaware	45-3838831
(State or other jurisdiction	(IRS Employer
of incorporation)	Identification No.)

6269 Caledon Road; King George, VA 22485

(Address of Principal Executive Offices)

(703) 789-3344

(Registrant’s Telephone Number)

—————————————————-

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 last 90 days. Yes x  No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes 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. See the definitions of "large accelerated filer, "accelerated filer," "non-accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected transaction period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

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

Applicable Only to Issuer Involved in Bankruptcy Proceeding During the receding Five Years.

N/A.

Applicable Only to Corporate Registrants

Securitas registered to Pursuant to Section 12(b) of the Act.

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
N/A	FFLO	OTC PINK

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 26,926,900 shares as of August 15, 2024

ITEM 1.  FINANCIAL STATEMENTS	2
Notes to Condensed Consolidated Financial Statements	6
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION	10
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS	11
ITEM 4. CONTROLS AND PROCEDURES	11
PART II – OTHER INFORMATION	12
ITEM 1. LEGAL PROCEEDINGS	12
ITEM 1A. RISK FACTOR	12
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	12
ITEM 3. DEFAULTS UPON SENIOR SECURITIES	12
ITEM 4. MINE SAFETY DISCLOSURE	12
ITEM 5. OTHER INFORMATION	12
PART II. OTHER INFORMATION	13
ITEM 6. EXHIBITS.	13
SIGNATURES	14

ITEM 1.  FINANCIAL STATEMENTS

FREE FLOW, INC. & SUBSIDIARIES

Unaudited Condensed Consolidated Balance Sheets

	June 30, 2024	December 31, 2023
	(Unaudited)	(Audited)
ASSETS
Current Assets
Cash and cash equivalents	$3,753	$39,521
Trade Receivables - current	102,264	95,440
Refund due from IRS - ERTC	32,730	32,730
Notes Receivable	300,000	-
Rounding off the decimals - error	-	(2)
Inter-company	-	-
Inventories	2,400	4,800
TOTAL CURRENT ASSETS	441,146	172,489
Fixed Assets
Land and Building, without depreciation	-	772,413
Less: Allowance for Depreciation	-	(283,731)
TOTAL FIXED ASSETS	-	488,682
Other Assets
Delivery Trucks, before depreciation allowance	2,500	2,500
Allowance for Depreciation	(2,500)	(2,500)
Improvements in progress	-	11,697
Equipment and Delivery Trucks, before depreciation allowance	31,712	31,712
Allowance for Depreciation	(31,712)	(31,712)
TOTAL OTHER ASSETS	-	11,697
TOTAL ASSETS	$441,146	$672,868
LIABILITES & STOCKHOLDERS' EQUITY (DIFICIT)
Current Liabilities
Accounts Payable	215,079	138,669
Notes Payable	1,500	2,500
Notes Payable - Related Parties	9,634	9,634
TOTAL CURRENT LIABILLITIES	226,213	150,803
Long Term Liabilities
Incredible Bank - Revolving Line of Credit - $350,000	20,107	319,319
PPP1	-	-
EIDL	499,900	499,900
PayPal Advance	29,517	29,517
Incredible Bank - Property Tax	40,587	40,587
Incredible Bank	8,582	847,817
TOTAL LONG TERM LIABILLITIES	598,693	1,737,140
Total Liabilities	824,906	1,887,943
Redeemable Preferred Stock
Series B; 500,000 shares authorized; 330,000 and 0 issued and outstanding as of December 31, 2018 and 2017 respectively ( Classified as Mezzanine Equity)	330,000	330,000
Series C; 500,000 shares authorized; 470,935 and 0 issued and outstanding as of December 31, 2018 and 2017 respectively ( Classified as Mezzanine Equity) - As equity in Accurate Auto Parts, Inc.	470,935	470,935
Stockholders' Equity (Deficit)
Preferred Stock ($0.0001) par value, 20,000,000 shares authorized 10,000 shares par value $0.0001 Class A issued on December 31, 2015	1	1
Additional Paid in capital
Common stock, ($0.0001) par value, 100,000,000 shares authorized and 25,926,900 and 25,876,900 shares issued and outstanding at June 30,2024 and December 31,2023 respectively	2,627	2,622
Additional Paid in capital	150,028	140,033
Subscription received - pending acceptance		-
Current year Profit (Loss)	821,315	(232,156)
(Accumulated Deficit) / Net worth, brought forward	(2,158,666)	(1,926,509)
(Accumulated Deficit) / Net worth
TOTAL STOCKHOLDERS' EQUITY / (DEFICIT)	(1,184,695)	(2,016,010)
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)	$441,146	$672,868

