UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

x	QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2015

 

Commission file number 000-27831

 

EV CHARGING USA, INC.

(Exact name of registrant as specified in its charter)

 

Nevada

(State or other jurisdiction of incorporation or organization)

 

180 North LaSalle St.

37th Floor Chicago, IL 60601

(Address of principal executive offices, including zip code.)

 

(312) 216-5106

(Telephone number, including area code)

 

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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 such filing requirements for the last 90 days. YES  x   NO o

 

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  o   NO x

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer, "accelerated filer," "non-accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	x

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES  o   NO x 

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 5,060,155,892 shares as of November 16, 2015.

 

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PART I.

FINANCIAL INFORMATION

 

			Page No.
Item 1.	Financial Statements		3
	Balance Sheet at September 30, 2015 and June 30, 2015 (unaudited)		3
	Statements of Operations for the three months ended September 30, 2015 and  2014 (unaudited).		4
	Statements of Cash Flows for the three months ended September 30, 2015 and  2014 (unaudited).		5
	Notes to Financial Statements		6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations/Plan of Operation.		10
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.
Item 4.	Controls and Procedures.		11
	PART II
	OTHER INFORMATION
Item
Item 1.	Legal Proceedings		11
Item 1A.	Risk Factors		11
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		11
Item 3.	Defaults Upon Senior Securities		11
Item 4.	Mine Safety Disclosures		11
Item 5.	Other Information		11
Item 6.	Exhibits		12
	Signatures		13

 

 

 

 

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EV CHARGING USA, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
	September 30,		June 30,
	2015		2015
ASSETS
CURRENT ASSETS:
Cash	$                   1,318		$               3,467
TOTAL CURRENT ASSETS AND ASSETS	$                   1,318		$               3,467
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
CURRENT LIABILITIES:
Accrued expenses	15,179		15,488
Credit card payable	14,076		12,929
Loan payable - related party	21,000		15,000
Note payable - related party	375,000		375,000
Accrued interest - related party	504		358
TOTAL CURRENT LIABILITIES AND TOTAL LIABILITIES	425,759		418,775
STOCKHOLDERS' DEFICIENCY
Preferred stock A, $.001 par value; 5,000,000 shares authorized No shares issued and outstanding	-		-
Preferred stock B, $.001 par value; 5,000,000 shares authorized No shares issued and outstanding	-		-
Preferred stock D, $.001 par value; 5,000,000 shares authorized      None and 2,180,000 issued and outstanding at September 30, 2015 and June 30, 2015, respectively	-		-
Common stock, $.001 par value; 6,000,000,000 shares authorized 5,060,155,892 and none issued and outstanding at September 30, 2015 and June 30, 2015, respectively	5,060,156		5,060,156
Additional paid in capital	-		-
Accumulated Deficit	(5,484,597)		(5,475,464)
TOTAL STOCKHOLDERS' DEFICIENCY	(424,441)		(415,308)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY	$                   1,318		$               3,467
	-		-
The accompanying notes are an integral part of these financial statements

 

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EV CHARGING USA, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
		Three months ended September 30
		2015		2014
Revenue				$                            -
COSTS AND EXPENSES:
General and administrative expenses		8,987		4,547
Interest expense - related party		146		44
Total Cost and expenses		9,133		4,591
Loss before provision for income taxes		(9,133)		(4,591)
Provision for income taxes		-		-
NET LOSS		$              (9,133)		$                     (4,591)
Basic and diluted loss per common share:		$                 (0.00)		$                            -
Weighted average number of shares outstanding:		5,060,155,892		-
The accompanying notes are an integral part of these financial statements

 

 

 

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EV CHARGING USA, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
		Three months ended September 30,
		2015		2014
OPERATING ACTIVITIES:
Net loss		$                    (9,133)		$                 (4,591)
Adjustments to reconcile net loss to net
cash used in operating activities:
Interest accrued to related party		146		44
Changes in operating assets and liabilities
Accrued expenses		(309)		1,231
Credit card payable		1,147		-
NET CASH USED IN OPERATING ACTIVITIES		(8,149)		(3,316)
FINANCING ACTIVITIES:
Proceeds from issuance of common stock				4,500
Proceeds of loan from related party		6,000		-
NET CASH PROVIDED BY FINANCING ACTIVITIES		6,000		4,500
INCREASE IN CASH		(2,149)		1,184
CASH - BEGINNING OF PERIOD		3,467		320
CASH - END OF PERIOD		$                     1,318		$                  1,504
The accompanying notes are an integral part of these financial statements

 

 

 

 

 

 

 

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EV CHARGING USA, INC.

Notes to Consolidated Financial Statements

September 30, 2015

(Unaudited)

 

 

Note 1 - Business description

 

Business

 

EV Charging USA, Inc. (“the Company”) is in the development stage. The Company’s purpose is to become a leading installer of Electric Vehicle Charging Stations in the state of Illinois.

