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 November 30, 2019

 

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

 

For the transition period from _________ to __________

 

Commission file number: 333-178210

 

SERVICE TEAM INC.
(Exact name of registrant as specified in its charter)

 

Wyoming 61-1653214

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer Identification No.)

 

18482 Park Villa Place, Villa Park, California 92861
(Address of principal executive offices) (Zip Code)

  

(714) 538-5214
(Registrant's telephone number, including area code)

 

 

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 and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Sec.232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).         Yes      No  

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of "large accelerated filer", "accelerated filer" and "smaller reporting 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 is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes      No  

 

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of January 14, 2019:  8,852,873,544 common shares and 150,000 shares of preferred stock.

 

 

 

 

 
 

 

PART I — FINANCIAL INFORMATION

  

Item 1. Financial Statements.

 

 

 

TABLE OF CONTENTS


 

    Page
Financial Statements  
     
  Consolidated Balance Sheets as of November 30, 2019 (Unaudited) and August 31, 2019 3
  Consolidated Statements of Operations for the three months periods ended November 30, 2019 and November 30, 2018 (Unaudited) 4
  Consolidated Statement of Shareholders' Equity for the year ended August 31, 2019 and the three months ended November 30, 2019 (Unaudited) 5
  Consolidated Statement of Cash Flows for the three months ended November 30, 2019 and November 30, 2018 (Unaudited) 6
  Notes to the Consolidated Financial Statements (Unaudited) 7

 

 

 

 

2 
 

 

SERVICE TEAM INC.
CONSOLIDATED BALANCE SHEETS
AS OF NOVEMBER 30, 2019 (UNAUDITED) AND AUGUST 31, 2019

 

    11/30/19   8/31/19
ASSETS        
Cash   $ 23,153     $ 52,636  
Accounts receivable, net     376,285       344,266  
Total Current Assets     399,438       396,902  
                 
Property and equipment, net     155,434       157,736  
Prepaid Expenses – non-current     14,000       14,000  
TOTAL ASSETS   $ 568,872     $ 568,638  
                 
LIABILITIES & SHAREHOLDERS' EQUITY                
Accounts payable   $ 109,162     $ 82,564  
Loan-Employee     1,300       1,300  
Convertible notes payable net – currently in default     136,632       140,232  
Promissory note payable net     —         10,120  
Accrued expense     62,652       63,521  
Accrued interest     90,256       84,866  
TOTAL LIABILITIES   $ 400,002     $ 382,603  
                 
SHAREHOLDERS' EQUITY                
Common stock, $0.001 par value, 20,000,000,000 authorized, and 8,852,873,544 issued and outstanding as of November 30, 2019 and 8,852,873,544 issued and outstanding as of August 31, 2019 respectively.     8,852,874       8,852,874  
Preferred stock – Series A, $0.001 par value, 150,000 authorized, 150,000 and 150,000 issued and outstanding as of November 30, 2019 and August 31, 2019, respectively.     150       150  
Additional paid in capital     (5,611,302 )     (5,611,302 )
Stock payable     —         —    
Accumulated deficit     (3,072,852 )     (3,055,687 )
TOTAL SHAREHOLDERS' EQUITY     168,870       186,035  
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY     568,872       568,638  

 

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

 

3 
 

 

 

SERVICE TEAM INC.
CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE MONTH PERIODS ENDING

NOVEMBER 30, 2019 AND NOVEMBER 30, 2018 (UNAUDITED)

 

 
    3 Months
Ended
11/30/19
  3 Months
Ended
11/30/18
REVENUES        
Sales   $ 994,625     $ 993,889  
                 
COST OF SALES                
Cost of sales     824,002       717,017  
Gross Margin     170,623       276,872  
                 
OPERATING EXPENSES                
General & administrative expenses     174,689       126,460  
Depreciation expense     4,017       4,206  
Total Operating Expenses     178,706       130,666  
                 
INCOME FROM OPERATIONS                
                 
OTHER EXPENSE                
Interest Expense     (9,082 )     32,680  
Total Other Expense     (9,082 )     32,680  
                 
NET INCOME (LOSS)   $ (17,165 )   $ 113,526  
                 
Weighted average number of common shares outstanding – basic     8,852,873,544       8,852,873,544  
Weighted average number of common shares outstanding – fully diluted     8,852,873,544       11,515,613,544  
                 
Net income (loss) per share - basic   $ (0.00 )   $ 0.00  
Net income (loss) per share - fully diluted   $ (0.00 )   $ 0.00  