The accompanying notes are an integral part of the Unaudited Condensed Consolidated Financial Statements

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FREE FLOW, INC. & SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Operations
	Six Months Ended June 30,		Three Months Ended June 30,
	2024	2023	2024	2023
REVENUES
REVENUES	$6,123	$4,032	$3,273	$3,076
TOTAL REVENUES	6,123	4,032	3,273	$3,076
COST OF GOODS SOLD	3,785	13,703	3,115	3,892
GROSS PROFIT	2,339	(9,671)	158	(816)
GENERAL AND ADMINISTRATIVE EXPENSES
Administrative expenses	24,068	26,077	3,924	15,538
Professional fees	128,507	14,712	12,846	12,493
Selling expenses	2,108	323	110	55
Financial expenses	228,196	704	216	281
TOTAL GENERAL & ADMINISTRATIVE EXPENSES	382,879	41,816	17,096	28,367
PROFIT (LOSS) FROM OPERATIONS	(380,540)	(51,487)	(16,938)	(29,183)
OTHER (EXPENSE)  INCOME
Gain on Sale of Assets	1,199,622	-	-	-
Other Income	2,233	34,047	2,233	31,172
NET INCOME (LOSS)	821,315	(17,440)	(14,705)	1,989
BASIC EARNING PER SHARE	0.032	(0.001)	(0.001)	0.000
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING	25,926,900	25,876,900	25,926,900	25,876,900

The accompanying notes are an integral part of the Unaudited Condensed Consolidated Financial Statements

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FREE FLOW, INC. & SUBSIDIARIES

Unaudited Condensed Consolidated Statements of Cash Flows

	Six Months Ended June 30,
	2024	2023
CASH FLOW FROM OPERATING ACTIVITIES
Net Profit / (Loss)	$821,315	$(17,440)
Adjustments to reconcile net income to net cash provided by operating activities:
Gain on disposal of fixed assets	(1,211,318)	-
PNC Clover Note written off	-	(10,401)
Inventory written off	-	890
Changes in assets and liabilities :
Trade Receivables	(6,824)	1,050
Inventories	2,400	-
Note Receivables	(300,000)	-
Trade Payable	76,410	5,100
Note Payables	(1,000)	-
Improvement in Progress	11,697	-
Incredible Bank Loan - Express Loan	(299,212)	-
Incredible Bank Loan - PLP Loan	(839,235)	-
NET CASH (USED IN) BY OPERATING ACTIVITIES	(1,745,768)	(20,801)
CASH FLOW FROM INVESTING ACTIVITIES
Proceeds from disposal of fixed assets	1,700,000	-
NET CASH PROVIDED BY  INVESTING ACTIVITIES	1,700,000	-
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from Notes Payable	-	2,500
Repayment to Pay Pal Advance	-	(4,011)
Repayment of Loan from Incredible Bank	-	(4,000)
Proceeds from Subscription Money	10,000	11,000
NET CASH PROVIDED BY  FINANCING ACTIVITIES	10,000	$5,489
NET (DECREASE) / INCREASEIN CASH AND CASH EQUIVALENTS	(35,768)	(15,312)
CASH AND CASH EQUIVALENTS IN THE BEGINNING OF PERIOD	39,521	17,274
CASH AND CASH EQUIVALENTS AT THE END OF  PERIOD	$3,753	$1,962

The accompanying notes are an integral part of the Unaudited Condensed Consolidated Financial Statements

