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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

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FORM 10-Q

 

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

 

For the quarterly period ended February 28, 2021

 

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

 

For the transition period from          to           

 

COMMISSION FILE NO. 333-222593

 

TradeFan, Inc.

(Exact name of registrant as specified in its charter)

 

Nevada

(State or other jurisdiction of incorporation)

 

30-0968244

(IRS Employer Identification No.)

 

81 Prospect Street

Brooklyn, NY 11201

Tel: (646) 828-1376

(Address and telephone number of registrant's executive office)

 

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

 

Title of each class	Trading Symbol	Name of each exchange on which registered
None	N/A	N/A

 

Indicate by checkmark whether the issuer: (1) has 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 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 ☐

 

Indicate by check mark whether the registrant is a large accelerated filed, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

 

Large accelerated filer ☐	Accelerated filer                  ☐
Non-accelerated filer   ☒	Smaller reporting company ☒	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. Yes ☐ No ☒

 

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

 

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

 

Class	Outstanding as of April 8, 2021
Common Stock, $0.001	99,985,500

 

 

TradeFan, Inc.

Table of Contents

 

		Page
PART I	Financial information
Item 1	Financial statements (unaudited)	3
Item 2	Management’s discussion and analysis of financial condition and results of operations	11
Item 3	Quantitative and qualitative disclosures about market risk	13
Item 4	Controls and procedures	13
PART II	Other Information
Item 1	Legal proceedings	14
Item 2	Unregistered sales of equity securities and use of proceeds	14
Item 3	Defaults upon senior securities	14
Item 4	Mine safety disclosures	14
Item 5	Other information	14
Item 6	Exhibits	15
	Signatures	16

 

 

 

 

 

PART I. FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS

 

TradeFan, Inc.

Condensed Consolidated Balance Sheets

 

		February 28,				November 30,
		2021				2020
		(unaudited)
ASSETS
Current assets
Cash		$	36,067			$	81,840
Total current assets			36,067				81,840
Total Assets			36,067				81,840
LIABILITIES AND (DEFICIENCY IN) STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable			1,375				12,376
Credit card payable			1,588				27
Due to related party			15,113				-
Total current liabilities			18,076				12,403
Total Liabilities			18,076				12,403
Commitments and contingencies			-				-
Stockholders' equity (deficit)
Preferred Stock, $0.001 par value, 10,000,000 shares authorized; 1,000,000 shares designated Series A			-				-
Preferred Stock, Series A; $0.001 par value, 100,000 shares issued and outstanding at February 28, 2021 and November 30, 2020			100				100
Common stock, $0.001 par value, 490,000,000 shares authorized, 99,985,500 shares issued and outstanding at February 28, 2021 and November 30, 2020			99,986				99,986
Additional paid-in capital			160,168				160,168
Accumulated deficit			(242,263	)			(190,817	)
Total (deficiency in) stockholders' equity			17,991				69,437
Total liabilities and stockholders' equity		$	36,067			$	81,840

 

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

 

 

TradeFan, Inc.

Condensed Consolidated Statements of Operations (unaudited)

 

		For the				For the
		Three Months Ended				Three Months Ended
		February 28,				February 29,
		2021				2020
Revenue		$	-			$	-
Operating expenses:
General and administrative			51,333				7,503
Total operating expenses			51,333				7,503
Other expense:
Interest expense			(113	)			-
Total other expense			(113	)			-
Net Operating Loss			(51,446	)			(7,503	)
Loss before provision for income taxes			(51,446	)			(7,503	)
Provision for income taxes			-				-
Net loss		$	(51,446	)		$	(7,503	)
Net loss available to common shareholders		$	(51,446	)		$	(7,503	)
Net loss per share - basic and diluted		$	(0.00	)		$	(0.00	)
Weighted average shares outstanding - basic and diluted			99,985,500				10,066,500

 

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

 

 

TradeFan, Inc.

