Washington, D.C. 20549
Form 8-K/A
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Act of 1934
August 8, 2016
(Date of Report)
TELCO CUBA, INC.
(Exact Name of Registrant as Specified in its Charter)
Nevada | 000-53157 | 98-0546544 |
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
2001 Hollywood Blvd, Suite 202, Hollywood, FL 33020
(Address of principal executive offices)
Registrant's telephone number, including area code: (305)747-7647
N/A |
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
EXPLANATORY NOTE:
This Form 8-K/A is filed to include the audited financial statements of Amgentech, Inc. for the years ended November 30, 2014 and 2013, and pro-forma consolidated financial statements for as of and for the six months ended May 31, 2015 and for year ended November 30, 2014, and condensed interim financial statements of Amgentech, Inc. as of and for the six months ended May 31, 2015 and 2014, as required by Rule 8-04(b) of Regulation S-X (17 CFR 210.8-04(b) and Rule 8-05 of Regulation S-X (17 CFR 210.8-05).
There are no other changes to the Form 8-K/A previously filed; however, Items 2.01, 5.01 and 5.02 are reiterated and included herein.
ITEM 2.01 COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS.
Closing Of Share Exchange Agreement
On June 12, 2015 the Registrant, CaerVision Holdings, Inc., a Nevada corporation (CaerVision), consummated a Share Exchange with Amgentech, Inc., a Florida corporation. Under the terms of the share exchange, the holders of Amgentech received 50,088 shares of CaerVision Series B Preferred Stock that had been previously issued to third parties in exchange for 100% of the issued and outstanding capital of Amgentech, Inc. Each share of Series B preferred stock is convertible into 5,000 shares of common stock (254,440,000 shares total) and has voting rights of 5,000 per share (254,440,000 votes). As a result of this transaction, Amgentech, Inc. became a wholly owned subsidiary of the resulting company with control transferring to the previous owners of Amgentech, Inc. Amgentech, Inc. elected to be treated as the successor issuer for SEC reporting and accounting purposes. The share exchange was accounted for as a reverse acquisition and recapitalization. The Amgentech, Inc. Shareholders obtained approximated 60% of voting control of CaerVision on the date the share exchange. On June 15th, 2015, the company appointed William J Sanchez to the position of CEO, CFO, President, Treasurer and Secretary. At the same time, Erwin Vahlsing Jr., Thomas J Craft Jr. and Frederick J Puccillo Jr., resigned their positions as officers and directors of the company.
ITEM 5.01 CHANGE IN CONTROL OF REGISTRANT
Under the terms of the Share Exchange detailed in Item 2.01, control of the Company was transferred to the previous shareholders of AMGENTECH and are held by William Sanchez, who now controls 50,088 shares of the Companys Series B Preferred Stock, representing the voting equivalent of 254,440,000 common shares (approximately 60% of the total shares eligible to vote on shareholder matters). These Series B preferred shares are convertible into 254,440,000 shares of common stock, which would represent approximately 81% of total common stock issued and outstanding if converted. Mr. Sanchez holds no additional shares of Registrant.
ITEM 5.02 CHANGE IN OFFICERS AND DIRECTORS
Under the terms of the Share Exchange detailed in Item 2.01, the shareholders of AMGENTECH were permitted to nominate representatives to serve on the Board of Directors to fill the seats vacated by prior directors. Accordingly, Erwin Vahlsing, Jr. resigned as an officer and director concurrent with the appointment of the following individuals to the Board of Directors and to serve in the capacities indicated until the next annual meeting of shareholders:
William Sanchez Chairman; President; Secretary; Director
Mr. Sanchez has over 23 years of experience in the Internet and telecommunications space. He has been involved as a systems engineer and architect during the inception of various nascent companies, such as SportsLine (www.sportsline.com), StarMedia (www.starmedia.com), SportsAdvisors (http://www.sportsadvisors.com), DLJDirect, which is now http://www.e-trade.com, AMGTEL (www.amgtel.com) and Tribune Interactive (www.tribuneinteractive.com). His career has spanned many companies, but his commitment has always been the same. 95% of the companies he helped start are still active. His core has always been process automation and infrastructure. For the last 15 years, he has been president of Amgentech, Inc. (www.amgentech.com) - a full service technology solutions company. At Amgentech, Mr. Sanchez was retained to create the technical process and procedures as well as the internet components of well over 20 companies that are still viable.
Registrant has not executed employment contracts with any of the above-named individuals.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
Registrants audited financial statements for the years ended November 30, 2014 and 2013, and unaudited pro-forma consolidated financial statements, are attached hereto as Exhibit 9.01.
Exhibit Number |
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2.01
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| Share Exchange Agreement between CaerVision and Amgentech |
| Previously filed
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9.01
9.02
9.03 |
| Audited Financial Statements of Amgentech, Inc. for the years ended November 30, 2014 and 2013
Pro-Forma Consolidated Financial Statements as of May 31, 2015 and for the six-month period then ended and year ended November 30, 2014
Interim Financial Statements of Amgentech, Inc. for the six months ended May 31, 2015 and 2014
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| Filed herewith
Filed herewith
Filed herewith |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
Dated August 8, 2016
TELCO CUBA, INC. | |
By: | /s/ William Sanchez |
| William Sanchez |
| Chief Executive Officer |
EXHIBIT 9.01
FINANCIAL STATEMENTS OF
AMGENTECH, INC.
