Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
| x | QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March 31, 2018
| o | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT |
For the transition period from to
Commission file number 333-177792
THE TEARDROPPERS, INC.
(Exact name of small business issuer as specified in its charter)
| Nevada | 20-4168979 |
| (State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |
180 Newport Center Dr. Ste. 230
Newport Beach, Ca. 92660
(Address of principal executive offices)
949-751-2173
(Issuer’s telephone number)
_______________________________________________
(Former name, former address and former fiscal year, if changed since last report)
Check whether the issues (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 past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one)
| | Large accelerated filer o | Accelerated filer o |
| | Non-accelerated filer o | Smaller reporting company x |
| | Emerging growth company x | |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
There were 41,530,000 shares of the registrant’s common stock, $0.001 par value per share, outstanding on March 31, 2018.
THE TEARDROPPERS, INC.
TABLE OF CONTENTS
PART I – FINANCIAL INFORMATION
ITEM 1. Condensed Unaudited Financial Statements
The Teardroppers, Inc.
CONDENSED BALANCE SHEETS (Unaudited)
| | | March 31, | | | December 31, | |
| | | 2018 | | | 2017 | |
| | | | | | | |
| ASSETS | | | | | | | | |
| | | | | | | | | |
| Current assets | | | | | | | | |
| Cash | | $ | 116,254 | | | $ | 40,027 | |
| Prepaid Expenses | | | 2,780 | | | | – | |
| Total current assets | | | 119,034 | | | | 40,027 | |
| | | | | | | | | |
| Property and Equipment: | | | | | | | | |
| Cost | | | 258,000 | | | | 254,000 | |
| Less accumulated depreciation | | | (32,425 | ) | | | (24,858 | ) |
| Property and Equipment, net | | | 225,575 | | | | 229,142 | |
| | | | | | | | | |
| Total Assets | | $ | 344,609 | | | $ | 269,169 | |
| | | | | | | | | |
| | | | | | | | | |
| LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT) | | | | | | | | |
| | | | | | | | | |
| Current liabilities | | | | | | | | |
| | | | | | | | | |
| Accounts payable | | $ | 150,299 | | | $ | 139,987 | |
| Accounts payable - related parties | | | 259,225 | | | | 234,885 | |
| Customer deposits | | | 14,500 | | | | 14,500 | |
| Deferred Revenue | | | 12,000 | | | | – | |
| Current portion of long term debt | | | 25,875 | | | | 21,134 | |
| Loan payable | | | 525,000 | | | | 450,000 | |
| Accrued interest – unrelated parties | | | 145,632 | | | | 139,250 | |
| Line of credit from related party | | | 60,450 | | | | 49,750 | |
| Accrued interest - related parties | | | 13,866 | | | | 13,339 | |
| Total current liabilities | | | 1,206,847 | | | | 1,062,905 | |
| | | | | | | | | |
| Long term note payable (net of current portion) | | | 137,105 | | | | 143,866 | |
| | | | | | | | | |
| Total Liabilities | | | 1,343,952 | | | | 1,206,771 | |
| | | | | | | | | |
| Stockholders' Equity (Deficit) | | | | | | | | |
| Preferred stock, par value $0.001, authorized 20,000,000 shares, issued shares 0, respectively | | | | | | | | |
| Common stock, par value $0.001, authorized 200,000,000 shares, issued and outstanding 41,530,000 shares and 41,550,000 shares, respectively | | | 41,530 | | | | 41,550 | |
| Additional paid in capital | | | 292,948 | | | | 283,728 | |
| Accumulated deficit | | | (1,333,821 | ) | | | (1,262,880 | ) |
| Total Stockholders' Equity (Deficit) | | | (999,343 | ) | | | (937,602 | ) |
| | | | | | | | | |
| Total Liabilities and Stockholders' Equity (Deficit) | | $ | 344,609 | | | $ | 269,169 | |
The accompanying notes are an integral part of the unaudited condensed financial statements.
The Teardroppers, Inc.