Condensed Consolidated Statements of Cash Flows (unaudited)

 

		For the				For the
		Three Months Ended				Three Months Ended
		February 28,				February 29,
		2021				2020
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss		$	(51,446	)		$	(7,503	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization			-				854
Changes in assets and liabilities:
Accounts payable			(11,001	)			-
Credit card payable			1,561				-
Due to related party			15,113				-
Net cash used in operating activities			(45,773	)			(6,649	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds of loan from shareholder			-				6,449
Net cash provided by financing activities			-				6,449
Net increase (decrease) in cash and cash equivalents			(45,773	)			(200	)
Cash and cash equivalents at beginning of period			81,840				233
Cash and cash equivalents at end of period		$	36,067			$	33
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid		$	-			$	-
Income taxes paid		$	-			$	-
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Issuance of 66,657,000 shares of common stock pursuant to stock split (see note 6)		$	66,658			$	-

 

The accompanying notes are an integral part of these financial statements

 

 

TradeFan, Inc.

Condensed Consolidated Statements of Stockholders’ Equity (deficit)

For the Three Ended February 28 (29), 2021 and 2020

 

STOCKHOLDERS' EQUITY - THREE MONTHS ENDED FEBRUARY 28 (29)
		Series A Preferred Stock								Common Stock
																		Additional
																		Paid-in				Accumulated
		Shares				Amount				Shares				Amount				Capital				Deficit				Total
Balance, November 30, 2019			-			$	-				10,066,500			$	10,065			$	19,045			$	(41,669	)		$	(12,559	)
Net loss for the period ended February 29, 2020			-				-				-				-				-				(7,503	)			(7,503	)
Balance, February 29, 2020			-			$	-				10,066,500			$	10,065			$	19,045			$	(49,172	)		$	(20,062	)
Balance, November 30, 2020			100,000			$	100				99,985,500			$	99,986			$	160,168			$	(190,817	)		$	69,437
Net loss for the period ended February 28, 2021			-				-								-				-				(51,446	)			(51,446	)
Balance, February 28, 2021			100,000			$	100				99,985,500			$	99,986			$	160,168			$	(242,263	)		$	17,991

 

 

 

TRADEFAN, INC.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED FEBRUARY 28(29), 2021 AND 2019(UNAUDITED)

 

NOTE 1 – ORGANIZATION AND BUSINESS

 

TradeFan, Inc., previously known as Vado Corp., (the “Company”) is a Nevada corporation established on February 10, 2017 and has adopted a November 30 fiscal year end. The Company formerly had operations in the embroidery business in the European Union. With the Change of Control  described in the following paragraph, the Company terminated its operations in the embroidery business and wrote off its assets. The Company currently has no operations and is seeking new business opportunities in the United States and abroad.  On February 10, 2021, the Company entered into a non-binding Term Sheet with another company (the “Target”) which if consummated would result in the shareholders of the Target owning 87% of the common stock of the Company. The Target does business under the name of TradeFan which is why the Company increased its authorized common stock and changed its name. See Notes 4 and 6. The Term Sheet also envisions the Company raising $2 million from the sale of convertible preferred stock, the terms of which have to be negotiated with investors. As of the date of this Report, no definitive Agreement has been executed. There can be no assurances that the reverse merger with the Target will occur. Among other conditions is completion of an audit of the financial statements of the Target.

 

On May 22, 2020, David Lelong purchased from Dusan Konc 6,000,000 shares of Common Stock of the Company and a convertible promissory note with a face value of $29,973 (the “Vado Related Party Note”), payable by the Company and convertible into shares of Common Stock at $0.0003 per share, for a total purchase price of $100,000 (the “Change of Control”). The Change of Control was affected pursuant to a Securities Purchase Agreement dated May 22, 2020 (the “Purchase Agreement”) by and among Mr. Lelong as the purchaser, the Company, and Mr. Konc, the Company’s majority shareholder, sole director and officer, as the seller. The Company was a party to the Purchase Agreement for the sole purpose of providing the representations and warranties contained therein. The Vado Related Party Note was cancelled, and a new convertible note in the amount of $29,973 was issued to Mr. Lelong (the “Lelong Related Party Note”). On May 28, 2020, Mr. Lelong fully converted the Related Party Note into 89,919,000 shares of the Company’s common stock.

