Attached files

file filename
EX-32.2 - CERTIFICATION OF CHIEF FINANCIAL OFFICER - TRICCAR INC.ex32-2.htm
EX-32.1 - CERTIFICATION OF CHIEF EXECUTIVE OFFICER - TRICCAR INC.ex32-1.htm
EX-31.2 - CERTIFICATION OF CHIEF FINANCIAL OFFICER - TRICCAR INC.ex31-2.htm
EX-31.1 - CERTIFICATION OF CHIEF EXECUTIVE OFFICER - TRICCAR INC.ex31-1.htm

 

 

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

FORM 10-Q

   
     
   
   
   
 

 

(Mark One)

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended: March 31, 2020

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from to

 

Commission File Number: 0-30746

 

TRICCAR, INC.

(Exact name of registrant as specified in its charter)

 

Nevada 84-4250492
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
   
848 N. Rainbow Blvd., #3254, Las Vegas, Nevada 89107
(Address of principal executive offices) (Zip Code)

 

702-330-2430

(Registrant’s telephone number, including area code)

 

Frontier Oilfield Services, Inc., 220 Travis Street, Suite 501, Shreveport, Louisiana 71101

(Former name, former address and former fiscal year, if changed since last report)

 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Trading
Symbol(s)
Name of each exchange on which registered
Common Stock, $0.0001 par value per share FOSI  

 

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     ☐    No     ☒

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files).    

Yes     ☐    No        ☒

 

Potential persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.

 

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

 

Large accelerated filer    
Accelerated filer   Smaller reporting company  
Non-accelerated filer   Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

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

 

APPLICABLE ONLY TO CORPORATE ISSUERS:

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

As of July 10, 2020 there were 72,500,000 shares of Class A common stock and 27,500,000 shares of Class B common stock outstanding pending issuance with name and symbol change.

 

 

 

 

 

 

TRICCAR, INC.
Index

 

    Pg. No.
PART I — Financial Information    
Item 1. Financial Statements    
  Consolidated Balance Sheets as of March 31, 2020 and December 31, 2019 (Unaudited)   3
  Consolidated Statements of Operations for the Three Months Ended March 31, 2020 and 2019 (Unaudited)   4
  Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2020 and 2019 (Unaudited)   5
  Consolidated Statements of Changes in Stockholders’ Deficit for the Three Months Ended March 31, 2020 and 2019 (Unaudited)   6
  Notes to Consolidated Financial Statements as of March 31, 2020 (Unaudited)   7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations   9
Item 3. Quantitative and Qualitative Disclosures about Market Risk   12
Item 4. Controls and Procedures   12
     
PART II — Other Information    
Item 1. Legal Proceedings   12
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds   12
Item 3. Defaults Upon Senior Securities   12
Item 5. Other Information   13
Item 6. Exhibits   13
     
SIGNATURES   13

  

 

 

 

PART 1 — FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS

 

TRICCAR, INC. AND SUBSIDIARIES  

CONSOLIDATED BALANCE SHEETS 

(UNAUDITED) 

         
   March 31,
2020
   December 31,
2019
 
         
ASSETS          
Current Assets:          
Cash  $20,261   $29,467 
Total current assets   20,261    29,467 
           
Total Assets  $20,261   $29,467 
           
LIABILITIES AND STOCKHOLDERS’ DEFICIT          
Current Liabilities:          
Accounts payable  $168,411   $ 
Accrued liabilities   48,830    32,491 
Total current liabilities   217,241    32,491 
           
Total Liabilities   217,241    32,491 
Commitments and Contingencies (Note 5)          
Stockholders’ Equity (Deficit):          
Preferred stock $.0001 par value; authorized 50,000,000 shares with no outstanding as March 31, 2020 and December 31, 2019        
Common stock- Class A $.00001 par value; authorized 100,000,000 shares with 52,500,000 shares issued and outstanding at December 31, 2019       525 
Common stock- Class B $.00001 par value; authorized 30,000,000 shares with 27,500,000 shares issued and outstanding at December 31, 2019       275 
Common stock- Class A $.0001 par value; authorized 372,500,000 shares with 72,500,000 shares issued and outstanding at March 31, 2020   7,250     
Common stock- Class B $.0001 par value; authorized 27,500,000 shares with 27,500,000 shares issued and outstanding at March 31, 2020   2,750     
Additional paid-in capital       101,401 
Accumulated deficit   (206,980)   (105,225)
Total stockholders’ equity (deficit)   (196,980)   (3,024)
Total Liabilities and Stockholders’ Equity (Deficit)  $20,261   $29,467 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