CONDENSED STATEMENTS OF OPERATIONS (Unaudited)
| | | Three Months Ended | |
| | | March 31, | | | March 31, | |
| | | 2018 | | | 2017 | |
| | | | | | | |
| Revenues | | $ | 4,000 | | | $ | – | |
| Cost of revenues | | | – | | | | – | |
| Gross margin | | | 4,000 | | | | – | |
| | | | | | | | | |
| Operating expenses: | | | | | | | | |
| Consulting to related party | | | 26,500 | | | | 27,500 | |
| Consulting to unrelated party | | | 5,000 | | | | – | |
| General and administrative | | | 23,450 | | | | 11,656 | |
| Professional fees | | | 3,262 | | | | 2,613 | |
| | | | 58,212 | | | | 41,769 | |
| | | | | | | | | |
| Operating income (loss) | | | (54,212 | ) | | | (41,769 | ) |
| | | | | | | | | |
| Other income (expense): | | | | | | | | |
| Interest expense related parties | | | (467 | ) | | | (2,049 | ) |
| Interest expense - unrelated parties | | | (16,262 | ) | | | (11,250 | ) |
| | | | (16,729 | ) | | | (13,299 | ) |
| | | | | | | | | |
| Net Income Before Taxes | | | (70,941 | ) | | | (55,068 | ) |
| | | | | | | | | |
| Income Tax Provision | | | – | | | | – | |
| | | | | | | | | |
| Net (loss) | | $ | (70,941 | ) | | $ | (55,068 | ) |
| | | | | | | | | |
| Net (loss) per share | | | | | | | | |
| (Basic and fully diluted) | | $ | (0.00 | ) | | $ | (0.00 | ) |
| | | | | | | | | |
| Weighted average number of common shares outstanding | | | 41,596,667 | | | | 37,830,000 | |
The accompanying notes are an integral part of the unaudited condensed financial statements.
The Teardroppers, Inc.
CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
| | | Three Months Ended | |
| | | March 31, | | | March 31, | |
| | | 2018 | | | 2017 | |
| | | | | | | |
| Cash Flows From Operating Activities: | | | | | | | | |
| Net income (loss) | | $ | (70,941 | ) | | $ | (55,068 | ) |
| | | | | | | | | |
| Adjustments to reconcile net loss to net cash used for operating activities: | | | | | | | | |
| Depreciation | | | 12,767 | | | | 1,050 | |
| | | | | | | | | |
| Changes in Operating Assets and Liabilities | | | | | | | | |
| Increase in prepaid expenses | | | (2,780 | ) | | | – | |
| Increase in accounts payable | | | 10,312 | | | | 3,612 | |
| Increase in accounts payable-related parties | | | 24,340 | | | | 27,500 | |
| Increase in accrued interest | | | 6,382 | | | | 11,250 | |
| Increase in accrued interest-related parties | | | 467 | | | | 2,049 | |
| Increase in deferred revenue | | | 12,000 | | | | – | |
| | | | | | | | | |
| Net cash used for operating activities | | | (7,453 | ) | | | (9,607 | ) |
| | | | | | | | | |
| Cash Flows From Investing Activities: | | | – | | | | – | |
| | | | | | | | | |
| Cash Flows From Financing Activities: | | | | | | | | |
| Proceeds from line of credit, unrelated party | | | 75,000 | | | | – | |
| Principal payments on long term debt | | | (2,020 | ) | | | – | |
| Proceeds from line of credit related party | | | 54,750 | | | | 54,200 | |
| Repayments on line of credit, related party | | | (44,050 | ) | | | (50,500 | ) |
| | | | | | | | | |
| Net cash provided by financing activities | | | 83,680 | | | | 3,700 | |
| | | | | | | | | |
| Net Increase (Decrease) In Cash | | | 76,227 | | | | (5,907 | ) |
| | | | | | | | | |
| Cash At The Beginning Of The Period | | | 40,027 | | | | 48,636 | |
| | | | | | | | | |
| Cash At The End Of The Period | | $ | 116,254 | | | $ | 42,729 | |
| | | | | | | | | |
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | | | | | | | | |
| Assets acquired for debt | | $ | 28,000 | | | $ | 24,000 | |
| Debt converted to stock | | $ | (28,000 | ) | | $ | – | |
| Asset sold for cancellation of stock | | $ | (18,800 | ) | | $ | – | |
| Cash paid during the year for: | | | | | | | | |
| Interest | | $ | 9,880 | | | $ | – | |
| Franchise and income tax | | $ | – | | | $ | – | |
The accompanying notes are an integral part of the unaudited condensed financial statements.
TEARDROPPERS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS (Unaudited)
For the Three Months Ended March 31, 2018 and 2017
NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS
On June 3, 2013, Teardroppers, Inc. (the “Company”), was incorporated under the laws of the state of Nevada.
