| Income Taxes | 7. Income Taxes The Company is subject to United States federal and state income taxes at a rate of 34% per annum. The reconciliation of the provision for income taxes at the statutory rate compared to the Company's income tax expense as reported is as follows: 2017 $ 2016 $ Income tax recovery at statutory rate (5,617) (620) Valuation allowance change 5,617 620 Provision for income taxes - - The significant components of deferred income tax assets and liabilities as at September 30, 2017 are as follows: 2017 $ 2016 $ Net operating losses carried forward 6,237 620 Valuation allowance (6,237) (620) Net deferred income tax asset - - As at September 30, 2017, the Company has net operating losses carried forward of $18,344, which are available to offset future years' taxable income. These losses expire as follows: $ 2036 1,824 2037 16,520 18,344 Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure None Item 9A(T) Controls and Procedures Disclosure Controls and Procedures. The Company maintains disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended) that are designed to ensure that information required to be disclosed in the Company's Securities Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to the Company's management, as appropriate, to allow timely decisions regarding required disclosure. The Company's management, with the participation of our principal executive and principal financial officer evaluated the effectiveness of the Company's disclosure controls and procedures as of the end of the period covered by this report. Based upon that evaluation, our principal executive and principal financial officer concluded that, as of the end of the period covered by this report, the Company's disclosure controls and procedures were not effective. Management's Report on Internal Controls over Financial 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 September 30, 2017 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 September 30, 2017, the Company determined that there were control deficiencies that constituted material weaknesses, as described below. 1. 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. 2. We did not maintain appropriate cash controls - As of September 30, 2017, 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. 3. We did not implement appropriate information technology controls - As at September 30, 2017, 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 September 30, 2017 based on criteria established in Internal Control- Integrated Framework issued by COSO. Saturna Group Chartered Professional Accountants LLP, our independent registered public accounting firm, were not required to and have not provided an assessment of our internal controls for the years ended September 30, 2017 and 2016. System of Internal Control over Financial Reporting Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that is designed to ensure that information required to be disclosed by us in the reports that we file or submit under the 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 an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer's management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. An evaluation was conducted under the supervision and with the participation of our management of the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2017. Based on that evaluation, our management concluded that our disclosure controls and procedures were not effective as of such date to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. Changes in Internal Control over Financial Reporting There was no change in the Company's internal control over financial reporting during the quarterly period covered by this report that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting. Item 9B. Other Information. None. PART III Item 10. Directors, Executive Officers, Promoters and Control Persons of the Company Our executive officer's and director's and their respective ages are as follows: Name Age Positions Leonid Skupchenko 25 President, Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer and Director Set forth below is a brief description of the background and business experience of our executive officers and directors for the past five years. Leonid Skupchenko Mr. Skupchenko has served as our President, Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer and Director since our inception on July 1, 2016. Our director, Leonid Skupchenko worked in textile and clothing manufacturing company Bocchese S.p.A. from May 2012 to June 2015. Leonid Skupchenko is not working for Bocchese S.p.A. at the moment. Position held was cloth design development manager. His main activities and responsibilities were developing sketches, cooperation with warehouses and orders composing, negotiations with suppliers, controlling sewing process and design line. Term of office All directors hold office until the next annual meeting of the stockholders of the Company and until their successors have been duly elected and qualified. The Company's Bylaws provide that the Board of Directors will consist of a minimum of one member. Officers are elected by and serve at the discretion of the Board of Directors. Director independence Our board of directors is currently composed of one member, and he does not qualify as an independent director in accordance with the published listing requirements of the NASDAQ Global Market (the Company has no plans to list on the NASDAQ Global Market). The NASDAQ independence definition includes a series of objective tests, such as that the director is not, and has not been for at least three years, one of our employees and that neither the director, nor any of his family members has engaged in various types of business dealings with us. In addition, our board of directors has not made a subjective determination as to our director that no relationships exist which, in the opinion of our board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director, though such subjective determination is required by the NASDAQ rules. Had our board of directors made these determinations, our board of directors would have reviewed and discussed information provided by directors and us with regard to our director's business and personal activities and relationships as they may relate to our management and us. Significant employees and consultants We currently have one employee, our sole officer, Leonid Skupchenko. Audit committee and conflicts of interest Since we do not have an audit or