UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the quarterly period ended: April 30, 2013

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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES

AND EXCHANGE ACT OF 1934  

TECTON CORPORATION

(Name of Small Business Issuer in its Charter)

15500 Roosevelt Blvd Suite 301, Clearwater, FL 33760

(Address number principal executive offices)

727-289-0010

(Issuer’s telephone number)

(Former Address)

Check 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  R     No £

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes  £  No   R

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company:

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

As of June 7, 2013 the registrant had 1,993,414 shares of common stock outstanding and 493,414 shares of preferred stock.  

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PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

UNAUDITED FINANCIAL STATEMENTS

April 30, 2013

Balance Sheets

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Statements of Operations

4

Statements of Cash Flows

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Notes to Financial Statements

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TECTON COPORATION

BALANCE SHEETS

The accompanying notes are an integral part of these financial statements

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TECTON CORPORATION

STATEMENTS OF OPERATIONS

The accompanying notes are an integral part of these financial statements

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TECTON CORPORATION.

STATEMENTS OF CASH FLOWS

(Unaudited)

The accompanying notes are an integral part of these financial statements

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TECTON CORPORATION

NOTES TO FINANCIAL STATEMENTS

APRIL 30, 2013

(Unaudited)

NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business and Basis of Presentation

Tecton Corporation (the “Company”) was incorporated under the laws of the State of Nevada on January 19, 2006, as a wholly-owned subsidiary of Hemis Corporation.  On December 1, 2006 Hemis declared a dividend of Tecton shares to all shareholders as of that date and concurrently cancelled its share ownership in the Company.  The effect of this dividend declaration and share cancellation was that Tecton was spun off as an independent company.  

The company discontinued operations on or about June 1, 2008 and has incurred losses of $4,908,426 since inception through April 30, 2013.  The company was formerly an exploration stage company but is no longer reporting as such.

Interim Period Financial Statements

The interim period financial statements have been prepared by the Company pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to such SEC rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading.  It is suggested that these financial statements be read in conjunction with the financial statements and the notes thereto, included in the Company’s latest Form 10-K.

In the opinion of management, all adjustments consisting of normal recurring adjustments necessary for a fair statement of the financial position at April 30, 2013 and the results of operations and cash flows for the three months ended April 30, 2013 and 2012 have been made.

Cash

For purposes of the Statements of Cash Flows, the Company considers all highly liquid debt instruments purchased with a maturity date of three months or less to be cash equivalents.

Income Taxes

The Company uses the liability method to record income tax activity. Deferred taxes are determined based upon the estimated future tax effects of differences between the financial reporting and tax reporting bases of assets and liabilities given the provisions of currently enacted tax laws.

The accounting for uncertainty in income taxes recognized in an enterprise’s financial statements uses the threshold of more-likely-than-not to be sustained upon examination for inclusion or exclusion. Measurement of the tax uncertainty occurs if the recognition threshold has been met.

Net Earnings (Losses) Per Common Share

Net loss per common share is computed by dividing net loss by the weighted average number of shares of common stock and dilutive common stock equivalents outstanding during the year. Dilutive common stock equivalents consist of shares issuable upon conversion of convertible preferred shares and the exercise of the Company's stock options and warrants (calculated using the treasury stock method). Through April 30, 2013, the Company has no potentially dilutive common stock equivalents to consider in the calculation of the weighted average number of common shares outstanding. Common stock issuable is considered outstanding as of the original approval date for purposes of earnings per share computations.

Capital Assets

Capital assets are recorded at cost. When retired or otherwise disposed, the related carrying value and accumulated depreciation are removed from the respective accounts and the net difference less any amount realized from disposition, is reflected in earnings. For financial statement purposes, capital assets are recorded at cost and are depreciated using the reducing balance method at 30% and 20 % per annum.

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Fair Value of Financial Instruments

The fair value of financial instruments, which include cash, loans receivable, accounts payable and accrued expenses and advances from related parties were estimated to approximate their carrying values due to the immediate or short-term maturity of these financial instruments. Management is of the opinion that the Company is not exposed to significant interest, currency or credit risks arising from financial instruments.

Foreign Currency Translation and Transactions

The Company records changes in foreign currency by translating assets and liabilities at current exchange rates in effect at the end the period. Revenues and expenses are translated at the average rate of exchange throughout the year. Resulting translation adjustments are recorded as a separate component in stockholder's equity. Foreign currency transaction gains and losses, if any, are included in the statement of operations.

Comprehensive Income (Loss)

The Company records comprehensive income as the change in equity of a business during a period from transactions and other events and circumstances from non-owner sources. It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners. Other comprehensive income (loss) includes foreign currency translation adjustments and unrealized gains and losses on available-for-sale securities. As of April 30, 2013 the Company had no items that represent comprehensive loss and, therefore, has not included a schedule of comprehensive loss in the financial statements.

