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 (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12
under the Exchange Act (17 CFR 240.14a -12)
[ ] Pre-commencement communications pursuant to
Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d -2(b))
[ ] Pre-commencement communications pursuant to
Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e -4(c))
ITEM 5.06 CHANGE IN SHELL
COMPANY STATUS
As a result of closing the Share Exchange Agreement
discussed herein, the Company ceased to be deemed a “shell company” as that term
is defined in Rule 405 of the Securities Act and Rule 12b-2 of the Exchange Act.
Also, the Company is providing the following information to the public to
provide full and adequate disclosure regarding the new business direction of the
Company and provide such current adequate information as we believe the public
would need in order to make an informed investment decision.
As referred to hereinafter in this Report and unless
otherwise indicated, the terms “we”, “us”, “our”, the “Company”, “FWTI” refer to
FlitWays Technology Inc.
Page 3 of 32
FORM 10 DISCLOSURE
ITEM
1. BUSINESS
Our Corporate History and Background
As previously announced on Form 8-K filed with the SEC on
September 7, 2016, on the same date Cataca Resources, Inc., a Nevada corporation
(the “Company” or “CATQ”) announced that it had entered into a Share Exchange
Agreement (the “Share Exchange Agreement”) with FlitWays Technology Inc., a
Delaware corporation (“FWTI”), and the controlling stockholders of FWTI (the
“FWTI Shareholders”). Pursuant to the Share Exchange Agreement, the Company will
acquire 100% of the issued and outstanding equity of FWTI from the FWTI
shareholders (the “FWTI Shares”) and in exchange the Company shall issue to FWTI
20,000,000 restricted shares of its common stock (the “CATQ Shares”). As a
result of the Share Exchange Agreement, FWTI shall become a wholly owned
subsidiary of the Company. The Share Exchange Agreement contains customary
representations, warranties and conditions to closing. The closing of the Share
Exchange (the “Closing”) shall only occur once the Company completes a name
change and FWTI provides CATQ with audited financial statements, with such
financial statements being prepared by an independent accounting firm registered
with the Public Company Accounting Oversight Board (“PCAOB”).
On October 14, 2016, (the “Closing Date”) FWTI provided the
Company the necessary audited financial statements, as required by the Share
Exchange Agreement, and the Company and FWTI determined that it is in the best
interest of both parties to Close the Share Exchange Agreement. Further, the
parties have determined that it is in their respective best interest to waive
the condition that the Company complete a name change prior to closing. However,
it is anticipated that the Company will undertake, in the near future, to
complete the name change.
Accordingly, as of the date of this Report the material terms
of the Share Exchange Agreement have been satisfied and as such the Share
Exchange Agreement is closed. Accordingly, FWTI is our wholly-owned subsidiary
of the Company and the business direction of the Company has shifted to the
business of FWTI. The transaction was accounted for as a reverse
recapitalization transaction, given the fact that the Company held no net
monetary assets at the date of Closing Date. As FWTI is deemed to be the
purchaser for accounting purposes under recapitalization accounting, these pro
forma financial statements are presented as a continuation of FWTI. The equity
of FWTI is presented as the equity of the combined company and the capital stock
account of FWTI is adjusted to reflect the par value of the outstanding and
issued common stock of the legal acquirer (Cataca Resources, Inc.) after giving
effect to the number of shares issued in the Share Exchange Agreement.
Who We Are
FlitWays Technology Inc. was founded in 2013, with a mission to
broaden the reach of transportation, by curating a network of ride providers to
help travelers find and schedule the best fitting mode of mobility, and help
drivers better utilize their equity. Our mission is to revolutionize the way
businesses and private travelers book and schedule ground travels. FlitWays
gives travelers access to a preferred travel ride through our reliable network
of ground travel providers. FlitWays wants every traveler to seamlessly pre-book
a ride to his or her priority. Make the management of the customer ground travel costs
easier by taking control of the customer ground travel expenses with FlitWays.
Page 4 of 32
FlitWays lets our customers manage and control their business
ground travel and expenses anytime and anywhere. Using our web and application
technology allows our customers to avoid unnecessary surprises and hassles by
using our streamlined integrated booking service. By utilizing the FlitWays
online and mobile application ride booking, our customers can stay organized and
can reduce airport wait times by pre-booking a vehicle that will be ready to
pick up and drop off at the customer's destination.
We consider FlitWays a one-stop shop for all of all travelers
ground transportation needs. With over 15,000 vehicles to choose from and with
service in over 140 cities, the possibilities are endless and our customers can
create their very own personal travel experience based on customer's lifestyle.
With FlitWays there are no surprising surcharges or hidden
fees, all of the competitive price rates that our customers enjoy already
include wait time, gratuity, and surcharges. Customers take comfort in knowing that they
are in control and do not have anticipate additional unwanted charges.
Page 5 of 32
FlitWays Solutions
Page 6 of 32
Advanced Booking Engine
We understand that everyone requires a unique solution for
their unique lifestyle. Our Advanced Booking Engine lets the customer drill down
to the exact specification, rates, and vehicle that meets their needs. It also
allows the customer to search through an expansive network of growing ground
travel providers for the safest, reliable, and most up-to-date vehicles
available.
One Travel Expense
Our technology allows the customer to manage all of their
travel expenses with ease, offering an ideal solution for business travelers.
FlitWays allows the customer to plan, maintain, and organize business travel in
one place. An excellent option for both corporate and individual travel bookings
with FlitWays lets the customer keep track of business spending and control their travel
budget.
24/7 Customer Support
Our customer support team is available around the clock to
assist the customer with all of their booking needs and questions.
Corporate Solutions/Competitive Advantage
FlitWays is the ideal solution for corporation to schedule and
manage global ground transportation services. We built our customer interfaces
with corporate travel needs in mind. Businesses can accomplish more using
FlitWays than compared to our competitors, including Lyft and Uber. We believe
that brands like Lyft and Uber are more consumer orientated, while we designed
and implemented our customer interface with the corporate user in mind. To this
end, we have tried to simplify the process of booking ground transpiration by
building direct integrations with major travel suppliers (e.g. Booking.com,
Kayak.com and others) to offer seamless ground transportation bookings to their
travelers.
Today, our corporate clientele includes major brands like
Samsung, Amazon, Rolls Royce, Citrix, and HSBC Bank and we are working to add
new clients every day.
Page 7 of 32
Travel Management & Travel Agencies
FlitWays empower travel management companies and travel
agencies to seamlessly offer ground transportation service to their clients, by
providing access to 15,000+ pre-booked travel rides and by allowing travel
management companies and travel agencies to book directly from major travel
management companies and travel agencies booking platforms. Travel management
companies and travel agencies receive revenue allocation of 10% on all booked
trips.
Booking rides with FlitWays
Booking rides, airport shuttles and/or executive cars with our
website/application requires the customer to be a registered user. When booking
with FlitWays the customer is able to select a choice of vehicle and preferred
gratuity based on their personal preference. The estimate travel fare provided
is built on the most resourceful travel route and on decent traffic situations.
The ultimate fare may differ due to traffic situations, the route taken, wait
time, parking, and return trip. Once the customer's booking has been completed and confirmed,
the company that owns the vehicle chosen is automatically notified that the
vehicle is booked. The notification of the booking confirmation is also sent to
the customer via SMS and email confirmation message together with the details of the
customer’s journey. Customers can view their past bookings in their FlitWays
account, which can be easily used for business travel expense reports.
