UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

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

 

For the quarterly period ended June 30, 2021

 

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

 

CARNEGIE DEVELOPMENT, INC.

(Exact Name of Registrant as Specified in its Charter)

 

Nevada

 

90-0712976

(State or other jurisdiction of

Incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

 

 

3495 Lakeside Drive, #1087

Reno, Nevada

 

89509

(Address of principal executive offices)

 

(Zip Code)

 

Registrant’s telephone number, including area code: 800-345-8561

 

Securities registered pursuant to Section 12(b) of the Act: None

 

Securities registered pursuant to Section 12(g) of the Act: Common Stock, $0.00001 par value

 

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☐ Yes     ☒ No

 

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ☐ Yes     ☒ No

 

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. ☐ Yes     ☒ No

 

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). ☐ Yes     ☒ No

 

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

 

Large accelerated filer

Accelerated filer

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. ☐

 

Indicate by check mark whether the Registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

 

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

 

State the aggregate market value of the voting and nonvoting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold or the average bid and asked price of such common equity, as of the last business day of the Registrant’s most recently completed second fiscal quarter.

 

Held by Non-affiliates at Market Price as on June 30, 2021

 

Voting

Common Stock

6,203,716 Shares

$0.45 per Share

$2,791,672

 

DOCUMENTS INCORPORATED BY REFERENCE

 

None

 

 

 

  

TABLE OF CONTENTS

 

 

 

Page

 

Part I Financial Information

 

 

 

 

 

 

 

Item 1

Financial Statements

 

3

 

 

Balance Sheet

 

 3

 

 

Statement of Operations

 

 4

 

 

Statement of Cash Flows

 

 5

 

 

Statement of Shareholder’s Equity Statement

 

 6

 

 

Notes to Financial Statements

 

7

 

Item 2

Management’s Discussion and Analysis of Financial Condition and results of Operation

 

12

 

Item 3

Quantitative and Qualitative Disclosures about Market Risk

 

 14

 

Item 4

Controls and Procedures

 

 14

 

 

Evaluation

 

 14

 

 

Management’s Report on Internal Control over Financial Reporting

 

14

 

 

 

 

 

Part II Other Information

 

 

 

Item 6

Exhibits

 

 15

 

 

 
2

Table of Contents

 

Carnegie Development, INC

Balance Sheet

 

 

 

6 months

 

 

12 months

 

 

 

ended

 

 

ended

 

 

 

06/30/21

 

 

12/31/20

 

 

 

Unaudited

 

 

Unaudited

 

Assets

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

Bank Account

 

$ 863

 

 

$ 907

 

Total current assets

 

$ 863

 

 

$ 907

 

Total assets

 

$ 863

 

 

$ 907

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

 

222,393

 

 

 

239,352

 

Credit Card payable

 

 

2,491

 

 

 

669

 

Loan from related party

 

 

197,828

 

 

 

156,921

 

Accrued expenses

 

 

-

 

 

 

-

 

Total Current Liabilities

 

 

422,712

 

 

 

396,942

 

Total liabilities

 

 

422,712

 

 

 

396,942

 

Stockholders' Equity

 

 

 

 

 

 

 

 

Series A preferred stock: 1,000 shares authorized, par value $0.001 per share; 1,000 shares issued and outstanding on June 30, 2021 and 1,000 shares issued and outstanding on December 31, 2020

 

 

4,000

 

 

 

4,000

 

Common stock: 250,000,000 shares authorized, par value $0.0001 per share, 46,203,716 shares issued and outstanding on June 30, 2021 and 46,203,716 shares issued and outstanding on December 31, 2020

 

 

3,532,757

 

 

 

3,532,757

 

Retained Earnings

 

 

(3,958,607

)

 

 

(3,932,792

)

Total Stockholders' Equity

 

 

(421,850

)

 

 

(396,035

)

Total Liabilities & Equity

 

$ 863

 

 

$ 907

 

  

See accompanying notes to financial statements.