We intend to enter the business of mobile billboard advertising by offering to provide billboard advertising space on custom designed "Teardrop Trailers". Teardrop Trailers, are usually designed for short-period accommodations for vacationers and travelers. Teardrop Trailers are designed to be towed behind small economy sized vehicles and pickup trucks.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation
The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
Interim Financial Statements
The accompanying financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In our opinion the financial statements include all adjustments (consisting of normal recurring accruals) necessary in order to make the financial statements not misleading. Operating results for the three months ended March 31, 2018 are not necessarily indicative of the final results that may be expected for the year ended December 31, 2018. For more complete financial information, these unaudited financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2017 filed with the SEC.
Use of estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Accordingly, actual results could differ from those estimates. Such estimates include management’s assessments of the carrying value of certain assets, useful lives of assets, and related depreciation and amortization methods applied.
Revenue recognition
Beginning January 1, 2018, the Company will apply the provisions of ASC 606 Revenue from Contracts with Customers, and related Accounting Standards Updates. The Company will apply the relevant provisions to the current period and will restate prior transactions as required. The Company does not believe application of the new provisions to present or past transactions will have a significant impact on amounts reported in the financial statements.
The primary source of revenue is from the rental of advertising space on custom designed Teardrop Trailers. The length of the rental agreements varies from one to thirty days. Customers pay in advance and revenue is recognized based on the number of days of each contract that have expired. For the three months ended March 31, 2018 and 2017, the Company recognized no income from the rental of the trailers.
In March 2018, the Company entered into a four-year agreement to lease equipment to an unrelated third party. As of March 31, 2018, $4,000 of lease income has been recognized.
Reclassification
Prior year amounts have been reclassified to conform to current year presentation.
Subsequent events
The Company follows the guidance in ASC 855-10-50 for the disclosure of subsequent events. The Company will evaluate subsequent events through the date when the financial statements were issued.
Recently issued accounting pronouncements
The Company has implemented all new accounting pronouncements that are in effect and applicable to the Company. 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.
NOTE 3 – GOING CONCERN
The Company's consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The financial statements do not include any adjustment relating to recoverability and classification of recorded amounts of assets and liabilities that might be necessary should the Company be unable to continue as a going concern.
The Company has a minimum cash balance available for payment of ongoing operating expenses. Its continued existence is dependent upon its ability to continue to execute its operating plan and to obtain additional debt or equity financing. There can be no assurance the necessary debt or equity financing will be available, or will be available on terms acceptable to the Company.
NOTE 4 – LINE OF CREDIT FROM RELATED PARTY
On February 25, 2014, the Company entered into a line of credit with DEVCAP Partners, LLC, a California limited liability company, for an amount up to $450,000 with a maturity date of June 1, 2018, bearing interest of 10% per annum. DEVCAP Partners, LLC is a related party to the Company as it is the majority shareholder of the Company. As of March 31, 2018, and December 31, 2017, the balance of the line of credit was $60,450 and $49,750, respectively. The Company recorded accrued interest of $9,134 and $8,667 on the line of credit at March 31, 2018 and December 31, 2017, respectively.
On August 13, 2015, the company entered into a line of credit with General Pacific Partners, LLC, a California limited liability company, for an amount up to $450,000. The line of credit is a demand loan bearing interest of 10% per annum. General Pacific Partners, LLC is a related party to the Company as it is owned by a majority shareholder of the Company. As of March 31, 2018, and December 31, 2017 the balance of the line of credit was $0. The Company recorded accrued interest of $4,732 at March 31, 2018 and December 31, 2017.
NOTE 5 – PROPERTY AND EQUIPMENT
Property and equipment consists of the following at March 31, 2018 and December 31, 2017:
| | | March 31, 2018 | | | December 31, 2017 | |
| Property and equipment, net | | $ | 258,000 | | | $ | 254,000 | |
| Less: accumulated depreciation | | | (32,425 | ) | | | (24,858 | ) |
| Property and equipment, net | | $ | 225,575 | | | $ | 229,142 | |
Depreciation expense for the three months ended March 31, 2018 and the year ended December 31, 2018 was $12,767 and $22,650 respectively.
On February 22, 2018, the Company sold a 1971 Corvette LS-5 to a related party for the cancellation of 160,000 shares of stock.
NOTE 6 – LOAN PAYABLE
On December 12, 2014, the Company entered into a loan agreement with Gemini Southern, LLC whereby the monies paid to the Company by Gemini Southern, LLC pursuant to the consulting agreement dated September 20, 2013. The balance will be paid back with interest commencing on January 1, 2015 at a rate of 10% per annum with a maturity date of December 12, 2018. As of March 31, 2018, and December 31, 2017, the loan amount was $525,000 and $450,000, respectively. The Company recorded accrued interest on this loan of $145,632 and $134,300 as of March 31, 2018 and December 31, 2018, respectively.
