| - SUBSEQUENT EVENTS | NOTE 9 - SUBSEQUENT EVENTS In accordance with ASC 855-10 we have analyzed our operations subsequent to October 22, 2019 to the date that the financial statements were issued and have determined that we do not have any material subsequent events to disclose. Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure None. Item 9A(T). Controls and Procedures Management's Report on Disclosure Controls and Procedures Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f)). The Company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, the Company conducted an evaluation of the effectiveness of the Company's internal control over financial reporting as of July 31, 2019 using the criteria established in “ Internal Control - Integrated Framework ” issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company's annual or interim financial statements will not be prevented or detected on a timely basis. In its assessment of the effectiveness of internal control over financial reporting as of July 31, 2019, the Company determined that there were control deficiencies that constituted material weaknesses, as described below. We do not have an Audit Committee - While not being legally obligated to have an audit committee, it is the management's view that such a committee, including a financial expert member, is an utmost important entity level control over the Company's financial statement. Currently the Board of Directors acts in the capacity of the Audit Committee, and does not include a member that is considered to be independent of management to provide the necessary oversight over management's activities. We did not maintain appropriate cash controls - As of July 31, 2019, the Company has not maintained sufficient internal controls over financial reporting for the cash process, including failure to segregate cash handling and accounting functions, and did not require dual signature on the Company's bank accounts. Alternatively, the effects of poor cash controls were mitigated by the fact that the Company had limited transactions in their bank accounts. We did not implement appropriate information technology controls - As at July 31, 2019, the Company retains copies of all financial data and material agreements; however there is no formal procedure or evidence of normal backup of the Company's data or off-site storage of data in the event of theft, misplacement, or loss due to unmitigated factors. Accordingly, the Company concluded that these control deficiencies resulted in a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis by the company's internal controls. As a result of the material weaknesses described above, management has concluded that the Company did not maintain effective internal control over financial reporting as of July 31, 2019 based on criteria established in Internal Control-Integrated Framework issued by COSO. Changes in Internal Control over Financial Reporting There has been no change in our internal control over financial reporting identified in connection with our evaluation we conducted of the effectiveness of our internal control over financial reporting as of July 31, 2019, that occurred during our fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. This annual report does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to temporary rules of the SEC that permit the Company to provide only management's report in this annual report. PART III Item 10. Directors, Executive Officers, Promoters and Control Persons of the Company DIRECTORS AND EXECUTIVE OFFICERS The name, address and position of our present officers and directors are set forth below: Name and Address Age Position(s) Iurii Iurtaev 42 President, Lelushenko 11, Unit 65 Chief Financial Officer, Rostov-on-Don Chief Executive Officer, Russian Federation 344000 Sole Director Rene Lawrence 39 Secretary 80 Whitmore Gardens London NW105HJ England, United Kingdom Our Director Iurii Iurtaev: Held his offices/positions since the inception of our Company and is expected to hold said offices/positions until the next annual meeting of our stockholders. The officers listed are our only officers and control persons. BACKGROUND INFORMATION ABOUT OUR OFFICER AND DIRECTOR Iurii Iurtaev Education: Higher, Don State Technical University 1993-1999 Faculty - Automation and informatics Specialty - programmer Work ( listed in inverse chronology): 1. 2012 up to now “YuDiCom” Ltd. Capacity: Director in sales 1. Identification of needs of drogerie format networks. 2. Finding of products meeting the specified conditions at foreign market. (Search of company producing necessary products is carried out by means of visit to exhibitions and by internet) 3. Focus group realization. Determination of price model of selected products. 4. conducting of negotiations with producing company. Determination of the product positioning at Russian market and its price model. 5. Signing of contract at agreement of the price model and marketing from the both parties. 6. Coordination of the first supply (name, stickering, certificates, custom clearance, delivery). Control over the next supplies. 7. Position in Russia network. Control over brand manager work on the territory. 2. 2007-2012 “YuDiCom” LTD. Capacity: Brand director in product promotion of “Kalina” and “Kalina Décor” concern. Numerous contracts were negotiated during the 2010-2012 time frame. Obligations: 1. Interaction with supplier representative. 2. Control of work of trade representatives. 3. TT monitoring. 4. Planning of annual budget. 5. Development of new territories. 6. Debit indebtedness. 7. TT training 3. 