 

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

 

4 
 

 

 

CONSOLIDATED STATEMENT OF SHAREHOLDERS DEFICIT FOR THE YEAR

ENDED AUGUST 31, 2019 AND THE THREE MONTHS ENDED NOVEMBER 30, 2019 (UNAUDITED)

 

 

    Common Stock        Preferred Stock    

Additional

Paid In

   

 

Stock

    Accumulated        
    Shares     Amount     Shares     Amount     Capital     Payable     Deficit     Total  
                                                 
Balance, August 31, 2018     8,852,873,544     $ 8,852,874       150,000     $ 150     $ (5,611,302)     $ -     $ (3,056,563)     $ 185,159  
                                                                 
Net Income     -       -       -       -       -       -       876       876  
Balance August 31, 2019     8,852,873,544     $ 8,852,874       150,000     $ 150     $ (5,611,302 )   $ -     $ (3,055,687)     $ 186,035  
                                                                 
Stock Payable for Note Conversion     -       -       -       -       -       -       -       -  
Net Loss     -       -       -       -       -       -       (17,165)       (17,165)  
Balance November 30, 2019     8,852,873,544     $ 8,852,874       150,000     $ 150     $ (5,611,302 )     -       (3,072,852)       168,870  

 

 

 

 

 

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

 

 

 

5 
 

 

SERVICE TEAM INC.

 CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE THREE MONTHS PERIOD ENDED NOVEMBER 30, 2019

AND NOVEMBER 30, 2018 (UNAUDITED)

 

    3 Months
Ended
11/30/19
  3 Months
Ended
11/30/18
CASH FLOWS FROM OPERATING ACTIVITIES        
Net Income (Loss)   $ (17,165 )   $ 113,526  
                 
Adjustments to reconcile net income (loss) with cash provided by (used in) operations:     —         —    
Debt discount amortization     3,279       19,881  
Depreciation     4,017       4,206  
                 
CHANGE IN OPERATING ASSETS AND LIABILITIES                
Accounts receivable     (32,019 )     (28,815 )
Accrued expenses     4,521       5,760  
Accounts payable     26,598       17,805  
Net Cash Provided by (Used in) Operating Activities     (10,769 )     132,363  
                 
CASH FLOWS FROM INVESTING ACTIVITIES                
Cash paid for purchase of fixed assets     (1,715 )     —    
Net Cash Used in Investing Activities     (1,715 )     —    
                 
CASH FLOWS FROM FINANCING ACTIVITIES                
Proceeds from convertible debt – third party     —         —    
Payments on promissory notes – third party     (16,999 )     (39,656 )
Net Cash Provided by (Used in) Financing Activities     (16,999 )     39,656  
                 
Net Increase (Decrease) In Cash and Cash Equivalents     (29,483 )     92,707  
Cash at Beginning of Period     52,636       48,855  
Cash at End of period   $ 23,153     $ 141,562  
                 
Supplemental Disclosures                
Interest Paid     413       —    
Taxes Paid     —         —    

 

 

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


 

6 
 

 

SERVICE TEAM, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AT NOVEMBER 30, 2019 (UNAUDITED)

 

NOTE 1 - ORGANIZATION

 

Organization

 

Service Team Inc. (the "Company") was incorporated pursuant to the laws of the State of Nevada on June 6, 2011.  The Company was organized to comply with the warranty obligations of electronic devices manufactured by companies outside of the United States.  The business proved to be unprofitable and the Company reduced its warranty and repair operations.  On June 5, 2013, Service Team Inc. acquired Trade Leasing, Inc. for 4,000,000 shares of its common stock, a commonly held company.  Trade Leasing, Inc., a California corporation, was incorporated on November 1, 2011, and commenced business January 1, 2013.  Trade Leasing, Inc. is principally involved in the manufacturing, maintenance and repair of truck bodies.   On September l, 2018, Service Team Inc. changed its state of domicile from the state of Nevada to the state of Wyoming.    

 

The Company has established a fiscal year end of August 31.

 

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The consolidated financial statements presented in this report are the combined financial reports of Trade Leasing, Inc. and Service Team Inc. 

 

The Company maintains its accounting records on an accrual basis in accordance with generally accepted accounting principles in the United States of America (U.S. GAAP).

 

The consolidated financial statements present the Balance Sheet, Statements of Operations, Shareholders' Equity and Cash Flows of the Company. These consolidated financial statements are presented in United States dollars. The accompanying audited, consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q.  All adjustments which are, in the opinion of management, necessary for a fair presentation of the results of operations for the interim periods have been made and are of a recurring nature unless otherwise disclosed herein.