For the Years Ended
November 30, 2014 and 2013
INDEX TO FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm | 4 |
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Balance sheets at November 30, 2014 and 2013 | 5 |
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Statements of operations for the years ended November 30, 2014 and 2013 | 6 |
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Statements of stockholders equity for the two years ended November 30, 2014 | 7 |
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Statements of cash flows for the years ended November 30, 2014 and 2013 | 8 |
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Notes to the financial statements | 9 |
3
To The Board of Directors and Shareholders
Amgentech, Inc.
We have audited the accompanying balance sheets of Amgentech, Inc. (the Company), as of November 30, 2014 and 2013, and the related statements of operations, stockholders equity and cash flows for each of the two years in the period ended November 30, 2014. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audits.
We have conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States of America). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Companys internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Amgentech, Inc. as of November 30, 2014 and 2013, and the results of its operations and its cash flows for each of the two years in the period ended November 30, 2014, in conformity with accounting principles generally accepted in the United States of America.
//s// RBSM LLP
New York, New York
August 8, 2016
4
AMGENTECH, INC. BALANCE SHEET AS OF NOVEMBER 30, 2014 and 2013 | ||||
ASSETS |
| 2014 | 2013 | |
CURRENT ASSETS | | | | |
| Cash and cash equivalents | | $ 11,727 | $ 10,382 |
| Accounts receivable |
| 6,923 | 13,617 |
| Total current assets | | 18,650 | 23,999 |
| | | | |
NON-CURRENT ASSETS | | | | |
| Property and equipment, net (NOTE 4) | | 1,809 | 2,331 |
| Other non-current assets |
| 1,632 | 1,632 |
| Total assets |
| 22,091 | 27,962 |
| | | | |
LIABILITIES AND STOCKERHOLDER'S EQUITY |
| | | |
CURRENT LIABILITIES | | | | |
| Loan from related party (NOTE 5) |
| $ 15,100 | $ 15,100 |
| Total current liabilities |
| 15,100 | 15,100 |
| | | | |
NON-CURRENT LIABILITIES | | | | |
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CONTINGENCIES (NOTE 8) | | | | |
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STOCKHOLDER'S EQUITY | | | | |
| Common shares no par value; 1,000 shares authorized; 1,000 shares issued and outstanding | | 1,000 | 1,000 |
| Retained earnings |
| 5,991 | 11,862 |
| Total Stockholder's Equity |
| 6,991 | 12,862 |
| | | | |
| TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY |
| $ 22,091 | $ 27,962 |
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The Accompanying Notes Are an Integral Part of These Financial Statements
5
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STATEMENT OF OPERATIONS | ||||||
FOR THE YEARS ENDED NOVEMBER 30, |
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| 2014 |
| 2013 | |
REVENUE AND COST OF SALES | ||||||
Service income | $ 265,555 | $ 297,067 | ||||
| Cost of sales |
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| 29,230 | 32,523 | |
Gross profit | 236,325 | 264,544 | ||||
GENERAL EXPENSES |
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| 130,370 | 103,203 | ||
Income from operations | 105,955 | 161,341 | ||||
OTHER EXPENSE: | ||||||
| Other expense |
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| - | - | |
NET INCOME BEFORE TAXES |
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| 105,955 | 161,341 | ||
| Income Tax Expense |
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| - |
| - |
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NET INCOME AFTER TAX |
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| $ 105,955 |
| $ 164,341 | |
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The Accompanying Notes Are an Integral Part of These Financial Statements |
6
AMGENTECH, INC. | ||||
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY | ||||
FOR THE TWO YEARS ENDED NOVEMBER 30, 2014 | ||||
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| Common Stock | | | |
| Number of | Amount | Retained | Total |
| Shares |
| Earnings |
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BALANCE- November 30, 2012 | 1,000 | $ 1,000 | $ 22,533 | $ 23,533 |
| | | | |
Distributions | | | (172,012) | (172,012) |
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Net income | | | 161,341 | 161,341 |
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BALANCE- November 30, 2013 | 1,000 | $ 1,000 | $ 11,862 | $ 12,862 |
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Distributions | | | (111,825) | (111,825) |
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Net income | | | 105,955 | 105,955 |
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BALANCE- November 30, 2014 | 1,000 | $ 1,000 | $ 5,991 | $ 6,991 |
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The Accompanying Notes Are an Integral Part of These Financial Statements |
7
AMGENTECH, INC. | |||||||
STATEMENTS OF CASH FLOWS | |||||||
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| | | | | | YEARS ENDED NOVEMBER 30, | |
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| 2014 | 2013 |
CASH FLOWS FROM OPERATING ACTIVITIES: | | | |||||
| Net income |
| $ 105,955 | $ 161,341 | |||
| Adjustments to reconcile net income to net cash | | | ||||
| | Bad Debt | | 13,679 | - | ||
| | Depreciation | 1,077 | 1,246 | |||
| | Changes in operating assets and liabilities: | | | |||
| | | Accounts receivable | (6,985) | 2,227 | ||
| | | Prepaid expenses and other current assets | - | (1,192) | ||
| | | Other current liabilities | - | (4,735) | ||
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| Total adjustments | 7,771 | (2,454) | |