 

On February 12, 2021, the Company’s Board of Directors approved changing the Company’s name to “TradeFan, Inc.”.

 

The preparation of unaudited condensed consolidated interim financial statements in conformity with accounting principles generally accepted in the United States of America 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

The unaudited interim condensed financial statements have been prepared by us pursuant to the rules and regulations of the Securities and Exchange Commission. The information furnished herein reflects all adjustments (consisting of normal recurring accruals and adjustments) which are, in the opinion of management, necessary to fairly present the operating results for the respective periods. Certain information and footnote disclosures normally present in the annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to such rules and regulations. These unaudited condensed interim financial statements should be read in conjunction with the audited consolidated financial statements and notes for the fiscal year ended November 30, 2020. The results of the three months ended February 28, 2021 are not necessarily indicative of the results to be expected for the full fiscal year ending November 30, 2021.

 

NOTE 2 – GOING CONCERN

 

The Company’s financial statements as of February 28, 2021 have been prepared using generally accepted accounting principles in the United States of America applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenue sufficient to cover its operating costs and allow it to continue as a going concern. The Company has an accumulated loss from inception (February 10, 2017) to February 28, 2021 of $(242,263). These and other factors raise substantial doubt about the ability of the company to continue as a going concern for a reasonable period of time.

 

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan is to obtain such resources for the Company by receiving capital from management and significant shareholders sufficient to meet its minimal operating expenses and to seek third party equity and/or debt financing. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. These financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

 

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America.

 

Fair values of financial instruments

 

The Company adopted Accounting Standards Codification (“ASC”) 820 “Fair Value Measurements,” which defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosures requirements for fair value measures. Current assets and current liabilities qualified as financial instruments and management believes their carrying amounts are a reasonable estimate of fair value because of the short period of time between the origination of such instruments and their expected realization and if applicable, their current interest rate is equivalent to interest rates currently available.  The three levels are defined as follow:

 

●

Level 1 — inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

 

●

Level 2 — inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.

 

●

Level 3 — inputs to the valuation methodology are unobservable and significant to the fair value.

 

Basic and Diluted Loss Per Share

 

Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted loss per share gives effect to all dilutive potential common shares outstanding during the period.  Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive.

 

Cash and Cash Equivalents

 

For purposes of the statement of cash flows, the Company considers all highly liquid instruments purchased with an original maturity of three months or less to be cash equivalents. The Company's bank accounts are deposited in insured institutions. The funds are insured up to $250,000. At February 28, 2021 the Company's bank deposits did not exceed the insured amounts.

 

Use of Estimates

 

Preparing financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Actual results and outcomes may differ from management’s estimates and assumptions.

 

Forward Stock Split

 

On February 12, 2021, the Company approved a 3-for-1 forward split of the Company’s common stock (the “Forward Split”), and increased the number of shares of common stock authorized from 75,000,000 to 490,000,000. Except as otherwise indicated, all share and per-share information in these financial statements have been restated to adjust for the effect of the forward split. At February 28, 2021 and November 30, 2020, the Company had 33,328,500 shares of common stock outstanding immediately before the Forward Split, and 99,985,500 shares of common stock outstanding immediately after the Forward Split, an increase of 66,657,000 shares. See note 6.

 

Stock-Based Compensation

 

As of February 28, 2021, the Company has not issued any stock-based payments to its employees.

 

Stock-based compensation will be accounted for at fair value in accordance with ASC 718, when applicable.  To date, the Company has not adopted a stock option plan and has not granted any stock options.