On October 1, 2017, the company acquired from Gemini Southern, LLC a 2006 Ultra-Comp 53” NASCAR type vehicle transport hauler (the “Hauler”) to be used for promotional / advertising services. The purchase price of the Hauler was $165,000. The Company paid for the Hauler with a promissory note (the “Hauler Note”). The Hauler Note bears interest at 12% per annum and is payable as follows: (i) interest only from October 1, 2017 through February 28, 2018; (ii) $ $3,670 per month from March 1, 2018 through February 1, 2022; and $45,000.35 on February 28, 2022. The trailer is collateral for the promissory note.
Principal payments for the next five years will be as follows:
| 2018 | | $ | 21,134 | |
| 2019 | | | 28,299 | |
| 2020 | | | 31,888 | |
| 2021 | | | 35,932 | |
| 2022 | | | 47,747 | |
| Total | | $ | 165,000 | |
NOTE 7 – OTHER RELATED PARTY TRANSACTIONS
Office space
We currently occupy approximately 800 square feet of office space at 180 Newport Center Drive Suite 230 Newport Beach, California. We share this space with related party DEVCAP Partners, LLC. Presently, we do not incur any expenses for the use of this facility.
Line of credit from related party
The Company has two line of credit agreements with related parties. The sole owner of DEVCAP Partners, LLC is also the majority shareholder in the Company. General Pacific Partners is owned by the party that owns DEVCAP Partners, LLC. See Note 4 for further disclosure.
Consulting expense to related party (DEVCAP Partners, LLC)
On January 1, 2014, the Company executed a three-year consulting agreement with DEVCAP Partners, LLC, (“DEVCAP”), whereby the Company agreed to pay $7,500 a month for consulting services to be provided to the Company such as marketing, architectural development, accounting, finance, corporate structure and tax planning. On January 1st, 2018 the agreement with DEVCAP Partners, LLC was extended through December 31, 2019. For the three months ended March 31, 2018 and March 31, 2017, the Company recorded consulting fee expense to DEVCAP of $22,500. The amount due but unpaid is $209,225 and $187,385 at March 31, 2018 and December 31, 2017, respectively, and is included in accounts payable- related parties on the balance sheet.
Consulting expense to related party (Ray Gerrity)
On January 1, 2014, the Company entered into a verbal consulting agreement with its Chief Executive Officer, Ray Gerrity, whereby the Company agreed to pay $2,500 per quarter for consulting services related to his duties as Chief Executive Officer. For each of the three months ended March 31, 2018 and 2017, the Company recorded consulting fee expense of $2,500. The amount due but unpaid was $32,500 and $30,000, at March 31, 2018 and December 31, 2017, respectively, and was included on the balance sheet as accounts payable - related parties. Ray Gerrity resigned his position effective March 31, 2018.
Related party purchase of asset
On March 1, 2018, the Company purchased a 2013 Ford F-150 truck from a related party for use in the business operations at a cost of $28,000. The vehicle was acquired from the father of the majority shareholder. The debt was immediately converted into 140,000 shares of common stock valued at $.20 per share.
NOTE 8 – STOCKHOLDERS’ EQUITY (DEFICIT)
At the time of incorporation, the Company was authorized to issue 10,000 shares of common stock and 1,000 shares of preferred stock with a par value of $0.001. The Company amended its articles of incorporation to increase its authorized shares to 200,000,000 shares of common stock and 20,000,000 shares of preferred stock, both $0.001 par value.
On February 22, 2018, the Company transferred a 1971 Corvette LS-5 to a related party for the cancellation of 160,000 shares of stock. The Company had previously acquired the vehicle on February 21, 2017 but transferred it back the company for the same number of shares originally issued.
On March 1, 2018, the Company converted $28,000 of related party accounts payable into 140,000 shares of stock at $.20 per share.
NOTE 9 – SUBSEQUENT EVENTS
Management has evaluated subsequent events pursuant to the requirements of ASC Topic 855 and has determined that no material subsequent events exist.
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Safe Harbor for Forward-Looking Statements
When used in this report, the words “may,” “will,” “expect,” “anticipate,” “continue,” “estimate,” “project,” “intend,” and similar expressions are intended to identify forward-looking statements within the meaning of Section 27a of the Securities Act of 1933 and Section 21e of the Securities Exchange Act of 1934 regarding events, conditions, and financial trends that may affect the Company’s future plans of operations, business strategy, operating results, and financial position. Persons reviewing this report are cautioned that any forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties and that actual result may differ materially from those included within the forward-looking statements as a result of various factors. Such factors are discussed under the “Item 2. Management’s Discussion and Analysis of Financial Condition or Plan of Operations,” and also include general economic factors and conditions that may directly or indirectly impact the Company’s financial condition or results of operations.