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| Net cash provided by operating activities | 113,726 | 158,887 |
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CASH FLOWS FROM INVESTING ACTIVITIES: | | | |||||
| Purchase of equipment | (555) | (2,766) | ||||
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| Net cash used in financing activities | (555) | (2,766) |
CASH FLOWS FROM FINANCING ACTIVITIES: | | | |||||
| Distributions to owners | (111,826) | (172,012) | ||||
| Advances from related parties | - | 15,100 | ||||
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| Net cash used in financing activities | (111,826) | (156,912) |
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NET INCREASE (DECRREASE) IN CASH AND CASH EQUIVALENTS | 1,345 | (791) | |||||
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CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR | 10,382 | 11,173 | |||||
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CASH AND CASH EQUIVALENTS - END OF YEAR | $ 11,727 | $ 10,382 | |||||
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Supplemental Disclosure of Cash Flow Information: | | | |||||
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Cash paid during the year for interest | $ - | $ - | |||||
Cash paid during the year for income taxes | $ - | $ - | |||||
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Supplemental Disclosure of Non cash Investing and Financing Activities | $ - | $ - | |||||
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The Accompanying Notes Are an Integral Part of These Financial Statements |
AMGENTECH, INC.
Notes to Financial Statements
For the Years Ended November 30, 2014 and 2013
NOTE 1. ORGANIZATION AND BUSINESS
Amgentech, Inc. (the Company) a Florida based Corporation since February 10, 2004, engaged in the business of providing technology solutions, integrating and building technology infrastructure and software and website development. Amgentech, Inc. also offers managed collocated and leased servers. Originally founded in 2001, Amgentech, Inc. has been providing Internet based solutions, VoIP infrastructure and consulting services.
On June 12, 2015, the Company consummated a Share Exchange with Telco Cuba, Inc., The Company became a wholly-owned subsidiary of Telco Cuba, Inc. with control transferring to the owners of the Company. The Company elected to be treated as successor issuer for SEC reporting and accounting purposes. Under the terms of the Share Exchange, the shareholders of the Company received 50,088 shares of Telco Cuba, Inc. Series B Preferred Stock in exchange for 100% of the issued and outstanding capital of the Company.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Financial Statement Presentation
The Company prepares its financial statements on the accrual basis in accordance with accounting principles generally accepted in the United States of America
Cash and Cash Equivalents
The Company generally considers all highly liquid financial instruments purchased with an original maturity of three months or less and money market accounts to be cash equivalents.
Accounts Receivable
Accounts receivable are recorded at the invoice amount. Management determines the allowance for doubtful accounts by identifying troubled accounts and by using experience applied to an aging of accounts receivable. Trade receivables are written off when deemed uncollectible. Recoveries of trade receivables previously written off are recorded when received. Trade receivables are considered to be past due if any portion of the receivable balance is outstanding for more than 30 days.
Property and Equipment
Property and equipment are recorded at cost less accumulated depreciation. The Company periodically reviews property and equipment to determine that the carrying values are not impaired.
Depreciation is provided over the estimated useful lives of the related assets using the straight line method for financial statement purposes. The Companys property and equipments useful life range from five to seven years for all property and equipment on hand.
Inventory
Inventory, which consists of finished goods, is valued at the lower of cost or market, using the weighted-average method in determining cost. The method approximates the first-in, first-out or net realizable value. There are no inventory as of November 30, 2014 and 2013.
Impairment of Long-Lived Assets
The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of such asset may not be recoverable. The Company evaluates recoverability by comparing the undiscounted cash flows associated with the assets carrying amount.
Income Taxes
The Company is organized as S corporation, therefore, under the internal revenue code, all taxable income or loss flows through to it members. Therefore, no income tax expense or liability is recorded in the accompanying financial statements.
The Company records a liability for uncertain tax positons when it probably that a loss has been incurred and the amount can be reasonable estimated. As of November 30, 2014 and 2013, the Company had no liabilities for uncertain tax positions. The Company evaluates expiring statues of limitations, audits, proposed settlements and changes in tax law and new authoritative rulings.
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the statement of financial position dates and the reported amounts of revenues and expenses during the reporting periods. Accordingly, actual results could differ from those estimates.
Revenue Recognition
The Company recognizes revenue when services are rendered and the customer takes ownership and assumes risk of loss, collection of the relevant receivable is probable, persuasive evidence of an arrangement exists and the sales price is fixed or determinable. Provisions for discounts to customers, and returns and other adjustments are recorded in the same accounting period that sales are recorded.
