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EX-31.1 - CERTIFICATION - TOA Distribution Systems Inc.ex_31-1.htm
EX-32.1 - CERTIFICATION PURSUANT TO - TOA Distribution Systems Inc.ex_32-1.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

For the fiscal Quarter ended December 31, 2012

OR

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

For the transition period from ____________ to ____________

TOA DISTRIBUTION SYSTEMS INC
(formerly Skyhigh Resources, Inc.)
(Exact Name of Registrant as Specified in its Charter)
 
Delaware   26-2746101
(State of other jurisdiction of incorporation or organization)   (I.R.S. Employer Identification No.)
                              
5700 University West Blvd, Suite 304, Albuquerque NM 87106
(Address of principal executive offices)

(formerly 1791 Marcy Lynn Court, San Jose CA 95124)

505 919 8036
 (Registrant's telephone number, including area code)
 
Securities Registered Pursuant to Section 12(B) of the Act: None

Securities Registered Pursuant to Section 12(G) of the Act:
Common Stock, par value $.001 per share

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes  o  No  þ
 
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes  o  No  þ
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  þ  No  o
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (section 229.405 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  þ  No  o
 
 
 

 
 
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-Q or any amendment to this Form 10-Q.þ
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer or a smaller reporting company. See definition of " large accelerated filer," or a smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one):
 
Large accelerated filer oAccelerated filer oNon-accelerated filer oSmaller reporting companyþ
 
Indicate by check mark if the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  þ  No  o
 
State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed fiscal quarter June 30, 2012 was $ $0.00 based on common shares outstanding of 47,100,060.
 
State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date.
 
47,100,060 shares of Common Stock, $0.001 par value, as of January 29, 2013
 
Documents incorporated by reference - None
 
State issuer's revenues for its most recent fiscal year:  Nil
 
 
 

 

 
Part 1 – FINANCIAL INFORMATION

Item 1:
FINANCIAL STATEMENTS
F-1
 
Unaudited Condensed Balance Sheets as of December 31, 2012 and March 31, 2012
F-2
 
Unaudited Condensed Statements of Operations for the three months and nine months ended December 31, 2012 and December 31, 2011 respectively
F-3
 
Unaudited Condensed Statements Cash Flows for the nine months ended December 31, 2012 and December 31, 2011 respectively
F-4
 
Notes to Unaudited Financial Statements
F-5
Item 2.
Management’s Discussion and Analysis of Financial Conditions and Results of Operations
2
 
Item 3.  Controls And Procedures
3
     
PART II –
OTHER INFROMATION
 
     
Item 1.
Legal Procedures
4
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
4
Item 3.
Default Upon Senior Securities
4
Item 4.
Submission Of Matters To A Vote Of Security Holders
4
Item 5.
Other Information
4
Item 6.
Exhibits
4
 
Signatures
5
 
 
 

 
 
 
ITEM 1- FINACIAL STATEMENTS

TOA Distribution Systems Inc
(formerly known as Skyhigh Resources Inc)
A Development Stage Company
Condensed Balance Sheets
 
   
At December
   
At March
 
      31, 2012       31, 2012  
                 
ASSETS
               
Cash
  $ 518     $ 1,812  
Total Current Assets
    518       1,812  
                 
LIABILITIES
               
Current Liabilities
               
Accrued Expenses
    2,150       4,860  
Accounts Payable
    4,237       2,955  
Loans Payable Related Parties- Principal (Note 4)
    35,225       47,712  
Loans Payable Related Parties- Accrued Interest (Note 4)
    5,388       7,050  
Total Current Liabilities
  $ 47,000     $ 62,577  
                 
STOCKHOLDERS’ EQUITY (DEFICIT)
               