3 

 

 

TRICCAR, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

 

   For the Three Months Ended 
   March 31,
2020
   March 31,
2019
 
         
Revenue, net of discounts  $   $ 
Costs and expenses:          
General and administrative   27,620    16,871 
Total costs and expenses   27,620    16,871 
Operating loss   (27,620)   (16,871)
Other (income) expense:          
Interest expense        
Loss before provision for income taxes   (27,620)   (16,871)
Provision for income taxes        
Net loss  $(27,620)  $(16,871)
           
Net loss per common share – basic:  $(0.00)  $(0.00)
           
Weighted Average Common Shares Outstanding:          
Basic   86,666,667    79,876,527 

 

The accompanying notes are an integral part of these consolidated financial statements.

  

4 

 

 

TRICCAR, INC. AND SUBSIDIARIES 

CONSOLIDATED STATEMENTS OF CASH FLOWS  

(UNAUDITED)

         
   For the Three Months Ended 
   March 31, 2020   March 31, 2019 
Cash Flows from Operating Activities:          
Net loss  $(27,620)  $(16,871)
Adjustments to reconcile net loss to net cash used in operating activities:          
Depreciation and amortization        
           
Changes in operating assets and liabilities:          
(Increase) decrease in operating assets:          
Accounts receivable        
Increase (decrease) in operating liabilities:          
Accounts payable        
Accrued liabilities   16,339    11,409 
Net cash used in operating activities   (11,281)   (5,462)
           
Cash Flows from Investing Activities        
           
Cash Flows from Financing Activities:          
Proceed from equity investment   2,075     
           
Net cash provided from financing activities:   2,075     
           
Net decrease in cash   (9,206)   (5,462)
Cash at beginning of the period   29,467    11,604 
Cash at end of the period  $20,261   $6,142 
           
Supplemental Cash Flow Disclosures          
Cash paid for:          
Interest  $   $ 
Taxes  $   $ 
Supplemental Disclosure of Non-Cash Investing and Financing          
Accounts payable acquired in reverse merger  $168,411   $ 

 

The accompanying notes are an integral part of these consolidated financial statements.

  

5 

 

 

TRICCAR, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE THREE MONTHS ENDED MARCH 31, 2020

(UNAUDITED)

 

                   Additional       Total 
   Common Stock Class A   Common Stock Class B   Paid-In   Accumulated   Stockholders’ 
   Shares   Par Value   Shares   Par Value   Capital   Deficit   Equity (Deficit) 
                             
Balance December31, 2018 of TRICCAR Holdings, Inc.   52,376,527   $524    27,500,000   $275   $23,402   $(16,047)  $8,154 
                                    
Net Loss                       (16,871)  $(16,871)
                                    
Balance March 31, 2019 of TRICCAR Holdings, Inc.   52,376,527   $524    27,500,000   $275   $23,402   $(32,918)  $(8,717)
                                    
Balance December31, 2019 of TRICCAR Holdings, Inc.   52,500,000   $525    27,500,000   $275   $101,401   $(105,225)  $(3,024)
                                    
Additional paid in capital                   2,075       $2,075 
                                    
Recapitalization on reverse merger - purging previous share   (52,500,000)   (525)   (27,500,000)   (275)   (103,476)      $(104,276)
                                    
Recapitalization on reverse merger - issuance of new share   72,500,000    7,250    27,500,000    2,750        (74,135)  $(64,135)
                                    
Net Loss                       (27,620)  $(27,620)
                                    
Balance March 31, 2020   72,500,000   $7,250    27,500,000   $2,750   $   $(206,980)  $(196,980)

 

The accompanying notes are an integral part of these consolidated financial statements.