 

 
3

Table of Contents

 

Carnegie Development, INC

Income Statement

 

 

 

3 months ended

 

 

6 months ended

 

 

 

30-Jun-21

 

 

30-Jun-20

 

 

30-Jun-21

 

 

30-Jun-20

 

 

 

Unaudited

 

 

Unaudited

 

 

Unaudited

 

 

Unaudited

 

Net Revenues

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bank Charges

 

 

419

 

 

 

339

 

 

 

493

 

 

 

 

 

Legal & Professional

 

 

23,295

 

 

 

9,397

 

 

 

23,802

 

 

 

34,516

 

Office Supplies & Software

 

 

 

 

 

 

70

 

 

 

27

 

 

 

233

 

Office Expenses

 

 

349

 

 

 

202

 

 

 

689

 

 

 

243

 

State Filing Fees

 

 

800

 

 

 

800

 

 

 

800

 

 

 

925

 

Website Expenses

 

 

92

 

 

 

 

 

 

 

92

 

 

 

 

 

Total operating expenses

 

 

24,956

 

 

 

10,808

 

 

 

25,904

 

 

 

35,917

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating loss

 

 

(24,956 )

 

 

(10,808 )

 

 

(25,904 )

 

 

(35,917 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Gain (loss)

 

 

(24,956 )

 

 

(10,808 )

 

 

(25,904 )

 

 

(35,917 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net gain (loss) attributable to common stock

 

 

(24,956 )

 

 

(10,808 )

 

 

(25,904 )

 

 

(35,917 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

 

(0.00054 )

 

 

(0.00023 )

 

 

(0.00056 )

 

 

(0.00078 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted weighted average common shares outstanding

 

 

46,203,716

 

 

 

46,203,716

 

 

 

46,203,716

 

 

 

46,203,716

 

 

See accompanying notes to financial statements.

 

 
4

Table of Contents

 

Carnegie Development, INC

Cash Flow Statement

 

 

3 months ended

 

 

6 months ended

 

 

 

30-Jun-21

 

 

30-Jun-20

 

 

30-Jun-21

 

 

30-Jun-20

 

 

 

Unaudited

 

 

Unaudited

 

 

Unaudited

 

 

Unaudited

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

 

 

 

 

 

 

Net Gain (loss)

 

 

(24,956 )

 

 

(10,808 )

 

 

(25,904 )

 

 

(35,917 )

Adjustments to reconcile Net Income to Net Cash provided by operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts Payable

 

 

(12,824 )

 

 

975

 

 

 

(11,921 )

 

 

3,435

 

Credit Card Payable

 

 

1,113

 

 

 

(152 )

 

 

1,113

 

 

 

(1,724 )

Loan from related party

 

 

36,667

 

 

 

9,941

 

 

 

36,667

 

 

 

34,206

 

Accrued Expenses

 

 

(0 )

 

 

(0 )

 

 

(0 )

 

 

0

 

Total Adjustments to reconcile Net Income to Net Cash provided by operations

 

 

24,956

 

 

 

10,764

 

 

 

25,859

 

 

 

35,917

 

Net cash provided by operating activities

 

 

0

 

 

 

(44 )

 

 

(45 )

 

 

(0 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CASH FLOW from Investing Activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET CASH used by Investing Activities

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CASH FLOWS from Financing Activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET CASH used by Financing Activities

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET CASH INCREASE (DECREASE) For PERIOD

 

 

0

 

 

 

(44 )

 

 

(45 )

 

 

(0 )

Cash, Beginning

 

 

863

 

 

 

84

 

 

 

907

 

 

 

84

 

Cash, Ending

 

 

863

 

 

 

84

 

 

 

863

 

 

 

84

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SUPPLEMENTAL CASH FLOW INFORMATION AND NONCASH INVESTING AND FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash paid during the period for:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

Income taxes

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

See accompanying notes to financial statements.

 

 
5

Table of Contents

 

Carnegie Development, INC

Statement of sharehloders' equity

 

 

 

Preferred Stock

 

 

Common Stock

 

 

Surplus

 

 

 

 

 

Shares

 

 

Value

 

 

Addl.