Capital Stock
               
Preferred Shares - 10,000,000 Shares Authorized, at $0.001
               
per share - Zero Issued and Outstanding
               
Common Stock - 250,000,000 authorized at $0.001 par value
               
47,100,060 Issued and Outstanding at December 31, 2012
               
 and Mar 31, 2012, respectively
    47,100       47,100  
Additional paid-in capital
    74,650       49,650  
Deficit Accumulated During the Development Stage
    (168,232 )     (157,515 )
Total Stockholders’ Equity (Deficit)
  $ (46,482 )   $ (60,765 )
                 
 Total Liabilities and Stockholders’ Equity (Deficit)
  $ 518     $ 1,812  
 
The accompanying notes are an integral part of these Financial Statements
 
 
F-1

 
 
 
TOA Distribution Systems Inc
(formerly known as Skyhigh Resources Inc)
A Development Stage Company
Condensed Statements of Operations
 
   
3 Month Period Ending Dec 31, 2012
   
3 Month Period Ending Dec 31, 2011
   
9 month Period Ended Dec 31, 2012
   
9 month Period Ended Dec 31, 2011
   
Cumulative Amounts from Date of Incorporation April 2, 2007 to Dec 31, 2012
 
Revenue
  $ 0     $ 0     $ 0     $ 0     $ 0  
Expenses
                                       
General and Administrative
    2,555       4,115       9,166       14,505       90,627  
Impairment Expense-Mining Claim
    -       -       -       -       26,250  
Impairment Expense-Distribution Agmt
    -       -       -       -       42,500  
 Total Expenses
    2,555       4,115       9,166       14,505       159,377  
                                         
Net Loss from Operations
    (2,555 )     (4,115 )     (9,166 )     (14,505 )     (159,377 )
Other Income and (Expense)
                                       
Foreign Exchange
    -       -                       33  
Interest
    (463 )     (1,087 )     (1,551 )     (2,819 )     (8,888 )
Provision for Income Tax
    -       -                       -  
Net Loss For The Period
    (3,018 )     (5,202 )     (10,717 )     (17,324 )     (168,232 )
                                         
Basic And Diluted Loss Per Common Share
  $ (0.00 )   $ (0.00 )   $ (0.00 )   $ (0.00 )        
Weighted Average Number of Common Shares Outstanding
    47,100,060       47,100,060       47,100,060       47,100,060          
 
The accompanying notes are an integral part of these Financial Statements
 
 
F-2

 
 
 
TOA Distribution Systems Inc
(formerly known as Skyhigh Resources Inc)
A Development Stage Company
Condensed Statements of Cash Flows

 
  9 month Period Ended Dec 31, 2012     9 month Period Ended Dec 31, 2011    
Cumulative Amounts from Date of Incorporation April 2, 2007 to Dec 31, 2012
 
Operating Activities
                 
  Net Income (Loss)
    (10,717 )     (17,324 )     (168,232 )
Adjustments To Reconcile Net Loss To Net Cash
                       
   Provided by Operations
    -       -       -  
   Stock Issued for Company Expenses paid by Related Parties
    -       -       22,000  
   Company Expenses paid by Related Parties
    9,301       19,995       38,846  
   Impairment of mining Property
    -       -       26,250  
   Impairment -Distribution License
    -       -       42,500  
Change in Assets and Liabilities
                       
   Increase (decrease) accounts payable
    1,282       1,271       4,237  
   Increase (decrease) in accrued expenses
    (2,710 )     (4,725 )     2,150  
   Increase (Decrease) in Accrued Interest-Related Party
    1,550       2,818       8,036  
   Increase (Decrease) in Loans Payable-Related Party
    -       -       -  
   Increase (Decrease) in Accrued Interest-Others
    -       -       564  
Net Cash Provided (Used) by Continuing Operating Activities
    (1,294 )     2,035       (23,649 )
Investing Activities
                       
Net Cash Provided (Used) by Investing Activities
    -       -       -  
Financing Activities
                       