 

6 

 

 

TRICCAR, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

March 31, 2020

(UNAUDITED)

 

1. BASIS OF PRESENTATION

 

The consolidated financial statements included herein have been prepared by TRICCAR, Inc. (“the Company”), without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been omitted. However, in the opinion of management, all adjustments (which include only normal recurring adjustments, unless otherwise indicated) necessary to present fairly the financial position and results of operations for the periods presented have been made. The results for interim periods are not necessarily indicative of trends or of results to be expected for the full year.

 

2. BUSINESS ACTIVITIES

 

On December 12, 2019, Frontier Oilfield Services, Inc., a Texas Corporation (“FOSI”) entered into a Reorganization and Stock Purchase Agreement (the “Agreement”) to change its corporate domicile from Texas to Nevada, assume the name TRICCAR, Inc. (“TRICCAR”), and to acquire 100% of the issued and outstanding equity of TRICCAR Holdings, Inc., a Nevada Corporation (“TRICCAR Holdings”).

 

Pursuant to the Agreement, effective on February 28, 2020, the parties closed the Agreement.

 

TRICCAR acquired 100% of the issued and outstanding equity of TRICCAR Holdings, Inc. TRICCAR issued 80,000,000 shares of stock to acquire all the issued and outstanding equity stock of TRICCAR Holdings while TRICCAR shareholders retained 20,000,000 shares of stock. As a consequence, immediately subsequent to the acquisition TRICCAR will have approximately 100,000,000 shares of common stock outstanding. The issuance of the new shares has already been reflected on TRICCAR’s book and is pending the name and symbol change with transfer agent.

 

The accompanying consolidated financial statements include the accounts of the Company and its former entity Frontier Oilfield Services, Inc., and its subsidiary TRICCAR Holdings, Inc.

 

TRICCAR is a vertically integrated biomedical research, development, and marketing firm that plans to develop, acquire, and partner to bring life-changing bioceutical solutions (not requiring FDA approval) and pharmaceutical drugs (requiring FDA approval) to the global market. The Company is engaged in the development of bioceutical and pharmaceutical products designed to support the well-being of humans and animals that have common diseases.

 

Development Stage Company – The Company is considered a development stage company and has had no commercial revenue to date. The Company has been focusing on the development of its products.

 

3. GOING CONCERN

 

The Company’s financial statements are prepared using U.S. generally accepted accounting principles (“U.S. GAAP”) applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. As of the date of the financial statements, the Company has generated losses from operations, has an accumulated deficit and working capital deficiency. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern.

 

To continue as a going concern and achieve a profitable level of operations, the Company will need, among other things, to increase its business volume and grow revenues, reduce its operating expenses, raise additional capital resources and develop new and stable sources of revenue to meet its operating expenses.

 

The Company’s ability to continue as a going concern will be dependent upon management’s ability to successfully implement management’s plans to pursue additional business volumes from new and existing customers, reduce indebtedness through sales of non-performing assets and conversions of debt to equity, and rationalize the Company’s cost structure to achieve profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. The Company’s continued existence will ultimately be dependent on its ability to generate cash flows to support its operations as well as provide sufficient resources to retire existing liabilities on a timely basis. The Company faces significant risk in implementing its business plan and there can be no assurance that financing for its operations and business plan will be available or, if available, such financing will be on satisfactory terms.

 

7 

 

 

4. SUMMARY OF SELECTED ACCOUNTING POLICIES

 

Reverse Merger 

The Share Exchange closed on February 28, 2020. As a result of the Share Exchange, the former shareholders of TRICCAR Holdings became the controlling shareholders of the Company. At the closing, each TRICCAR Holdings shareholder received 1.00 shares (the “Exchange Ratio”) of TRICCAR Inc. common stock for each TRICCAR Holdings share exchanged. The Share Exchange was accounted for as a reverse takeover/recapitalization effected by a share exchange, wherein TRICCAR Holdings is considered the acquirer for accounting and financial reporting purposes. The capital, share price, and earnings per share amount in these consolidated financial statements for the period prior to the reverse merger were restated to reflect the recapitalization in accordance with the exchange ratio established in the merger except otherwise noted.