Fair Value Measurements
The Company adopted ASC 820, Fair Value Measurements and Disclosures, for all financial assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis. The fair value of financial instruments are classified as current assets or liabilities, such as cash and cash equivalents, contracts receivable, short-term payables, and note payable, principally because of the short maturity of those items. The Company routinely assesses the financial strength of its customers and believes that the carrying amounts approximate fair value, due to their short term maturities and current interest rates.
Recent Accounting Pronouncements
There were various updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Companys financial position, results of operations or cash flows.
NOTE 3. CONCENTRATION OF CREDIT RISK
Financial instruments which potentially subject the Company to concentrations of credit risk, consist principally of cash and cash equivalents and contract receivables. Management believes the financial risks associated with these financial instruments are not material.
9
NOTE 4. PROPERTY AND EQUIPMENT
Property and equipment consisted of the following at November 30:
| | 2014 | | 2013 |
| Computer Equipment | $ 6,416 | | $ 5,862 |
| Accumulated Depreciation | (4,607) | | (3,531) |
| | $ 1,809 | | $ 2,331 |
Depreciation expense for the year ended November 30, 2014 and 2013 amounted to $1,077 and $1,246; respectively.
NOTE 5. RELATED PARTY TRANSACTIONS
As of November 30, 2014 and 2013, the Company had interest free advance from related party in the amount of $15,100 and $15,100, respectively.
Note 6. EQUITY ISSUED CAPITAL
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| 2014 |
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| 2014 |
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| Shares |
| Shares |
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Ordinary shares - fully paid |
| 1,000 |
| 1,000 |
| $ 1,000 |
| $ 1,000 |
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the company in proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the company have a $1,000 amount of authorized capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have one vote.
Dividend
During the years ended November 30, 2014 and 2013, the Company have not declared and paid any dividends to shareholder of the Company.
Distributions
During the years ended November 30, 2014 and 2013, the Company had distributions in the amount of $111,826 and $172,012, respectively.
NOTE 7. OPERATING LEASE
The Company leases office space in Hollywood, Florida.
Rent expense for the year ended November 30, 2014 and 2013 was $9,794 and $7,405, respectively. Future minimum lease payments are as follows:
Years Ended November 30, | | Amount |
2015 | | $ 14,177 |
2016 | | 24,258 |
2017 | | 2,028 |
Total | | $ 40,463 |
NOTE 8. CONTINGENCIES
Certain of the Companys construction contracts contain warranty provisions on material and workmanship. The Companys management feels that any warranty work that should arise would be nominal and not have a material effect on the consolidated financial statements.
The Company, from time to time, is a party to various claims or actions arising out of the ordinary course of business. While any proceeding or litigation contains an element of uncertainty, management believes no matters exist that would have a material impact on the financial position, liquidity or results of operations of the Company.
NOTE 9. SUBSEQUENT EVENTS
On June 12, 2015, the Company consummated a Share Exchange with Telco Cuba, Inc., The Company became a wholly-owned subsidiary of Telco Cuba, Inc. with control transferring to the owners of the company. The Company elected to be treated as successor issuer for SEC reporting and accounting purposes. Under the terms of the Share Exchange, the shareholders of the Company received 50,088 shares of Telco Cuba, Inc. Series B Preferred Stock in exchange for 100% of the issued and outstanding capital of the Company.
10
EXHIBIT 9.03
INTERIM
FINANCIAL STATEMENTS OF
AMGENTECH, INC.
(Unaudited)
Index to Unaudited Condensed Financial Statements
Condensed balance sheets at May 31, 2015 (unaudited) and November 30, 2014 |
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Unaudited condensed statements of operations for six months ended May 31, 2015 and 2014 |
| 3 |
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Unaudited condensed statements of stockholders (deficit) for the six months ended May 31, 2015 |
| 4 |
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Unaudited condensed statements of cash flows for the six months ended May 31, 2015 and 2014 |
| 5 |
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Notes to the unaudited condensed financial statements |
| 6 |
1
AMGENTECH, INC.