  Cash provided by (Used for) Notes Payable Related Party
    -       -       13,577  
  Cash provided by (Used for) Notes Payable- Others
    -       -       4,590  
  Stock Issued for Cash
    -       -       6,000  
Net Cash Provided (Used) by Financing Activities
    -       -       24,167  
Increase (Decrease) in Cash from Continuing Operations
    (1,294 )     2,035       518  
Cash and Cash Equivalents at Beginning of Period
    1,812       97       -  
Cash and Cash Equivalents at End of Period
    518       2,132       518  
Supplemental Information
                       
Cash Paid For:
                       
Income Taxes
    -       -       -  
Non-Cash Activities
                       
Stock issued for services
    -       -       3,000  
Stock issued for Interest Payable
    -       -       287  
Stock issued for Accounts Payable
    -       -       10,713  
Stock Issued for mining claims
    -       -       26,250  
Stock Issued for Distribution Agreement
    -       -       42,500  
Contributed Capital- sale of mineral claims to Related Parties
    25,000       -       25,000  
Interest
    1,088       2,818       7,574  
 
The accompanying notes are an integral part of these Financial Statements
 
 
F-3

 
 

TOA Distribution Systems Inc
(formerly known as Skyhigh Resources Inc)
A Development Stage Company
Condensed Statements of Stockholders’ Equity (Deficit)
From Inception on April 2, 2007 through December 31, 2012
 
                     
Deficit
       
                     
Accumulated
       
                     
During the
       
   
Common Stock
   
Paid-In
   
Development
   
Stockholders'
 
   
Shares
   
Amount
   
Capital
   
Stage
   
Equity (Deficit)
 
Balance,  April 2, 2007   (Date of Inception)
    --     $ --     $ --     $ --     $ --  
Common Stock issued for cash at $0.0001 per
                                       
   share on December 13, 2007
    15,000,000       15,000       (13,500 )             1,500  
Common Stock issued for debt at $0.0025
                                       
   per share on December 13, 2007
    600,000       600       900               1,500  
Common Stock issued for mining property
                                       
  at $0.01 per share on January 10, 2008
    2,000,000       2,000       18,000               20,000  
Deficit for Period from Inception on April 2, 2007
                                       
  to March 31, 2008
                            (10,472 )     (10,472 )
Balance March 31, 2008
    17,600,000       17,600       5,400       (10,472 )     12,528  
Deficit for 3 months ended March 31,2009
                            (38,246 )     (38,246 )
Balance March 31, 2009
    17,600,000       17,600       5,400       (48,718 )     (25,718 )
Common Stock issued for Cash at $0.0025
                                       
  per share on May 11, 2009
    2,400,000       2,400       3,600               6,000  
Common Stock issued for accounts payable -
                                       
 related party at $0.0025 per share on June 1, 2009
    4,285,000       4,285       6,428               10,713  
Common Stock issued for loans payable at
                                       
  $0.0025 per share on June 13, 2009
    3,315,000       3,315       4,972               8,287  
Common Stock issued for mining property at
                                       
  $0.0025 per share on June 15, 2009
    2,500,060       2,500       3,750               6,250  
Common Stock issued for distribution agreement
                                       
  at $0.0025 per share on September 2, 2009
    17,000,000       17,000       25,500               42,500  
Deficit for the year ended March 31, 2010
                            (74,388 )     (74,388 )
Balance March 31, 2010
    47,100,060       47,100       49,650       (123,106 )     (26,356 )
Deficit for the year ended March 31, 2011
                            (7,803 )     (7,803 )
Balance March 31, 2011
    47,100,060       47,100       49,650       (130,909 )     (34,159 )
Deficit for - 12 month period ended March 31, 2012
                            (26,606 )     (26,606 )
Balance March 31, 2012
    47,100,060       47,100       49,650       (157,515 )     (60,765 )
Contributed Capital- Note 6
                    25,000               25,000  
Deficit for - 9 month period ended  Dec 31, 2012
                            (10,717 )     (10,717 )
Balance December 31, 2012
    47,100,060       47,100       74,650       (168,232 )     (46,482 )
 