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FREE FLOW, INC. & SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Stockholders' Equity
————————————————————————————————————————————————————————————————————————————
					ADDITIONAL			TOTAL
	COMMON STOCK		PREFERRED STOCK		PAID-IN	SUBSCRIPTION	RETAINED	STOCKHOLDERS'
	SHARES	AMOUNT	SHARES	AMOUNT	CAPITAL	RECEIVED	EARNINGS	EQUITY
			Series -A
Balance as of  January 1, 2024	25,876,900	$2,622	10,000	$1.00	$140,033	$-	$(2,158,665)	$(2,016,009)
Subscription Received	50,000	5	-	-	9,995		-	$10,000
Net income for  the period	-	-	-	-	-	-	836,018	$836,018
Balance as of  March 31, 2024	25,926,900	$2,627	10,000	$1	$150,028	$-	$(1,767,486)	$(1,169,991)
Shares Issued	0				$-			$-
Net loss for  the period	-	-	-	-	-	-	$(14,705)	$(14,705)
Balance as of  June 30, 2024	25,926,900	$2,627	10,000	$1	$150,028	$-	$(1,782,191)	$(1,184,696)
Balance as of  January 1, 2023	26,221,000	$2,620	10,000	$1	$129,033	$-	$(1,926,509)	$(1,794,855)
Shares Cancelled	(1,379,100)	-	-	-	-	-	-	$-
Net Loss for the period	-	-	-	-	-		(19,429)	$(19,429)
Balance as of  March 31, 2023	24,841,900	$2,620	10,000	$1	$129,033	$-	$(1,767,486)	$(1,814,284)
Shares Issued	1,035,000				$11,000			$11,000
Net Loss for the period	-					$-	$1,989	$1,989
Balance as of  June 30, 2023	25,876,900	$2,620	10,000	$1	$140,033	$-	$(1,765,497)	$(1,801,295)
The accompanying notes are an integral part of the Unaudited Condensed Consolidated Financial Statements

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Free Flow, Inc. and Subsidiaries

Notes to the Unaudited Condensed Consolidated Financial Statements

June 30, 2024 and 2023

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

Free Flow, Inc. (the "Company") was incorporated on October 28, 2011 under the laws of State of Delaware to enter the green energy industry. It began with the idea of developing swimming pool solar pump system. The solar energy business became very volatile due to constant decline in prices of solar panels. The Company could not conclude any business in the solar energy sector. In February 2016 the Company formed a subsidiary namely JK Sales, Corp. (name changed to “Accurate Auto Sales, Inc.”) and began the business of selling used auto parts.  

Accurate Auto Sales, Inc., at a 19+ acre facility that it now owns, in King George, VA, buys end of life and wrecked automobiles from Insurance Auctions and disassembles the same to parts. After the dis-assembly these parts are labelled and stored at its warehouse, the inventory is uploaded and sold through a very sophisticated internet network. The primary customers are auto body and mechanic shops. Accurate Auto Parts, Inc. is in pause mode until it formulates new business policy.  

In December 2020 the Company acquired the Assets of Inside Auto Parts, Inc. incorporated in 1993, which is centrally located between Richmond, Charlottesville, and Fredericksburg, Virginia with easy access to main transport routs. The salvage dealership, specializing in used foreign car and truck parts has been acquired by Free Flow, Inc. subsidiary named “FFLO -  Inside Auto Parts, Inc.” and has 21,953.9 square feet fully enclosed and another 17,392.35 square feet under roof enclosed on 3 sides, all located on 16 acres of land in Mineral, Virginia then owned by FFLO. After over a year the assets were resold to the seller. The primary reason not to continue was the Company’s inability to get financing to pay off acquisition debt.

Subsequent to receipt, by another subsidiary of FFLO – namely Motors & Metals, Inc., of an LOI from an overseas buyer the Company planned to set up a “Scrap Metal Processing” plant and sought funding for equipment. A contract for purchase of equipment was intended to be executed with a Chinese equipment manufacturer, but due to Covid 19 pandemic the transaction came to a halt. Also, the Government of China put an embargo to finance US projects. However, Motors & Metals, Inc., diversified its efforts and began in physical trading of scrap metal and continues to do so.  

On March 04, 2024 the company sold its 10+ acre facility for a gross sum of $ 1,700,000 and continues to operate the salvage yard under a concession agreement which is at the will of both parties.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

The unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and include all the adjustments necessary for the fair presentation of the Company’s financial position for the periods presented. These condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for 2023 (“2023 Form 10-K”) as filled with SEC on April 01, 2024.

Use of Estimates

In preparing the consolidated financial statements in conformity with U.S GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of reported amounts of revenues and expenses during the reporting period. Significant estimates and assumptions made by management include but are not limited to, revenue recognition, the allowance for bad debts, income taxes, and unrecognized tax benefits. Actual results could differ from those estimates.

