Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 10Q
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(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2014
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from __________ to ___________
Commission file number: 000-54868
FREE FLOW, INC.
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(Exact name of registrant as specified in its charter)
Delaware 45-3838831
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(State of Incorporation) (IRS Employer ID Number)
2301 WOODLAND CROSSING DRIVE, SUITE 155, HERNDON, VA 20171
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(Address of principal executive offices)
(703) 789-3344
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(Registrant's Telephone number)
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(Former Address and phone of principal executive offices)
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 past 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to the filing requirements for
the past 90 days. Yes [ X ] 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 for Regulation S-T (ss.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 [ ]
Indicate by check mark whether the registrant is a large accelerated file, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
(Do not check if 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 [ ] No [ X ]
Indicate the number of share outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
As of November 19, 2014, there were 26,200,000 shares of the registrant's common
stock issued and outstanding.
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION PAGE
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Item 1. Financial Statements (Unaudited) 2
Condensed Balance Sheets - September 30, 2014 and
December 31, 2013 (Audited) 3
Condensed Statements of Operations -
Three and nine months ended September 30, 2014 and 2013
and From Inception (October 28, 2011) to September 30, 2014 4
Statements of Changes in Shareholders' Equity (Deficit) -
From Inception (October 28, 2011) to September 30, 2014 5
Condensed Statements of Cash Flows -
Nine months ended September 30, 2014 and 2013 and
From Inception (October 28, 2011) to September 30, 2014 6
Notes to the Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 11
Item 3. Quantitative and Qualitative Disclosures About Market Risk 13
- NOT APPLICABLE
Item 4. Controls and Procedures 13
PART II - OTHER INFORMATION
Item 1. Legal Proceedings - NOT APPLICABLE 14
Item 1A. Risk Factors - NOT APPLICABLE 14
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 14
- NOT APPLICABLE
Item 3. Defaults Upon Senior Securities - NOT APPLICABLE 14
Item 4. Mine Safety Disclosure - NOT APPLICABLE 14
Item 5. Other Information - NOT APPLICABLE 14
Item 6. Exhibits 15
SIGNATURES 16
-1-
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
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-2-
FREE FLOW, INC.
(A Development Stage Company)
Condensed Balance Sheets
---------------------------------------------------------------------------------------------------
As of As of
Sept 30, December 31,
2014 2013
(Unadited) (Audited)
---------------- -----------------
Current Assets
Cash $ 1,779 $ 237
Accounts Receivable 3,840 -
Prepaid expenses 5,392 -
Inventories 85,760 -
---------------- -----------------
TOTAL CURRENT ASSETS 96,771 237
OTHER ASSETS
Trademark 250,000 -
---------------- -----------------
TOTAL OTHER ASSETS 250,000
PROPERTY AND EQUIPMENT, NET - 718
---------------- -----------------
TOTAL ASSETS $ 346,771 $ 955
================ =================
LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ - 2,940
Notes payable -related parties 25,200 10,000
Accrued interest 1,102 617
---------------- -----------------
TOTAL CURRENT LIABILITIES 26,302 13,557
LONG-TERM LIABILITIES
Accrued interest - 117
Notes payable -related parties 330,000 12,468
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TOTAL LONG-TERM LIABILITIES 330,000 12,585
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TOTAL LIABILITIES 356,302 26,142
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STOCKHOLDERS' EQUITY (DEFICIT)
Preferred Stock ($0.0001 par value, 20,000,000
shares authorized; 300 and 0
shares issued and outstanding
as of September 30, 2014 and December 31, 2013 - -
Common stock, ($0.0001 par value, 100,000,000 shares
authorized; 26,200,000 shares issued and outstanding
as of September 30, 2014 and December 31, 2013 2,620 2,620
Additional paid-in capital 56,546 18,380
Deficit accumulated during development stage (68,697) (46,187)
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TOTAL STOCKHOLDERS' EQUITY (DEFICIT) (9,531) (25,187)
---------------- -----------------
TOTAL LIABILITIES &
STOCKHOLDERS' EQUITY (DEFICIT) $ 346,771 $ 955
================ =================
The accompanying notes are an integral part of these financial statements.
-3-
FREE FLOW, INC.