 

TRICCAR Holdings, incorporated on August 22, 2017, is a vertically integrated biomedical research, development, and marketing firm that develops, acquires, and partners to bring life-changing bioceutical solutions (not requiring FDA approval) and pharmaceutical drugs (requiring FDA approval) to the global market. The Company is engaged in the development of bioceutical and pharmaceutical products designed to support the well-being of humans and animals that have common diseases.

 

As a result of the Merger, TRICCAR Holdings stock owned by the Company has been cancelled and each share of TRICCAR Holdings not owned by the Company was exchanged for 1.00 share of Company’s common stock. A total of 80,000,000 shares of TRICCAR Holdings common stock was exchanged for 80,000,000 shares of Company common stock.

 

Principles of Consolidation 

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant inter-company transactions and balances have been eliminated in consolidation.

 

Fair Value of Financial Instruments 

In accordance with the reporting requirements of ASC Topic 825, Financial Instruments, the Company calculates the fair value of its assets and liabilities which qualify as financial instruments under this standard and includes this additional information in the notes to the financial statements when the fair value is different than the carrying value of those financial instruments. The Company does not have assets or liabilities measured at fair value on a recurring basis. Consequently, the Company did not have any fair value adjustments for assets and liabilities measured at fair value at the balance sheet dates, nor gains or losses reported in the statements of operations that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held during the three months ended March 31, 2020 and 2019, except as disclosed.

 

Earnings (Loss) Per Share (EPS) 

Basic earnings per common share are calculated by dividing net income or loss by the weighted average number of shares outstanding during the period. Diluted earnings per common share are calculated by adjusting outstanding shares, assuming conversion of all potentially dilutive stock options and warrants. The computation of diluted EPS does not assume conversion, exercise, or contingent issuance of shares that would have an anti-dilutive effect on earnings per common share. Anti-dilution results from an increase in earnings per share or reduction in loss per share from the inclusion of potentially dilutive shares in EPS calculations. Currently there are no common stock dilutive instruments in 2020 or 2019 which have been excluded from EPS that could potentially have a dilutive effect on EPS in the future.

 

Use of Estimates 

The preparation of the unaudited consolidated financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and the related disclosures at the date of the financial statements and during the reporting period. Actual results could materially differ from these estimates. Significant estimates in the three months ended March 31, 2020 and 2019 include the allowance for doubtful accounts on accounts and other receivables, the useful life of property and equipment and intangible assets, and assumptions used in assessing impairment of long-term assets.

 

Revenue Recognition 

The Company recognizes revenues when services are rendered, products are delivered, and when payment is determinable and reasonably assured. The Company plans to extend short-term, unsecured credit to its distributors for amounts invoiced.

 

8 

 

 

5. COMMITMENTS AND CONTINGENCIES

 

The COVID-19 pandemic 

In December 2019, when the first indications of SARS-CoV-2 were being reported from Wuhan, China, Management began implementing plans to incorporate work-from-home initiatives, acquiring face masks and gloves for employees, and accumulating disinfectants such as alcohol and bleach. On January 27, 2020 the Company formally put in place work-from-home efforts. On March 12, 2020, Nevada Governor Steve Sisolak implemented state-at-home orders for businesses and employees which are still in effect. While our early identification of the risks of SARS-CoV-2 have protected our employees with zero cases of COVID-19 infection to date, the global pandemic has delayed the Company’s plans to bring 11 of our products to market due to supplier and transportation limitations. Given the continued challenges of the pandemic, Management is unable to provide a definitive date when our first bioceutical products will be made available for public purchase. The pandemic has resulted in record unemployment in the United States which impacts consumers’ financial ability to purchase bioceuticals and this retraction in employment and consumer confidence may have a negative short-term impact on the Company.

