UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

S ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934

 

For the fiscal Quarter ended June 30, 2015

 

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	(I.R.S. Employer
incorporation or organization)	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  £  No  R

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  £  No  R

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  R  No  £

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  R  No  £

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. R

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 £ Accelerated filer £ Non-accelerated filer £ Smaller reporting companyR

 

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

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 September 30, 2014 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 at August 5, 2015.

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 at June 30, 2015 and March 31, 2015	F-2
Unaudited Condensed Statements of Operations for the three month period ended  June 30, 2015 and June 30, 2014 respectively	F-3
Unaudited Condensed Statements Cash Flows for the three- months ended June 30, 2015 and June 30, 2014 respectively	F-4
Notes to Unaudited Financial Statements	F-1 - 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 INFORMATION
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

 

TOA Distribution Systems Inc
(formerly known as Skyhigh Resources Inc)
Balance Sheets Unaudited

			At June 30,			At March 31,
			2015			2015
ASSETS
Cash		$	33		$	78
Prepaid Expenses			—			3,500
Total Current Assets			33			3,578
LIABILITIES
Current Liabilities
Accounts Payable			46			—
Accrued Expenses			—			500
Loans Payable Related Parties- Principal (Note 4)			69,972			69,472
Loans Payable Related Parties- Accrued Interest (Note 4)			12,016			11,100
Total Current Liabilities		$	82,034		$	81,072
STOCKHOLDERS’ EQUITY
Capital Stock
Preferred Shares - 10,000,000 Shares Authorized, at $0.001per share - Zero Issued and Outstanding
Common Stock - 250,000,000 authorized at $0.001 par value 47,100,060 issued and outstanding at June 30, 2015 and March 31, 2015, respectively			47,100			47,100
Additional paid-in capital			74,650			74,650
Accumulated Deficit			(203,751	)		(199,244	)
Total Stockholders’ Equity (Deficit)		$	(82,001	)	$	(77,494	)
Total Liabilities and Stockholders’ Equity		$	33		$	3,578

The accompanying notes are an integral part of these Financial Statements

F-2 

  

 

TOA Distribution Systems Inc
(formerly known as Skyhigh Resources Inc)
Statements of Operations
Unaudited

 

		At June 30, 2015				At June 30, 2014
Revenue		$	0			$	0
Expenses
General and Administrative			3,591				2,250
Total Expenses			3,591				2,250
Net Loss from Operations			(3,591	)			(2,250	)
Other Income and (Expense)
Foreign Exchange			—				—
Interest			(916	)			(678	)
Provision for Income Tax			—				—
Net Loss For The Period			(4,507	)			(2,928	)
Basic And Diluted Loss Per Common Share		$	(0.00	)		$	(0.00	)
Weighted Average Number of Common Shares Outstanding			47,100,060				47,100,060

 

The accompanying notes are an integral part of these Financial Statements

 

F-3

 

TOA Distribution Systems Inc
(formerly known as Skyhigh Resources Inc)
Statements of Operations Unaudited

 

			At June 30,			At June 30,
			2015			2014
Operating Activities
Net Income (Loss)			(4,507	)		(2,928	)
Adjustments To Reconcile Net Loss To Net Cash
Provided by Operations			—			—
Stock Issued for Company Expenses paid by Related Parties			—			—
Company Expenses paid by Related Parties			—			3,199
Impairment of mining Property			—			—
Impairment -Distribution License			—			—
Change in Assets and Liabilities
Increase (decrease) accounts payable			46			1,800
Increase (decrease) in accrued expenses			(500	)		(2,750	)
Increase (decrease) in Prepaid expenses			3,500			—
Increase (Decrease) in Accrued Interest-Related Party			916			679
Increase (Decrease) in Loans Payable-Related Party			500			—
Increase (Decrease) in Accrued Interest-Others			—			—
Net Cash Provided (Used) by Continuing Operating Activities			(45	)		—
Investing Activities
Net Cash Provided (Used) by Investing Activities			—			—
Financing Activities
Cash provided by (Used for) Notes Payable Related Party			—			—
Cash provided by (Used for) Notes Payable- Others			—			—
Stock Issued for Cash			—			—
Net Cash Provided (Used) by Financing Activities			—			—
Increase (Decrease) in Cash from Continuing Operations			(45	)		—
Cash and Cash Equivalents at Beginning of Period			78			—
Cash and Cash Equivalents at End of Period			33			—
Supplemental Information
Cash Paid For:
Income Taxes			—			—
Non-Cash Activities
Interest			916			679

 The accompanying notes are an integral part of these Financial Statements

 

F-4

 

 

TOA Distribution Systems Inc

(formerly known as Skyhigh Resources Inc)

Notes to Unaudited Interim Financial Statements

June 30, 2015

 

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, 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.