CONDENSED BALANCE SHEETS
(Unaudited)
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| ASSETS | | May 31, 2015 | | November 30, 2014 |
Current Assets | | (Unaudited) | | | |
| Cash | | $ 6,688 | | $ 11,727 |
| Accounts receivable (net of allowance of $0) | | 3,776 | | 6,923 |
| Total Current Assets: | | 10,464 | | 18,650 |
| | | | | |
| Non-Current Assets: | | | | |
| Property and equipment, net (NOTE 4) | | 2,780 | | 1,809 |
| Other non-current assets | | 816 | | 1,632 |
| Total Assets | | $ 14,058 | | $ 22,091 |
| LIABILITIES AND STOCKERHOLDER'S (DEFICIT) EQUITY | | | | |
Current Liabilities: | | | | | |
| Accounts payable and accrued expenses | | $ 18,000 | | $ - |
| Loan from related party (NOTE 5) | | 15,100 | | 15,100 |
| Total Current liabilities |
| 33,100 | | 15,100 |
| Non-current Liabilities | | | | |
| Contingencies (NOTE 8) | | | | |
| Stockholders (Deficit) Equity | | | | |
| Common shares: no par value; 1,000 shares authorized; 1,000 shares issued and outstanding | | 1,000 | | 1,000 |
| (Accumulated deficit) Retained earnings | | (20,042) | | 5,991 |
| Total Stockholders (Deficit) Equity | | (19,042) | | 6,991 |
| Total Liabilities and Stockholders (Deficit) Equity | | $ 14,058 | | $ 22,091 |
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The Accompanying Notes Are an Integral Part of These Unaudited Condensed Financial Statements |
2
AMGENTECH, INC. | |||
CONDENSED STATEMENTS OF OPERATIONS | |||
(Unaudited) | |||
For the six months ended | |||
May 31, 2015 | May 31, 2014 | ||
REVENUE AND COST OF SALES |
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Service income | $ 87,105 |
| $ 148,152 |
Cost of Sales | 6,170 | 14,959 | |
Gross profit | 80,935 | 133,193 | |
GENRAL EXPENSES: | 48,154 | 60,230 | |
Income from operations | 32,781 | 72,963 | |
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OTHER EXPENSE: |
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Other Expense | - | - | |
NET INCOME BEFORE TAXES | 32,781 | 72,963 | |
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Income tax expenses | - |
| - |
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NET INCOME AFTER TAXES | $ 32,781 |
| $ 72,963 |
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The Accompanying Notes Are an Integral Part of These Unaudited Condensed Financial Statements |
3
AMGENTECH, INC. | ||||
CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT | ||||
FOR THE SIX MONTHS ENDED MAY 31, 2015 | ||||
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| Common Stock | | | |
| Number of | Amount | Retained | Total |
| Shares |
| Earnings |
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BALANCE- November 30, 2014 | 1,000 | $ 1,000 | $ 5,991 | $ 6,991 |
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Distributions | | | (58,814) | (58,814) |
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Net income | | | 32,781 | 32,781 |
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BALANCE- MAY 31, 2015 | 1,000 | $ 1,000 | $ (20,042) | $ (19,042) |
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The Accompanying Notes Are an Integral Part of These Unaudited Condensed Financial Statements |
4
AMGENTECH, INC. | ||||||||
CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) | ||||||||
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| | | | | | Six Months Ended | ||
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| May 31, 2015 | May 31, 2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | | | ||||||
| Net income |
| $ 32,781 | $ 72.963 | ||||
| Adjustments to reconcile net income to net cash | | | |||||
| | Bad debt | | - | 346 | |||
| | Depreciation | 329 | 538 | ||||
| | Changes in operating assets and liabilities: | | | ||||
| | | Accounts receivable | 3,147 | (4,967) | |||
| | | Prepaid expenses and other current assets | 818 | - | |||
| | | Other current liabilities | 18,000 | - | |||
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| Total adjustments | 22,294 | (4,083) | ||
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| Net cash provided by operating activities | 55,075 | 68,880 | |
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CASH FLOWS FROM INVESTING ACTIVITIES: | | | ||||||
| Purchase of property and equipment | (1,300) | (2,341) | |||||
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| Net cash used in investing activities | (1,300) | (2,341) | |
CASH FLOWS FROM FINANCING ACTIVITIES: | | | ||||||
| Distributions to owners | (58,814) | (55,662) | |||||
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| Net cash used in financing activities | (58,814) | (55,662) | |
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NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | (5,039) | 10,877 | ||||||
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CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR | 11,727 | 10,382 | ||||||
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CASH AND CASH EQUIVALENTS - END OF YEAR | $ 6,688 | $ 21,259 | ||||||
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Supplemental Disclosure of Cash Flow Information: | | | ||||||
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| | | | | | | | |
Cash paid during the year for interest | $ - | $ - | ||||||
Cash paid during the year for income taxes | $ - | $ - | ||||||
| | | ||||||
Supplemental Disclosure of Non cash Investing and Financing Activities | $ - | $ - | ||||||
| | | ||||||
| | | ||||||
The Accompanying Notes Are an Integral Part of These Unaudited Condensed Financial Statements |
5
AMGENTECH, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1. ORGANIZATION AND BUSINESS
Amgentech, Inc. (the Company) a Florida based Corporation since February 10, 2004, engaged in the business of providing technology solutions, integrating and building technology infrastructure and software and website development. Amgentech, Inc. also offers managed collocated and leased servers. Originally founded in 2001, Amgentech, Inc. has been providing Internet based solutions, VoIP infrastructure and consulting services.