The accompanying notes are an integral part of these Financial Statements

 
F-4

 

TOA Distribution Systems Inc
(formerly known as Skyhigh Resources Inc)
A Development Stage Company
Notes to Financial Statements
December 31, 2012

NOTE 1.                      BASIS OF PRESENTATION

In August 2009 the Company initiated a number of corporate changes, including 1), a name change to TOA Distribution Systems Inc, (formerly known as Skyhigh Resources Inc, 2) approved a 10 for 1 roll forward of its issued and outstanding common stock, 3), increased it authorized par value $0.001 common shares to 250,000,000 shares (formerly 50,000,000), and 4), authorized 10,000,000 par value $0.001 preferred shares.
The Company also resolved to change its corporate focus, moving from mining and exploration into bottled drinking water distribution.
 
On September 2, 2009 the Company entered into to a Sub-Distribution agreement with Taste of Aruba (US), Inc to distribute bottled water products produced in Aruba by Taste of Aruba-Premium Aruban Water.   The territory in which the Company can distribute these products include the United States and all its territories and insular areas in the Caribbean and Pacific such as but not limited to Puerto Rico, U.S. Virgin Islands, Marshall Islands, and Guam, and all of Canada.
 
 The water product is made from desalinated seawater, is filtered through coral calcium and will be further enhanced by the addition of electrolytes then bottled in Taste of Aruba’s proprietary biodegradable bottles. The products will be marketed to retail locations that currently handle bottled water such as display cases in food beverage marketer at airports, food chain store, and sublicensing to bulk dealers and will include the use of vending machines located at high traffic locations.

The Company owned two (2) mineral properties, which were acquired by issuing stock to related parties and which had been fully impaired. These claims were deemed surplus, had been held for sale for about two years and were sold in May 2012.

It is management’s opinion that all adjustments necessary for a fair statement of the results for this interim period have been made and all adjustments made are of a normal recurring nature.

NOTE 2.                      GOING CONCERN

The accompanying financial statements have been prepared in conformity with generally accepted accounting principles (GAAP) in the United States of America, which contemplates continuation of the Company as a going concern.  However, the Company has no business operations to date, accumulated losses amounting to $168,232 and must secure additional financing to commence the Company’s plan of operations, which means there is substantial concern about the Company’s ability to continue as a going concern.  The Company intends to acquire additional operating capital through equity offerings to the public to fund its business plan or loans from shareholders and others. There is no assurance that the equity offerings will be successful or loans will be received to provide sufficient funds to commence operations or to assure the eventual profitability of the Company.
 
 
1

 

 
NOTE 3.                      SUB-DISTRIBUTION AGREEMENT

On September 2, 2009 the Company signed an Exclusive Sub-Distribution Agreement (“Agreement”) with Taste of Aruba (US) Inc, a State of Nevada Incorporated company, owner and master distributor of products from Taste of
Aruba-Premium Aruban Water. Under the Agreement, the Company will distribute in the United States, its territories and insular areas in the Caribbean and Pacific and Canada, bottled water produced under license in Aruba
by Water Energy Company-Aruba. To maintain the Agreement, the Company will be required to meet certain product sales volumes after Taste of Aruba commences production. The start of production by Taste of Aruba had been delayed due to it inability to complete funding arrangements which is now reported to be eminent although to date these funds have not been received. If Taste of Aruba receives funding as projected, the production facility is
 
NOTE 3.                      SUB-DISTRIBUTION AGREEMENT (Continued)

projected to be complete by August 31, 2013. Payment for the Agreement cost of $42,500, which was fully impaired on acquisition, was paid by the issuance of 17,000,000 post dividend shares of the Company’s common restricted stock issued in accordance with ASC 505-50-30-6 at $0.025 per share.