In the opinion of management, the accompanying balance sheets and related interim statements of income, cash flow, and stockholders' equity include all adjustments, consisting only of normal recurring items, necessary for their fair presentation in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP"). Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Actual results and outcomes may differ from management's estimates and assumptions.

Interim results are not necessarily indicative of results for a full year. The information included in this Form 10-Q should be read in conjunction with information included in the Form 1O-K for the year ended March 31, 2015.

 

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 $203,751 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.

 

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

 

 

NOTE 3. SUB-DISTRIBUTION AGREEMENT (Continued)

 

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 anticipated, the production facility is estimated to be complete with product available in the fourth quarter of 2015, as at the date of this 10-Q filing, funding arrangements have not reached commitment stage. Payment for the Agreement cost of $42,500, which was fully impaired on acquisition, was paid by the issuance of 17,000,000 post forward split 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 were received from a director of the Company and others closely associated persons or businesses. These funds were provided as cash loans to cover operating expenses, payment of Company expenses and as payment for services provided.

 

Loans payable to our President and a past officer/director totaled $5,866, made up of principal amounting to $3,760 and accrued interest of $2,106

 

Loans payable to a closely associated business totaled $76,122; made up of principal amounting to $66,212 and accrued interest amounting to $9,910.

 

In aggregate, Loans Payable Related Parties to June 30, 2015 totaled $81,988 made up of $69,972 for principal and $12,016 for accrued interest.

 

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 $0.001 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.

 

In May 2012 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.

 

As of June 30, 2015 and March 31, 2015 we had zero preferred stock issued 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, 2008

- 2,400,000 common shares issued for cash at $0.0025 on May 11, 2009

- 4,285,000 common shares issued for accounts payable at $0.0025 on June 1, 2009

- 3,315,000 common shares issued for loan payable at $0.0025 on June 13, 2009

- 2,500,060 common shares issued for a mining property at $0.0025 on June 15, 2009

- 17,000,000 common shares issued for a sub-distribution agreement at $0.0025 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, 2014, a reduction of the rate of interest payable to 5% and the issuance by the purchaser of shares in two private companies. These private company shares were valued at $0 therefore had no impact on the financial statements. The shares of these private companies were distributed equally to each of the shareholders of TOA Distribution Systems Inc.

 

NOTE 7. CHANGES TO GENERALLY ACCEAPTED ACCOUNTING PRINCIPLES (GAAP)

 

During this current period the Company adopted the revised Accounting Standard Update No. 2014-10 that removes the definition of a development stage entity from ASC Topic 915 under GAAP. This change become effective December 15, 2014 while permitting Companies to adopt these guidelines earlier. Our Company elected to adopt these guidelines effective with the filing of the financial statement filed for the three month period ended September 30, 2014.

 

NOTE 8. 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.

 

 

 

 

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 a trading symbol. 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.

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 Periods:

 

The three month period ended June 30, 2015 compared to the three month period ended June 30, 2014.

 

No sales or income was recorded for these periods

 

Operating Costs and Expenses for the three-month period ended June 30, 2015

 

Net losses incurred during the three-month period ending June 30, 2015 were $4,507 compared to $2,928 in the comparable period ended June 30, 2014, an increase of $1,579 for the June 30, 2015 period which was primarily due to a change in March 2015 of expense reporting method used. To explain the results of this change, in the June 30, 2014 period we had accrued the quoted costs of audit and filing fees amounting to $2,250. In the current period we did not record any expense costs or accruals, however, the March 31, 2015 audit fees amounting to $3,500 were expensed in the current period. This reporting method change created a difference of ($3,500 - $2,250) =$1,250, add to that an increase in bank charges of $91 and increased interest costs of $238, all totalling $1,579, the recorded increase .

 

The increase of $238 in interest expense is due to a larger loan principal amount upon which interest was calculated.

 

SELECTED FINANCIAL INFORMATION

 

			June 30, 2015
Current Assets		$	33
Total Assets		$	—
Current Liabilities		$	(82,034	)
Stockholders' Equity		$	(82,001	)

 

LIQUIDITY AND CAPITAL RESOURCES

 

Our cash balance was $33 on June 30, 2015. During this three-month period ended June 30, 2015 we received loans from related parties amounting to $500 and have a commitment for additional funds required to fund our limited levels of operations through March 31, 2016. We have not generated any revenue to date.

 

We have loans payable including interest amounting to $81,988 due December 2016, and $46 for accounts payable.

 

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.

 

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 30, 2014. There were no changes in our internal controls over financial reporting during the period ended December 30, 2014 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.

 

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

 

 

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		August 4, 2015
Andy Ruppanner		(Principal Executive Officer)