On June 12, 2015, the Company consummated a Share Exchange with Telco Cuba, Inc., The Company became a wholly-owned subsidiary of Telco Cuba, Inc. with control transferring to the owners of the company. The Company elected to be treated as successor issuer for SEC reporting and accounting purposes. Under the terms of the Share Exchange, the shareholders of the Company received 50,088 shares of Telco Cuba, Inc. Series B Preferred Stock in exchange for 100% of the issued and outstanding capital of the Company.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Financial Statement Presentation
The Company prepares its financial statements on the accrual basis in accordance with accounting principles generally accepted in the United States of America
Cash and Cash Equivalents
The Company generally considers all highly liquid financial instruments purchased with an original maturity of three months or less and money market accounts to be cash equivalents.
Accounts Receivable
Accounts receivable are recorded at the invoice amount. Management determines the allowance for doubtful accounts by identifying troubled accounts and by using experience applied to an aging of accounts receivable. Trade receivables are written off when deemed uncollectible. Recoveries of trade receivables previously written off are recorded when received. Trade receivables are considered to be past due if any portion of the receivable balance is outstanding for more than 30 days.
Property and Equipment
Property and equipment are recorded at cost less accumulated depreciation. The Company periodically reviews property and equipment to determine that the carrying values are not impaired.
Depreciation is provided over the estimated useful lives of the related assets using the straight line method for financial statement purposes. The Companys property and equipments useful life range from five to seven years for all property and equipment on hand.
Inventory
Inventory, which consists of finished goods, is valued at the lower of cost or market, using the weighted-average method in determining cost. The method approximates the first-in, first-out or net realizable value. There are no inventory as of May 31, 2015 and November 30, 2014.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Impairment of Long-Lived Assets
The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of such asset may not be recoverable. The Company evaluates recoverability by comparing the undiscounted cash flows associated with the assets carrying amount.
Income Taxes
The Company is organized as S corporation, therefore, under the internal revenue code, all taxable income or loss flows through to it members. Therefore, no income tax expense or liability is recorded in the accompanying financial statements.
The Company records a liability for uncertain tax positons when it probably that a loss has been incurred and the amount can be reasonable estimated. As of May 31, 2015 and November 31, 2014, the Company had no liabilities for uncertain tax positions. The Company evaluates expiring statues of limitations, audits, proposed settlements and changes in tax law and new authoritative rulings.
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the statement of financial position dates and the reported amounts of revenues and expenses during the reporting periods. Accordingly, actual results could differ from those estimates.
Revenue Recognition
The Company recognizes revenue when services are rendered and the customer takes ownership and assumes risk of loss, collection of the relevant receivable is probable, persuasive evidence of an arrangement exists and the sales price is fixed or determinable. Provisions for discounts to customers, and returns and other adjustments are recorded in the same accounting period that sales are recorded.
6
Fair Value Measurements
The Company adopted ASC 820, Fair Value Measurements and Disclosures, for all financial assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis. The fair value of financial instruments are classified as current assets or liabilities, such as cash and cash equivalents, contracts receivable, short-term payables, and note payable, principally because of the short maturity of those items. The Company routinely assesses the financial strength of its customers and believes that the carrying amounts approximate fair value, due to their short term maturities and current interest rates.
Recent Accounting Pronouncements
There were various updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Companys condensed financial position, results of operations or cash flows.
NOTE 3. CONCENTRATION OF CREDIT RISK
Financial instruments which potentially subject the Company to concentrations of credit risk, consist principally of cash and cash equivalents and contract receivables. Management believes the financial risks associated with these financial instruments are not material.
NOTE 4. PROPERTY AND EQUIPMENT
Property and equipment consisted of the following at:
| May 31, 2015 | | November 30, 2014 |
Computer Equipment | $ 7,717 | | $ 6,416 |
Accumulated Depreciation | (4,937) | | (4,607) |
| $ 2,780 | | $ 1,809 |
Depreciation expense for the six months ended May 31, 2015 and 2014 amounted to $329 and $538, respectively.
NOTE 5. RELATED PARTY TRANSACTIONS
As of May 31, 2015 and November 30, 2014, the Company had interest free advance from related party in the amount of $15,100; respectively.
NOTE 6. CONTINGENCIES
Certain of the Companys construction contracts contain warranty provisions on material and workmanship. The Companys management feels that any warranty work that should arise would be nominal and not have a material effect on the consolidated financial statements.
The Company, from time to time, is a party to various claims or actions arising out of the ordinary course of business. While any proceeding or litigation contains an element of uncertainty, management believes no matters exist that would have a material impact on the financial position, liquidity or results of operations of the Company.
NOTE 7. SUBSEQUENT EVENTS
On June 12, 2015, the Company consummated a Share Exchange with Telco Cuba, Inc., The Company became a wholly-owned subsidiary of Telco Cuba, Inc. with control transferring to the owners of the company. The Company elected to be treated as successor issuer for SEC reporting and accounting purposes. Under the terms of the Share Exchange, the shareholders of the Company received 50,088 shares of Telco Cuba, Inc. Series B Preferred Stock in exchange for 100% of the issued and outstanding capital of the Company.
7
EXHIBIT 9.02
CONSOLIDATED PRO-FORMA
FINANCIAL STATEMENTS OF
TELCO CUBA, INC.