 

On October 27, 2014, the Company completed an Agreement and Plan of Merger that it had entered into with EV USA Charging, Inc. ("EVUS") under its former corporate name "Milwaukee Iron Arena Football, Inc." In connection with the merger, the sole shareholder of the Company received 2,180,000 shares of Series D Convertible Preferred Stock of EVUS in exchange for his shares of the Company. The merger will be accounted for as a recapitalization of EVUS, whereby the Company will be the accounting acquirer and surviving reporting company. In connection with the merger, EVUS completed a private placement of 350,000 shares of its Series D Convertible Preferred Stock for proceeds of $25,000. Also in connection with the merger, the former president and sole director of EVUS exchanged 5,000,000 shares of Series A Convertible Preferred Stock and 5,000,000 shares of Series B Convertible Preferred Stock of EVUS owned by him and $40,928 of indebtedness owed to him for a convertible promissory note in the amount of $400,000 and the proceeds of the private placement referred to above.

 

 

Note 2 – Basis of Presentation

 

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial statements and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the United States Securities and Exchange Commission (“SEC”). Accordingly, they do not contain all information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements. In the opinion of the Company’s management, the accompanying unaudited consolidated financial statements contain all the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of September 30, 2015 and the results of operations and cash flows for the periods presented. The results of operations for the three months ended September 30, 2015 are not necessarily indicative of the operating results for the full fiscal year or any future period. These unaudited consolidated financial statements should be read in conjunction with the financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2015 filed with the SEC on November 6, 2015.

 

The Company has elected to adopt early application of Accounting Standards Update No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements; and no longer presents or discloses inception-to-date information and other remaining disclosure requirements of Topic 915.

 

Note 3 – Significant accounting policies

 

Use of Estimates

 

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The preparation of the financial statements in conformity with Generally Accepted Accounting Principles (“GAAP”) 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 dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates.

 

 

Start-Up Costs

 

In accordance with ASC 720, “Start-up Costs”, the Company expenses all costs incurred in connection with the start-up and organization of the Company.

 

Fair Value Measurements

 

The Company follows ASC 820, “Fair Value Measurements and Disclosures”, which defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3).

 

The three levels of the fair value hierarchy are described below:

 

Level 1

 

Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

 

Level 2

 

Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

 

Level 3

 

Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

 

The fair value of cash, accrued expenses and loans payable approximates their carrying amounts because of their immediate or short term maturity.

 

 

Income Taxes

 

The Company uses the asset and liability method of accounting for income taxes in accordance with ASC Topic 740, “Income Taxes.” Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current year and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements or tax returns. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance

  

 

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 is provided to reduce the deferred tax assets reported if based on the weight of the available positive and negative evidence, it is more likely than not some portion or all of the deferred tax assets will not be realized.

 

ASC Topic 740.10.30 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740.10.40 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. We have no material uncertain tax positions for any of the reporting periods presented.

 

Recent Accounting Pronouncements

 

Management has considered all recent accounting pronouncements issued since the last audit of our financial statements. The Company’s management believes that these recent pronouncements will not have a material effect on the Company’s financial statements.

 

Note 4 – Going Concern

 

The accompanying financial statements have been prepared on a going concern basis, which contemplates the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has only generated minimal revenues since inception, has incurred losses since inception, and its current cash balances will not meet its working capital needs. The continuation of the Company as a going concern is dependent upon, among other things, the continued financial support from its shareholders or the attainment of profitable operations. These factors, among others, raise substantial doubt regarding the Company’s ability to continue as a going concern. There is no assurance that the Company will be able to generate revenues in the future. These financial statements do not give any effect to any adjustments that would be necessary should the Company be unable to continue as a going concern.

 

Note 5 – Note Payable - Related Party

 

In connection with the merger referred to in note 1, the company issued a promissory note in the amount of $400,000, which bears interest at 0.38% per annum and matures March 31, 2016. $25,000 of the note was repaid with the proceeds of the private placement referred to in note 7. The note is convertible, upon an event of default as defined in the agreement, at 50% of the current market price of the Company’s stock

 

Note 6 – Loan Payable - Related Party

The Company has a loan agreement with its shareholder whereby the shareholder will loan the company funds, as required, to operate its business. The term of the loan is indefinite and can be repaid at any time in part or in full. The loan will bear interest at 3.25% per annum. For the period from inception (August 27, 2013) to September 30, 2015 the shareholder has loaned an aggregate of $21,000 to the Company. Interest expense accrued on the loan was $146 and $44 for the three months ended September 30, 2015 and 2014, respectively.

 

Note 7 – Stockholders’ Equity

 

In connection with merger referred to in note 1 2,180,000 shares of Series D preferred were issued to the shareholder of the company in the reverse merger.

 

Also in connection with the merger, the Company completed a private placement of 350,000 shares of Series D Convertible Preferred Stock for proceeds of $25,000.