 

Principles of Consolidation

 

The accompanying consolidated financial statements include the accounts of Service Team Inc. and Trade Leasing, Inc. both of which are under common control and ownership. The consolidated financial statements herein contain the operations of the wholly-owned subsidiaries listed above. All significant inter-company transactions have been eliminated in the preparation of these financial statements. 

 

7 
 

 

Use of Estimates

 

The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period.  Actual results could differ from those estimates. 

  

Going Concern

 

The Company's financial statements are prepared using the accrual method of accounting in accordance with accounting principles generally accepted in the United States of America, and have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities in the normal course of business. The Company has an accumulated deficit as of November 30, 2019 of $3,072,852 and is dependent on raising capital through placement of our common stock in order to implement its business plan. There can be no assurance that the Company will be successful in order to continue as a going concern. The Company is funding its initial operations by issuing common shares and debt.  We cannot be certain that capital will be provided when it is required.

 

 Cash and Equivalents

 

Cash and equivalents include investments with initial maturities of three months or less. The Company maintains its cash balances at credit-worthy financial institutions that are insured by the Federal Deposit Insurance Corporation ("FDIC") up to $250,000. There were no cash equivalents at November 30, 2019, or August 31, 2019.

 

Concentration of Credit Risk

 

Financial instruments and related items, which potentially subject the Company to concentrations of credit risk, are cash and cash equivalents. The Company places its cash and temporary cash investments with credit quality institutions. At times, such investments may be in excess of FDIC insurance limits.

 

Accounts Receivable

 

All accounts receivable are due thirty (30) days from the date billed. If the funds are not received within thirty (30) days the customer is contacted to arrange payment. The Company uses the allowance method to account for uncollectable accounts receivable. Whilst management is confident that its customers will settle their debts, it has recorded an allowance for doubtful accounts in amount of $14,310 as of November 30, 2019 and August 31, 2019

 

Accounts Receivable and Revenue Concentrations

 

The company has approximately 400 customers. One customer South Bay Ford represented more than 10% of sale in the last 12 months. The company is not dependent on a few major customers.

 

8 
 

 

Inventory

 

The Company does not own inventory, materials are purchased as needed from local suppliers; therefore, there was no additional inventory on hand at November 30, 2019 or August 31, 2019. 

   

Property and Equipment

 

Equipment, vehicles and furniture, which are recorded at cost, consist primarily of fabrication equipment and are depreciated using the straight-line method over the estimated useful lives of the related assets (generally 15 years or less). Costs incurred for maintenance and repairs are expensed as incurred and expenditures for major replacements and improvements are capitalized and depreciated over their estimated remaining useful lives. There was $4,017 and $4,206 of depreciation expense during the three months ended November 30, 2019 and 2018, respectively. 

   

 Net property and equipment were as follows at November 30, 2019 and August 31, 2019: 

 

    11-30-19   8-31-19
Equipment   $ 369,673     $ 367,958  
Vehicles     15,000       15,000  
Furniture     24,000       24,000  
Leasehold improvements     52,826       52,826  
Subtotal     461,499       459,784  
Less: accumulated depreciation     306,065       (302,048 )
Total Fixed Assets, Net   $ 155,434     $ 157,736  

 

Lease Commitments

 

Service Team Inc. leases facilities at 1818 Rosslynn Avenue, Fullerton, California, to manufacture its products.   The facility is leased for six and one half years at a price of $10,000 per month, for the first six months; and, $14,000 per month thereafter.  Service Team Inc pays for the fire insurance and property taxes on the building estimated to be approximately $2,000 per month. The location consists of three acres of land and one building of approximately 30,000 square feet.   As of November 30, 2019, the deferred rent related to this lease was $7,333 and is included in accrued expenses.

The table below discloses the Company’s future minimum lease payment obligations as of November 30, 2019.

 

  2020     $ 126,000  
  2021       168,000  
  2022       14,000  
  TOTAL:     $ 308,000  

 

9 
 

 

 

Beneficial Conversion Features

 

From time to time, the Company may issue convertible notes that may contain an imbedded beneficial conversion feature. A beneficial conversion feature exists on the date a convertible note is issued when the fair value of the underlying common stock to which the note is convertible into is in excess of the remaining unallocated proceeds of the note after first considering the allocation of a portion of the note proceeds to the fair value of warrants, if related warrants have been granted. The intrinsic value of the beneficial conversion feature is recorded as a debt discount with a corresponding amount to additional paid in capital. The debt discount is amortized to interest expense over the life of the note using the effective interest method.