 

 

Income Taxes

 

The Company follows the liability method of accounting for income taxes.  Under this method, deferred income tax assets and liabilities are recognized for the estimated tax consequences attributable to differences between the financial statement carrying values and their respective income tax basis (temporary differences).  The effect on deferred income tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

 

New Accounting Pronouncements

 

In January 2017, the FASB issued ASU No. 2017-01, Clarifying the Definition of a Business, which narrows the existing definition of a business and provides a framework for evaluating whether a transaction should be accounted for as an acquisition (or disposal) of assets or a business. The ASU requires an entity to evaluate if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets; if so, the set of transferred assets and activities (collectively, the set) is not a business. To be considered a business, the set would need to include an input and a substantive process that together significantly contribute to the ability to create outputs. The standard also narrows the definition of outputs. The definition of a business affects areas of accounting such as acquisitions, disposals and goodwill.

 

Under the new guidance, fewer acquired sets are expected to be considered businesses. This ASU was effective January 1, 2018 on a prospective basis with early adoption permitted. The adoption of this guidance had no material effect on the Company’s financial statements.

 

In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment. Under the new standard, goodwill impairment would be measured as the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying value of goodwill. This ASU eliminates existing guidance that requires an entity to determine goodwill impairment by calculating the implied fair value of goodwill by hypothetically assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. This ASU was effective to impairment tests beginning January 1, 2020, with early adoption permitted. The adoption of this guidance had no material effect on the Company’s financial statements.

 

Revenue Recognition

 

We adopted ASC Topic 606, “Revenue from Contracts with Customers”, and all related interpretations for recognition of our revenue from tours and consulting services. Previously we recorded revenue based on ASC Topic 605. Adoption of new accounting standard did not have any material impact on our reported revenue.

 

Revenue is recognized when the following criteria are met:

 

- Identification of the contract or contracts with the customer; 

 

- Identification of the performance obligations in the contract(s); 

 

- Determination of the transaction price; 

 

- Allocation of the transaction price to the performance obligations in the contract(s); and 

 

- Recognition of revenue when, or as, we satisfy performance obligations. 

 

The Company has evaluated all the recent accounting pronouncements and determined that there are no other accounting pronouncements that will have a material effect on the Company’s financial statements.

 

Property and Equipment

 

Property and equipment are stated at cost and depreciated on the straight-line method over the estimated life of the asset, which is three years. The company purchased a computer for $1,250 on December 4, 2017.

 

On April 21, 2018, the Company purchased an embroidery machine for $15,000. This equipment is stated at cost and depreciated on the straight-line method over the estimated life of the asset, which is five years. At February 28, 2021, the book value of long term assets on the Company’s balance sheet was $0.

 

 

NOTE 4 – CAPITAL STOCK

 

On February 12, 2021, the Company’s Board of Directors approved a change to the Company’s Articles of Incorporation increasing the number of shares of common stock authorized from 75,000,000 to 490,000,000. Also on February 12, 2021, the Company’s Board of Directors approved a 3-for-1 forward split of the Company’s common stock outstanding. The Company had 33,328,500 shares of common stock outstanding immediately before the Forward Split, and 99,985,500 shares of common stock outstanding immediately after the Forward Split, an increase of 66,657,000 shares. See note 6.

 

Common Stock

 

The Company had 99,985,500 shares of common stock, par value $0.001, outstanding at February 28, 2021 and November 30, 2020.

 

Preferred Stock

 

The Company had 100,000 shares of Series A Preferred Stock, par value $0.001, outstanding at February 28, 2021 and November 30, 2020.

 

NOTE 5 – RELATED PARTY TRANSACTIONS

 

Consulting Agreement

 

On June 1, 2020, the Company entered into a consulting agreement with Accelerated Online Inc. (“Accelerated Online”, the “2020 Accelerated Online Agreement”), an entity wholly-owned by David Lelong.  Pursuant to the 2020 Accelerated Online Agreement, Accelerated Online provided executive management and business development services to the Company for a fee of $15,000 per month. 