(A Development Stage Company)
Condensed Statements of Operations
(Unaudited)
-------------------------------------------------------------------------------------------------------------------------
OCTOBER 28, 2011
THREE MONTHS THREE MONTHS NINE MONTHS NINE MONTHS (INCEPTION)
ENDED ENDED ENDED ENDED THROUGH
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
2014 2013 2014 2013 2014
-------------- ------------- ------------- ------------- --------------
REVENUES
Sales $ 4,560 $ - $ 4,560 $ - $ 4,560
-------------- ------------- ------------- ------------- --------------
TOTAL REVENUES 4,560 - 4,560 - 4,560
COST OF GOODS SOLD 3,240 - 3,240 - 3,240
-------------- ------------- ------------- ------------- --------------
GROSS PROFIT 1,320 - 1,320 - 1,320
General & Administrative Expenses
Administrative expenses 3,841 1,690 11,591 3,742 23,121
Professional fees 2,650 2,250 10,840 12,200 39,340
Depreciation Expense - 57 57 171 480
Amortization Expense - - - - 5,000
-------------- ------------- ------------- ------------- --------------
TOTAL GENERAL & ADMINISTRATIVE EXPENSES 6,491 3,997 22,488 16,113 67,941
-------------- ------------- ------------- ------------- --------------
LOSS FROM OPERATION (5,171) (3,997) (21,168) (16,113) (66,621)
-------------- ------------- ------------- ------------- --------------
OTHER EXPENSE
Interest expense-related party 1,102 133 1,342 343 2,076
-------------- ------------- ------------- ------------- --------------
TOTAL OTHER EXPENSES 1,102 133 1,342 343 2,076
NET INCOME (LOSS) $ (6,273) $ (4,130) $ (22,510) $ (16,456) $ (68,697)
============== ============= ============= ============= ==============
BASIC EARNINGS PER SHARE $ (0.00) $ (0.00) $ (0.00) $ (0.00)
============== ============= ============= =============
WEIGHTED AVERAGE NUMBER OF
COMMON AND PREFERRED SHARES
OUTSTANDING $ 26,200,000 $ 26,200,000 $ 26,200,000 $ 26,200,000
============== ============= ============= =============
The accompanying notes are an integral part of these financial statements.
-4-
FREE FLOW, INC.
(A Development Stage Company)
Statement of changes in Shareholders' Equity (Deficit)
From October 28, 2011 (Inception) through September 30, 2014 (Unaudited)
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DEFICIT
ADDITIONAL ACCUMULATED
COMMON STOCK PREFERRED STOCK PAID-IN DURING TOTAL
SHARES AMOUNT SHARES AMOUNT CAPITAL DEVELOPMENT
STAGE
-----------------------------------------------------------------------------------------------------------------------------------
BALANCE, OCTOBER 28, 2011 ( INCEPTION) - $ - - $ - $ - $ - $ -
Common stock issued, November 22, 2011
at $0.0008 per share 25,000,000 2,500 17,500 - 20,000
Common stock issued, December 6, 2011 at
$0.000833 per share 1,200,000 120 880 1,000
Loss for the period beginning October 28, 2011
(inception) to December 31, 2011 (2,893) (2,893)
-----------------------------------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 2011 26,200,000 $ 2,620 - $ - $ 18,380 $ (2,893) $ 18,107
===================================================================================================================================
Loss for the year ended December 31, 2012 (19,971) (19,971)
-----------------------------------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 2012 26,200,000 $ 2,620 - $ - $ 18,380 $(22,864) $ (1,864)
===================================================================================================================================
Loss for the year ended December 31, 2013 (23,323) (23,323)
-----------------------------------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 2013 26,200,000 $ 2,620 - $ - $ 18,380 $(46,187) $(25,187)
===================================================================================================================================
Liabilities assumed in private stock purchase
agreement on April 18, 2014 37,866 37,866
Preferred stock issued, August 1, 2014 at
$1.00 per share 300 300 300
Loss for the period ended September 30, 2014 (22,510) (22,510)
-----------------------------------------------------------------------------------------------------------------------------------
BALANCE, SEPTEMBER 30, 2014 (UNAUDITED) 26,200,000 $ 2,620 300 $ - $ 56,546 $(68,697) $ (9,531)
===================================================================================================================================
The accompanying notes are an integral part of these financial statements.