The Company periodically reviews for impairment its long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Management has determined that its Distribution Agreement asset requires impairment. As no sale activities have occurred, no product is yet available for sale and funds to establish a sales and distribution operation have not been secured.
 
NOTE 4.                      LOANS PAYABLE – RELATED PARTIES

Loans payable to related parties resulted from funds provided by a director and from shareholders of the company as cash loans for payment of certain operating expenses and for services provided.

Loans payable to a former director totaled $4,852, made up of principal amounting to $3,660 and accrued interest of $1,192. Loans payable to Related Parties totaled $35,761 made up of principal amounting to $31,565 and accrued interest amounting to $ 4,196. See Note 6 for additional information.

In aggregate, Loans Payable Related Parties to December 31, 2012 totaled $40,613 made up of $35,225 for principal and $5,388 for accrued interest.

During the quarter ended June 30, 2012, we sold our two mineral claims to the Related Party for $25,000. This amount was used to reduce Related Party Loans principal owing by $21,788 and reduce Related Party Accrued Interest payable by $3,212.

Up to September 30, 2009 the Related Party Loans were without defined interest or payment terms and were payable on demand. In the quarter ended September 30, 2009 Loan Agreements were entered into which clarified and confirmed the terms and conditions. Commencing October 1, 2009, the outstanding amount and subsequent amounts, were payable on demand, interest accrued at the rates of 10% per annum and if earlier demand for payment was not made, the loans are payable November 30, 2012. On May 1, 2012 the interest rate was reduced to 5% per annum and the due date was extended to November 30, 2013
 
 
2

 

 
NOTE 5.                      EQUITY

At a special shareholders meeting held August 13, 2009, the shareholders approved the change of the Company’s name to TOA Distribution Systems Inc, approved charges to the authorized capital which included creation of 10,000,000 shares of preferred stock at a par value of $0.01 per share and increased the authorized common stock to 250,000,000 with a par value of $0.001 per share. As well, the shareholders approved a 10 for 1 forward stock split of the outstanding shares. All share amounts shown in these financial statements have been adjusted retroactively to account for the forward stock split.

During this current period, we sold our two mineral claims for $25,000. As the sale was made to a related party, the sale amount was recorded to Additional Paid In Capital and not treated as a gain.

At December 31, 2012 we had zero preferred stock issued and outstanding and had 47,100,060 common shares issued and outstanding, which were issued on the dates and for the purposes listed below.

-  15,000,000 common shares issued to a director for cash at $0.0001 on December 13, 2007
-  600,000 common shares issued for services at $0.0025 on December 13, 2007
-  2,000,000 common shares issued for a mining property at $0.01 on January10, 2007
-  2,400,000 common shares issued for cash on May 11, 2009
-  4,285,000 common shares issued for accounts payable on June 1, 2009
-  3,315,000 common shares issued to a related party for loan payable on June 13, 2009
 
NOTE 5.                      EQUITY (Continued)

- 2,500,060 common shares issued for a mining property on June 15, 2009
- 17,000,000 common shares issued for a sub-distribution agreement on Sept 2, 2009
 
NOTE 6.                      CONTRIBUTED SURPLUS
 
The Company owned two (2) mineral claims that had been deemed surplus and fully impaired. On to May 1, 2012 these claims were sold to a related party to whom the Company had loans payable. The terms of the sale was a reduction of the loans payable and proportionate accrued interest in aggregate amounting to Twenty-Five Thousand Dollar, ($25,000.00), an extension on the due date of the loan to November 13, 2013, a reduction of the rate of interest payable to 5% and the issuance by the purchaser of shares in two private companies. These shares were valued at $0 therefore there was no impact on the financial statements. These shares were distributed equally to each of the shareholders of the Company.
 
NOTE 7.                      SUBSEQUENT EVENTS
 
The Company has evaluated subsequent events through the date that the financial statements were issued. There were no significant subsequent events that need to be disclosed.