Payment
We accept credit card payment for ride booking from our
customers. Partners can set a corporate account to have ride bookings billed and
paid through invoice. Our platform allows our customers to pay securely and
also eliminate the hassle of negotiating fare price with the ride driver. All
payment information processed on our site is encrypted and secured with
state-of-the-art SSL before they are transferred.
Page 8 of 32
Customer Accounts
FlitWays is free and we intend it to always be. Customers will
need to establish an account prior to booking. We require an account in order to
collect basic information (i.e., name, mobile phone number and email) and to
process all bookings. Once a booking is made, the customer will receive
notification via SMS and email. The driver will use the customer's information to
identify them during pick up. Additionally, having an account will enable
customers to bypass the hassle of providing information next time they want to
use FlitWays to book a ride. Customers will also be able to make modifications
to their booking, such as cancel a booking, request for refund and more.
Customers can deactivate their FlitWays account at any given time without any
obligation.
Frequently Asked Questions
The following Frequently Asked Questions (FAQs) relate to the
general customer experience when using FlitWays. More information relating to
the FAQs can be found on our website at www.flitways.com.
How can a customer locate their ride at the airport?
If a trip is from an airport, the driver/greeter will meet the
customer at the arrival terminal with a sign that shows the name of the
customer.
What happens if a driver did not arrive on time?
If a driver didn't arrive on time and the driver didn't notify
the customer of any delay, the customer is expected to contact the driver
directly by calling the driver’s phone number on their booking voucher to check
the status of the driver and new estimated arrival time.
What happens if a flight is cancelled, arrives early or is
delayed?
If a customer is travelling from the airport, the driver will
use the flight details of the customer provided during the booking to track the
flight arrival situation. FlitWays drivers are experienced in handling
situations with early arrival or flight delays. Drivers constantly check the
aviation flight update on the flight arrival situation and pick up the customer
at the exact time of their arrival. If the customer flight is cancelled and
won't be able to make the ride pick up time, the customer need to log in to
their FlitWays account or call our customer support phone number to cancel the
booking.
What options is available during booking?
There are different options during a booking such as choosing a
preferred vehicle, choosing a wait and return trip (if a customer want the
driver to do a return trip to the pickup location), paying with one of the customer's 3
saved credit card details and more.
How many rides can a customer book at a time?
A customer can book as many rides as they want. Cancelation fee
or no show fee may apply if a customer is not available during the pickup.
Page 9 of 32
How can a customer be certain of a pick up after a
booking?
Once a customer have successfully booked a ride, all booking
information is transmitted accurately using data communication between FlitWays
and the driver. A driver is then sent out for pick up. In the event whereby the
driver dispatched to pick up a customer cannot do so, a customer will receive a
notification via SMS/Email informing the customer about the situation, and what to do
here forth (cancel the booking to get full refund or re-book). We evaluate our
drivers lead time and ETA time thoroughly before approving their request to join
our network. All of our providers are experienced and reliable with long track
record of meeting and picking up passengers at scheduled time and this is the
same guarantee we pass along to our customers.
How can a customer monitor their trip status?
To check the status of a booking, a customer can log in to
their FlitWays Account, and then go to the Bookings menu. The current/latest
booking is always the first one on the list with the latest update.
How can the driver identify a customer during pick up?
The driver only need the customer voucher number to identify
the customer during the pickup. The customer voucher number can be found in the
booking confirmation email and SMS sent to the customer.. A customer have
different options to show the driver their voucher number:
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The SMS confirmation also includes the voucher
number.
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A customer can write down the voucher number from the
email or SMS they received and give it to their
driver.
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Cancellation and Refund Policy
For taxi/ride share bookings, a full refund will be given if a
customer cancel the booking 5 minutes after placing the booking.
There's a
cancellation fee of $5
for taxi/ride share if a customer cancel their
booking after the 5 minutes grace period. We charge a full fare price for a No
show, if the driver arrives at your pick up address and waits for 15 minutes.
For executive cars and airport shuttle bookings, full refund
will be given, if a customer cancel the booking 5 minutes after placing the
booking.
There's a cancellation fee of $20
for Executive Cars and Airport
Shuttle if the customer cancel the booking after the 5 minutes grace period. We
charge a full fare price for a no show, if the driver arrives at the customer's pick up
address and waits for 30 minutes.
Our refund processing time takes about 24 - 48 hours. Once it's
processed, the refund will be released to the customer credit/debit card. Please
note that bank processing time varies, and allow up to 5 business days for the
refund to appear on the credit card statement.
How can a customer get a refund if a driver did not show
up?
In order to be entitled to a full refund a customer need to
notify our customer support phone number or email our customer support agents to
claim their refund. Our refund processing time takes about 24 – 48 hours. Once
it's processed, the refund will be released to the customer credit/debit card.
Page 10 of 32
Marketing Strategy
Most of our customers have been acquired through various
partnerships with travel vendors, which give us the opportunity to minimize
marketing costs and to focus on establishing new partnerships daily. In the
future we intend to promote FlitWays using Business-to-Business marketing
concepts to increase and expand brand awareness and general corporate
exposure.
Employees
FlitWays team is made up of 3 employees and 7 independent
contractors and we all strive to dominate our market niche and make ground
travel booking ridiculously easy.
ITEM
1A. RISK FACTORS
You should carefully consider each of the risks and
uncertainties described below and elsewhere in this Current Report on Form 8-K,
as well as any amendments or updates reflected in subsequent filings with the
SEC. We believe these risks and uncertainties, individually or in the aggregate,
could cause our actual results to differ materially from expected and historical
results and could materially and adversely affect our business operations,
results of operations, financial condition and liquidity. Further, additional
risks and uncertainties not presently known to us or that we currently deem
immaterial may also impair our results and business operations.
Risks Associated with Our Business
We Have Limited Resources For Marketing Of Our Services
And We May Not Be Able To Attract Sufficient Paying End Users To Make Our
Business Sustainable
We have limited resources for marketing of our services. Our
future sales will depend in large part on our ability to attract sufficient
paying end users to make our business profitable and sustainable. Also, we may
not be able to attract and retain personnel or be able to build an efficient and
effective Internet marketing force, which could negatively impact sales of our
services, and reduce our revenues and profitability.
The Company's Ability To Implement Its Business And
Marketing Strategy
The implementation of the Company's business and marketing
strategy will depend on a number of factors. These include our ability to (i)
find and hire reliable and sufficiently skilled third-party Internet marketing
personnel, (ii) make our services known and establish a trusted brand to our
potential end user customers, (iii) establish a significant paying end user
customer base, (iv) obtain adequate financing on favorable terms in order to
fund our business, (v) maintain appropriate procedures, policies and systems;
(vi) hire, train and retain skilled employees, and (vii) operate successfully
and profitably within an environment of increasing competition. The inability of
the Company to manage any or all of these factors could impair our ability to
implement our business strategy successfully, which could have a material
adverse effect on our business, financial condition and the results of our
operations.