 

 

Shares

 

 

Value

 

 

Addl

 

 

(Deficit)

 

 

Net worth

 

Balance, January 1, 2019

 

1000

 

 

$ 1

 

 

$ 3,999

 

 

 

41,153,156

 

 

$ 2,270,117

 

 

$ 1,142,640

 

 

$ (3,536,757 )

 

$ (120,000 )

Share Issuance

 

 

 

 

 

 

 

 

 

 

 

 

 

5,050,560

 

 

$ 1,262,640

 

 

 

 

 

 

 

 

 

 

$ 1,262,640

 

Converted into Shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$ (1,142,640 )

 

 

 

 

 

$ (1,142,640 )

Net Income (Loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$ (322,426 )

 

$ (322,426 )

Balance, December 31, 2019

 

 

1,000

 

 

$ 1

 

 

$ 3,999

 

 

 

46,203,716

 

 

 

3,532,757

 

 

 

 

 

 

$ (3,859,183 )

 

$ (322,426 )

Net Income (Loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$ (73,609 )

 

$ (73,609 )

Balance, December 31, 2020

 

 

1,000

 

 

$ 1

 

 

$ 3,999

 

 

 

46,203,716

 

 

$ 3,532,757

 

 

 

 

 

 

$ (3,932,703 )

 

$ (395,946 )

Net Income (Loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$ (25,904 )

 

$ (25,904 )

Balance, June 30, 2021

 

 

1,000

 

 

$ 1

 

 

$ 3,999

 

 

 

46,203,716

 

 

$ 3,532,757

 

 

 

 

 

 

$ (3,958,607 )

 

$ (421,850 )

 

See accompanying notes to financial statements.

 

 
6

Table of Contents

  

CARNEGIE DEVELOPMENT INC

NOTES TO FINANCIAL STATEMENTS

June 30, 2021

 

1 NATURE OF OPERATIONS AND BASIS OF PRESENTATION

 

Carnegie Development Inc., is a publicly trading company under the symbol, “CDJM”

 

The Company Website is http://carnegiedevelopment.net/

 

This Company was previously known as:

 

 

·

Escue Energy Inc until July 1, 2019

 

 

o

State of incorporation changed from Delaware to Nevada in 2015

 

 

·

eDoorways Corporation, Inc. until 2015

 

 

 

 

·

M Power Entertainment, Inc. until 2007

 

 

 

 

·

GK Intelligent Systems, Inc. until 2005

 

 

 

 

·

Technicraft Financial, Ltd. until 1994

 

 

 

 

·

Incorporated in Delaware in February 1988

 

Effective July 1st, 2019 the Articles of Incorporation has been amended and the new name is Carnegie Development, Inc.

 

On Friday 5th June 2020, FINRA approved the name change as well as the symbol change. The new CUSSIP is 14350V108

 

Going concern

 

The Company has an accumulated deficit of $ 3,958,607 as on the reporting date and there was no revenue since inception. Since this company is not a fully reporting company and is filing the reports voluntarily, the Company is currently filing the unaudited financial statements and wait for the audited financial statements

 

The Company is also seeking debt or equity financing to fund its development plan although no financing arrangements are currently in place and the Company can provide no assurance that financing will be available on acceptable terms. However, the management believes that the actions for (a) obtaining the additional funds and (b) implementing its strategic plans, provide the opportunity for the Company to continue as a going concern.

 

Basis of Presentation

 

This Company uses the enterprise reporting under the provisions of Statement of Financial Accounting Standards ("SFAS”) no. 7. The accompanying financial statements are prepared in accordance with Generally accepted accounting principles (“US GAAP”) in the United States of America.

 

 
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Table of Contents

 

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Use of Estimates and Assumptions

 

The preparation of financial statements requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reporting amounts of revenues and expenses for the reported period. Actual results will differ from those estimates.

 

Included in these estimates are legal risks and exposures, valuation of stock-based compensation, the potential outcome of future tax consequences of events that have been recognized in the financial statement or tax returns.

 

Cash and Cash Equivalents

 

For purposes of the statement of cash flows, the Company considers highly liquid financial instruments purchased with a maturity of three months or less to be cash equivalents.

 

Concentration of Credit Risks

 

The Company is attempting to acquire land for real estate development.

 

The Company's cash and cash equivalents accounts are held at financial institutions and are insured by the Federal Deposit Insurance Corporation, or the FDIC, up to $250,000. As on the reporting date, there were no cash balances in excess of federally insured limits.