 
3

 

 
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

PLAN OF OPERATION

In an effort to make available the facilities of the public market to our funding requirements, the Company intends to make application to FINRA for the Company's shares to be quoted on the OTCBB. The Company's application to FINRA will consist of current corporate information, financial statements and other documents as required by Rule 15c211 of the Securities Exchange Act of 1934.

Subject to receiving adequate funding and the water product being available from Taste of Aruba products, we will selectively target various distribution outlets / locations such as airports, trade shows, exhibitions and other public activities which attract large gatherings of people.
 
During this quarter ended December 31, 2012 on November 17, 2012, the Company filed a Form 8-K, Item 5.02: Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers with the Securities and Exchange Commission. This 8-K filing disclosed the resignation of Trevor Blank as a Director and from all officer positions held with the Company. Concurrent with Mr. Blank’s resignation, Mr. Andy Ruppanner was appointed to serve as sole director and as President and CEO, Vice-President and CFO, Secretary and Treasurer.
 
RESULTS OF OPERATIONS

Interim Period: For the three month period ended December 31, 2012 and comparable three month period in 2011

No sales or income was recorded for this period

Operating Costs and Expenses

The net loss incurred for the three-month period October 1, 2012 to December 31, 2012 amounted to $3,018 compared to $5,202 for the comparable period in 2011. Total expenses incurred during the three-month period October 1, 2012 to December 31, 2012 were $2,555 compared to $4,115 for the same period in 2011. The amount of $2,555 was made up of audit expenses $1,750, and Edgar filing fees of $785 and bank fees of $20 whereas in the comparable 2011 period expenses totalling $4,115 consisted of audit expenses in the amount $2,250, mineral claims filing fees amounting to $1,025, and Edgar filing fees of $840. Interest expense amounted to $436 for the three-month period ended December 31, 2012, compared to $ 1,087 for the comparable period in 2011.

Interim Period: For the nine month period ended December 31, 2012 and comparable nine month period in 2011

No sales or income was recorded for this period

Operating Costs and Expenses

The net loss incurred for the nine-month period ended December 31, 2012 amounted to $10,717 compared to $17,324 for the comparable period in 2011. Total expenses incurred during the nine-month period ended December 31, 2012 were $9,166 compared to $14,505 for the same period in 2011. The amount of $9,166 was made up of audit expenses of $5250, $2,002 for stock transfer fees, bank service charges of $169 and Edgar filing fees of $1,745 whereas in the comparable 2011 period expenses of $14,505 consisted of audit expenses in the amount $5,250, mineral claims filing fees amounting to $6,168, Edgar filing fees of $2,844, bank services charges of $137 and miscellaneous fees totalling $107. Lower cost of mineral claims fees in the current period were as a result of the Company’s sale of its two claims in the period ended June 30, 2012.  Interest expense amounted to $1,551 for the nine-month period ended December 31, 2012, compared to $ 2,818 for the comparable period ended December 31, 2011.

 
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SELECTED FINANCIAL INFORMATION
   
December 31, 2012
 
   
 
 
Current Assets
  $ 518  
Total Assets
  $ 518  
Current Liabilities
  $ (47,000 )
Stockholders' Equity
  $ (46,482 )

LIQUIDITY AND CAPITAL RESOURCES

Our cash balance was $518 on December 31, 2012. During this nine-month period ended December 31, 2012 we received loans from related parties amounting to $4,745. These loans and a commitment for any additional funds required through March 31, 2013 will be sufficient to fund our limited levels of operations. We are a development stage company and have generated no revenue to date. We sold 1,000,000 shares of common stock in June 2009 for $25,000 for cash amounting to $6,000, and for debt reduction amounting to $19,000. The debt reduction in the amount of $19,000 consisted of loans payable amounting to $8,287 and accounts payable amounting to $10,713.