Stock Based Compensation

Stock based compensation cost is measured at fair value on date of grant and recognition of compensation over the service period for awards expected to vest. The Company determines the fair value of awards using the Black - Scholes valuation model.  As of April 30, 2013, the Company has not issued any awards that qualify as stock based compensation.

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles 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 revenue and expenses during the reporting period. Actual results could differ from those estimates.

New Accounting Pronouncements

The Company reviews new accounting standards as issued. No new standards had any material effect on these financial statements. The accounting pronouncements issued subsequent to the date of these financial statements that were considered significant by management were evaluated for the potential effect on these consolidated financial statements. Management does not believe any of the subsequent pronouncements will have a material effect on these consolidated financial statements as presented and does not anticipate the need for any future restatement of these consolidated financial statements because of the retro-active application of any accounting pronouncements issued subsequent to April 30, 2013 through the date these financial statements were issued.

NOTE B – GOING CONCERN MATTERS

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the accompanying financial statements for the period ended April 30, 2013 the Company has incurred total losses of $4,908,426. The Company has no liquid assets.  These factors, among others, indicate that the Company will be unable to continue as a going concern for a reasonable period of time.

The Company's existence is dependent upon management's ability to develop profitable operations and resolve its liquidity problems. The accompanying financial statements do not include any adjustments that might result should the Company be unable to continue as a going concern.

NOTE C – ADVANCES FROM RELATED PARTIES AND RELATED PARTY TRANSACTIONS

On April 27, 2011, the company borrowed $25,000 from Island Capital Management, LLC. under a promissory note bearing interest at 6%.  Island Capital Management, LLC is related through common shareholders. The original maturity of the note was April 27, 2012.  The note is currently in default.

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As of April 30, 2013, the Company's significant shareholders have at varying times and in various amounts, advanced funds to the Company for working capital purposes.  Total amounts due to related parties through advances and the promissory note were $285,532 and $169,150 as of April 30, 2013 and January 31, 2013, respectively. Except for the terms stipulated in the promissory note, all other amounts advanced are unsecured, non-interest bearing and have no specific terms of repayment.

During the quarter ended April 30, 2013, the related parties assumed $63,932 in the liabilities from discontinued operations.  

NOTE D – COMMON STOCK TRANSACTIONS AND REVERSE SPLIT

As of April 30, 2013 the Company had 100,000,000 shares of capital stock authorized to issue.  The articles of incorporation in the State of Nevada do not stipulate a difference between common and preferred shares.  The Company has accounted for its authorized shares as 80,000,000 for common shares.   On May 8, 2013, the Company issued 19,736,560 preferred shares out of the remaining 20,000,000 shares of capital stock authorized. These preferred shares have no preferential rights over that of common shareholders.

June 6, 2013, the Company affected a 1 share for 40 shares reverse split of its common stock.  As a result, the issued and outstanding shares at April 30, 2013 and 2012 were decreased from 79,736,560 to 1,993,414.  The authorized shares at April 30, 2013 and 2012 were decreased from 100,000,000 to 2,500,000; 2,000,000 shares of common stock and 500,000 preferred shares. There were no preferred shares issued as of April 30, 2013. As noted above, the preferred stock was issued on May 8, 2013.  

NOTE E – COMMON STOCK ISSUABLE

In April 2008, the Company entered into a subscription agreement with a non-U.S. investor for the purchase of 533,333 at a price of $0.42 per share, resulting in cash proceeds of $224,000. This issuance was exempt from registration pursuant to Regulation S of the Securities Act.  The Company was unable to issue these shares and at April 30, 2013 considers this common stock issuable and has recorded it in the equity section. As a result of the reverse split, the number of shares issuable has been decreased from 533,333 to 13,333 at April 30, 2013 and 2012.

NOTE F– SUBSEQUENT EVENTS

On May 8, 2013, the Company entered into a Debt Conversion Agreement with Endeavour Cooperative Partners LLC in the amount of $272,356.  This amount represents the related party debt payable to Endeavour as of that date.  The terms of the agreement allow for Endeavour to convert this debt into preferred stock at $.000172 per share.  On May 8, 2013 Endeavour filed a notice of conversion for $3,400 of its debt, in exchange for 19,736,560 of pre-reverse split preferred shares. These shares converted to 493,414 shares of preferred stock after the reverse split.

June 6, 2013 the Company authorized a reverse split of its then current issued and outstanding shares of common and preferred stock in a ratio of one share for forty shares.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Business Overview

We were incorporated as a Nevada company on January 19, 2006, as a wholly owned subsidiary of Hemis Corporation. On December 1, 2006 Hemis declared a dividend in the amount of one common share of Tecton for every $0.0001 of dividend declared, which equated to one common share of Tecton for every 100 shares of the Hemis owned as at December 1, 2006. At the same time the dividend was declared, Hemis cancelled its share ownership in Tecton. The effect of this dividend declaration and share cancellation was that Tecton was spun off as an independent company. We are quoted on the OTC Bulletin Board under the symbol “TTNC.OB”. We do not currently have any subsidiaries.