2004-2007 “Crocus” Ltd. Capacity: Trade representative of “YuDiCom” Ltd, “Kalina” division Obligations: Promotion of “Kalina” concern products on the basis of “YuDiCom” Ltd. Distributor · Work at trade sites of retail and wholesale categories, control and making orders with customers, achievement of high-quality distribution, money collection, planning of working week schedule, making of plan of visiting, monitoring of territory, search of new customers. · Since 2995 work with all key networks dedicated for “YuDiCom” Ltd. Entering alterations into specifications, conducting of negotiations with networks on matrix expansion, making of orders with goods managers and heads, goods layout, control of merchandiser, conducting of reconciliation acts, control over debit indebtedness. · Since 2007 Deputy brand director of marketing department on promotion of “Kalina” concern products. Additional obligations: - Maintenance of internal accounts. - Control and analysis of distribution level in TT. - Customer base administration. 4. 2003-2004 “Advertising Space” Ltd. Capacity: Advertising manager of “Advertising Space” Ltd. Obligations: Finding of customers, development of advertising actions, solution of set tasks. 5. 2001-2003 “Metro” Ltd. Capacity: Administrator of shops “Headgear” in “Metro” TC and “21 Century” Obligations: Selection of shop assistants, purchase of equipment, selection of goods group, document execution, conducting of accounting, goods acceptance, payment to suppliers for sale. 6. 1998-2005 “Funky Bit” Ltd. Capacity: Promoter (organization and control over performing artists) Obligations: Organization of corporate parties, promotion actions, exhibitions, festivals, conducting of negotiations with customer, accompanying of promoting artists at shows, participation in show programs. I took part in organization of events of major Russian and international companies, in election campaigns of deputies and governors. AUDIT COMMITTEE We do not have an audit committee financial expert. We do not have an audit committee financial expert because we believe the cost related to retaining a financial expert at this time is prohibitive. Further, because we have no operations, at the present time, we believe the services of a financial expert are not warranted. SIGNIFICANT EMPLOYEES We have no employees other than our Treasurer and a sole director, Iurii Iurtaev ; he currently devotes approximately twenty hours per week to company matters. We intend to hire employees on an as needed basis. Item 11. Executive Compensation The following tables set forth certain information about compensation paid, earned or accrued for services by our President, and Secretary and all other executive officers (collectively, the “Named Executive Officers”) from inception on December 9, 2013 until July 31, 2019. SUMMARY COMPENSATION TABLE Name and Principal Position Year Salary (US$) Bonus (US$) Stock Awards (US$) Option Awards (US$) Non-Equity Incentive Plan Compensation (US$) Nonqualified Deferred Compensation Earnings (US$) All Other Compensation (US$) Total (US$) Iurii Iurtaev 2019 0 0 0 0 0 0 0 0 President, Treasurer, CEO, CFO 2019 0 0 0 0 0 0 0 0 Rene Lawrence 2019 0 0 0 0 0 0 0 0 Director, Secretary 2019 0 0 0 0 0 0 0 0 There are no current employment agreements between the company and its sole officer. The compensation discussed herein addresses all compensation awarded to, earned by, or paid to our named executive officer. There are no other stock option plans, retirement, pension, or profit sharing plans for the benefit of our officers and directors other than as described herein. CHANGE OF CONTROL As of July 31, 2019, we had no pension plans or compensatory plans or other arrangements that provide compensation in the event of a termination of employment or a change in our control. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The following table provides certain information regarding the ownership of our common stock, as of July 31, 2019 and as of the date of the filing of this annual report by: • each of our executive officers; • each director; • each person known to us to own more than 5% of our outstanding common stock; and • all of our executive officers and directors and as a group. Title of Class Name and Address of Beneficial Owner Amount and Nature of Beneficial Ownership Percentage Common Stock Rene Lawrence 80 Whitmore Gardens London NW 105HJ England, United Kingdom 5,000,000 shares of common stock 82% The percent of class is based on 7,430,000 shares of common stock issued and outstanding as of the date of this annual report. Item 13. Certain Relationships and Related Transactions During the year ended July 31, 2019, we had not entered into any transactions with our sole officer or director, or persons nominated for these positions, beneficial owners of 5% or more of our common stock, or family members of these persons wherein the amount involved in the transaction or a series of similar transactions exceeded the lesser of $120,000 or 1% of the average of our total assets for the last three fiscal years. Item 14. Principal Accountant Fees and Services During fiscal year ended July 31, 2019, we incurred approximately $8,000 in fees to our principal independent accountants for professional services rendered in connection with the audit of our financial statements and for the reviews of our financial statements for the quarters ended January 31, 2017, April 30, 2017, and October 31, 2016. Item 15. Exhibits The following exhibits are filed as part of this Annual Report. Exhibits: 31.1 Certification of Chief Executive Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act 31.2 Certification of Chief Financial Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act 32.1 Certification of Chief Executive Officer and Chief Financial Officer Under Section 1350 as Adopted Pursuant Section 906 of the Sarbanes-Oxley Act SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. LEPOTA INC. Dated: October 28, 2019 By: /s/ Iurii Iurtaev Iurii Iurtaev, President and Chief Executive Officer and Chief Financial Officer |