Page 11 of 32
We May Be Unable To Gain Any Significant Market
Acceptance For Our Services Or Establish A Significant Market
Presence
The Company's growth strategy is substantially dependent upon
its ability to market its services successfully to prospective paying end user
customers. However, its services may not achieve significant acceptance. Such
acceptance, if achieved, may not be sustained for any significant period of
time. Failure of the Company's services to achieve or sustain market acceptance
could have a material adverse effect on our business, financial condition and
the results of our operations.
Our Operating Results May Prove Unpredictable
Our operating results are likely to fluctuate significantly in
the future due to a variety of factors, many of which we have no control over.
Factors that may cause our operating results to fluctuate significantly include:
the level of commercial acceptance by the public of our services; fluctuations
in the demand for our services; the amount and timing of operating costs and
capital expenditures relating to the operation of and/or expansion of our
business, operations, infrastructure and general economic conditions. If
realized, any of these risks could have a material adverse effect on our
business, financial condition and the results of operations.
Due To Our Dependence On Computer And Telecommunications
Infrastructure And Computer Software, Any Systems Disruptions Or Operating
Malfunctions Would Affect Our Costs Of Doing Business And Could Cause Our
Business To Fail
We will market our services through our website and the
Internet. We will rely upon the Internet to contact and solicit orders from
prospective end user consumers, and to distribute and receive payment for our
services. Our success will depend in part on computer systems that interconnect
our software systems with those of travel services, and e-commerce connections
that allow us to collect revenues for the services we provide. Operating
malfunctions in the software systems of travel services, e-commerce connections
and other parties would have an adverse effect on our operations.
Customer Complaints Or Negative Publicity About Our
Customer Service Could Diminish Use Of Our Services
Customer complaints or negative publicity about our customer
service could severely diminish consumer confidence in and use of our services.
Measures we will be taking to combat risks of fraud and breaches of privacy and
security could damage relations with our end user consumers. These measures will
heighten the need for prompt and accurate customer service to resolve
irregularities and disputes. Effective customer service requires significant
personnel expense, and this expense, if not managed properly, could
significantly impact our profitability. Failure to manage or train our customer
service representatives properly could compromise our ability to handle customer
complaints effectively. If we do not handle customer complaints effectively, our
reputation may suffer and we may lose our end user consumers' confidence.
Page 12 of 32
Our Competitors May Infringe On Our Customer Base And
Have An Adverse Effect Upon Our Business And The Results Of
Operations
We have identified a market opportunity for our ground
transportation services. Competitors may enter this segment of the ground
transportation services market with superior services, thus rendering our
services obsolete and nullifying any competitive advantage we may enjoy. There
may be traditional ground transportation services providers, such as Uber, Lyft,
Sidecar, Hailo, EasyTaxi, GrabTaxi, etc., that are better financed and may have
long standing relationships with our primary potential end user consumers. There
can be no guarantee that such pre-existing companies will not mimic our business
model. This would infringe on our customer base and have an adverse effect upon
our business and the results of our operations.
If There Are Events Or Circumstances Affecting The
Reliability And Security Of The Internet, Access To Our Websites And/Or The
Ability To Safeguard Our Customer's Confidential Information Our Business Could
Be Impaired causing A Negative Effect On The Financial Results Of Our
Operations
Despite the implementation of security measures, our website
infrastructure may be vulnerable to computer viruses, hacking or similar
disruptive problems caused by customers, other internet users, other connected
internet websites, and the interconnecting telecommunications networks. Such
problems caused by third-parties could lead to interruptions, delays or
cessation of service to our customers. Inappropriate use of the internet by
third-parties could also potentially jeopardize the security of our customer's
confidential information stored in our computer system, which may deter
individuals from becoming customers. Such inappropriate use of the internet
includes attempting to gain unauthorized access to information or systems, which
is commonly known as "cracking" or "hacking.” Although we intend to implement
security measures, such measures have been circumvented in the past, and there
can be no assurance that any measures we implement would not be circumvented in
future. Dealing with problems caused by computer viruses or other inappropriate
uses or security breaches may require interruptions, delays or cessation of
service to our customers, which could have a material adverse effect on our
business, financial condition and results of operations.
Our Articles Of Incorporation Exculpates Our Officers And
Directors From Certain Liability To Our Company Or Our Stockholders.
Our Articles of Incorporation contain a provision limiting the
liability of our officers and directors for their acts or failures to act,
except for acts involving intentional misconduct, fraud or a knowing violation
of law. This limitation on liability may reduce the likelihood of derivative
litigation against our officers and directors and may discourage or deter our
stockholders from suing our officers and directors based upon breaches of their
duties to our Company.
Our Directors And Named Executive Officers Are Also Our
Principal Stockholders, As Such They Will Be Able To Exert Significant Influence
Over Matters Submitted To Stockholders For Approval, Which Could Delay Or
Prevent A Change In Corporate Control Or Result In The Entrenchment Of
Management Or The Board Of Directors, Possibly Conflicting With The Interests Of
Other Stockholders.
Our directors and named executive officers are also our
principal stockholders as such they exert significant influence in determining
the outcome of corporate actions requiring stockholder approval and otherwise
control of our business. This control could have the effect of delaying or
preventing a change in control or entrenching management or the Board of
Directors, which could conflict with the interests of our other stockholders
and, consequently, could adversely affect the market price of our common stock.
Page 13 of 32
Our Continuing Losses And Liquidity Position May Cause Us To Be Unable To Pursue All Of Our Operational Objectives If Sufficient Financing And/Or Additional Cash From Revenues Is Not Realized. This Raises Doubt As To Our Ability To Continue As A Going Concern.
The independent registered public accounting firm of Flitways Technology, Inc. for the years ended December 31, 2015 and 2014, has included an explanatory paragraph in their opinion that accompanies our audited financial statements as of and for the years ended December 31, 2015 and 2014, indicating that our continuing losses and current liquidity position raises substantial doubt about our ability to continue as a going concern. If we are unable to improve our liquidity position we may not be able to continue as a going concern. Our ability to raise the capital needed to improve our financial condition may be hindered market conditions. The accompanying financial statements do not include any adjustments that might result if we are unable to continue as a going concern and, therefore, be required to realize our assets and discharge our liabilities other than in the normal course of business which could cause investors to suffer the loss of all or a substantial portion of their investment.
Risks Relating to Ownership of Our Securities
Our Stock Price May Be Volatile, Which May Result In
Losses To Our Shareholders.
The stock markets have experienced significant price and
trading volume fluctuations, and the market prices of companies listed on the
OTC Markets quotation system in which shares of our common stock are listed,
have been volatile in the past and have experienced sharp share price and
trading volume changes. The trading price of our common stock is likely to be
volatile and could fluctuate widely in response to many factors, including the
following, some of which are beyond our control:
-
variations in our operating results;
-
changes in expectations of our future financial performance, including
financial estimates by securities analysts and investors;
-
changes in operating and stock price performance of other companies in our
industry;
-
additions or departures of key personnel; and
-
future sales of our common stock.
Domestic and international stock markets often experience
significant price and volume fluctuations. These fluctuations, as well as
general economic and political conditions unrelated to our performance, may
adversely affect the price of our common stock.
Our Common Shares May Become Thinly Traded And You May Be
Unable To Sell At Or Near Ask Prices, Or At All.