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Recent Accounting Standards Not Yet Adopted

In December 2023 the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosure, which expands the disclosures required for income taxes, primarily through changes to the rate reconciliation and income taxes paid information. The ASU is effective for fiscal years beginning after December 15, 2024, with early adaptation permitted. The amendment should be applied on a prospective basis while retrospective application is permitted. The Company is currently evaluating the effect of this pronouncement on its disclosures.

Cash and cash Equivalents   

Cash and cash equivalents are on deposit with financial institutions without any restrictions. The Company maintains its cash with high-quality financial institutions.

Property and Equipment, net

Property and equipment are stated at cost less accumulated depreciation impairment. Depreciation of property, plant, and equipment is calculated on the straight-line method over the estimated useful lives as follows:

NOTE 3 GOING CONCERN

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of the business.  Future issuances of the Company's equity or debt securities will be required for the Company to continue to finance its operations and continue as a going concern. The Company's present revenues are marginally sufficient to meet operating expenses. The Company’s financial statement has been prepared assuming that the Company will continue as a going concern, which contemplates, among other things, the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred cumulative net losses of $1,184,695 since its inception. There are no significant fixed recurring expenses and the current receivables are far more than current payables, thus the management does not doubt that it will continue as a going concern and recover the expenses through trading activities that are in progress.

The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

NOTE 4 – INCORPORATION OF SUBSIDIARY

In February 2015, the company incorporated a subsidiary, Promedaff, Inc., and purchased a skin care product line and formulations for $2,000,000 against a promissory note. An e commerce platform was set up for sales and marketing. The efforts did not bear any success and the entire inventory was sold through the Seller and the Promissory Note was cancelled and marked “VOID”. The name of this entity has been changed to Motors & Metals, Inc. In August 2018 Motors & Metals, Inc. received firm expression of interest from an overseas buyer willing to place long term purchase orders to buy 3,000 to 5,000 MT of Processed Scrap Metal. For over eight (8) months, the management scouted around to find a seller but learnt that no scrap metal processor was willing to entertain the business due to their loyalty agreements they have with their Buyer(s). Ultimately, the management decided to set up its own Scrap Metal Processing facility at the company owned 20 acre facility in King George, Virginia. Since the facility has been sold, so this plan is no longer being pursued.

As reported in 10Qs for the earlier quarters, as well as in 10-K for the Annual reports, on February 4, 2016 the company incorporated another subsidiary in the State of Virginia under the name of JK Sales, Corp. (on December 7, 2017 the name was changed to Accurate Auto Parts, Inc.,) and has since remained in the business of buying end of life and salvage vehicles and selling auto parts.

On April 17, 2018 the company incorporated in Virginia, another subsidiary named Accurate Investments, Inc. the objectives of acquiring real estate property, which plan did not materialize. However, Accurate Investments, Inc. continues to pursue other investment opportunities that could add revenues to the Company.

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On January 4, 2017 the company incorporated in Virginia another subsidiary named City Autos, Corp. with the objectives of operating an auto dealership and has finally commenced operations. Free Flow Auto Auction, an on-line auto auction platform is expected to be launched by the end of third quarter.

On December 22, 2020 the company through another subsidiary named FFLO – Inside Auto Parts, Inc. acquired the assets and business of an auto recycling entity located on a 16-acre facility in Mineral, Virginia. These assets through an amicable settlement, were resold to the seller in January 2022 due to reason that company failed to obtain to financing to redeem the promissory note given to the Seller.

NOTE 5 – NOTE PAYABLE, RELATED PARTY

As of December 31, 2023, the Company had a note payable in the amount of $9,634 to Redfield Holdings, Ltd. a related party. During the six months ended June 30, 2024 there was no change in the amount owed. The note is unsecured and does not bear any interest and has a maturity date of December 31, 2024.

Redfield Holdings Ltd. is 100% owned by the CEO.

NOTE 6 – CAPITAL STOCK

The Company has authorized 100,000,000 shares of common shares with a par value of $0.0001 per shares and 20,000,000 shares of preferred stock, with a par value of $0.0001 per shares.