 

On January 4, 2021, the Company entered into a new agreement for professional services with Accelerated Online (the “2021 Accelerated Online Agreement”), which replaced the 2020 Accelerated Online Agreement. Pursuant to the 2021 Accelerated Online Agreement, Accelerated Online provides executive management and business development services to the Company for a fee of $7,500 per month, with interest payable at the rate of 1.5% per month on any unpaid balance. During the three months ended February 28, 2021, the Company paid the amount of $15,000 in full satisfaction of the 2020 Accelerated Online Agreement.  Also during the three months ended February 28, 2021, the Company charged to operations the amount of $15,000 for consulting fees and $113 for accrued interest pursuant to the 2021 Accelerated Online Agreement; these amounts are recorded as due to related party on the Company’s balance sheet at February 28, 2021. 

 

NOTE 6 – SUBSEQUENT EVENTS

 

On February 12, 2021, the Company’s Board of Directors approved a change to the Company’s Articles of Incorporation increasing the number of shares of common stock authorized from 75,000,000 to 490,000,000. Also on February 12, 2021, the Company’s Board of Directors approved a 3-for-1 forward split of the Company’s common stock outstanding. On March 15, 2021, the Company, filed a Certificate of Amendment to its Articles of Incorporation (the “Certificate of Amendment”) to (i) change its corporate name from “Vado Corp.” to “TradeFan, Inc.”, (ii) increase its authorized shares of common stock, par value $0.001 per share, from 75,000,000 shares to 490,000,000 shares, and (iii) effect the Forward Split pursuant to which each share of the Company’s common stock issued and outstanding as of the effective date of the Forward Split were reclassified and changed into three shares of common stock (collectively, the “Amendments”). Except for the Forward Split, which was effective on March 18, 2021, the Amendments were effective March 15, 2021. In connection with the Amendments, the symbol for the Company’s common stock was changed to “VADPD” on March 18, 2021 and will be changed to “TFAN” 20 business days after March 18th.

 

 

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

 

Cautionary Note Regarding Forward Looking Statements

 

This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding management’s future plans for the Company, our liquidity and ability to raise capital, our business strategy and our future operations. All statements other than statements of historical facts contained in this report, including statements regarding our future financial position, liquidity, working capital sources, business strategy and plans and objectives of management for future operations, are forward-looking statements. The words “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “could,” “target,” “potential,” “is likely,” “will,” “expect” and similar expressions, as they relate to us, are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs.

 

The results anticipated by any or all of these forward-looking statements might not occur. Important factors, uncertainties and risks that may cause actual results to differ materially from these forward-looking statements include the ongoing impact of the coronavirus pandemic and its negative effect on the U.S. and global economies and our lack of an operating history and revenue. Further information on the risk factors affecting our business is contained in “Risk Factors” of our annual report on Form 10-K for the fiscal year ended November 30, 2020. We undertake no obligation to publicly update or revise any forward-looking statements, whether as the result of new information, future events or otherwise.

 

Description of Business 

 

TradeFan, Inc., previously known as Vado Corp., was incorporated in the State of Nevada on February 10, 2017 and established a fiscal year end of November 30. We have not generated material revenues, have minimal assets and have incurred losses since inception. We were formed to engage in the embroidery business, but in connection with the Change of Control described in the following paragraph, the Company has terminated its plans in the embroidery business and wrote off its assets. Since the Change of Control, we commenced seeking new business opportunities in the United States and abroad. Among other things, we may acquire an ongoing business in a reverse merger.

 

On May 22, 2020, David Lelong purchased from Dusan Konc 6,000,000 shares of Common Stock of the Company and a convertible promissory note with a face value of $29,973 (the “Vado Related Party Note”), payable by the Company and convertible into shares of Common Stock at $0.0003 per share, for a total purchase price of $100,000 (the “Change of Control”). The Change of Control was affected pursuant to a Securities Purchase Agreement dated May 22, 2020 (the “Purchase Agreement”) by and among Mr. Lelong as the purchaser, the Company, and Mr. Konc, the Company’s majority shareholder, sole director and officer, as the seller. On May 28, 2020, Mr. Lelong fully converted the Related Party Note into 89,919,000 shares of the Company’s common stock.