We cannot predict the extent to which an active public market
for trading our common stock will be sustained. Although the trading price of
our common shares increased significantly recently, it has historically been
sporadically or “thinly-traded” meaning that the number of persons interested in
purchasing our common shares at or near bid prices at certain given time may be
relatively small or nonexistent.
This situation is attributable to a number of factors,
including the fact that we are a small company which is relatively unknown to
stock analysts, stock brokers, institutional investors and others in the
investment community who generate or influence sales volume. Even if we came to
the attention of such persons, those persons tend to be risk-averse and may be
reluctant to follow, purchase, or recommend the purchase of shares of an
unproven company such as ours until such time as we become more seasoned and
viable. As a consequence, there may be periods of several days or more when
trading activity in our shares is minimal or non-existent, as compared to a
seasoned issuer which has a large and steady volume of trading activity that
will generally support continuous sales without an adverse effect on share
price. We cannot give you any assurance that a broader or more active public
trading market for our common stock will develop or be sustained, or that
current trading levels will be sustained.
Page 14 of 32
The Market Price For Our Common Stock Is Particularly
Volatile Given Our Status As A Relatively Small Company, Which Could Lead To
Wide Fluctuations In Our Share Price. You May Be Unable To Sell Your Common
Stock At Or Above Your Purchase Price If At All, Which May Result In Substantial
Losses To You.
Shareholders should be aware that, according to SEC Release No.
34-29093, the market for penny stocks has suffered in recent years from patterns
of fraud and abuse. Such patterns include (1) control of the market for the
security by one or a few broker-dealers that are often related to the promoter
or issuer; (2) manipulation of prices through prearranged matching of purchases
and sales and false and misleading press releases; (3) boiler room practices
involving high-pressure sales tactics and unrealistic price projections by
inexperienced sales persons; (4) excessive and undisclosed bid-ask differential
and markups by selling broker-dealers; and (5) the wholesale dumping of the same
securities by promoters and broker-dealers after prices have been manipulated to
a desired level, along with the resulting inevitable collapse of those prices
and with consequent investor losses. Our management is aware of the abuses that
have occurred historically in the penny stock market. Although we do not expect
to be in a position to dictate the behavior of the market or of broker-dealers
who participate in the market, management will strive within the confines of
practical limitations to prevent the described patterns from being established
with respect to our securities. The occurrence of these patterns or practices
could increase the volatility of our share price.
We Do Not Anticipate Paying Any Cash Dividends To Our
Common Shareholders.
We presently do not anticipate that we will pay dividends on
any of our common stock in the foreseeable future. If payment of dividends does
occur at some point in the future, it would be contingent upon our revenues and
earnings, if any, capital requirements, and general financial condition. The
payment of any common stock dividends will be within the discretion of our Board
of Directors. We presently intend to retain all earnings after paying the
interest for the preferred stock, if any, to implement our business plan;
accordingly, we do not anticipate the declaration of any dividends for common
stock in the foreseeable future.
Volatility In Our Common Share Price May Subject Us To
Securities Litigation.
The market for our common stock is characterized by significant
price volatility as compared to seasoned issuers, and we expect that our share
price will continue to be more volatile than a seasoned issuer for the
indefinite future. In the past, plaintiffs have often initiated securities class
action litigation against a company following periods of volatility in the
market price of its securities. We may, in the future, be the target of similar
litigation. Securities litigation could result in substantial costs and
liabilities and could divert management’s attention and resources.
Page 15 of 32
The Elimination Of Monetary Liability Against Our
Directors, Officers And Employees Under Nevada Law And The Existence Of
Indemnification Rights Of Our Directors, Officers And Employees May Result In
Substantial Expenditures By Our Company And May Discourage Lawsuits Against Our
Directors, Officers And Employees.
Our Articles of Incorporation contains a specific provision
that eliminates the liability of our directors and officers for monetary damages
to our company and shareholders. Further, we are prepared to give such
indemnification to our directors and officers to the extent provided for by
Nevada law. We may also have contractual indemnification obligations under our
employment agreements with our officers. The foregoing indemnification
obligations could result in our company incurring substantial expenditures to
cover the cost of settlement or damage awards against directors and officers,
which we may be unable to recoup. These provisions and resultant costs may also
discourage our company from bringing a lawsuit against directors and officers
for breaches of their fiduciary duties, and may similarly discourage the filing
of derivative litigation by our shareholders against our directors and officers
even though such actions, if successful, might otherwise benefit our company and
shareholders.
Our Business Is Subject To Changing Regulations Related
To Corporate Governance And Public Disclosure That Have Increased Both Our Costs
And The Risk Of Noncompliance.
Because our common stock is publicly traded, we are subject to
certain rules and regulations of federal, state and financial market exchange
entities charged with the protection of investors and the oversight of companies
whose securities are publicly traded. These entities, including the Public
Company Accounting Oversight Board, the SEC and FINRA, have issued requirements
and regulations and continue to develop additional regulations and requirements
in response to corporate scandals and laws enacted by Congress, most notably the
Sarbanes-Oxley Act of 2002. Our efforts to comply with these regulations have
resulted in, and are likely to continue resulting in, increased general and
administrative expenses and diversion of management time and attention from
revenue-generating activities to compliance activities. Because new and modified
laws, regulations and standards are subject to varying interpretations in many
cases due to their lack of specificity, their application in practice may evolve
over time as new guidance is provided by regulatory and governing bodies. This
evolution may result in continuing uncertainty regarding compliance matters and
additional costs necessitated by ongoing revisions to our disclosure and
governance practices.
Page 16 of 32
ITEM
2. FINANCIAL
INFORMATION
MANAGEMENT’S DISCUSSION AND ANALYSIS
The following discussion should be read in conjunction with
our audited financial statements and the related notes that appear elsewhere in
this annual report. The discussions of results, causes and trends should not be
construed to imply any conclusion that these results or trends will necessarily
continue into the future
.
Our audited financial statements are stated in United States
Dollars and are prepared in accordance with United States Generally Accepted
Accounting Principles
.
RESULTS OF OPERATIONS
Cataca Resources Inc.
Working Capital
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June 30, 2016
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December 31, 2015
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|
|
Current Assets
|
|
6,830
|
|
|
4,537
|
|
|
|
Current Liabilities
|
|
127,231
|
|
|
106,026
|
|
|
|
Working Capital Deficit
|
|
(120,401
|
)
|
|
(101,489
|
)
|
Cash Flows
|
|
|
|
Six months ended
|
|
|
Six months ended
|
|
|
|
|
|
June 30, 2016
|
|
|
June 30, 2015
|
|
|
|
|
|
$
|
|
|
$
|
|
|
|
Cash Flows used in Operating Activities
|
|
(17,707
|
)
|
|
(44,297
|
)
|
|
|
Cash Flows used in Investing Activities
|
|
-
|
|
|
-
|
|
|
|
Cash Flows from Financing Activities
|
|
20,000
|
|
|
49,000
|
|
|
|
Net increase in Cash During Period
|
|
2,293
|
|
|
4,703
|
|
Flitways Technology Inc.