 

Fair Value of Financial Instruments

 

The Company adopted Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 820 on June 6, 2011. Under this FASB, fair value is defined 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 (an exit price). The standard outlines a valuation framework and creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures. Under GAAP, certain assets and liabilities must be measured at fair value, and FASB ASC 820-10-50 details the disclosures that are required for items measured at fair value.

  

 The Company has various financial instruments that must be measured under the new fair value standard including: cash, convertible notes payable, accrued expenses, promissory notes payable, accounts receivable and accounts payable. The Company's financial assets and liabilities are measured using inputs from the three levels of the fair value hierarchy. The three levels are as follows:   

 

Level 1 – Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.  The fair value of the Company's cash is based on quoted prices and therefore classified as Level 1. 

 

Level 2 - Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).

 

Level 3 - Unobservable inputs that reflect our assumptions about the assumptions that market participants would use in pricing the asset or liability.

 

Cash, accounts receivable, accounts payable, promissory notes, convertible notes and accrued expenses reported on the balance sheet are estimated by management to approximate fair market value due to their short-term nature.

 

10 
 

 


 The following table presents assets and liabilities that were measured and recognized at fair value as of November 30, 2019 on a recurring basis:

 

Description   Level 1   Level 2   Level 3   Total
Realized
Loss
Convertible Note Payable-net   $ 0     $ —       $ —       $ —    
Convertible Note Payable-net, in default     136,632       —         —         —    
Total   $ 136,632       —         —         —    

 

The following table presents assets and liabilities that were measured and recognized at fair value as of August 31, 2019 on a recurring basis: 

 

Description   Level 1   Level 2   Level 3   Total
Realized
Loss
Convertible Note Payable-net   $ 140,232     $ —       $ —       $ —    
                                 
Total   $ 140,232       —         —         —    

   

Income Taxes

 

In assessing the realization of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. The Company considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based on the level of historical operating results and the uncertainty of the economic conditions, the Company has recorded a full valuation allowance against its deferred tax assets at November 30, 2019 and August 31, 2019 where it cannot conclude that it is more likely than not that those assets will be realized.

Revenue Recognition

 

Trade Leasing Inc dba Delta Stag Manufacturing

 

Service Team Inc, 100% owned subsidiary Trade Leasing Inc dba Delta Stag Manufacturing receives orders from customers to build or repair truck bodies. The company builds the requested product. At the completion of the product the truck is delivered to the customer.  If the customer accepts the product Trade Leasing Inc dba Delta Stag Manufacturing issues an invoice to the customer for the job. The invoice is entered into our accounting system and is recognized as revenue at that time.

 

In Trade Leasing Inc we use the completed contract method for truck bodies built, which typically have construction periods of 15 days or less. Contracts are considered complete when title has passed, the customer has accepted the product and we do not retain risks or rewards of ownership of the truck bodies. Losses are accrued if manufacturing costs are expected to exceed manufacturing contract revenue.  Manufacturing expenses are primarily composed of aluminum cost, which is the largest component of our raw materials cost and the cost of labor. 

 

11 
 

 

 

 

On September 1, 2018, we adopted Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes the revenue recognition requirements in Accounting Standards Codification (ASC) Topic 605, Revenue Recognition (Topic 605). Results for reporting periods beginning after September 1, 2018 are presented under Topic 606. The impact of adopting the new revenue standard was not material to our financial statements and there was no adjustment to beginning retained earnings on September 1, 2018.

Under Topic 606, revenue is recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.

 

We determine revenue recognition through the following steps:

 

 identification of the contract, or contracts, with a customer;

 identification of the performance obligations in the contract;

 determination of the transaction price;

 allocation of the transaction price to the performance obligations in the contract; and

 recognition of revenue when, or as, we satisfy a performance obligation. 

 

Share Based Expenses

 

The Company accounts for the issuance of equity instruments to acquire goods and/or services based on the fair value of the goods and services or the fair value of the equity instrument at the time of issuance, whichever is more readily determinable. The Company's accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows the provisions of standards issued by the FASB. The measurement date for the fair value of the equity instruments issued is determined at the earlier of (i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant or vendor's performance is complete. In the case of equity instruments issued to consultants, the fair value of the equity instrument is recognized over the term of the consulting agreement.