 

On February 12, 2021, the Company’s Board of Directors approved changing the Company’s name to “TradeFan, Inc.”.

 

Plan of Operation

 

The Company has no operations or revenue as of the date of this report. We have terminated our operations in the embroidery business, and are currently in the process of developing a business plan. Management intends to explore and identify viable business opportunities within the U.S. and abroad including seeking to acquire a business in a reverse merger. See Note 1 to the unaudited financial statements contained in this Report. Our Chief Executive Officer has a history of successfully achieving that goal, although no assurances can be given that he can achieve this.  Our ability to effectively identify, develop and implement a viable plan for our business may be hindered by risks and uncertainties which are beyond our control, including without limitation, the continued negative effects of the coronavirus pandemic on the U.S. and global economies. For more information about the risk of coronavirus on our business, see “Risk Factors” contained in our annual report on Form 10-K for the fiscal year ended November 30, 2020.

 

Results and Plan of Operations

 

Revenue, Cost of Revenue and Gross Profit

 

We had no revenue for the three months ended February 28, 2021 and February 29, 2020. We expect this trend to persist until we can locate and acquire an operating business.

 

 

Operating Expenses

 

Included in continuing operations, we incurred operating expenses of $51,333 and $7,503 during the three months ended February 28, 2021 and February 29, 2020, respectively. The operating expenses were mainly due to the professional fees related to the Company’s filings under the Securities Exchange Act of 1934 (the “Exchange Act”) and general operating expenditures of running the Company.

 

Interest Expense

 

The Company recorded interest expense in the amount of $113 during the three months ended February 28, 2021 in connection with the 2021 Accelerated Online Agreement; there was no comparable transaction during the prior period.

 

Net Income (Loss)

 

During the three months ended February 28, 2021 and February 29, 2020, we recorded a net income (loss) of $(51,446) and $(7,503), respectively. The increase was due to additional expenditures in connection with Exchange Act reporting and our search for an operating business to acquire. 

 

Liquidity and Capital Resources

 

Cash Flows used by Operating Activities:

 

For the three months ended February 28, 2021, net cash flows used in operating activities was $45,773.

 

Once we have developed and begun to implement our business plan, management intends to fund our working capital requirements through a combination of our existing funds and future issuances of debt or equity securities. Our working capital requirements are expected to increase in line with the implementation of a business plan and commencement of operations.

 

Based upon our current operations, we have sufficient working capital to fund our operations over the next 12 months. If we are able to close a reverse merger, it is likely we will need capital as a condition of closing that acquisition. Because of the uncertainties, we cannot be certain as to how much capital we need to raise or the type of securities we will be required to issue. In connection with a reverse merger, we will be required to issue a controlling block of our securities to the target’s shareholders which will be very dilutive. 

 

Additional issuances of equity or convertible debt securities will result in dilution to our current shareholders. Further, such securities might have rights, preferences or privileges senior to our common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, we may not be able to take advantage of prospective new business endeavors or opportunities, which could significantly and materially restrict our business operations.

 

We anticipate that we will incur operating losses in the next 12 months. Our prospects must be considered in light of the risks, expenses and difficulties frequently encountered by companies in their early stage of development.  Such risks for us include, but are not limited to, an evolving and unpredictable business model; recognition of revenue sources; and the management of growth. To address these risks, we must, among other things, develop, implement and successfully execute our business and marketing strategy, respond to competitive developments, and attract, retain and motivate qualified personnel.  There can be no assurance that we will be successful in addressing such risks, and the failure to do so could have a material adverse effect on our business prospects, financial condition and results of operations.