Working Capital
|
|
|
|
June 30, 2016
|
|
|
December 31, 2015
|
|
|
|
|
|
$
|
|
|
$
|
|
|
|
Current Assets
|
|
9,264
|
|
|
14,020
|
|
|
|
Current Liabilities
|
|
211,474
|
|
|
185,277
|
|
|
|
Working Capital Deficit
|
|
(202,210
|
)
|
|
(171,257
|
)
|
Page 17 of 32
Cash Flows
|
|
|
|
Six months ended
|
|
|
Six months ended
|
|
|
|
|
|
June 30, 2016
|
|
|
June 30, 2015
|
|
|
|
|
|
$
|
|
|
$
|
|
|
|
Cash Flows used in Operating
Activities
|
|
(47,829
|
)
|
|
(8,040
|
)
|
|
|
Cash Flows used in Investing Activities
|
|
-
|
|
|
-
|
|
|
|
Cash Flows provided by
Financing Activities
|
|
45,409
|
|
|
1,692
|
|
|
|
Net decrease in Cash During Period
|
|
(2,420
|
)
|
|
(6,348
|
)
|
Operating Revenues
Cataca Resources Inc.
During the period from December 11, 2012 (date of
incorporation) to June 30, 2016, Cataca Resources Inc. (“Cataca”) has not
recorded any revenues.
Flitways Technology Inc.
During the six months ended June 30, 2016, Flitways Technology
Inc. (“Flitways”) recorded revenues of $173,049 and gross profit of $58,828
compared to revenues of $124,831 and gross profit of $14,663 during the six
months ended June 30, 2015. The increase in revenue and gross profit is due to
an increase in overall business. Gross profit margin for the six months ended
June 30, 2016 was 34% compared to a gross profit of 12% during the six months
ended June 30, 2015. The increase in gross profit margin is due to a combination
of economies of scale with the increased activity during fiscal 2016 as well as
the ability of management to minimize overall costs in order to increase the
profit margins.
Operating Expenses and Net Loss
Cataca Resources Inc.
For the six months ended June 30, 2016, Cataca incurred
operating expenses of $18,912 consisting primarily of professional fees
including accounting, audit, and legal expenses for Cataca’s SEC filings. Cataca
had operating expenses during the six months ended June 30, 2015 of $45,611
consisting primarily of professional fees including accounting, audit, and legal
expenses for their SEC filings and one-time fees to establish a stock transfer
agent, DTC eligibility and FINRA approval for Cataca’s stock listing.
For the six months ended June 30, 2016, Cataca incurred a net
loss of $18,912 compared with a net loss of $45,611 for the six months ended
June 30, 2015.
Page 18 of 32
Flitways Technology Inc.
For the six months ended June 30, 2016, Flitways incurred
operating expenses of $136,480 compared to $72,754 during the six months ended
June 30, 2015. Operating expenses consists primarily of professional fees,
including accounting, legal, and management fees, for services required for
day-to-day operations. Flitways also incurs general and administrative expense
for day-to-day operating costs, rent expense for the rent incurred at the
corporate head office, and marketing expense for the marketing of Flitways and
its operations. During the six months ended June 30, 2016, the increase in
operating expenses was due to an increase in professional fees for time and
services spent on Flitway’s management and accounting and legal costs which was
offset by a decrease in wages and salaries, as those costs were incorporated
into professional fees.
Flitways incurred a net loss of $79,841 for the six months ended June 30, 2016 compared to $59,962 during the six months ended June 30, 2015. The increase in net loss is due to an increase in professional fees offset by the increase in gross profit.
Liquidity and Capital Resources
Cataca Resources Inc.
As at June 30, 2016, Cataca had current assets of $6,830
compared with current assets of $4,537 at December 31, 2015. The increase in
current assets was due to an advance of cash to Cataca by a related party.
As at June 30, 2016, Cataca had current liabilities of $127,231
compared with current liabilities of $106,026 at December 31, 2015. The increase
in current liabilities was attributed to amounts due for administrative expenses
as of June 30, 2016, Cataca had a working capital deficit of $120,401 compared
with a working capital deficit of $101,489 at December 31, 2015. The increase in
working capital deficit was due to an increase in total liabilities due to
amounts used to fund outstanding obligations of Cataca.
Flitways Technology Inc.
As of June 30, 2016, Flitways had current assets of $9,264
compared with current assets of $14,020 at December 31, 2015. The decrease in
current assets is due to a decrease in cash as Flitways has not earned enough
revenues to generate positive cash flows from operations and requires support
from financing activities to sustain operations.
Flitways has current liabilities of $211,474 at June 30, 2016
compared to $185,277 at December 31, 2015. The increase in total liabilities is
due to an increase in wages payable offset by a decrease in accounts payable of $16,652 as a result of the use of cash
to repay outstanding operating obligations netted against an increase of $36,000 as a result of accruing wages due, an increase of sales tax payable, and other payables due.
As of June 30, 2016, Flitways has a working capital deficit of $202,210 compared to a working capital deficit of $171,257 as of December 31, 2015. Overall, working capital deficit has increased largely due to an increase in wages payable, sales tax payable, and other payables.
During the six months ended June 30, 2016, Flitways has not had
any capital transactions.
Page 19 of 32
Cashflows from Operating Activities
Cataca Resources Inc.
During the six months ended June 30, 2016, Cataca used cash of
$17,707 for operating activities as compared to $44,297 during the six months
ended June 30, 2015. The decrease in cash used for operating activities is due
to the fact that Cataca received less cash financing from related party
obligations during fiscal 2016 as compared to fiscal 2015.
Flitways Technology Inc.
During the six months ended June 30, 2016, Flitways used
$47,829 of cash for operating activities as compared to $8,040 during the six
months ended June 30, 2015. The increase in the use of cash for operating
activities is due to the fact that Flitways continues to rely on financing from
related parties to sustain day-to-day operations and received more funding from
related parties during fiscal 2016 as compared to fiscal 2015.
Cashflows from Investing Activities
Cataca Resources Inc.
During the six months ended June 30, 2016 and 2015, Cataca did
not have any investing activities.
Flitways Technology Inc.
During the six months ended June 30, 2016 and 2015, Flitways
did not have any investing activities.
Cashflows from Financing Activities
Cataca Resources Inc.
During the six months ended June 30, 2016, Cataca received
$20,000 from related parties as compared to $49,000 during the six months ended
June 30, 2015.
Flitways Technology Inc.
During the six months ended June 30, 2016, Flitways received
$45,409 from related parties as compared to $1,692 during the six months ended
June 30, 2015.
Going Concern
As of June 30, 2016, the Company has a going concern assumption
as the Company has a working capital deficit and an accumulated deficit since
inception. Although the Company has revenues, the level of revenues and gross
profit is not sufficient to overcome the current costs of operations. As such,
the Company will require additional financing to continue operations either from
management, existing shareholders, or new shareholders through equity financing.
These factors raise substantial doubt regarding the Company’s ability to
continue as a going concern. The financial statements do not include any
adjustments to the recoverability and classification of recorded asset amounts
and classification of liabilities that might be necessary should the Company be
unable to continue as a going concern.
Page 20 of 32
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements, as defined in Item
303(a)(4)(ii) of Regulation S-K, obligations under any guarantee contracts or
contingent obligations. We also have no other commitments, other than the costs
of being a public company that will increase our operating costs or cash
requirements in the future.
Contractual Obligations
We are a smaller reporting company as defined by Rule 12b-2 of
the Securities Exchange Act of 1934 and are not required to provide the
information under this item.