 

6. EQUITY
   
 

The total number of common stock authorized that may be issued by the Company is four hundred million (400,000,000) shares of common stock with a par value of one hundredth of one cent ($0.0001) per share consisting of three hundred seventy-two million five hundred thousand (372,500,000) shares Class A shares with 1:1 voting rights and twenty-seven million five hundred thousand (27,500,000) Class B shares with 20:1 voting rights, and fifty million (50,000,000) shares of preferred stock with a par value of one hundredth of a cent ($0.0001) per share. To the fullest extent permitted by the laws of the state of Nevada (currently set forth in NRS 78.195), as the same now exists or may hereafter be amended or supplemented, the board of directors may fix and determine the designations, rights, preferences or other variations of each class or series within each class of capital stock of the corporation.

 

There are currently 72,500,000 shares of Common stock- Class A and 27,500,000 shares of Common stock- Class B outstanding pending issuance with name and symbol change. The Class B common stock includes 20,000,000 shares held by William Townsend, Chief Executive Officer and Director and 7,500,000 shares held by Katrina Yao, Chief Financial Officer and director.

 

7.

RELATED PARTY TRANSACTIONS

 

  None
   
8.

SUBSEQUENT EVENTS

 

  The Company has completed an agreement for an investment of $18,594,692 via private placement in the public entity from Antonomastic Investment Holdings, Ltd., resulting in the sale of 11,621,683 shares of common stock at $1.60 per share. As part of the investment, Nairobi, Kenya based Antonomastic Investment Holdings, Ltd. will appoint a yet to be determined member to TRICCAR’s board of directors. As of the date of this report, no funds have been received by TRICCAR, Inc.
   

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

 

CAUTIONARY STATEMENT

 

Statements in this report which are not purely historical facts, including statements regarding the Company’s anticipations, beliefs, expectations, hopes, intentions or strategies for the future, may be forward-looking statements within the meaning of Section 21E of the Securities Act of 1934, as amended. All forward-looking statements in this report are based upon information available to us on the date of the report. Any forward-looking statements involve risks and uncertainties that could cause actual results or events to differ materially from events or results described in the forward-looking statements. Important factors with respect to any such forward-looking statements, including certain risks and uncertainties that could cause actual results to differ materially from the Company’s expectations (“Cautionary Statements”), are disclosed in the Company’s annual report on Form 10-K, including, without limitation, in conjunction with the forward-looking statements under the caption “Risk Factors.” In addition, important factors that could cause actual results to differ materially from those in the forward-looking statements included herein include, but are not limited to, limited working capital, limited access to capital, changes from anticipated levels of sales and revenues changes in the oil and gas markets especially in the oil field services markets and fluids disposal business, future national or regional economic and competitive conditions, changes in relationships with customers, difficulties in developing new business in the disposal business, difficulties integrating any new businesses or products acquired, replacing the lost customer revenue, regulatory change, the ability of the Company to meet its stated business goals, the Company’s restructuring initiatives, the Company’s ability to sustain profitability, the Company’s ability to service its debt, its ability to comply with covenants contained in its financing arrangements, the current defaults existing under the Company’s senior and subordinated credit arrangements, and general economic and business conditions. Although the Company believes the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. All subsequent written and oral forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the Cautionary Statements. We do not undertake to update any forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements.

  

9 

 

 

As a result of the Reorganization Agreement and the change in business and operations of the Company, a discussion of the past financial results of the Company, formally known as Frontier Oilfield Services, Inc., is not pertinent, and, under generally accepted accounting principles in the United States the historical financial results of TRICCAR Holdings, Inc., the acquired company for accounting purposes, prior to the Reorganization Agreement are considered the historical financial results of the Company.

 

The following discussion highlights the Company’s results of operations and the principal factors that have affected its consolidated financial condition as well as its liquidity and capital resources for the periods described, and provides information that management believes is relevant for an assessment and understanding of the Company’s consolidated financial condition and results of operations presented herein. The following discussion and analysis are based on the Company’s unaudited financial statements contained in this Current Report, which have been prepared in accordance with generally accepted accounting principles in the United States. You should read the discussion and analysis together with such financial statements and the related notes thereto.