 

Product Concentration

 

As part of real estate development, this company can sell the well laid-out paper lots (a parcel with an approved tract map which is essentially a level of entitlements) as approved by the city and/or use the paper lots for building (a) single family homes; (b) multi-family homes; and/or (c) Rent-To-Build Homes.

 

Fair Value of Financial Instruments

 

The Company accounts, for the assets and liabilities measured at fair value on a recurring basis, in accordance with ASC Topic 820, Fair Value Measurements and Disclosures, ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements, establishes a framework for measuring fair value, and expands disclosure about such fair value measurements

 

ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:

 

Level 1: Observable inputs such as quoted market prices in active markets for identical assets or liabilities.

Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data.

Level 3: Unobservable inputs for which there is little or no market data, which require the use of the reporting entities own assumptions.

 

The Company did not have any Level 2 or Level 3 assets or liabilities on the reporting date.

 

The Company did not identify any non-recurring assets and liabilities that are required to be presented in the balance sheets at fair value in accordance with ASC 815

 

ASC 825-10 "Financial Instruments." permits entities to choose to measure many financial assets and financial liabilities at fair value. Unrealized gains and losses on items for which the fair value option has been elected are reported in earnings. The Company chose not to elect the option to measure the fair value of eligible financial assets and liabilities.

 

 
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Table of Contents

 

Additional Disclosures Regarding Fair Value Measurements

 

The carrying value of cash and cash equivalents, credit card payable, accounts payable and loan from related party approximate their fair value due to the short maturity of these items.

 

Revenue Recognition

 

The Company recognizes revenue on arrangements in accordance with ASC 606 — Revenue from Contracts with Customers. Revenue is recognized only when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service is performed, and collectability of the resulting receivable is reasonably assured. Since inception and until now, this company has not earned any revenue.

 

Advertising

 

The Company expenses advertising costs as incurred. The Company did not spend any money for the advertising, during the reporting period.

 

Share-Based Payment

 

The Company accounts for stock-based compensation in accordance with ASC Topic 718, Compensation- Stock Compensation, Under the fair value recognition provisions of this topic, stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as an expense on a straight-line basis over the requisite service period, which is the vesting period.

 

Basic and Diluted Earnings per Share

 

Basic earnings per share are calculated by dividing the income available to stockholders by the weighted- average number of shares of Common Stock outstanding during each period. Diluted earnings per share are computed using the weighted average number of shares of Common Stock and dilutive Common Stock share equivalents outstanding during the period. Dilutive Common Stock share equivalents consist of shares issuable upon the exercise of stock options and warrants (calculated using the modified-treasury stock method). Earnings per share calculations are provided as part of the income statement.

 

Provisions

 

Provisions are recognized when the Company has a present legal or constructive obligation because of past events, and it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount can be made.

 

Net Income per Share

 

The Company computes net income (loss) per share in accordance with ASC 260-10, "Earnings per Share." The basic net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding. Diluted net loss per share gives effect to all dilutive potential common shares outstanding during the period using the "as if converted” basis.

 

3 LOAN FROM RELATED PARTY

 

A short-term loan was extended by a related party to finance working capital requirements of the Company. The loan is unsecured, and non- interest bearing, with no set terms of repayment.

 

4 COMMON STOCK AND PREFERRED

 

STOCK Common Stock

 

The Company has one class of common stock. Each share common stock is entitled to one vote.

 

The authorized number of shares of common stock of the Company on the reporting date was 250,000,000 shares with a par value per share of $0.00001. Authorized shares that have been issued and outstanding are 46,203,716 as on the reporting date. Past dues were settled by share issuance as reflected in Statement of Shareholders equity.

 

 
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Preferred Stock

 

Series A - [1] Designation: A series of preferred stock is hereby designated as Series A Preferred Stock. [2] Liquidation Preference: The holders of the Series A Preferred Stock has no liquidation preference. [3] Dividends: The holders of the Series A Preferred Stock shall not receive dividend. [4] Number: The number of shares is fixed at 1,000. As on the reporting date, 1,000 shares are authorized, issued and outstanding. [5] Conversion: The Series A Preferred Stock is not convertible into shares of common stock. [7] Voting Rights: The Series A Preferred Stock, collectively, are entitled to that number of votes which shall equal Seventy-five percent (75%) of all eligible votes. There is currently 1 shareholder of record of the company's common stock.