Critical Accounting Policies
Our financial statements and accompanying notes have been
prepared in accordance with United States generally accepted accounting
principles applied on a consistent basis. The preparation of financial
statements in conformity with U.S. generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities, the disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting periods.
We regularly evaluate the accounting policies and estimates
that we use to prepare our financial statements. A complete summary of these
policies is included in the notes to our financial statements. In general,
management's estimates are based on historical experience, on information from
third party professionals, and on various other assumptions that are believed to
be reasonable under the facts and circumstances. Actual results could differ
from those estimates made by management.
Recently Issued Accounting Pronouncements
The Company has implemented all new accounting pronouncements
that are in effect. These pronouncements did not have any material impact on the
financial statements unless otherwise disclosed, and the Company does not
believe that there are any other new accounting pronouncements that have been
issued that might have a material impact on its financial position or results of
operations.
Contractual Obligations
We are a smaller reporting company as defined by Rule 12b-2 of
the Securities Exchange Act of 1934 and are not required to provide the
information under this item.
Selected Financial Data
We are a smaller reporting company as defined by Rule 12b-2 of
the Securities Exchange Act of 1934 and are not required to provide the
information under this item.
Quantitative and Qualitative Disclosures About Market
Risk
We are a smaller reporting company as defined by Rule 12b-2 of
the Securities Exchange Act of 1934 and are not required to provide the
information under this item.
Page 21 of 32
ITEM
3. PROPERTIES
We have maintained executive offices at 400 Corporate Pointe,
Suite 300, Culver City, California 90230. The office and general expenses
associated with leasing our office space is approximately $1,700 per month. We
believe that our office space is adequate for our current needs, but growth
potential may require a facility due to anticipated addition of personnel. We do
not have any policies regarding investments in real estate, securities or other
forms of property. We do not own any real property.
ITEM
4. SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information concerning
the number of shares of our common stock owned beneficially as of the date of
this Current Report by: (i) each of our directors; (ii) each of our executive
officers; and (iii) each person or group known by us to beneficially own more
than 5% of our issued and outstanding shares of common stock. Unless otherwise
indicated, the shareholders listed below possess sole voting and investment
power with respect to the shares they own.
As of October 12, 2016, there are 50,000,000 common shares
issued and outstanding, 0 shares issuable upon the exercise of stock purchase
options within 60 days, and 0 shares issuable upon the exercise of stock
purchase warrants within 60 days.
|
Name and Address of Beneficial
|
Title of
|
|
|
|
Owner
|
Class
|
Shares Held
|
Percent of Class
1
|
Tobi Mac Aro
2
400 Corporate Pointe, Suite 300
Culver City, CA 90230
|
Common
|
15,000,000
|
50.0%
|
|
1
|
The number and percentage of shares beneficially owned is
determined under rules promulgated by the SEC and the information is not
necessarily indicative of beneficial ownership for any other purpose.
Under such rules, beneficial ownership includes any shares as to which the
individual has sole or shared voting power or investment power and also
any shares, which the individual has the right to acquire within 60 days
through the exercise of any stock option or other right. The entities or
persons named in the table have sole voting and investment power with
respect to all shares of common stock shown that are beneficially owned by
them, subject to community property laws where applicable and the
information contained in the footnotes to this table.
|
|
|
|
|
2
|
Mr. Aro was appointed as the Company’s President,
Secretary, Treasurer, and sole Director on September 6,
2016.
|
Page 22 of 32
ITEM
5. DIRECTORS
AND EXECUTIVE OFFICERS
Identification of Executive Officers and Directors of the
Company
Name and Address of
Beneficial Owner
Directors and Officers:
|
AGE
|
Class
|
Shares Held or
Controlled
|
Percentage of Class
1
|
Tobi Mac
Aro
2
President, Secretary,
Treasurer, and sole
Director
400 Corporate Pointe,
Suite 300
Culver City, CA
90230
|
31
|
Common
|
15,000,000
|
50.0%
|
All executive
officers
and directors as a group
(1 person)
|
|
Common
|
50,000,000
|
50.0%
|
|
1
|
The number and percentage of shares beneficially owned is
determined under rules promulgated by the SEC and the information is not
necessarily indicative of beneficial ownership for any other purpose.
Under such rules, beneficial ownership includes any shares as to which the
individual has sole or shared voting power or investment power and also
any shares, which the individual has the right to acquire within 60 days
through the exercise of any stock option or other right. The entities or
persons named in the table have sole voting and investment power with
respect to all shares of common stock shown that are beneficially owned by
them, subject to community property laws where applicable and the
information contained in the footnotes to this table.
|
|
|
|
|
2
|
On September 6, 2016, Mr. Aro was appointed as the
Company’s President, Secretary, Treasurer, and sole
Director.
|
Term of Office
Each director of the Company serves for a term of one year and
until his successor is elected and qualified at the next Annual Shareholders’
Meeting, or until his death, resignation or removal. Each officer of the Company
serves for a term of one year and until his successor is elected and qualified
at a meeting of the Board of Directors.
Significant Employees
None.
Family Relationships
There are no family relationships among the Company’s officers,
directors or persons nominated for such positions.
Page 23 of 32
Involvement in Certain Legal Proceedings
During the past ten years no director, executive officer,
promoter or control person of the Company has been involved in the following:
|
|
(1)
|
A petition under the Federal bankruptcy laws or any state
insolvency law which was filed by or against, or a receiver, fiscal agent
or similar officer was appointed by a court for the business or property
of such person, or any partnership in which he was a general partner at or
within two years before the time of such filing, or any corporation or
business association of which he was an executive officer at or within two
years before the time of such filing;
|
|
|
|
|
|
|
(2)
|
Such person was convicted in a criminal proceeding or is
a named subject of a pending criminal proceeding (excluding traffic
violations and other minor offenses);
|
|
|
|
|
|
|
(3)
|
Such person was the subject of any order, judgment, or
decree, not subsequently reversed, suspended or vacated, of any court of
competent jurisdiction, permanently or temporarily enjoining him from, or
otherwise limiting, the following activities:
|
|
|
i.
|
Acting as a futures commission merchant, introducing
broker, commodity trading advisor, commodity pool operator, floor broker,
leverage transaction merchant, any other person regulated by the Commodity
Futures Trading Commission, or an associated person of any of the
foregoing, or as an investment adviser, underwriter, broker or dealer in
securities, or as an affiliated person, director or employee of any
investment company, bank, savings and loan association or insurance
company, or engaging in or continuing any conduct or practice in
connection with such activity;
|
|
|
|
|
|
|
ii.
|
Engaging in any type of business practice; or
|
|
|
|
|
|
|
iii.