-5-
FREE FLOW, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
--------------------------------------------------------------------------------------------------------------------------------
OCTOBER 28, 2011
NINE MONTHS NINE MONTHS (INCEPTION)
ENDED ENDED THROUGH
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
2014 2013 2014
----------------- ---------------- -----------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (22,510) $ (16,456) $ (68,697)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Amortization expense 0 0 5,000
Depreciation expense 57 171 480
Changes in operating assets and liabilities:
(Increase) Decrease in inventory (85,760) (85,760)
Increase (Decrease) in accounts payable 12,145 3,890 15,085
(Increase) Decrease in prepaid expenses (3,840) - -
(Increase) Decrease in accounts receivable (5,392) - (9,232)
Increase in accrued interest 1,342 343 2,076
----------------- ---------------- -----------------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (103,958) (12,052) (141,048)
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of Equipment 0 0 (1,141)
Acquisition of Intangible Assets (250,000) 0 (255,000)
----------------- ---------------- -----------------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES (250,000) - (256,141)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceed from notes payable - related parties 356,200 6,968 378,668
Payment to notes payable- related parties (1,000) - (1,000)
Issuance of preferred stock 300 - 300
Issuance of common stock - - 21,000
----------------- ---------------- -----------------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 355,500 6,968 398,968
----------------- ---------------- -----------------
NET INCREASE (DECREASE) IN CASH 1,542 (5,084) 1,779
CASH AT BEGINNING OF PERIOD 237 7,407 -
----------------- ---------------- -----------------
CASH AT END OF PERIOD 1,779 2,323 1,779
================= ================ =================
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during period for:
Interest $ - $ - $ -
================= ================ =================
Income Taxes $ - $ - $ -
================= ================ =================
SIGNIFICANT NON-CASH INVESTING AND FINANCING ACTIVITIES
----------------- -----------------
Forgiveness from shareholders $ 37,866 $ 37,866
================= =================
The accompanying notes are an integral part of these financial statements.
-6-
FREE FLOW, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
September 30, 2014
NOTE 1 - CONDENSED FINANCIAL STATEMENTS
---------------------------------------
The accompanying condensed financial statements have been prepared by the
Company without audit. In the opinion of management, all adjustments (which
include only normal recurring adjustments) necessary to present fairly the
financial position, results of operations, and cash flows at September 30, 2014,
and for all periods presented herein, have been made.
Certain information and footnote disclosures normally included in the condensed
financial statements prepared in accordance with accounting principles generally
accepted in the United States of America have been condensed or omitted. It is
suggested that these condensed financial statements be read in conjunction with
the financial statements and notes thereto included in the Company's December
31, 2013 audited financial statements. The results of operations for the periods
ended September 30, 2014 and the same period last year are not necessarily
indicative of the operating results for the full years.
NOTE 2 - GOING CONCERN
----------------------
The Company's financial statements are prepared using generally accepted
accounting principles in the United States of America applicable to a going
concern which contemplates the realization of assets and liquidation of
liabilities in the normal course of business. The Company has not yet
established an ongoing source of revenues sufficient to cover its operating
costs and allow it to continue as a going concern. The ability of the Company to
continue as a going concern is dependent on the Company obtaining adequate
capital to fund operating losses until it becomes profitable. If the Company is
unable to obtain adequate capital, it could be forced to cease operations.
In order to continue as a going concern, the Company will need, among other
things, additional capital resources. Management's plan is to obtain such
resources for the Company by obtaining capital from management and significant
shareholders sufficient to meet its minimal operating expenses and seeking
equity and/or debt financing. However management cannot provide any assurances
that the Company will be successful in accomplishing any of its plans.
The ability of the Company to continue as a going concern is dependent upon its
ability to successfully accomplish the plans described in the preceding
paragraph and eventually secure other sources of financing and attain profitable
operations. The accompanying financial statements do not include any adjustments
that might be necessary if the Company is unable to continue as a going concern.
-7-
FREE FLOW, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
September 30, 2014
NOTE 3 - ACCOUNTS RECEIVABLE
----------------------------
As of September 31, 2014, the Company has Accounts Receivable balance $3,840,
which reflected as accounts receivable is for HYGIENiQ sold to Best Carpets &
Interior, Inc. Saddle Brook, NJ for sale at their Expo Center. The invoice as at
this date has been paid in full.
NOTE 4 - INVENTORIES
--------------------
September 30, 2014 December 31, 2013
-------------------- -------------------
Finished Goods $ 44,301 0
Working in Process 35,358 0
Packing Materials 6,101 0
-------------------- -------------------
$ 85,760 0
==================== ===================
The inventory comprises of HYGIENiQ, finished products stored at an independent
third party, fulfillment center while the raw material and unfinished inventory
is stored at Aerosol & Packaging, Inc., a contract manufacturing facility in
Maryland.