Three Months Ended March 31, 2018 Compared to Three Months Ended March 31, 2017
Revenues
The Company had $4,000 in revenue during the three months ended March 31, 2018 compared to $0 in revenue during the three months ended March 31, 2017.
Operating Expenses
For the three months ended March 31, 2018 operating expenses were $58,612 compared to $41,769 for the same period in 2017 for an increase of $16,843. The increase was primarily a result of the increase in general and administrative expenses to $23,850 from $11,656 and an increase in unrelated consulting fees to $5,000 compared to $0 for the same period in 2017.
Interest and Financing Costs
Interest expense was $16,729 for the three months ended March 31, 2018 compared to $13,299 for the three months ended March 31, 2017.
Net Income (Loss)
The Company incurred losses of $70,941 for the three months ended March 31, 2018 compared to $55,068 during the three months ended March 31, 2017 due to the factors discussed above.
LIQUIDITY AND CAPITAL RESOURCES
The Company's financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The financial statements do not include any adjustment relating to recoverability and classification of recorded amounts of assets and liabilities that might be necessary should the Company be unable to continue as a going concern.
The Company has a minimum cash balance available for payment of ongoing operating expenses and has incurred losses since inception and anticipates future losses in the development of its business raising substantial doubt about the Company’s ability to continue as a going concern. Its continued existence is dependent upon its ability to continue to execute its operating plan and to obtain additional debt or equity financing. There can be no assurance the necessary debt or equity financing will be available, or will be available on terms acceptable to the Company.
The Company had $116,254 in cash at March 31, 2018 with availability on our related party lines of credit with DEVCAP Partners, LLC and General Pacific Partners, LLC of $259,225. As at March 31, 2018we had a working capital deficit of $1,087,813.
Operating activities
During the three months ended March 31, 2018, we had $7,453 in operating activities compared to $9,607 during the three months ended March 31, 2017, a decrease in cash outflows of $2,154. The decrease between the periods was largely due to a $4,868 reduction in accrued interest to unrelated parties and a $1,582 reduction in accrued interest to related parties.
Investing activities
We neither generated nor used cash flow in investing activities during the three months ended March 31, 2018 and the same for the period in 2017.
Financing activities
During the three months ended March 31, 2018, we generated $83,680 from financing activities compared to $3,700 for the same period ended March 31, 2017. The increase was primarily due to proceeds received from an unrelated party line of credit.
ITEM 3. Quantitative and Qualitative Disclosures about Market Risk.
As a “smaller reporting company,” we are not required to provide the information under this Item 3.
ITEM 4. Controls and Procedures
Evaluation of disclosure controls and procedures
Based upon an evaluation of the effectiveness of our disclosure controls and procedures performed by our Chief Executive Officer as of the end of the period covered by this report, our Chief Executive Officer concluded that our disclosure controls and procedures have not been effective as a result of a weakness in the design of internal control over financial reporting identified below.
As used herein, “disclosure controls and procedures” mean controls and other procedures of our company that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). The Company’s internal control over financial reporting is a process designed to provide reasonable assurance to our management and board of directors regarding the reliability of financial reporting and the preparation of the financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.
Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.
This quarterly report does not include an attestation report of our registered independent public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered independent public accounting firm.
Changes in Internal Control Over Financial Reporting
No changes in our internal control over financial reporting occurred during the quarter ended March 31, 2018 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II – OTHER INFORMATION
ITEM 1. Legal Proceedings
We know of no material, existing or pending legal proceedings against us, nor are we involved as a plaintiff in any material proceeding or material pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our company.
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds
During the three months ended March 31, 2018, the Company issued 140,000 shares of common stock to purchase a vehicle for use in operations.
ITEM 3. Default Upon Senior Securities
During the three months ended March 31, 2018, the Company had no senior securities issued and outstanding.
ITEM 4. Mine Safety Disclosures
Not applicable to our Company.
ITEM 5. Other Information
On April 12, 2017, our Chief Financial Officer, Robert Wilson submitted his resignation to the company.
ITEM 6. Exhibits
Copies of the following documents are included as exhibits to this report pursuant to Item 601 of Regulation S-K
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized
| | THE TEARDROPPERS, INC. |
| | |
| | |
| | By: | /s/ Larry Krogh |
| | | Larry Krogh
Chief Executive Officer |
Date: May 21, 2018