 

COVID-19 Update

 

To date, the COVID-19 pandemic has not had a material impact on the Company, particularly due to our current lack of operations. The pandemic may, however, have an impact on our ability to evaluate and acquire an operating entity through a reverse merger or otherwise. See “Risk Factors” contained in our annual report on Form 10-K for the fiscal year ended November 30, 2020 for more information.

 

Off-Balance Sheet Arrangements

 

As of the date of this Quarterly Report, 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 are material to investors.

 

 

Going Concern

 

The independent registered public accounting firm auditors’ report accompanying our November 30, 2020 financial statements contained an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. The financial statements have been prepared “assuming that we will continue as a going concern,” which contemplates that we will realize our assets and satisfy our liabilities and commitments in the ordinary course of business.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

 

Not applicable.

 

ITEM 4. CONTROLS AND PROCEDURES

 

Disclosure Controls and Procedures

 

Our disclosure controls and procedures are designed to ensure that information required to be disclosed in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission. Mr. David Lelong, our principal executive officer and principal financial officer has reviewed the effectiveness of our “disclosure controls and procedures” (as defined in the Exchange Act Rules 13(a)-15(e) and 15(d)-15(e)) as of the end of the period covered by this Quarterly Report on Form 10-Q and has concluded that our disclosure controls and procedures are not effective to ensure that material information relating to the Company is recorded, processed, summarized, and reported in a timely manner, for the following reasons:

 

	●	The Company does not have an independent board of directors or audit committee or adequate segregation of duties;
	●	All of our financial reporting is carried out by our financial consultant;
	●	We do not have an independent body to oversee our internal controls over financial reporting and lack segregation of duties due to the limited nature and resources of the Company.

 

We plan to rectify these weaknesses by implementing an independent board of directors and hiring additional accounting personnel at such time as we complete a reverse merger.

 

Changes in Internal Controls over Financial Reporting

 

There have been no changes in the Company's internal control over financial reporting during the three-month period covered by this report that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

 

 

PART II. OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

Management is not aware of any legal proceedings contemplated by any governmental authority or any other party involving us or our properties. As of the date of this Quarterly Report, no director, officer or affiliate is (i) a party adverse to us in any legal proceeding, or (ii) has an adverse interest to us in any legal proceedings. Management is not aware of any other legal proceedings pending or that have been threatened against us or our properties.

 

ITEM 1A. RISK FACTORS

 

Not applicable.

 

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

 

All recent unregistered sales of securities have been previously reported.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

None.

 

ITEM 4. MINE SAFETY DISCLOSURES

 

Not applicable.

 

ITEM 5. OTHER INFORMATION

 

None.

 

 

ITEM 6. EXHIBITS

 

		Incorporated by Reference			Filed or Furnished Herewith
Exhibit #	Exhibit Description	Form	Date	Number
3.1(a)	Articles of Incorporation	S-1	01/18/18	3.1
3.1(b)	Certificate of Amendment to Articles of Incorporation	10-Q	07/15/20	3.1B
3.1(c)	Certificate of Amendment to Articles of Incorporation	8-K	04/01/21	3.1
3.2	Amended and Restated Bylaws	8-K	05/29/20	3.1
4.1	Certificate of Designations of Series A Convertible Preferred Stock	8-K	06/29/20	4.1
10.1	Consulting Agreement between the Company and Accelerated Online Inc. dated June 1, 2020	10-Q	10/08/20	10.1
10.2	Amended Consulting Agreement between the Company and Accelerated Online Inc. dated January 4, 2021	10-K	02/03/21	10.2
31.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(a) or 15d-14(a)				Filed
32.1	Certifications pursuant to Securities Exchange Act of 1934 Rule 13a-14(b) or 15d-14(b) and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002				Filed
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

 

 

 

SIGNATURES

 

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

 

	TradeFan, Inc.
Dated: April 12, 2021	By: /s/ David Lelong
	David Lelong, Chief Executive Officer and Chief Financial Officer (Principal Executive Officer and Principal Financial Officer)