NOTE 5 - TRADE MARK
-------------------
On July 31, 2014, the Company purchase "HYGIENiQ", the trade mark amounting
$250,000 from GS Pharmaceutical, Inc., a related party. The ownership rights to
produce, market and sell globally of the HYGIENiQ products and the rights and
previliges in regard to ownership of the trade mark, i.e., HYGIENiQ (registered
or unregistered) were sold, assigned and transferred to the Company. The
consideration for all of the above included all advertisement and sales
promotion material including but not limited to website, videos for infomercials
etc.
This sale is subject to re-stocking at no charge provided it is returned within
six months from July 31 2014.
NOTE 6 - NOTES PAYABLE - RELATED PARTIES
----------------------------------------
S. Douglas Henderson, former president
Since inception the Company received cash totaling $25,100 from S. Douglas
Henderson in the form of a promissory. As of September 30, 2014 the amount due
to S. Douglas Henderson was $0.
-8-
FREE FLOW, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
September 30, 2014
On March 13, 2014, S. Douglas Henderson (the "Seller"), entered into a Common
Stock Purchase Agreement (the "Stock Purchase Agreement") pursuant to which the
Seller agreed to sell to Redfield Holdings. On April 18, 2014 the sale of the
shares was completed at which time the full loan in the amount of $25,100 to S.
Douglas Henderson was waived per the purchase agreement. Also the Seller paid
all outstanding payable and the Company recorded $37,866 as additional paid-in
capital.
GS Pharmaceutical, Inc.
On July 31, 2014, the Company purchase "HYGIENiQ", the trade mark, along with
all intellectual properties, inventories amounting $339,000 from GS
Pharmaceutical, Inc., a related party. The relationship being that the CEO of
Free Flow, Inc., namely Mr. Sabir Saleem is also the CEO of the Seller, namely
GS Pharmaceuticals, Inc. However, Mr. Saleem does not own any shares of stock in
GS Pharmaceuticals, Inc. The payment of this purchase is three years promissory
note bearing 2% interest per annum for $330,000 and a sum of $9,000 trade
receivable, simple interest 0.75% per month, to be charged upon final payment,
payable on or before March 31, 2015.
Sabir Saleem, president
On September 30, 21014, the Company received cash loans totaling $1,000 and the
Company paid $1,000 of the loan balance. These loans are at 0% interest with
principle balance due prior to December 30, 2014.
Redfield Holdings, Ltd, main shareholder
On September 30, 2014, the Company received cash loans totaling $16,200 from
Redfield Holdings, Ltd and the Company paid $0 of the loan balance. These loans
are at 0% interest with principle balance. Amounting $8,000 is due prior to
December 30, 2014 and $8,200 is due prior to March 30, 2015.
The Company issued 300 Preferred Shares--series A to Redfield Holdings, Ltd.
against a subscription for $300 which was accepted by the Company and shares
there against issued to Redfield Holdings, Ltd.
NOTE 7 - STOCK PURCHASE AGREEMENT
---------------------------------
On March 13, 2014, S. Douglas Henderson (the "Seller"), entered into a Common
Stock Purchase Agreement (the "Stock Purchase Agreement") pursuant to which the
Seller agreed to sell to Redfield Holdings, Ltd., a Virginia corporation (the
"Purchaser"), with a principal place of business at 2301 Woodland Crossing Dr.,
Suite 155, Herndon, VA 20171, the Twenty Five Million (25,000,000) shares of
common stock of the Registrant(the "Shares") owned by Mr. Henderson,
constituting approximately 95.4% of the Registrant's outstanding common stock,
for $255,000. Mr. Henderson paid off all liabilities of the company at that
time.
-9-
FREE FLOW, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
September 30, 2014
The sale of the Shares was completed on April 18, 2014. As a result of the sale
there was a change of control of the Registrant. The new Director of the Company
is Ferdinando (Fred) Ferrara and the new CEO is Sabir Saleem. There was no
family relationship or other relationship between the Seller and the Purchaser.
Pursuant to the terms of the Common Stock Purchase Agreement dated March 13,
2014, S. Douglas Henderson, the Registrant's sole officer and director resigned
his positions on April 18, 2014. Mr. Henderson's resignation was not the result
of any dispute or disagreement with the Registrant.