 

On February 23, 2015, the Company’s authorized Common Stock was increased to 6,000,000,000 shares and all of the 2,530,000 shares of Series D were converted into 5,060,000,000 shares of Common Stock.

 

 

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Note 8 – Income Taxes

As of September 30, 2015 the Company has approximately $52,000 of federal and state net operating loss carryovers (“NOLs”) which begin to expire in 2033. Utilization of the NOLs may be subject to limitation under the Internal Revenue Code Section 382 should there be a greater than 50% ownership change as determined under regulations.

 

In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based on the assessment, management has established a full valuation allowance against all of the deferred tax asset relating to NOLs for every period because it is more likely than not that all of the deferred tax asset will not be realized.

 

Note 9 – Subsequent Events

 

Management has evaluated events occurring after the date of these financial statements through the date that these financial statements were available to be issued.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

Forward Looking Statements

 

This section includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like: believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements, which apply only as of the date of this report. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or our predictions.

 

Results of Operations - for the three months ended September 30, 2015

 

We are still in our development stage and did not generate any revenue for the three months ended September 30, 2015, compared to the same for the three months ended September 30, 2014.

  

During the three months ended September 30, 2015 we generated $9,133 in total expenses, compared to $4,591 in total expenses for the three months ended September 30, 2014.

  

Liquidity and Capital Resources

 

We had $1,318 in cash at September 30, 2015, and there were outstanding liabilities of $425,759. The Company hopes to meet its operating expenses through revenue generated by current client engagements.

 

There is very little historical financial information about us upon which to base an evaluation of our performance. We are a development stage corporation and we cannot guarantee we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources and possible cost overruns due to price and cost increases in products.

 

Off-Balance Sheet Arrangements

 

We do not have any 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 that is material to investors.

 

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ITEM 4. CONTROLS AND PROCEDURES.

 

Evaluation of Internal Controls

 

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f). Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the criteria in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission as of the end of the period covered by this report. Based on that evaluation, our Principal Executive Officer and Principal Financial Officer concluded that there was a material weakness in our disclosure controls and procedures and were not effective as of the end of the period covered by this report because the information required to be disclosed by us in reports filed under the Exchange Act was not being (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our Principal Executive Officer and Principal Financial Officer, as appropriate to allow timely decisions regarding disclosure. We are a growing company and we currently lack documented procedures included documentation related to testing of processes, data validation procedures from the systems into the general ledger, testing of systems, validation of results, disclosure review, and other analytics. Furthermore, we lacked sufficient personnel to properly segregate duties. A controls system cannot provide absolute assurance, however, that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. Because of the material weaknesses noted above, we have concluded that we did not maintain effective internal control over financial reporting as of September 30, 2015, based on Internal Control over Financial Reporting – Guidance for Smaller Public Companies issued by COSO.

 

Remediation Plan

 

Management has been actively engaged in developing a remediation plan to address the above mentioned material weakness. Implementation of the remediation plan is in process and consists of establishing a formal review process As of September 30, 2015, management has not yet completed these remediation efforts. Management believes the foregoing efforts will effectively remediate the material weakness. As we continue to evaluate and work to improve our internal control over financial reporting, management may execute additional measures to address potential control deficiencies or modify the remediation plan described above. Management will continue to review and make necessary changes to the overall design of our internal control.

 

Changes in Internal Controls over Financial Reporting

 

As of the end of the period covered by this report, there have been no changes in the internal controls over financial reporting during the quarter ended September 30, 2015, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting subsequent to the date of management’s last evaluation.

 

 

 

 

PART II. OTHER INFORMATION

 

 

Item 1. Legal Proceedings.

To the best knowledge of the Company’s officers and directors, the Company is currently not a party to any material pending legal proceeding.

Item 1A. Risk Factors.

Not applicable as a smaller reporting company.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

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ITEM 6. EXHIBITS.

 

The following exhibits are included with this quarterly filing. Those marked with an asterisk and required to be filed hereunder, are incorporated by reference and can be found in their entirety in our original Registration Statement on Form S-1, filed under SEC File Number 333-201696, at the SEC website at www.sec.gov :

 

Exhibit No.		Description
3.1		Articles of Incorporation*
3.2		Bylaws*
31.1		Sec. 302 Certification of Principal Executive Officer & Chief Financial Officer
32.1		Sec. 906 Certification of Principal Executive Officer & Chief Financial Officer
101		Interactive data files pursuant to Rule 405 of Regulation S-T

 

 

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this amended report to be signed on its behalf by the undersigned thereunto duly authorized.

 

SIGNATURES

 

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, hereunto duly authorized, this 15th day of January, 2016

 

 

 

 

EV Charging USA, Inc.

 

/s/ Brian C. Howe

----------------------------

Chief Executive Officer, President, Chief Accounting Officer and Director

 

 

 

 

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