 

Additional paid in capital

 

Additional paid in capital is attributable to Series A preferred stock.

 

5 RELATED PARTY TRANSACTIONS

 

Related parties comprise the shareholders, directors, key management personnel of the Company, and entities controlled, jointly controlled, or significantly influenced by such parties.

 

The company enters transaction with related parties which arise in the normal course of business from the commercial transactions and same are approved the board.

 

Since 2019, this company received short loans from a private business entity to pay the bills. The Chairman & the CEO of this company is also managing the private business entity which is providing the short-term loan to this company.

 

No remuneration was paid to any directors or members of key management during the current reporting year

 

 

 

Q1 2021

 

 

Q4 2020

 

 

Q3 2020

 

 

Q2 2020

 

Compensation.

 

$ 0

 

 

$ 0

 

 

$ 0

 

 

$ 0

 

 

6 INCOME TAXES

 

Deferred income taxes are provided using the liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of the changes in tax laws and rates of the date of enactment.

 

When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination.

 

Applicable interest and penalties associated with unrecognized tax benefits are classified as additional income taxes in the statements of operations.

 

 
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A reconciliation of the Company's effective tax rate to the statutory federal rate is as follows:

 

 

 

 6/30/2021

USD

 

 

 2020

USD

 

Deferred tax assets

 

 

 

 

 

 

Net operating loss carryovers

 

 

3,958,607

 

 

 

3,932,792

 

Stock-based compensation

 

 

-

 

 

 

-

 

 Other temporary differences

 

 

-

 

 

 

-

 

Total deferred tax assets

 

 

3,958,607

 

 

 

3,932,792

 

Valuation allowance

 

 

(3,958,607 )

 

 

(3,932,79 )

Net deferred tax asset

 

 

-

 

 

 

-

 

 

As on the reporting date, the Company had net operating loss carryovers of $3,958,607 that may be applied against future taxable income and expires at various dates between 2026 and 2031, subject to certain limitations. The Company has a deferred tax asset arising substantially from the benefits of such net operating loss deduction and has recorded a valuation allowance for the full amount of this deferred tax asset since it is more likely than not that some or all the deferred tax asset may not be realized.

 

7 CONTINGENCIES AND COMMITMENTS

 

Contingencies

 

NONE

 

Capital commitments

 

For the current reporting year, the Company had no capital commitments which is the same for the previous reporting year.

 

The management reviewed with the legal team and concluded that there are no disputes remaining unresolved and hence there are no contingent liabilities as on the reporting date. The company is trying to settle the claims by share issuance as and when received and processed.

 

8 SUBSEQUENT EVENTS

 

None

 

9 RESTATEMENT OF PRIOR YEAR COMPARATIVES

 

Certain figures for the previous year were regrouped/reclassified, wherever necessary, to conform to current year's presentation. However, such reclassifications do not have any impact on the Company's previously reported financial results.

 

10 MANAGEMENT ASSERTIONS ON CRITICAL AUDIT MATTERS

 

Manuals and handbooks: Absence of written manuals and handbooks is the concern for the audit. Since the Company is involving experienced professionals for the day-to-day operations, the need for specialized training was not felt. So also, the need for the written manuals and handbooks. However, the Management is aware of the need for standard operating procedures to educate and train its growing general staff. Preparation of manuals and handbooks has begun.

 

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

 

This Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to provide a reader of our financial statements with a narrative from the perspective of our management on our financial condition, results of operations, liquidity, and certain other factors that may affect our future results. The following discussion and analysis should be read in conjunction with our audited consolidated financial statements and the accompanying notes thereto included in “Item 8. Financial Statements and Supplementary Data.” In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties, and assumptions. See “Forward-Looking Statements.” Our results and the timing of selected events may differ materially from those anticipated in these forward-looking statements because of many factors.