(Unaudited)
PRO FORMA FINANCIAL INFORMATION
●
Condensed Consolidated Pro Forma Unaudited Balance Sheet as of May 31, 2015
●
Condensed Consolidated Pro Forma Unaudited Statement of Operations for the Year Ended November 30, 2014
●
Condensed Consolidated Pro Forma Unaudited Statement of Operations for the Six Months Ended May 31, 2015
●
Notes to Condensed Consolidated Pro Forma Unaudited Financial Statements
On June 12, 2015, Telco Cuba, Inc. consummated a share exchange with Amgentech, Inc., the result of which was Amgentech became the successor issuer for reporting and accounting purposes.
The unaudited condensed combined pro forma statements of operations are presented as if the Acquisition had been completed on December 1, 2013 combining Amgentechs audited condensed statement of operations for the year ended November 30, 2014 and the Telcos audited condensed statement of operations for the year ended November 30, 2014 and the Companys condensed unaudited statement of operations for the six months ended May 31, 2015, respectively. The unaudited condensed combined pro forma balance sheet gives effect to the acquisition as if the Acquisition had taken place on June 12, 2015 and combines Telcos unaudited condensed balance sheet as of May 31, 2015 with the Telcos unaudited condensed balance sheet as of May 31, 2015.
The unaudited pro forma combined statement of income is presented for illustrative purposes only and, therefore, is not necessarily indicative of the operating results that might have been achieved had the transaction occurred as of an earlier date, nor is it necessarily indicative of the operating results that may be achieved in the future. You should not rely on the pro forma condensed combined financial information as being indicative of the historical results that would have been achieved had the companies always been combined or the future results that the combined companies will experience after the Acquisition.
The unaudited pro forma combined statement of operations and comprehensive loss, including the notes thereto, should be read in conjunction with the Companys audited historical consolidated financial statements for the year ended November 30, 2014 included in our Annual Report on Form 10-K for the year ended November 30, 2014, as well as Amgentechs audited financial statements for the years ended November 30, 2014 and 2013 and unaudited condensed financial statements for the six month ended May 31, 2015 and 2014 included in Exhibit 99.1 to this Form 8-K/A.
8
Telco Cuba, Inc. | |||||||
Pro-forma Condensed Consolidated Balance Sheet | |||||||
(Unaudited) | |||||||
| |||||||
| | | May 31, 2015 Telco Cuba | May 31, 2015 Amgentech | Pro-forma Adjustments | | Total |
ASSETS: | | | | | | | |
Current Assets | | | | | | | |
| Cash | | $ 2 | $ 6,686 | | | $ 6,688 |
| Accounts receivable | | - | 3,776 | | | 3,776 |
| Security Deposit | | - | 816 | | | 816 |
| | | 2 | 11,278 | | | 11,280 |
| | | | | | | |
| Computer equipment, net | | - | 7,717 | | | 7,716 |
| Less accumulated depreciation | | - | (4,937) | | | (4,937) |
| | | - | 2,780 | | | 2,780 |
| Total Assets | | $ 2 | $ 14,058 | $ - | | $ 14,060 |
| | | | | | | |
| | | | | | | |
LIABILITIES AND STOCKERHOLDER'S (DEFICIT) EQUITY | | | | ||||
Current Liabilities | | | | | | | |
| Accounts payable | | $ 99,983 | $ - | | | $ 99,983 |
| Accrued payroll | | 1,297,949 | - | | | 1,297,949 |
| Convertible debentures | | 336,810 | - | | | 336,810 |
| Other payables | | 1,384 | - | | | 1,384 |
| Accrued Expenses | | 518,477 | 18,000 | | | 536,477 |
| Due to Officers | | 16,022 | 15,100 | | | 31,122 |
| Notes payable | | 2,233,332 | - | | | 2,233,332 |
| Derivative Liability | | 921,814 | - | | | 921,814 |
| | | 5,425,771 | 33,100 | | | 5,458,871 |
| Total Liabilities | | 5,425,771 | 33,100 | - | | 5,458,871 |
Equity | | | | | | | |
Stockholders deficit | | | | | | | |
| Preferred A Stock | | 3 | | | | 3 |
| Preferred B Stock | | 83 | | | | 83 |
| Common Stock | | 46,288 | 1,000 | (1,000) | (1) | 46,288 |
| Additional paid-in-capital | | 12,395,256 | | (12,395,256) | (2) | - |
| Accumulated Deficit | | (17,374,759) | (52,822) | 17,374,759 | (2) | (5,031,325) |
| | | | | 1,000 | (1) | |