We have loans payable including interest amounting to $40,613 due December 2013, accrued expenses of $2,150 made up of audit fees and Edgar fees, and $4,237 for accounts payable. These accruals and accounts payable exceed our cash available by $5,767. We have received commitments from related parties and shareholders for additional funds to pay expenses for our minimum level of operations through March 31, 2013.

Our auditor has issued a going concern opinion. This means that there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay our bills. This is because we have not generated revenues and no revenues are anticipated until we begin receiving and selling water products. There is no assurance we will ever reach that stage.

OFF-BALANCE SHEET ARRANGEMENTS

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

ITEM 3.                      CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS

As of the end of the period covered by this report, we conducted an evaluation, under the supervision and with the participation of our chief executive officer and chief financial officer, of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act). Based upon this evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures are ineffective 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 Security and Exchange Commission's rules and forms.
 
 
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There has been no change in our internal control over financial reporting during the current quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

EVALUATION OF AND REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Our management is responsible for establishing and maintaining adequate internal control  over  financial  reporting  for  the  company.  Internal  control  over financial reporting is to provide reasonable assurance regarding the reliability of our  financial  reporting  purposes  accordance  with  accounting  principles generally  accepted in the United  States of  America.  Internal  control  over financial  reporting  includes  maintaining  records that in  reasonable  detail accurately and fairly reflect our transaction;  providing  reasonable  assurance that  transactions  are recorded as necessary for  preparations of our financial statements;  providing  reasonable assurance that receipts and  expenditures of company  assets  are  made in  accordance  with  management  authorization;  and providing   reasonable   assurance  that  unauthorized   acquisitions,   use  or disposition of company assets that could have a material effect on our financial statements would be prevented or detected.

Management  conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control – Integrated Framework  issued by the Committee of Sponsoring  Organizations  of the Treadway Commission.  Based on this  evaluation  management  concluded that the Company's internal control over financial reporting was ineffective as of December 31, 2012. There where no changes in our internal controls over financial reporting during the  period  ended  December 31, 2012 that have  materially  affected,  or are reasonable  likely to materially  affect our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1.   LEGAL MATTERS

None

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

On March 25, 2009 our Registration Statement on Form S-1, commission file number 333-153863, became effective and qualified under Rule 144 for the sale of 10,000,000 shares of the Company’s common sold in accordance with the requirements of Section 4(2) offering under the Securities Act of 1933, as amended and Rule 506 promulgated thereunder.  The offering was fully subscribed by June 25, 2009 raising a total of $25,000.  There were no underwriters for this offering.
 
 
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ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None

ITEM 5.  OTHER INFORMATION

None

ITEM 6. EXHIBITS AND REPORTS

The following exhibits are included herein, except for the exhibits marked with a footnote, which are incorporated herein by reference and can be found in the appropriate document referenced.
 
3.1
 
Articles and By-Laws as filed with the Delaware Secretary of State April 02, 2007*
   
Amendment to By-Laws dated August 13, 2009*
99.2
 
Geologist Report*
31.1
 
Rule 13a-14(a)/15d-14(a) Certification by the Principal Executive Officer**
     
31.2
 
Rule 13a-14(a)/15d-14(a) Certification by the Principal Financial Officer**
     
32.1
 
Section 1350 Certification by the Principal Executive Officer**
     
32.2
 
Section 1350 Certification by the Principal Financial Officer**

*      Incorporated by reference to the Registrant's Registration Statement on Form S-1, filed on October 6, 2008.
** Filed herewith

 
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SIGNATURES

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

In accordance with the requirements of the Securities Act, this 10-Q has been signed by the following persons in the capacities and on the dates stated.


SIGNATURE
 
TITLE
 
DATE
 TOA DISTRIBUTION SYSTEMS INC.
       
/s/ Andy Ruppanner
 
Chief Executive Officer, Chief Financial Officer, Secretary, Director
 
January 25, 2013
Trevor Blank
 
(Principal Executive Officer)
   

 
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