 

Much of the discussion in this Item is “forward-looking” as that term is used in Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended. Actual operations and results may materially differ from present plans and projections due to changes in economic conditions, new business opportunities, changed business conditions, and other developments. Other factors that could cause results to differ materially are described in our filings with the Securities and Exchange Commission. There are several factors that could cause actual results or events to differ materially from those anticipated, and include, but are not limited to general economic, financial and business conditions, changes in and compliance with governmental laws and regulations, including various state and federal environmental regulations, our ability to obtain additional financing from outside investors and/or bank and mezzanine lenders and our ability to generate sufficient revenues to cover operating losses and position us to achieve positive cash flow. Readers are cautioned not to place undue reliance on the forward-looking statements contained herein, which speak only as of a certain date. We undertake no obligation to update any forward-looking statements.

 

Going Concern

 

While the auditor has been questioning our ability to continue as a going concern due to our recurring losses from operations, deficit in equity, and the need to raise additional capital to fund operations, the company re-aligned itself to engage in land acquisition for Real Estate Development. During the current period of reporting, the Company continued to engage in its attempts to acquire land for Real Estate Development. A “going concern” opinion could impair our ability to raise the required finance for our proposed operations through the sale of debt or equity securities. However, the financial statements have been prepared assuming that the Company continues as a going concern

 

Results of Operations for the current reporting period, as compared to previous reporting period

 

There was no revenue during this period

 

Expenses during the current reporting period are $24,956 while it was $10,808 for the same reporting period of the previous year.

 

The net loss for the current reporting period is $24,956 while it was $10,808 for the same reporting period of the previous year.

 

Liquidity and Capital Resources

 

During the current reporting period, the company’s liquidity was very impacted by the Pandemic caused by the Covid-19. Consequently, this company was not able to access any capital resources during the current reporting period.

 

Cash Flow from Operating Activities

 

The Company used $0 in cash for the current reporting period as against $44 for the same reporting period of the previous year.

 

Cash Flow from Investing Activities

 

The Company neither used nor received any from the investing activities for the current reporting period and it is the same in for the same reporting period of the previous year.

 

Cash Flow from Financing Activities

 

The Company received $36,667 as a repayable loan as a related party transaction, in the current reporting period whereas it was $9,941 for the same reporting period of the previous year.

 

 
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Off-Balance Sheet Arrangements

 

The company has no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect or change on the company’s financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

 

The term “off-balance sheet arrangement” generally means any transaction, agreement, or other contractual arrangement to which an entity unconsolidated with the company is a party, under which the company has (i) any obligation arising under a guarantee contract, derivative instrument, or variable interest; or (ii) a retained or contingent interest in assets transferred to such entity or similar arrangement that serves as credit, liquidity, or market risk support for such assets.

 

Critical Accounting Policies

 

A critical accounting policy is defined as one that is both material to the presentation of our financial statements and requires management to make difficult, subjective, or complex judgments that could have a material effect on our financial condition and results of operations. Specifically, critical accounting estimates have the following attributes: 1) we are required to make assumptions about matters that are highly uncertain at the time of the estimate; and 2) different estimates we could reasonably have used, or changes in the estimate that are reasonably likely to occur, would have a material effect on our financial condition or results of operations.

 

Estimates and assumptions about future events and their effects cannot be determined with certainty. We base our estimates on historical experience and on various other assumptions believed to be applicable and reasonable under the circumstances. These estimates may change as new events occur, as additional information is obtained and as our operating environment changes. These changes have historically been minor and have been included in the financial statements as soon as they became known. Based on a critical assessment of our accounting policies and the underlying judgments and uncertainties affecting the application of those policies, management believes that our financial statements are fairly stated in accordance with accounting principles generally accepted in the United States and present a meaningful presentation of our financial condition and results of operations. We believe the following critical accounting policies reflect our more significant estimates and assumptions used in the preparation of our financial statements:

 

Use of Estimates—These financial statements have been prepared in accordance with accounting principles generally accepted in the United States and, accordingly, require management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Specifically, our management has estimated variables used to calculate the Black Scholes and binomial lattice model calculations used to value derivative instruments discussed below under “Valuation of Derivative Instruments”. In addition, management has estimated the expected economic life and value of our licensed technology, our net operating loss for tax purposes, share-based payments for compensation to employees, directors, consultants and investment banks, and the useful lives of our fixed assets. Actual results could differ from those estimates.