PURCHASE OF SHARES OF SKY ENERGY (PVT) LTD., INDIA.
On August 7, 2014 the company entered into a stock purchase contract with
Riyazuddin Kazi and Ahteshamuddin Kagzi to purchase 225,000 shares for a sum of
$4,005,000 of Sky Energy (Pvt) Ltd. being 90% of the issued and outstanding
shares. As consideration thereof, Bills of Exchange are lodged with the Escrow
Agent. The effectuation of the contract (the effective date of the closing of
the transaction) is subject to the Sellers delivering the audited financial
statements to the Company. As of this date the agreed upon Audited Statement has
not been received by the Company.
NOTE 8 - CAPITAL STOCK
----------------------
The Company's capitalization is 100,000,000 common shares with a par value of
$0.0001 per share and 20,000,000 preferred stock, with a par value of $ 0.0001
per share.
Of the 20,000,000 authorized Preferred Stock, the company has designated 10,000
shares as "Preferred Shares - Series A". Each share of "Preferred Share - Series
A" carries voting rights equal to ten thousand (10,000) votes. In other words
the 10,000 "Preferred Shares - Series A" collectively have a voting right equal
to one hundred million (100,000,000) common shares of the Corporation.
On November 22, 2011, the Company issued a total of 25,000,000 shares of common
stock to one director for cash in the amount of $0.0008 per share for a total of
$20,000.
On December 6, 2011, the Company issued a total of 1,200,000 shares of common
stock to Garden Bay International for cash in the amount of $0.000833 per share
for a total of $1,000.
On August 1, 2014 The Company issued 300 Preferred Shares--series A to Redfield
Holdings Ltd. for $1 each for a total of $300.
As of September 30, 2014 the Company had 26,200,000 shares of common stock
issued and outstanding and 300 shares of preferred Shares issued and
outstanding.
-10-
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
--------------------------------------------------------------------------------
THE FOLLOWING DISCUSSION SHOULD BE READ IN CONJUNCTION WITH OUR UNAUDITED
FINANCIAL STATEMENTS AND NOTES THERETO INCLUDED HEREIN. IN CONNECTION WITH, AND
BECAUSE WE DESIRE TO TAKE ADVANTAGE OF, THE "SAFE HARBOR" PROVISIONS OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995, WE CAUTION READERS REGARDING
CERTAIN FORWARD LOOKING STATEMENTS IN THE FOLLOWING DISCUSSION AND ELSEWHERE IN
THIS REPORT AND IN ANY OTHER STATEMENT MADE BY, OR ON OUR BEHALF, WHETHER OR NOT
IN FUTURE FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION. FORWARD-LOOKING
STATEMENTS ARE STATEMENTS NOT BASED ON HISTORICAL INFORMATION AND WHICH RELATE
TO FUTURE OPERATIONS, STRATEGIES, FINANCIAL RESULTS OR OTHER DEVELOPMENTS.
FORWARD LOOKING STATEMENTS ARE NECESSARILY BASED UPON ESTIMATES AND ASSUMPTIONS
THAT ARE INHERENTLY SUBJECT TO SIGNIFICANT BUSINESS, ECONOMIC AND COMPETITIVE
UNCERTAINTIES AND CONTINGENCIES, MANY OF WHICH ARE BEYOND OUR CONTROL AND MANY
OF WHICH, WITH RESPECT TO FUTURE BUSINESS DECISIONS, ARE SUBJECT TO CHANGE.
THESE UNCERTAINTIES AND CONTINGENCIES CAN AFFECT ACTUAL RESULTS AND COULD CAUSE
ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED IN ANY FORWARD LOOKING
STATEMENTS MADE BY, OR ON OUR BEHALF. WE DISCLAIM ANY OBLIGATION TO UPDATE
FORWARD-LOOKING STATEMENTS.
THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM'S REPORT ON THE COMPANY'S
FINANCIAL STATEMENTS AS OF DECEMBER 31, 2013, AND FOR EACH OF THE YEARS IN THE
TWO-YEAR PERIOD THEN ENDED, INCLUDES A "GOING CONCERN" EXPLANATORY PARAGRAPH,
THAT DESCRIBES SUBSTANTIAL DOUBT ABOUT THE COMPANY'S ABILITY TO CONTINUE AS A
GOING CONCERN.