 

OVERVIEW

 

TRICCAR Inc. (or “TRICCAR” or “the Company”) is a public Nevada C-corporation and vertically integrated biomedical research, development, and marketing firm that develops, acquires, and partners to bring bioceutical solutions (not requiring FDA approval) and pharmaceutical drugs (requiring FDA approval) to the global market.

 

The Company is engaged in the development of bioceutical and pharmaceutical products designed to support the well-being of humans and animals that have ailments and diseases. The Company’s dual-approach to product development includes bioceuticals (e.g., bioceuticals and over-the-counter products), not requiring FDA approval, and thus being able to enter the market and generate revenues; along with pharmaceuticals which require FDA approval. It is Management’s intent to pursue strategic partnerships with larger pharmaceutical companies to underwrite the costs of FDA approval as needed. This approach minimizes risks for the Company by providing revenue streams from our first eighteen (18) nutraceutical products planned for introduction between September 2020 and August 2022, and thus, generate revenue while we concurrently pursue our partnership approach to FDA approval of our pharmaceuticals, which Management intends to do beginning with a possible cure for ALS (Lou Gehrig’s disease).

 

The Company’s products includes bioceutical formulations designed to support 38 diseases and maladies, including four formulae centered around the most bioavailable calcium supplement available; a weight loss and obesity supplement that requires no dramatic change in diet or requirement of exercise; a formula that helps relieve the symptoms of menopause; a fast-acting blood performance product that separates white and red blood cells; a mental focus formula proven to increase attention and recall of information and beneficial to children diagnosed with Attention Deficit Disorder (“ADHD”); a mental acuity formula proven to increase memory recall and aid in the formation of new memories; and others.

 

SIGNIFICANT ACCOUNTING POLICIES

 

The preparation of financial statements in conformity with US Generally Accepted Accounting Principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates. The Company has adopted ASC 842 requiring the recoding of assets and liabilities related to leases on the balance sheet. The Company records rent on straight-line basis over the terms of the underlying leases.

 

10 

 

 

RESULTS OF OPERATIONS

 

For the three months ended March 31, 2020, we reported a net loss of $27,620 as compared to a net loss of $287,363 for the three months ended March 31, 2019. The components of these results are explained below.

 

Revenue - No revenue was generated for the three months ended March 31, 2020.

 

Expenses - The components of our costs and expenses for the three months ended March 31, 2020 and 2019 are as follows:

 

    For the Three Months Ended     %  
    March 31,     March 31,     Increase  
    2020     2019     (Decrease)  
Costs and expenses:                        
General and administrative     27,620       16,871       64 %
                         
Total cost and expenses   $ 27,620     $ 16,871       64 %

 

Operating results for the three months ended March 31, 2020 and 2019 reflect a net loss of $27,620 and a net loss of $16,871 respectively. We have not recorded any federal income taxes for the three months ended March 31, 2020 and 2019 because of our accumulated losses and our net operating loss carry forwards.

 

LIQUIDITY AND CAPITAL RESOURCES

 

Cash Flows and Liquidity

 

As of March 31, 2020, we had total current assets of $20,261. Our total current liabilities as of March 31, 2020 were approximately $217,241. We had a working capital deficit of approximately $196,980 as of March 31, 2020.

 

Management are seeking to raise up to $15,000,000 through PIPE financing, which we will use for operations and growth.

 

As of March 31, 2020, we had $20,261 in cash, a decrease of $9,206 from December 31, 2019 due to minimal general administrative expenses.

 

Capital Expenditures

 

The Company suspended capital expenditures during the three months ended March 31, 2020 due to low working capital available.