|
Engaging in any activity in connection with the purchase
or sale of any security or commodity or in connection with any violation
of Federal or State securities laws or Federal commodities
laws;
|
|
|
(4)
|
Such person was the subject of any order, judgment or
decree, not subsequently reversed, suspended or vacated, of any Federal or
State authority barring, suspending or otherwise limiting for more than 60
days the right of such person to engage in any activity described in
paragraph (f)(3)(i) of this section, or to be associated with persons
engaged in any such activity;
|
|
|
|
|
|
|
(5)
|
Such person was found by a court of competent
jurisdiction in a civil action or by the Commission to have violated any
Federal or State securities law, and the judgment in such civil action or
finding by the Commission has not been subsequently reversed, suspended,
or vacated;
|
|
|
|
|
|
|
(6)
|
Such person was found by a court of competent
jurisdiction in a civil action or by the Commodity Futures Trading
Commission to have violated any Federal commodities law, and the judgment
in such civil action or finding by the Commodity Futures Trading
Commission has not been subsequently reversed, suspended or
vacated;
|
|
|
|
|
|
|
(7)
|
Such person was the subject of, or a party to, any
Federal or State judicial or administrative order, judgment, decree, or
finding, not subsequently reversed, suspended or vacated, relating to an
alleged violation of:
|
Page 24 of 32
|
|
i.
|
Any Federal or State securities or commodities law or
regulation; or
|
|
|
|
|
|
|
ii.
|
Any law or regulation respecting financial institutions
or insurance companies including, but not limited to, a temporary or
permanent injunction, order of disgorgement or restitution, civil money
penalty or temporary or permanent cease- and-desist order, or removal or
prohibition order; or
|
|
|
|
|
|
|
iii.
|
Any law or regulation prohibiting mail or wire fraud or
fraud in connection with any business entity;
or
|
|
|
(8)
|
Such person was the subject of, or a party to, any
sanction or order, not subsequently reversed, suspended or vacated, of any
self-regulatory organization (as defined in Section 3(a)(26) of the
Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in
Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or
any equivalent exchange, association, entity or organization that has
disciplinary authority over its members or persons associated with a
member.
|
Code of Ethics
The Company has not adopted any formal Code of Ethics.
Committees of the Board of Directors
The Company does not presently have a separately designated
standing audit committee, compensation committee, nominating committee,
executive committee or any other committees of our Board of Directors. The
functions of those committees are undertaken by our Board of Directors
Audit Committee
The Company has not established a separately designated
standing audit committee. However, the Company intends to establish a new audit
committee of the Board of Directors that shall consist of independent directors.
The audit committee’s duties will be to recommend to the Company’s board of
directors the engagement of an independent registered public accounting firm to
audit the Company’s financial statements and to review the Company’s accounting
and auditing principles. The audit committee will review the scope, timing and
fees for the annual audit and the results of audit examinations performed by the
internal auditors and independent registered public accounting firm, including
their recommendations to improve the system of accounting and internal controls.
The audit committee shall at all times be composed exclusively of directors who
are, in the opinion of the Company’s Board of Directors, free from any
relationship which would interfere with the exercise of independent judgment as
a committee member and who possess an understanding of financial statements and
generally accepted accounting principles.
Page 25 of 32
ITEM
6. EXECUTIVE
COMPENSATION
The following table sets forth information concerning all cash
and non-cash compensation awarded to, earned by or paid to the named persons for
services rendered in all capacities during the noted periods. No other executive
officer received total annual salary and bonus compensation in excess of
$100,000.
|
SUMMARY COMPENSATION TABLE
1
|
|
Name and Principal Position
|
Fisca
l
Year
|
Salary
($)
|
All Other
Compensation
($)
(2)
|
Total
($)
|
Tobi Mac Aro
2
President, Secretary, Treasurer,
and sole Director
|
2016
|
NIL
|
NIL
|
NIL
|
|
2015
|
NIL
|
NIL
|
NIL
|
|
2014
|
NIL
|
NIL
|
NIL
|
Edward
Barrios
3
Former President and Director
|
2016
|
NIL
|
NIL
|
NIL
|
|
2015
|
NIL
|
NIL
|
NIL
|
|
2014
|
NIL
|
NIL
|
NIL
|
Maxwell Ramos
4
Former Treasury and Secretary
|
2016
|
NIL
|
NIL
|
NIL
|
|
2015
|
NIL
|
NIL
|
NIL
|
|
2014
|
NIL
|
NIL
|
NIL
|
|
|
1
|
We have omitted certain columns in the summary
compensation table pursuant to Item 402(a)(5) of Regulation S-K as no
compensation was awarded to, earned by, or paid to any of the executive
officers or directors required to be reported in that table or column in
any fiscal year covered by that table.
|
|
|
|
|
|
|
2
|
The “All Other Compensation” column is used to disclose
the aggregate amount of all compensation that the company could not
properly report in any other column of the Summary Compensation Table
(with a limited exceptions).
|
|
|
|
|
|
|
3
|
Prior to his appointment as an Officer and Director on
September 6, 2016, Mr. Aro was the Director and the CEO of our wholly
owned subsidiary, FlitWays Technology Inc.
|
|
|
|
|
|
|
4
|
Effective September 6, 2016, Edward Barrios resigned from
his positions as the President and the sole Director of the
Company.
|
|
|
|
|
|
|
5
|
Effective September 6, 2016, Maxwell Ramos resigned from
his positions as the current Treasury and Secretary of the Company (the
“Resignation”).
|
Option Grants
We have not granted any options or stock appreciation rights to
our named executive officers or directors since inception. We do not have any
stock option plans.
Management Agreements
None.
Page 26 of 32
Pension, Retirement or Similar Benefit Plans
There are no arrangements or plans in which we provide pension,
retirement or similar benefits to our directors or executive officers. We have
no material bonus or profit sharing plans pursuant to which cash or non-cash
compensation is or may be paid to our directors or executive officers, except
that stock options may be granted at the discretion of the Board of Directors or
a committee thereof.
Compensation Committee
We do not currently have a compensation committee of the Board
of Directors or a committee performing similar functions. The Board of Directors
as a whole participates in the consideration of executive officer and director
compensation.
Indebtedness of Directors, Senior Officers, Executive
Officers and Other Management
None of our directors or executive officers or any associate or
affiliate of our company during the last two fiscal years is or has been
indebted to our company by way of guarantee, support agreement, letter of credit
or other similar agreement or understanding currently outstanding.
ITEM
7. CERTAIN
RELATIONSHIPS AND RELATED PARTY TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Related Party Transactions
None of the directors or executive officers of the Company, nor
any person who owned of record or was known to own beneficially more than 5% of
the Company’s outstanding shares of its common stock, nor any associate or
affiliate of such persons or companies, has any material interest, direct or
indirect, in any transaction that has occurred during the past two fiscal years,
or in any proposed transaction, which has materially affected or will affect the
Company.
With regard to any future related party transaction, we plan to
fully disclose any and all related party transactions in the following manner:
-
Disclosing such transactions in reports where required;
-
Disclosing in any and all filings with the SEC, where required;
-
Obtaining disinterested directors consent; and
-
Obtaining shareholder consent where required.
Director Independence
For purposes of determining director independence, we have
applied the definitions set out in NASDAQ Rule 5605(a)(2). The OTC Pink Sheets
on which shares of the Company’s Common Stock are quoted does not have any
director independence requirements. The NASDAQ definition of “Independent
Director” means a person other than an Executive Officer or employee or any
other individual having a relationship, which, in the opinion of the Board of
Directors, would interfere with the exercise of independent judgment in carrying
out the responsibilities of a director.
According to the NASDAQ definition, we have no independent
directors.
Page 27 of 32
Review, Approval or Ratification of Transactions with
Related Persons
We are a smaller reporting company as defined by Rule 12b-2 of
the Securities Exchange Act of 1934 and are not required to provide the
information under this item.