 

Stock Based Compensation

 

In December of 2004, the FASB issued a standard which applies to transactions in which an entity exchanges its equity instruments for goods or services and also applies to liabilities an entity may incur for goods or services that are based on the fair value of those equity instruments. For any unvested portion of previously issued and outstanding awards, compensation expense is required to be recorded based on the previously disclosed methodology and amounts. Prior periods presented are not required to be restated. We adopted the standard as of inception.  The Company has not issued any stock options to its Board of Directors and officers as compensation for their services.  If options are granted, they will be accounted for at a fair value as required by the FASB ASC 718.

 

12 
 

Net Loss Per Share

 

The Company adopted the standard issued by the FASB, which requires presentation of basic earnings or loss per share and diluted earnings or loss per share. Basic income (loss) per share ("Basic EPS") is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share ("Diluted EPS") are similarly calculated using the treasury stock method except that the denominator is increased to reflect the potential dilution that would occur if dilutive securities at the end of the applicable period were exercised.  During the three month period ended November 30, 2018, because the Company operations resulted in net income, therefore additional dilutive securities were included in the diluted EPS.   During the three month period ended November 30, 2019, there were net losses; therefore, no additional dilutive securities were included in the diluted EPS as that would be anti-dilutive to the resulting diluted earnings per share.
 

Recent Accounting Pronouncements

 

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842): Accounting for Leases. This update requires that lessees recognize right-of-use assets and lease liabilities that are measured at the present value of the future lease payments at lease commencement date. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee will largely remain unchanged and shall continue to depend on its classification as a finance or operating lease. The Company has performed a comprehensive review in order to determine what changes were required to support the adoption of this new standard. The Company will elect the optional transition method that allows for a cumulative-effect adjustment in the period of adoption and will not restate prior periods. Under the new guidance, the Company’s lease will continue to be classified as operating. During fiscal 2020, the Company will complete its implementation of its processes and policies to support the new lease accounting and reporting requirements. The adoption of this ASU is not expected to have a significant impact on our Consolidated Statements of Operations or Cash Flows.

 

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), to clarify the principles of recognizing revenue and create common revenue recognition guidance between U.S. GAAP and International Financial Reporting Standards. Under ASU 2014-09, revenue is recognized when a customer obtains control of promised goods or services and is recognized at an amount that reflects the consideration expected to be received in exchange for such goods or services. In addition, ASU 2014-09 requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The ASU is effective for fiscal years beginning after December 15, 2017. The new revenue standard is principle based and interpretation of those principles may vary from company to company based on their unique circumstances. It is possible that interpretation, industry practice, and guidance may evolve as companies and the accounting profession work to implement this new standard. The implementation of this standard did not have a material effect on the Company’s results of operations.

 

13 
 

 

 

In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment, which simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. In computing the implied fair value of goodwill under Step 2, current U.S. GAAP requires the performance of procedures to determine the fair value at the impairment testing date of assets and liabilities (including unrecognized assets and liabilities) following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Instead, the amendments under this ASU require the goodwill impairment test to be performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The ASU becomes effective for the Company on January 1, 2020. The amendments in this ASU will be applied on a prospective basis. Early adoption is permitted for interim or annual goodwill impairment tests performed.

 

In August 2016, the Financial Accounting Standards Board (the “FASB”) issued ASU 2016-15, Statement of Cash Flows (Topic 230). The update addresses eight specific cash flow issues and is intended to reduce diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. This update is effective for reporting periods beginning after December 15, 2017, including interim periods within the reporting period. Adoption of ASU 2016-15 did not have a material effect on our financial statements.

 

In May 2017, the FASB issued ASU No. 2017-09, Stock Compensation - Scope of Modification Accounting, which provides guidance on which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. The ASU requires that an entity account for the effects of a modification unless the fair value (or calculated value or intrinsic value, if used), vesting conditions and classification (as equity or liability) of the modified award are all the same as for the original award immediately before the modification. The ASU became effective for the Company on January 1, 2018 and will be applied to an award modified on or after the adoption date. Adoption of ASU 2017-09 did not have a material effect on the Company’s financial statements.