On August 5, 2020 the company filed the following Amendment to the Capital Stock:

The amount of the total Common Stock of the corporation is Hundred Million (100,000,000) shares of Common Stock, par value ($.0001) per shares.

The total amount of Preferred Stock of the corporation is Twenty Million (20,000,000) shares, par value ($.0001) per share. The preferences being that there will be various series of Preferred Share, such preferences are more specifically defined as under along with the number of shares allocated to each series:

Series “A”: Number of shares allocated are Ten Thousand (10,000) – par value $.0001 per share; one share of this class of Preferred Stock Series “A” will carry voting rights equal to Ten Thousand (10,000) shares of Common Shares; thus the voting rights attributed to all of these 10,000 shares would be equal to One Hundred Million common shares.

Series “B”: Number of shares allocated are Five Hundred Thousand (500,000) – par value $.0001 per share; one share of this class of Preferred Stock Series “B” will carry voting rights equal to one share of Common Shares; and are redeemable with 365 days’ notice.

Series “C”: Number of shares allocated are Five Hundred Thousand (500,000) – par value $.0001 per share; one share of this class of Preferred Stock Series “C” will carry voting rights equal to one share of Common Shares and could be used to assign corresponding capital in to any subsidiary of Free Flow, Inc. with a view to extend comfort to any lender. Such shares are redeemable upon such lender authorizing the redemption of capital in the respective subsidiary company.

Series “D”:  Number of shares allocated are Fifteen Million  (15,000,000) – par value $.0001 per share; one share of this class of Preferred Stock Series “D” will carry voting rights equal to one share of Common Shares This series of shares could be issued against subscription of any amount as the board of directors and/or majority of the shareholders approve. Series “D” shares could be converted in to common shares as approved by the majority shareholders.

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Series “E”: Number of shares allocated are Three Million Nine Hundred Ninety Thousand (3,990,000) – par value $.0001 per share; one share of this class of Preferred Stock Series “E” will carry voting rights equal to one share of Common Shares This series of shares could be issued against subscription in cash or kind including but not limited to subscription directly into capital account of any subsidiary for any amount as the board of directors and/or majority of the shareholders approve. Series “E” shareholders could be entitled to a specifically defined profit sharing in a specific project or transaction(s). Series E shares could be redeemable and/or converted in to common shares as agreed between the subscriber(s) and approved by the majority shareholders and/or by the Board of Directors of the Company.

The amendment effected herein was authorized by the affirmative vote of the holders of a majority of the outstanding shares entitled to vote thereon at a meeting of the shareholders pursuant to Section 242 of the General Corporation Law of the State of Delaware

Pursuant to the resolution of the shareholders meeting held on March 30, 2015 the Company designated 500,000 shares of the preferred authorized shares as preferred shares – Series “B” shares. The preferred shares – Series “B” were assigned the following preferences:

a)Each share to carry one vote. 

b)Each share will be redeemable with a 365 days written notice to the company. 

c)Each share will be junior to any debt incurred by the Company.  

d)The redemption value will be the par value at which such “preferred shares – series B” are bought by the subscriber. 

e)Each share will carry a dividend right at par with the common shares. 

On December 31, 2014 the Company had a Note outstanding in the principal amount of $330,000 plus interest payable to GS Pharmaceuticals, Inc. By mutual consent this note and accrued interest was converted to 330,000 preferred shares – Series “B”.

On March 31, 2015 an amount of $58,000 was subscribed by Redfield Holdings, Ltd. by cancellation of a Note against the issuance of 9,700 shares of preferred shares – Series “A”. These shares were issued to Redfield Holding, Ltd. thus making a total of entire designated preferred shares – Series “A” shares to Redfield Holdings, Ltd. Each share of preferred shares – Series “A” carries voting rights equal to 10,000 common shares.

On September 30, 2017 total preferred shares issued and outstanding are 10,000 Series “A” and 330,000 Series “B”.