compensation committee comprised of independent directors, the functions that would have been performed by such committees are performed by our directors. The Board of Directors has not established an audit committee and does not have an audit committee financial expert, nor has the Board of Directors established a nominating committee. The Board is of the opinion that such committees are not necessary since the Company is a start-up stage company and has only one director, and to date, such directors have been performing the functions of such committees. Thus, there is a potential conflict of interest in that our directors and officers have the authority to determine issues concerning management compensation, nominations, and audit issues that may affect management decisions. Other than as described above, we are not aware of any other conflicts of interest with any of our executive officers or directors. Stockholders communications with the board of directors We have not implemented a formal policy or procedure by which our stockholders can communicate directly with our board of directors. Nevertheless, every effort will be made to ensure that the board of directors hears the views of stockholders, and that appropriate responses are provided to stockholders in a timely manner. During the upcoming year, our board of directors will continue to monitor whether it would be appropriate to adopt such a process. Item 11. Executive Compensation The following table sets forth information regarding each element of compensation that we paid or awarded to our named executive officers for fiscal 2017 and 2016: Name and Principal Position Period Salary ($) Bonus ($) Stock Awards ($)* Option Awards ($)* Non-Equity Incentive Plan Compensation ($) Nonqualified Deferred Compensation ($) All Other Compensation ($) Total ($) Leonid Skupchenko, President 2017 0 0 0 0 0 0 0 0 2016 0 0 0 0 0 0 0 0 Our sole officer and director have not received monetary compensation since our inception to the date of this prospectus. We currently do not pay any compensation to any officer or any member of our board of directors. Employment agreements The Company is not a party to any employment agreement and has no compensation agreement with any officer or director. Director compensation The following table sets forth director compensation as of September 30, 2017: Name Fees Earned or Paid in Cash ($) Stock Awards ($) Opinion Awards ($) Non-Equity Incentive Plan Compensation ($) Nonqualified Deferred Compensation Earnings ($) All Other Compensation ($) Total ($) Leonid Skupchenko, President 0 0 0 0 0 0 0 We have not compensated our directors for their service on our Board of Directors since our inception. There are no arrangements pursuant to which directors will be compensated in the future for any services provided as a director. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The following table lists, as of the date of this prospectus, the number of shares of common stock of our Company that are beneficially owned by (i) each person or entity known to our Company to be the beneficial owner of more than 5% of the outstanding common stock; (ii) each officer and director of our Company; and (iii) all officers and directors as a group. Information relating to beneficial ownership of common stock by our principal shareholders and management is based upon information furnished by each person using "beneficial ownership" concepts under the rules of the Securities and Exchange Commission. Under these rules, a person is deemed to be a beneficial owner of a security if that person has or shares voting power, which includes the power to vote or direct the voting of the security, or investment power, which includes the power to vote or direct the voting of the security. The person is also deemed to be a beneficial owner of any security of which that person has a right to acquire beneficial ownership within 60 days. Under the Securities and Exchange Commission rules, more than one person may be deemed to be a beneficial owner of the same securities, and a person may be deemed to be a beneficial owner of securities as to which he or she may not have any pecuniary beneficial interest. Except as noted below, each person has sole voting and investment power. The percentages below are calculated based on 3,750,000 shares of our common stock issued and outstanding as of September 30, 2017. We do not have any outstanding warrant, options or other securities exercisable for or convertible into shares of our common stock. Title of class Name and Address of Beneficial Owner Amount and Nature of Beneficial Ownership Percent of Common Stock Common Stock Leonid Skupchenko 2,800,000 74.67% Item 13. Certain Relationships and Related Transactions Mr. Skupchenko is considered to be a promoter, and currently is the only promoter, of Ferd as that term is defined in the rules and regulations promulgated under the Securities and Exchange Act of 1933. On August 22, 2016, we offered and sold 2,800,000 shares of common stock to Leonid Skupchenko, our President, Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer and a Director, at a purchase price of $0.001 per share, for aggregate proceeds of $2,800. As of September 30, 2017, Leonid Skupchenko has loaned us $7,793. The loan does not have any term, carries no interest and is not secured. Item 14. Principal Accountant Fees and Services During fiscal years ended September 30, 2017 and 2016, we incurred approximately $8,000 and $nil in fees respectively to our principal independent accountants for professional services rendered in connection with the audit of our September 30, 2016 financial statements and for the reviews of our financial statements for the quarters ended December 31, 2016, March 31, 2017, and June 30, 2017. PART IV Item 15. Exhibits The following exhibits are included as part of this report by reference: 31.1 Certification of Chief Executive Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(a) or 15d-14(a). 31.2 Certification of Chief Financial Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(a) or 15d-14(a). 32.1 Certifications pursuant to Securities Exchange Act of 1934 Rule 13a-14(b) or 15d-14(b) and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002. SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized in the Venice, Italy on December _, 2017. Ferd By: /s/ Leonid Skupchenko Name: Leonid Skupchenko Title: President, Treasurer, Secretary and Director (Principal Executive, Financial and Accounting Officer) |