| | | | | (4,979,503) | (2) | |
| Net (Loss) Income | | (492,640) | 32,780 | | | (459,860) |
| Total Stockholders deficit | | (5,425,769) | (19,042) | - | | (5,444,811) |
| Liabilities & Equity | | $ 2 | $ 14,058 | $ - | | $ 14,060 |
| | | | | | | |
| (1) To record the reverse acquisition in the connection of the share exchange acquisition of Telco Cuba Inc. and to eliminate the common shares of Amgentech, Inc. as of May 31, 2015. | ||||||
| (2) To eliminate the equity section of Telco Cuba, Inc. as of May 31, 2015 and adjusted the insufficient additional paid in capital against accumulated deficit as of May 31, 2015. |
9
Telco Cuba, Inc. | ||||||
Pro-forma Condensed Statement of Operations | ||||||
Six months ended May 31, 2015 | ||||||
(Unaudited) | ||||||
| ||||||
| | | Six Months Ended May 31, 2015 | Six Months Ended May 31, 2015 | Pro-forma Adjustments | Total |
| | | Telco Cuba | Amgentech | | |
Revenues | | | | | | |
| Sales | | $ - | $ 87,105 | $ - | $ 87,105 |
| COGS | | | (6,170) | - | (6,170) |
| | | - | 80,935 | - | 80,935 |
Operating Expenses | | - | | | | |
| Automobile Expenses | | - | 6,271 | - | 6,271 |
| Bank Charges | | - | 352 | - | 352 |
| Depreciation Expense | | - | 329 | - | 329 |
| Insurance | | - | 333 | - | 333 |
| Professional fees | | - | 27,812 | - | 27,812 |
| Other | | (2,863) | 13,058 | - | 10,195 |
| Total Expenses | | (2,863) | 48,155 | - | 45,292 |
| | | | | | |
| Net Income from Operations | | 2,863 | 32,780 | - | 35,643 |
Expenses | | | | | | |
Other Income and Expenses | | | | | | |
| Interest Expenses | | 72,631 | - | - | 72,631 |
| Change in Fair Value | | 422,872 | - | - | 422,872 |
| Total Other Expenses | | 495,503 | - | - | 495,503 |
| | | | | | |
| Net (loss) Income | | $ (492,640) | $ 32,780 | $ - | $ (459,860) |
BASIC (LOSS) INCOME PER SHARE | | $ (0.02) | - | | $ (0.02) | |
| | | | | | |
DILUTED (LOSS) INCOME PER SHARE | | $ (0.02) | - | | $ (0.02) | |
| | | | | | |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | | | | | | |
Basic | | 28,967,831 | - | | 28,967,831 | |
Diluted | | 28,967,831 | - | | 28,967,831 |
10
Telco Cuba, Inc. | |||||||||||||||||||
Pro-forma Condensed Statement of Operations | |||||||||||||||||||
Twelve months ended November 30, 2014 | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
| |||||||||||||||||||
| | Year Ended Nov. 30, 2014 | Year Ended Nov. 30, 2014 | Pro-forma Adjustments | Total | ||||||||||||||
| | Telco Cuba | Amgentech | | | ||||||||||||||
Revenues | | | | | | ||||||||||||||
| Sales | | $ - | $ 265,555 | $ - | $ 265,555 | |||||||||||||
| COGS | | | (29,230) | - | (29,230) | |||||||||||||
| | | - | 236,325 | - | 236,325 | |||||||||||||
Operating Expenses | | | | | | ||||||||||||||
| Automobile Expenses | | - | 15,869 | - | 15,869 | |||||||||||||
| Bank Charges | | - | 778 | - | 778 | |||||||||||||
| Bad Debt Expense | | | 13,679 | - | 13,679 | |||||||||||||
| Depreciation Expense | | - | 1,086 | - | 1,086 | |||||||||||||
| Insurance | | - | 1,917 | - | 1,917 | |||||||||||||
General and Admin. | | | 5,096 | - | 5,096 | ||||||||||||||
| Marketing | | | 4,238 | - | 4,238 | |||||||||||||
| Professional fees | | - | 55,846 | - | 55,846 | |||||||||||||
| Other | | 362,654 | 31,862 | - | 394,516 | |||||||||||||
| Total Expenses | | 362,654 | 130,371 | - | 493,025 | |||||||||||||
| | | | | | | |||||||||||||
| Net (Loss) Income from Operations | | (362,654) | 105,954 | - | (256,700) | |||||||||||||
Other Income and Expenses | | | | | | ||||||||||||||
| Interest Expenses | | 165,766 | - | - | 165,766 | |||||||||||||
| Change in Fair Value | | (303,210) | - | - | (303,210) | |||||||||||||
| Total Other (Income) Expenses | | (137,444) | - | - | (137,444) | |||||||||||||
| | | | | | | |||||||||||||
| Net (loss) Income | | $ (225,210) | $ 105,954 | $ - | $ (119,256) | |||||||||||||
BASIC (LOSS) INCOME PER SHARE | | $ (0.01) | $ - | | $ (0.01) |
| |||||||||||||
| | | | | |
| |||||||||||||
DILUTED (LOSS) INCOME PER SHARE | | $ (0.01) | $ - | | $ (0.01) |
| |||||||||||||
| | | | | |
| |||||||||||||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | | | | | |
| |||||||||||||
Basic | | 15,885,259 | - | | 15,885,259 |
| |||||||||||||
Diluted | | 15,885,259 | - | | 15,885,259 |
|
11