PLAN OF OPERATIONS
We are a development stage company and have only recently generated limited
revenues. Because of the change in control, as disclosed in the Form 8-K filed
with the SEC on May 5, 2014, the Registrant is going in a new business
direction, as discussed below in Plan of Operations. The income statements for
the period ended September 30, 2014 are indicative of the Registrant's proposed
new business.
RESULTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2014 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 2013
During the three months ended September 30, 2014, the Company recognized
revenues of $4,560 from sales. During the three months ended September 30, 2013,
the Company did not recognize any revenues from it operational activities.
During the three months ended September 30, 2014, the Company incurred
operational expenses of $6,491. During the three months ended September 30,
2013, the Company incurred operational expenses of $3,997. The increase of
$2,494 was primarily a result of a $2,151 increase in general and administrative
expenses and a $57 decrease in depreciation expenses combined with a $400
increase in professional fees.
During the three months ended September 30, 2014, the Company recognized a net
loss of $6,273 compared to a net loss of $4,130 during the three months ended
September 30, 2013.
-11-
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2014 COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 2013
During the nine months ended September 30, 2014, the Company recognized revenues
of $4,560 from sales. During the nine months ended September 30, 2013, the
Company did not recognize any revenues from it operational activities.
During the nine months ended September 30, 2014, the Company incurred
operational expenses of $22,488. During the nine months ended September 30,
2013, the Company incurred operational expenses of $16,113. The increase of
$6,375 was primarily a result of a $7,849 increase in general and administrative
expenses combined with a $1,360 decrease in professional fees and $114 decrease
in depreciation expenses.
During the nine months ended September 30, 2014, the Company recognized a net
loss of $22,510 compared to a net loss of $16,456 during the nine months ended
September 30, 2013.
LIQUIDITY
THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM'S REPORT ON THE COMPANY'S
FINANCIAL STATEMENTS AS OF DECEMBER 31, 2013, AND FOR EACH OF THE YEARS IN THE
TWO-YEAR PERIOD THEN ENDED, INCLUDES A "GOING CONCERN" EXPLANATORY PARAGRAPH,
THAT DESCRIBES SUBSTANTIAL DOUBT ABOUT THE COMPANY'S ABILITY TO CONTINUE AS A
GOING CONCERN.
At September 30, 2014, the Company had total current assets of $96,771,
consisting of $1,779 in cash, $3,840 in accounts receivable, $5,392 in prepaid
expenses and $85,760 in inventories. At September 30, 2014, total current
liabilities were $26,302, consisting of $0 in accounts payable, notes payable to
related party of $25,200 and accrued interest of $1,102. At September 30, 2014,
the Company had working capital of $70,469.
During the nine months ended September 30, 2014, the Company used $103,958 in
funds in its operational activities. During the nine months ended September 30,
2014, the Company recognized a net loss of $22,510. During the nine months ended
September 30, 2013, the Company used $12,052 in its operations, a net loss of
$16,456.
SHORT TERM
On a short-term basis, the Company has not generated any revenue or revenues
sufficient to cover operations. For short term needs the Company will be
dependent on receipt, if any, of offering proceeds.
CAPITAL RESOURCES
The Company's capitalization is 100,000,000 common shares with a par value of
$0.0001 per share and 20,000,000 preferred stock, with a par value of $ 0.0001
per share.
The Company has no material commitments for capital expenditures within the next
year, however if operations are commenced, substantial capital will be needed to
pay for participation, investigation, acquisition and working capital.
-12-
NEED FOR ADDITIONAL FINANCING
The Company does not have capital sufficient to meet its cash needs. The Company
will have to seek loans or equity placements to cover such cash needs.
No commitments to provide additional funds have been made by the Company's
management or other stockholders. Accordingly, there can be no assurance that
any additional funds will be available to the Company to allow it to cover the
Company's expenses as they may be incurred.
SIGNIFICANT ACCOUNTING POLICIES
REVENUE RECOGNITION
The Company recognizes revenue on arrangements in accordance with Securities and
Exchange Commission Staff Accounting Bulletin Topic 13, REVENUE RECOGNITION and
FASB ASC 605-15-25, REVENUE RECOGNITION. In all cases, revenue is recognized
only when the price is fixed or determinable, persuasive evidence of an
arrangement exists, the service is performed and collectability is reasonably
assured. The Company did not report any revenues from inception to September 30,
2014.