ITEM
8. LEGAL
PROCEEDINGS
We know of no material, existing or pending legal proceedings
against the Company, nor is the Company involved as a plaintiff in any material
proceeding or pending litigation. There are no proceedings in which directors,
officers or any affiliates, or any registered or beneficial shareholders, of the
Company is an adverse party or has a material interest adverse to the interests
of the Company.
ITEM
9. MARKET PRICE
OF AND DIVIDENDS ON THE REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
Market Price and Dividends
Our common stock is currently quoted on the OTC Pink Sheets,
under the symbol “CATQ.” Our common stock has been quoted on the OTC Pink Sheets
under this symbol since approximately May 2016. Because we are quoted on the OTC
Pink Sheets, our securities may be less liquid, receive less coverage by
security analysts and news media, and generate lower prices than might otherwise
be obtained if they were listed on a national securities exchange.
The following table sets forth the high and low bid quotations
for our common stock as reported on the OTC Pink Sheets for the periods
indicated.
|
Fiscal Year
2016
|
|
High
|
|
Low
|
|
October 5, 2016
|
|
0.82
|
|
0.66
|
|
August 31, 2016
|
|
1.15
|
|
0.25
|
|
June 30, 2016
|
|
1.21
|
|
0.25
|
|
|
(1)
|
High and Low prices reflected are through September 30,
2016.
|
Information for the periods referenced above has been furnished
by the OTC Bulletin Board. The quotations furnished by the OTC Bulletin Board
reflect inter-dealer prices, without retail mark-up, mark-down or commission and
may not reflect actual transactions
The reported last sales price for our common stock on the OTC
Bulletin Board on October 5, 2016 was $0.76 per share. As of October 12, 2016,
there were 50,000,000 shares of common stock outstanding, and our outstanding
shares of common stock were held by approximately 14 stockholder accounts of
record.
We have never declared or paid any cash dividends on our common
stock nor do we intend to do so in the foreseeable future. Any future
determination to pay cash dividends will be at the discretion of our board of
directors and will depend upon our financial condition, operating results,
capital requirements, any applicable contractual restrictions and such other
factors as our board of directors deems relevant.
Page 28 of 32
Re-Purchase of Equity Securities
None.
Securities Authorized for Issuance under Equity
Compensation Plan
None.
ITEM
10. RECENT SALES OF
UNREGISTERED SECURITIES
None.
ITEM 11.
DESCRIPTION OF THE REGISTRANT’S SECURITIES
Common Stock
Our Articles of Incorporation authorize us to issue 75,000,000
shares of common stock, par value $0.001. As of the date of this Current Report
50,000,000 shares of our common stock were issued and outstanding and we have
zero shares of our common stock reserved for options, warrants and other
commitments.
Preferred Stock
Our Articles of Incorporation authorize us to issue no shares
of preferred stock.
Voting Rights
Except as otherwise required by law or as may be provided by
the resolutions of the Board of Directors authorizing the issuance of common
stock, all rights to vote and all voting power shall be vested in the holders of
common stock. Each share of common stock shall entitle the holder thereof to one
vote.
No Cumulative Voting
Except as may be provided by the resolutions of the Board of
Directors authorizing the issuance of common stock, cumulative voting by any
shareholder is expressly denied.
Rights upon Liquidation, Dissolution or Winding-Up of the
Company
Upon any liquidation, dissolution or winding-up of the
corporation, whether voluntary or involuntary, the remaining net assets of the
Company shall be distributed pro rata to the holders of the common stock.
We refer you to our Articles of Incorporation, any amendments
thereto, Bylaws, and the applicable provisions of the Nevada Revised Statutes
for a more complete description of the rights and liabilities of holders of our
securities.
Page 29 of 32
ITEM 12.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 78.138 of the NRS provides that a director or officer
will not be individually liable unless it is proven that (i) the director’s or
officer’s acts or omissions constituted a breach of his or her fiduciary duties,
and (ii) such breach involved intentional misconduct, fraud or a knowing
violation of the law.
Section 78.7502 of NRS permits a company to indemnify its
directors and officers against expenses, judgments, fines and amounts paid in
settlement actually and reasonably incurred in connection with a threatened,
pending or completed action, suit or proceeding if the officer or director (i)
is not liable pursuant to NRS 78.138 or (ii) acted in good faith and in a manner
the officer or director reasonably believed to be in or not opposed to the best
interests of the corporation and, if a criminal action or proceeding, had no
reasonable cause to believe the conduct of the officer or director was
unlawful.
Section 78.751 of NRS permits a Nevada company to indemnify its
officers and directors against expenses incurred by them in defending a civil or
criminal action, suit or proceeding as they are incurred and in advance of final
disposition thereof, upon receipt of an undertaking by or on behalf of the
officer or director to repay the amount if it is ultimately determined by a
court of competent jurisdiction that such officer or director is not entitled to
be indemnified by the company. Section 78.751 of NRS further permits the company
to grant its directors and officers additional rights of indemnification under
its articles of incorporation or bylaws or otherwise.
Section 78.752 of NRS provides that a Nevada company may
purchase and maintain insurance or make other financial arrangements on behalf
of any person who is or was a director, officer, employee or agent of the
company, or is or was serving at the request of the company as a director,
officer, employee or agent of another company, partnership, joint venture, trust
or other enterprise, for any liability asserted against him and liability and
expenses incurred by him in his capacity as a director, officer, employee or
agent, or arising out of his status as such, whether or not the company has the
authority to indemnify him against such liability and expenses.
Our Articles of Incorporation provide that no director or
officer of our company will be personally liable to our company or any of its
stockholders for damages for breach of fiduciary duty as a director or officer;
provided, however, that the foregoing provision shall not eliminate or limit the
liability of a director or officer (i) for acts or omissions which involve
intentional misconduct, fraud or knowing violation of law, or (ii) the unlawful
payment of dividends. In addition, our bylaws permit for the indemnification and
insurance provisions in Chapter 78 of the NRS.
Insofar as indemnification by us for liabilities arising under
the Securities Act may be permitted to our directors, officers or persons
controlling our company pursuant to provisions of our articles of incorporation
and bylaws, or otherwise, we have been advised that in the opinion of the SEC,
such indemnification is against public policy as expressed in the Securities Act
and is therefore unenforceable. In the event that a claim for indemnification by
such director, officer or controlling person of us in the successful defense of
any action, suit or proceeding is asserted by such director, officer or
controlling person in connection with the securities being offered, we will,
unless in the opinion of our counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by us is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
At the present time, there is no pending litigation or
proceeding involving a director, officer, employee or other agent of ours in
which indemnification would be required or permitted. We are not aware of any
threatened litigation or proceeding, which may result in a claim for such
indemnification.
Page 30 of 32
Further, in the normal course of business, we may have in our
contracts indemnification clauses, written as either mutual where each party
will indemnify, defend, and hold each other harmless against losses arising from
a breach of representations or covenants, or out of intellectual property
infringement or other claims made against certain parties; or single where we
have agreed to hold certain parties harmless against losses etc.
ITEM
13. FINANCIAL STATEMENTS
AND SUPPLEMENTARY DATA
The information provided below in Item 9.01 of this Current
Report on Form 8-K is incorporated by reference into this Item 13.