 

Deferred Financing Costs—Payments, either in cash or share-based payments, made in connection with the sale of debentures are recorded as deferred debt issuance costs and amortized using the effective interest method over the lives of the related debentures.

 

Fair Value of Financial Instruments—For certain of our financial instruments, including accounts receivable, accounts payable, accrued expenses, interest payable, bank overdraft, advances payable and notes payable, the carrying amounts approximate fair value due to their relatively short maturities.

 

Valuation of Derivative Instruments—FAS 133, “Accounting for Derivative Instruments and Hedging Activities” requires bifurcation of embedded derivative instruments and measurement of fair value for accounting purposes. In addition, FAS 155, “Accounting for Certain Hybrid Financial Instruments” requires measurement of fair values of hybrid financial instruments for accounting purposes. In determining the appropriate fair value, the Company uses a variety of valuation techniques including Black Scholes models, Binomial Option Pricing models, Standard Put Option Binomial models and the net present value of certain penalty amounts. Derivative liabilities are adjusted to reflect fair value at each period end, with any increase or decrease in the fair value being recorded in results of operations as Adjustments to Fair Value of Derivatives. The effects of interactions between embedded derivatives are calculated and accounted for in arriving at the overall fair value of the financial instruments. In addition, the fair values of freestanding derivative instruments such as warrant derivatives are valued using the Black Scholes model.

 

 
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Stock Based Compensation—The Company follows the fair value recognition provisions of FAS 123(R). Stock-based compensation expense is recognized in the financial statements for granted, modified, or settled stock options based on estimated fair values.

  

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

 

Not applicable to a “smaller reporting company” as defined in Rule 12b-2 of the Exchange Act.

 

ITEM 4. CONTROLS AND PROCEDURES.

 

Evaluation of Disclosure Controls and Procedures.

 

This Company is receiving the administrative support and is planning to provide adequate controls and procedures in place in due course.

 

The book-keeping and the financial statement preparations were handled by qualified professionals and hence this management believes that there are adequate controls and procedures for the current period covered by this report which are effective to ensure that the information required to be disclosed by us in reports filed under the Securities Exchange Act of 1934 is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management, as appropriate to allow timely decisions regarding disclosure. It has been determined by the management that the Company has adequate segregation of duties consistent with control objectives and has also adapted various accounting policies in accounting and financial reporting with respect to the requirements and application of GAAP and SEC requirements. The Company has effective controls over the financial disclosure and reporting processes.

 

Management’s Report on Internal Control over Financial Reporting

 

The management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act. The internal control system is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes, in accordance with generally accepted accounting principles. The system of internal control over financial reporting prevents or detect misstatements. All projections such as evaluation of effectiveness to future periods, are provided by well experienced professionals, while the same can be subject to inherent risks such as changing conditions, or that the degree of compliance with the policies or procedures may deteriorate.

  

The management conducts quarterly evaluation of the effectiveness of internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework. Based on its evaluation, the Company is constantly requiring the experts to improve the system to remove any material weakness in our internal control over financial reporting. A material weakness is a deficiency, or a combination of control deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

 

The material weakness is eliminated by segregation of duties in financial reporting, as our financial reporting and all accounting functions are performed by experts with adequate oversight by a professional with accounting expertise.

 

In general, there have been no changes in our system of internal controls over financial reporting during the current period of reporting, while the management has been constantly reviewing and eliminating any area of material weakness. The management assertion is adequate internal control over financial reporting.

 

However, this company being not a fully reporting company is not required to adhere to detailed and exhaustive procedures.

 

 
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PART II

 

OTHER INFORMATION

 

ITEM 6. EXHIBITS.

 

Exhibit No.

Description

31.1

RULE 13A-14(A)/15D-14(A) CERTIFICATIONS

31.2

Certification of Principal Financial Officer Pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.1

Certification of Principal Executive Officer Pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

_________

Filed Herewith 

 

 
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SIGNATURES

 

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

 

Carnegie Development, Inc.

 

 

 

 

 

 

 

 

 

 

 

By:

/s/ Timothy Barton

 

By:

/s/ Saskya Bedoya

 

Date: July 20, 2021

 

Timothy Barton

 

 

Saskya Bedoya

 

 

 

President & Director

 

 

Treasurer & Director

 

 

 

 

16

 

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