EARNINGS PER SHARE
The Company has adopted ASC 260-10-50, EARNINGS PER SHARE, which provides for
calculation of "basic" and "diluted" earnings per share. Basic earnings per
share includes no dilution and is computed by dividing net income or loss
available to common shareholders by the weighted average common shares
outstanding for the period. Diluted earnings per share reflect the potential
dilution of securities that could share in the earnings of an entity. Basic and
diluted losses per share were the same at the reporting dates as there were no
common stock equivalents outstanding at September 30, 2014 or September 30,
2013.
ITEM 3. QUANTATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
----------------------------------------------------------------
Not Applicable.
ITEM 4. CONTROLS AND PROCEDURES
-------------------------------
Disclosures Controls and Procedures
We have adopted and maintain disclosure controls and procedures (as such term is
defined in Rules 13a 15(e) and 15d-15(e) under the Securities Exchange Act of
1934, as amended (the "Exchange Act")) and that are designed to ensure that
information required to be disclosed in our reports under the Exchange Act, is
recorded, processed, summarized and reported within the time periods required
under the SEC's rules and forms and that the information is gathered and
communicated to our management, including our Chief Executive Officer (Principal
Executive Officer) and Chief Financial Officer (Principal Financial Officer), as
appropriate, to allow for timely decisions regarding required disclosure.
As required by SEC Rule 15d-15(b), our Chief Executive/Financial Officer carried
out an evaluation under the supervision and with the participation of our
management, of the effectiveness of the design and operation of our disclosure
controls and procedures pursuant to Exchange Act Rule 15d-14 as of the end of
the period covered by this report. Based on the foregoing evaluation, our Chief
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Executive Officer has concluded that our disclosure controls and procedures are
effective in timely alerting them to material information required to be
included in our periodic SEC filings and to ensure that information required to
be disclosed in our periodic SEC filings is accumulated and communicated to our
management, including our Chief Executive Officer, to allow timely decisions
regarding required disclosure.
There was no change in our internal control over financial reporting that
occurred during the fiscal quarter ended September 30, 2014, that has materially
affected, or is reasonably likely to materially affect, our internal control
over financial reporting.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
-------------------------
None.
ITEM 1A. RISK FACTORS
---------------------
Not Applicable to Smaller Reporting Companies.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
-------------------------------------------------------------------
During the period of July 1, 2014 through September 30, 2014, the Company did
not make any issuances of its equity securities.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
---------------------------------------
None.
ITEM 4. MINE SAFETY DISCLOSURE
------------------------------
Not Applicable.
ITEM 5. OTHER INFORMATION
-------------------------
None.
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ITEM 6. EXHIBITS
----------------
EXHIBITS. The following is a complete list of exhibits filed as part of this
Form 10-Q. Exhibit numbers correspond to the numbers in the Exhibit Table of
Item 601 of Regulation S-K.
Exhibit 31.1 Certification of Chief Executive and Chief Financial Officer
pursuant to Section 302 of the Sarbanes-Oxley Act
Exhibit 32.1 Certification of Principal Executive and Financial Officer
pursuant to Section 906 of the Sarbanes-Oxley Act
Exhibit 101.INS XBRL Instance Document
Exhibit 101.SCH XBRL Taxonomy Extension Schema Document (1)
Exhibit 101.CAL XBRL Taxonomy Extension Calculation Linkbase Document (1)
Exhibit 101.DEF XBRL Taxonomy Extension Definition Linkbase Document (1)
Exhibit 101.LAB XBRL Taxonomy Extension Label Linkbase Document (1)
Exhibit 101.PRE XBRL Taxonomy Extension Presentation Linkbase Document (1)
-----------------
(1) Pursuant to Rule 406T of Regulation S-T, this interactive data file is
deemed not filed or part of a registration statement or prospectus for
purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed
not filed for purposes of Section 18 of the Securities Exchange Act of
1934, and otherwise is not subject to liability under these sections.
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SIGNATURES
Pursuant to the requirements of Section 12 of the Securities and Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
FREE FLOW, INC.
-----------------------------------
(REGISTRANT)
Dated: November 19, 2014 BY: /s/ Sabir Saleem
--------------------------------------
Sabir Saleem
(Chief Executive Officer,
Principal Executive Officer,
Chief Financial Officer
and Principal Accounting Officer)
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