The Company discontinued operations on or about June 1, 2008 and has incurred losses of $4,908,426 since inception from January 19, 2006 through April 30, 2013.

Results of Operations

Lack of Revenue

Since our inception on January 19, 2006 to April 30, 2013 we have not earned any revenues.  We have no operations or plans in place to earn any revenues at this time.

Expenses

We incurred general and administrative costs of $26,950 for the three months ended April 30, 2013 as compared to $6,338 for the three months ended April 30, 2012.  The expenses for both periods consist primarily of legal and professional fees.  

Net Losses

From January 19, 2006 (date of inception) to April 30, 2013, we incurred net losses of $4,908,426.

Liquidity and Capital Resources

As of April 30, 2013, we had no cash and the Company’s general and administrative costs were financed by money borrowed and expenses advanced.

This raises substantial doubt about our ability to continue as a going concern. Our auditors have issued a going concern opinion on our audited financial statements as of January 31, 2013. This means that our auditors believe there is substantial doubt that we can continue as an on-going business for the next twelve months. The financial statements do not include any adjustments that might result from the uncertainty about our ability to continue our business. Since we were unable to obtain additional financing from outside sources and produce enough revenues, we ceased our operations.

Research and Development

From January 19, 2006 (inception) to April 30, 2013 we did not have any research and development expenses.

Inflation

The amounts presented in the financial statements do not provide for the effect of inflation on our operations or financial position. The net operating losses shown would be greater than reported if the effects of inflation were reflected either by charging operations with amounts that represent replacement costs or by using other inflation adjustments.

Off-Balance Sheet Arrangements

As of April 30, 2013, we had no off balance sheet transactions that have or are reasonably likely to have a current or future effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

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ITEM 4. CONTROLS AND PROCEDURES

Not applicable.

ITEM 4T. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f)). Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

No significant changes have been made to our internal control over financial reporting during our last fiscal quarter in connection with the results of Management’s report included in the Form 10-K filed with the Securities and Exchange Commission on February 27, 2013.  

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Management is not aware of any legal proceedings contemplated by any governmental authority or any other party against us. None of our directors, officers or affiliates is (i) a party adverse to us in any legal proceedings, or (ii) has an adverse interest to us in any legal proceedings. Management is not aware of any other legal proceedings that have been threatened against us.

Tecton commenced negotiations with the holders of the unsecured claims in order to establish a consensus on the framework for a Chapter 11 plan of reorganization that would satisfy the requirements of section 524(g) of the Bankruptcy Code and treat all creditors and stakeholders fairly and equitably.  In May 2011, counsel for Tecton began discussions with Tecton’s creditors to explore the feasibility of and the potential for a pre-negotiated Chapter 11 plan of reorganization that would afford all the stakeholders an opportunity for some recovery of their claim, if not all.

Upon receiving consensus among the Tecton’s creditors, the Company filed a pre-negotiated Plan of Reorganization with its Chapter 11 bankruptcy petition on February 2, 2012 in the United States Bankruptcy Court, Middle District of Florida (Case no. 8:12-bk-01564-KRM).  Unfortunately, the US Trustee filed a Motion to Dismiss Case or Alternatively a Motion to Convert Case to Chapter 7.  After discussions with the Trustee, and with the intent to preserve any existing shareholder value, the Company consented to the dismissal and the bankruptcy case was subsequently dismissed on order of the Court on April 2, 2012.

ITEM 1A. RISK FACTORS

Not applicable.

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

We have not made any previously unreported sales for the three months ended April 30, 2012.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

None.

ITEM 5. OTHER INFORMATION

On January 14, 2013, Micah . Eldred, believing it to be in the best interest of the Company to bring on additional board members and officers, pursuant to Sections 78.335(5) and the Bylaws, appointed Carl Dilley and Christine Zitman as Directors, to hold said director position until the next shareholder meeting, and Christine Zitman as Secretary/Treasurer, to hold said officer positions until removed by the Board, resignation, or death. Micah Eldred remains as Director, Chairman of the Board, President and Chief Executive Officer.

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ITEM 6. EXHIBITS

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.

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Exhibit 31.1

CERTIFICATION PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

Date: June 12, 2013

/s/ Micah Eldred           

Micah Eldred

Chief Executive Officer

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Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

In connection with the Tecton Corporation (the “registrant”) on Form 10-Q for the period ended April 30, 2012, as filed with the Securities and Exchange Commission on the date hereof (the “report”), I, Micah Eldred, Chief Executive Officer of the registrant, and Christine Zitman, Chief Financial Officer of the registrant, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1) The report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the report fairly presents, in all material respects, the financial condition and results of operations of the registrant.

Date: June 12, 2013

/s/ Micah Eldred

Micah Eldred

Chief Executive Officer

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