 

Effective June 1, 2018, the Company adopted Accounting Standards Codification (“ASC”) 606 — Revenue from Contracts with Customers. Under ASC 606, the Company recognizes revenue from the commercial sales of products, licensing agreements and contracts to perform pilot studies by applying the following steps: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract; and (5) recognize revenue when each performance obligation is satisfied. For the comparative periods, revenue has not been adjusted and continues to be reported under ASC 605 — Revenue Recognition. Under ASC 605, revenue is recognized when the following criteria are met: (1) persuasive evidence of an arrangement exists; (2) the performance of service has been rendered to a customer or delivery has occurred; (3) the amount of fee to be paid by a customer is fixed and determinable; and (4) the collectability of the fee is reasonably assured. There was no impact on the Company’s financial statements as a result of adopting ASC 606.

 

There are various other updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company’s consolidated financial position, results of operations or cash flows.

 

14 
 

 

 

NOTE 3 – CAPITAL STOCK

 

The Company's authorized capital is 20,000,000,000 common shares with a par value of $0.001 per share and 150,000 preferred shares with a par value of $0.001 per share.  

Common Shares

 

On February 12, 2016, the Articles of Incorporation were amended to increase the authorized shares of capital stock to 500,000,000.   On December 20, 2016, the Articles of Incorporation were amended to increase the authorized share of capital stock to 1,000,000,000.    On January 19, 2017, the Articles of Incorporation were amended to increase the authorized share of capital stock to 2,000,000,000.   On February 16, 2017, the Articles of Incorporation were amended to increase the authorized share of capital stock to 3,000,000,000.   On April 27, 2017, the Articles of Incorporation were amended to increase the authorized share of capital stock to 4,500,000,000.  On June 13, 2017, the Articles of Incorporation were amended to increase the authorized share of capital stock to 8,000,000,000.   On June 28, 2017, the Articles of Incorporation were amended to increase the authorized share of capital stock to 10,000,000,000.  On August 22, 2017, the Company moved its state of domicile from Nevada to Wyoming, and in the process of the transfer increased its authorized common stock to 20,000,000,000.

 

Preferred Shares

 

On January 23, 2015, Service Team Inc. filed with the Secretary of State of Nevada a Certificate of Designation for 100,000 shares of Series A Preferred Stock.  The Designation gives the Series A Preferred Stock 500 votes per share.   Series A Preferred Stock were not entitled to receive dividends, any liquidation preference, or conversion rights.  On October 16, 2015, the Designation of Preferred Stock was amended to allow Preferred Shareholders to receive dividends in an amount equal to dividends paid per share on Common Stock.  On July 27, 2016, an amendment was filed to increase the voting rights of the preferred stock from 500 votes per share to 10,000 votes per share. The Series A share amendments valued according to the additional voting rights and dividend rights assigned. The value assigned to the dividend rights was derived from a model utilizing future economic value of the dividends and was $525 which was recorded on the grant date as stock based compensation.  The value assigned to the voting rights was derived from a model utilizing control premiums to value the voting control of the preferred stock and was $83,000 which was recorded on the grant date as stock based compensation.  On December 30, 2016 the Articles of Incorporation were amended to increase the authorized preferred shares to 150,000.

 

On July 25, 2017, the Articles of Incorporation were amended to increase the voting rights of preferred shares to 100,000 votes per share. The Series A share amendments valued according to the additional voting rights and dividend rights assigned. The value assigned to the dividend rights was derived from a model utilizing future economic value of the dividends and was $0 which was recorded on the grant date as stock based compensation.  The value assigned to the voting rights was derived from a model utilizing control premiums to value the voting control of the preferred stock and was $54,000 which was recorded on the grant date as stock based compensation.

 

On December 4, 2017, the Company granted 50,000 additional Series A Preferred Stock shares to Robert Cashman, a related party.  The value assigned to the new shares was derived from a model utilizing control premiums to value the voting control of the preferred stock and was $1,000 which was recorded on the grant date as stock based compensation.

   

15 
 

Share Transactions

 

2020

There were no share transactions in 2020

 

2019

There were no share transactions in 2019

 

Stock Based Compensation

 

We have accounted for stock-based compensation under the provisions of FASB Accounting Standards codification (ASC) 718-10-55.  (Prior authoritative literature:  FASB Statement 123 (R), Share-based payment.)  This statement requires us to record any expense associated with the fair value of stock-based compensation.  Determining fair value requires input of highly subjective assumptions, including the expected price volatility.  Changes in these assumptions can materially affect the fair value estimate. As of November 30, 2019, the company has not granted any stock options.