 

Outlook

 

Management are seeking to raise up to $15,000,000 through PIPE financing, which we will use for operations and growth. However, if in the future we do not turn profitable or generate cash from operations and additional capital is needed to support operations, economic and market conditions may make it difficult or impossible to raise additional funds through debt or equity financings. If funds are not sufficient to support operations, we may need to pursue a financing or reduce expenditures to meet our cash requirements. If we do obtain such financing, we cannot assure that the amount or the terms of such financing will be as attractive as we may desire, and your equity interest in the company may be diluted considerably. If we are unable to obtain such financing when needed, or if the amount of such financing is not sufficient, it may be necessary for us to take significant cost saving measures or generate funding in ways that may negatively affect our business in the future. To reduce expenses, we may be forced to make personnel reductions or curtail or discontinue development programs. To generate funds, it may be necessary to monetize future royalty streams, sell intellectual property, divest of technology platforms or liquidate assets. However, there is no assurance that, if required, we will be able to generate sufficient funds or reduce spending to provide the required liquidity. Long term capital requirements will depend on numerous factors, including, but not limited to, the status of collaborative arrangements, the progress of research and development programs and the receipt of revenues from sales of products.

 

11 

 

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

Not required for smaller reporting companies.

 

ITEM 4. CONTROLS AND PROCEDURES

 

Disclosure Controls and Procedures 

Our management evaluated, with the participation of our Chief Executive Officer (CEO) and Chief Financial Officer (CFO), the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of the end of the quarter covered by this quarterly report on Form 10-Q. In making this assessment, the Company used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework .

 

A material weakness is a deficiency or combination of deficiencies in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis by the Company’s internal controls.

 

The Company’s management has identified a material weakness in the effectiveness of internal control over financial reporting related to a shortage of resources in the accounting department required to assure appropriate segregation of duties with employees having appropriate accounting qualifications related to the Company’s unique industry accounting and disclosure rules. Management has outsourced certain financial functions to mitigate the material weakness in internal control over financial reporting. The Company is reviewing its finance and accounting staffing requirements.

 

Internal Control Over Financial Reporting 

There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. As a result, no corrective actions were required or undertaken.

 

Limitations on the Effectiveness of Controls 

Our management, including the CEO, does not expect that its disclosure controls or its internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple errors or mistakes. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

 

PART II. OTHER INFORMATION

 

Item 1. LEGAL PROCEEDINGS

 

None. 

 

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

None. 

 

Item 3. DEFAULTS UPON SENIOR SECURITIES

 

None

 

12 

 

 

Item 5. OTHER INFORMATION

 

This is to add this additional disclosure of the Company’s reliance on the March 4, 2020 order issued by the Commission under Section 36 (Release No. 34-88318), as modified on March 25, 2020 (Release No. 34-88465) of the Securities Exchange Act of 1934 (“Exchange Act”) granting exemptions from specified provisions of the Exchange Act and certain rules thereunder (the “Order”), as a result of the novel coronavirus (“COVID-19”) pandemic, to file the Company’s Original 10-Q when originally due on May 15, 2020.

 

The Company was not able to file its Original 10-Q by the original due date as a result of disruptions caused by the COVID-19 pandemic. The COVID-19 pandemic has impacted the Company through inaccessibility to key partners and their services. A significant portion of the Company’s business operations are contracted in certain domestic markets currently on “lock-down” orders or “shelter in place” recommendations for the national health crisis, including key personnel responsible for assisting the Company in the development of its financial statements. As a result of the travel and work restrictions stemming from the COVID-19 pandemic, the Company was unable to obtain financial records that it needs from its operations to permit the Company to file a timely and accurate Quarterly Report on Form 10-Q for its quarter ended March 31, 2020 by the prescribed date without undue hardship and expense to the Company. 

 

Item 6. EXHIBITS

 

  (a) EXHIBITS:
     
    31.1 Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
     
    31.2 Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
     
    32.1 Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
     
    32.2 Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
     
  101 101.INS XBRL Instance Document
     
    101.SCH XBRL Taxonomy Schema
     
    101.CAL XBRL Taxonomy Calculation Linkbase
     
    101.LAB XBRL Taxonomy Label Linkbase
     
    101.PRE XBRL Taxonomy Presentation Linkbase
     
    101.DEF XBRL Taxonomy Definition Linkbase

  

SIGNATURES

 

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on July 10, 2020.

 

TRICCAR, INC.

     
SIGNATURE: /s/ William Townsend  
 

William Townsend, 

Chief Executive Officer and Director 

 

 

13