On April 2, 2019, in a private transaction, the Company accepted a sum of $14,490 against issuance of 21,000 restricted Common shares of the Company. Thus the total common shares issued and outstanding as on September 30, 2019, stood at 26,221,000

On August 17, 2020, the Company completed its Private Placement Memorandum to raise $19.5 million with no minimum, against issuance of 15,000,000 Series “D” shares at a price of $1.30 per share. The memorandum can be accessed on the Company’s website, i.e., www.FreeFlowPLC.com

NOTE 7 – SUBSEQUENT EVENTS

The Company has evaluated subsequent events through July 31, 2024, the date these financial statements were prepared to be issued and noted no material subsequent events for disclosure.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ALALYIS OR PLAN OF OPERATION

THE FOLLOWING DISCUSSION SHOULD BE READ IN CONJUNCTION WITH OUR UNAUDITED FINANCIAL STATEMENTS AND NOTES THERETO INCLUDED HEREIN. IN CONNECTION WITH, AND BECAUSE WE DESIRE TO TAKE ADVANTAGE OF, THE “SAFE HARBOR” PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995, WE CAUTION READERS REGARDING CERTAIN FORWARD LOOKING STATEMENTS IN THE FLOWING DISCUSSION AND ELSEWHERE IN THE THIS REPORT AND IN ANY OTHER STATEMENT MADE BY, OR AN BEHALF, WHETHER OR NOT IN FUTURE FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION, FORWARD-LOOKING STATEMENTS ARE STATEMENT NOT BASED ON HISTORICAL INFORMATION AND WHICH RELATE TO FUTURE OPERATIONS, STRATEGIES, FINANCIAL RESULTS OR OTHER DEVELOPMENTS. FORWARD-LOOKING STATEMENTS ARE NECESSARILY BASED UPON ESTIMATES AND ASSUMPTIONS THAT ARE INHERENTLY SUBJECT TO SIGNIFICANT BUSINESS, ECONOMIC AND COMPETITIVE UNCERTAINTIES, MANY OF WHICH ARE BEYOND OUR CONTROL AND MANY OF WHICH, WITH RESPECT TO FUTURE BUSINESS DECISIONS, ARE SUBJECT TO CHANGE, THESE UNCERTAINTIES AND CONTINGENCIES CAN AFFECT ACTUAL RESULTS AND COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FORM THOSE EXPRESSED IN ANY FORWARD-LOOKING STATEMENTS AND COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED IN ANY FORWARD LOOKING STATEMENTS MADE BY, OR ON OUR BEHALF, WE DIS TO UPDATE FORWARD-LOOKING STATEMENTS.

PLAN OF OPERATION

Auto Parts Division:

The company has decided to only trade in the auto parts business.

City Autos, Corp.

The prospects are under review, the subsidiary may be closed for business as nothing much has been transacted since the beginning of 2024.

Motors & Metal, Inc.:

Having shelved the plan to set up a scrap metal processing plant at its facility in King George, as the purchase orders of customers from abroad are still active, the management in addition to trading in scrap metal may continue pursuing setting up its own facility.

RESULTS OF OPERATIONS

The Company did recognize revenue for a sum of $6,123 during the six months ended June 30, 2024, and $4,032 of revenues during the six months ended June 30, 2023. The net revenues for the period ended June 30, 2024were greater by $2,091 than for the same period during 2023 and the Cost of Goods Sold was low by $9,918 during the period ended June 30, 2024, as compared to the same period during 2023. There is a Gross Profit of $ 2,339 as on June 30, 2024, as compared to the Gross Loss of $ 9,671for the same period during 2023.  

During the six months ended June 30, 2024, the Company incurred operational expenses of $382,879. This compares to $41,816 for the six months ended June 30, 2023. This increase in operational expenses due to increase in professional and financial expenses.

During the six months ended June 30, 2024 the company recognized a net gain of $821,315 as compared to the net loss of $17,440 for the corresponding period in the year 2023, thus recognizing a significant increase as compared to the six months ended June 30, 2023 due to gain on disposal of fixed assets.

The tax returns for the previous year shall be filed within the allowed filing date and due to loss there is no tax liability.

The Company’s office continues to be relocated at 6269 Caledon Road, King George, VA 22485.

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LIQUIDITY

THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM’S REPORT ON THE COMPANY’S FINANCIAL STATEMENTS AS OF DECEMBER 31, 2017, AND FOR EACH OF THE PRECEDING YEARS THEN ENDED, INCLUDES A “GOING CONCERN” EXPLANATORY PARAGRAPH, THAT DESCRIBES SUBSTANTIALLY DOUBT ABOUT THE COMPANY’S ABILITY TO CONTINUE AS A GOING CONCERN.