 

 NOTE 4 – DEBT TRANSACTIONS

 

Convertible Notes Payable – Related Party

 

R.L. Cashman

 

On April 17, 2017, the Company issued a convertible note to Robert Cashman (a related party) for $12,500 of cash consideration.  The note bears interest at 10%, matures on April 17, 2018, and is convertible into common stock at 50% of the average bid price of the stock during the 30 days prior to the conversion. The Company recorded a debt discount equal to $12,500 due to this conversion feature and amortized $4,658 during the year ended August 31, 2017, with a remaining debt discount of $7,842 amortized during the year ended August 31, 2018.  The note was repaid during the fiscal year ended August 31, 2018.

 

The Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were determinate due to the conversion price floor and, as such, does not constitute a derivative liability as the Company has sufficient authorized shares and a conversion floor of $0.0005. In the event that the authorized shares were not sufficient, the Company has obtained authorization from a majority of shareholders such that the appropriate number of shares will be available or issuable for settlement to occur.

  

 

16 
 

 

Convertible Notes Payable – Third Party

 

JMJ Financial Group

 

On April 28, 2017, the Company issued a convertible note to JMJ Financial Group for $55,000 of cash consideration.  The note bears interest at 12%, matures on April 28, 2018, and is convertible into common stock at 50% of the lowest 3 closing market prices of the previous 20 trading days prior to conversion. The Company recorded a debt discount equal to $37,080 due to this conversion feature. The Company also recorded a $6,000 and $11,920 debt discounts due to accrued interest and origination fees required by the agreement to be accrued at the beginning of the note. The note had accrued interest of $7,222 as of November 30, 2019 and August 31, 2019 respectively. The debt discounts had a balance at November 30, 2019 and August 31, 2019 of $0. The Company recorded debt discount amortization expense of $0 during the three months ended November 30, 2019 and during the year ended August 31, 2019. The Company converted $31,570 of principal and $12,222 of interest into shares during the year ended August 31, 2018.   This note is currently in default.

 

The Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were determinate due to the conversion price floor and, as such, does not constitute a derivative liability as the Company has sufficient authorized shares and a conversion floor of $0.00005. In the event that the authorized shares were not sufficient, the Company has obtained authorization from a majority of shareholders such that the appropriate number of shares will be available or issuable for settlement to occur.

 

Tangiers Capital Group

 

On November 10, 2017, Service Team Inc issued a 12% Convertible Promissory Note payable to Tangiers Investment Group LLC (the "Investor") in the principal amount of $23,000. The Note, which is due on November 10, 2018, was funded by the Investor in the sum of $20,000 and $3,000 was retained by the Investor through an original issue discount or "OID" for due diligence and legal expense related to this transaction. The Note is convertible into shares of the Registrant's common stock, par value $0.001, at a conversion price of 50% of the lowest trading price of the Company's common stock during the 25 consecutive trading days prior to the date on which Holder elects to convert all or part of the Note.  The Company recorded a $20,000 discount due to the beneficial conversion feature.  During the year ended August 31, 2019, $18,526 of discount amortization was recorded, to result in a remaining debt discount balance of $0 as of August 31, 2019.  Accrued interest at August 31, 2019 and November 30, 2019 was $11,186 and $11,703, respectively.  This note is currently in default.

 

The Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were determinate due to the conversion price floor and, as such, does not constitute a derivative liability as the Company has sufficient authorized shares and a conversion floor of $0.00005. In the event that the authorized shares were not sufficient, the Company has obtained authorization from a majority of shareholders such that the appropriate number of shares will be available or issuable for settlement to occur.

 

17 
 

 

On February 27, 2018, Service Team Inc issued a 12% Convertible Promissory Note payable to Tangiers Investment Group LLC (the "Investor") in the principal amount of $23,000. The Note, which is due on February 27, 2019, was funded by the Investor in the sum of $20,000 and $3,000 was retained by the Investor through an original issue discount or "OID" for due diligence and legal expense related to this transaction. The Note is convertible into shares of the Registrant's common stock, par value $0.001, at a conversion price of 50% of the lowest trading price of the Company's common stock during the 25 consecutive trading days prior to the date on which Holder elects to convert all or part of the Note.  The Company recorded a $20,000 discount due to the beneficial conversion feature and a $3,000 discount due to the original issue discount. During the year ended August 31, 2019, the Company amortized $11,342 of the debt discount leaving a remaining balance of $0 as of August 31, 2019.  Accrued interest at August 31, 2019 and November 30, 2019 was $19,237 and $20,502, respectively.

 

The Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were determinate due to the conversion price floor and, as such, does not constitute a derivative liability as the Company has sufficient authorized shares and a conversion floor of $0.00005. In the event that the authorized shares were not sufficient, the Company has obtained authorization from a majority of shareholders such that the appropriate number of shares will be available or issuable for settlement to occur.