On June 30, 2024 the Company had total current assets of $441,146 consisting of $3,753 in cash and $102,264 in trade receivables, $2,400 value of Inventory, receivable from IRS $ 32,730and notes receivables $ 300,000.

NEED FOR ADDITONAL CAPITAL

The Company does not have capital sufficient to meet its expansion Capital needs. The Company will have to seek loans or Equity placements to cover such cash needs.

No commitments to provide additional funds have been made by the Company’s management or other stockholders. Accordingly, there can be no assurance that any additional funds will be available to the Company to allow it to cover the Company’s expansion budget.

REVENUE RECOGNITION

The Company recognizes revenues on arrangements in accordance with Securitas and Exchange Commission Staff Accounting Bulletin Topic 13, REVENUE RECOGNITION and FASB ASC 605-15-25, REVENUE RECONGNITION. In all cases, revenue is recognized only when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service is performed and collectability is reasonable assured. The Company reported gross revenues of $2,924,181 for the year ending December 31, 2023.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

As a “Smaller Reporting Company” as defined by item 10 of Regulation S-K , we are not required to provide information required by this item.

ITEM 4. CONTROLS AND PROCEURES

Management's Report on Disclosure Controls and Procedures

Management is responsible for establishing and maintaining adequate internal control so as to

(1)  maintain the records  in reasonable detail, which will accurately and fairly reflect the transactions and dispositions of the Company's assets;

(2) to provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that the Company's receipts and expenditures are  made  within the delegated authority ; and

(3) to provide reasonable assurance for the  prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on company’s financial statements.

However, the management asserts that the company does not have any accounting staff due to limited financial resources though has plans to recruit gradually.  Also, this company does not have a well written document on accounting policies and procedures, though has plans to have them shortly.  Consequently, this can result in possible errors in the presentation and disclosure of financial information in our annual, quarterly, and other filings.

The SIC Code of 1700 as showing in Edgar for this company is no longer valid, since this company is now dealing with the auto parts, as OEM Recycled Auto Parts. Segregation of duties is an important factor in Internal Control. Though it is achieved to a certain extent, the management is committed to strengthen the internal controls effectively in the coming months.  

Changes in Internal Control over Financial Reporting

There have been no changes in our internal controls over financial reporting that occurred during the period ended March 31, 2023, that have materially or are reasonably likely to materially affect, our internal controls over financial reporting.

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PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None.

ITEM 1A. RISK FACTOR

Not Applicable to Smaller Reporting Companies.

ITEM 2 UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

During the period of January 1, 2015 and March 31, 2015, the Company issued 9,700 shares of Preferred Shares – Series “A” for a sum of $58,000 and 330,000 shares of Preferred Shares – Series “B” for a sum of $330,000 which were the result of conversion of certain debts of the company.

On April 2, 2019, in a private transaction the Company accepted a sum of $14,490.00 against issuance of 21,000 restricted Common shares of the Company. Thus the total common shares issued and outstanding as on June 30, 2019 stood at 26,221,000.

During the current quarter the company issued 1,035,000 of common shares for a sum of $11,000.00.  while 1,379,100 were cancelled. Thus, the total common shares outstanding as of June 30, 2023 are 25,876,900.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURE

Not Applicable

ITEM 5. OTHER INFORMATION

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PART II. OTHER INFORMATION

ITEM 6.     EXHIBITS.

The following exhibits are included with this quarterly filing.  Those marked with an asterisk and required to be filed hereunder, are incorporated by reference and can be found in their entirety in our original Registration Statement on Form S-1, filed under SEC File Number 000-54868, at the SEC website at www.sec.gov:

Exhibit No.	Description
3.1	Articles of Incorporation*
3.2	Bylaws*
31.1	Sec. 302 Certification of Principal Executive Officer
31.2	Sec. 302 Certification of Principal Financial Officer
32.1	Sec. 906 Certification of Principal Executive Officer
32.2	Sec. 906 Certification of Principal Financial Officer
101	Interactive data files pursuant to Rule 405 of Regulation S-T

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SIGNATURES

Pursuant to the requirements 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.

	Free Flow Inc.
	Registrant
Dated:  August 15, 2024	By:	/s/ Sabir Saleem
		Sabir Saleem, Chief Executive Officer,
		Chief Financial and Accounting Officer

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