  

Iconic Holdings LLC

 

On July 10, 2017, the Company issued a convertible note to Iconic Holdings of $34,993 for consideration of certain machine tools.  The note bears interest at 10%, matures on July 10, 2018, and is convertible into common stock at 50% of the lowest 3 closing market prices of the previous 20 trading days prior to conversion. The Company recorded a debt discount equal to $31,812 due to this conversion feature. The Company also recorded a $3,181 debt discount due to issuance fees. The note had accrued interest of $39,221 as of November 30, 2019 and $37,471 as of August 31, 2019.  The debt discounts had a balance of $0 as of August 31, 2019.  This note is currently in default.

 

The Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were determinate due to the conversion price floor and, as such, does not constitute a derivative liability as the Company has sufficient authorized shares and a conversion floor of $0.00005. In the event that the authorized shares were not sufficient, the Company has obtained authorization from a majority of shareholders such that the appropriate number of shares will be available or issuable for settlement to occur.

 

18 
 

 

Crown Bridge Partners, LLC.

 

On June 12, 2017, the Company issued a convertible note to Crown Bridge Partners, LLC. for $63,750 of cash consideration.  The note bears interest at 6%, matures on June 12, 2018, and is convertible into common stock at 55% of the lowest 3 closing market prices of the previous 20 trading days prior to conversion. The Company recorded a debt discount equal to $52,600 due to this conversion feature. The Company also recorded a $11,150 debt discount due to issuance fees. The note had accrued interest of $2,180 as of November 30, 2019 and $1,817 as of August 31, 2019.   The debt discounts had a balance at August 31, 2019 of $0.   This note is currently in default.

 

The Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were determinate due to the conversion price floor and, as such, does not constitute a derivative liability as the Company has sufficient authorized shares and a conversion floor of $0.00005. In the event that the authorized shares were not sufficient, the Company has obtained authorization from a majority of shareholders such that the appropriate number of shares will be available or issuable for settlement to occur.

 

Crossover Capital Fund, LLC

 

On July 24, 2017, the Company issued a convertible note to Crossover Capital Fund, LLC for $40,000 of cash consideration.  The note bears interest at 10%, matures on July 24, 2018, and is convertible into common stock at 50% of the lowest 3 closing market prices of the previous 20 trading days prior to conversion. The Company recorded a debt discount equal to $40,000 due to this conversion feature. The note had accrued interest of $9,428 as of November 30, 2019 and $7,917 at August 31, 2019.   The debt discounts had a balance of $0 at August 31, 2018.     This note is currently in default.

 

The Company evaluated the convertible note and determined that the shares issuable pursuant to the conversion option were determinate due to the conversion price floor and, as such, does not constitute a derivative liability as the Company has sufficient authorized shares and a conversion floor of $0.00005. In the event that the authorized shares were not sufficient, the Company has obtained authorization from a majority of shareholders such that the appropriate number of shares will be available or issuable for settlement to occur.

 

Promissory Notes Payable – Third Party

 

IOU Financial

 

On March 30, 2018, the Company issued a promissory note to IOU Financial for $120,000 of cash consideration.  The note bears interest at 32% and matures on March 30, 2019. The Company recorded a debt discount equal to $38,630 due to the unpaid interest which was added to the principal balance to be repaid during the 12 month note.  During the year ended August 31, 2018, the company amortized $16,299 of the debt discount into interest expense leaving a remaining total debt discount on the note of $22,331 as of August 31, 2018.  During the year ended August 31, 2018, the Company repaid $69,206 in principal on the note in cash leaving a balance on the note of $73,200 owed as of August 31, 2018.  During the year ended August 31, 2019, the company amortized $22,331 of the debt discount into interest expense leaving a remaining total debt discount on the note of $0 as of August 31, 2019.  During the year ended August 31, 2019, the Company repaid $89,424 in principal on the note in cash leaving a balance on the note of $0 owed as of August 31, 2019.

 

19 
 

On January 22, 2019, the Company issued a promissory note to IOU Financial for $75,000 of cash consideration.  The note bears interest at 32%, matures on October 23, 2019.  The Company recorded a debt discount equal to $16,954 due to the unpaid interest which was added to the principal balance to be repaid during the 9 month note. During the year ended August 31, 2018, the company amortized $35,836 of the debt discount into interest expense leaving a remaining total debt discount on the note of $0 as of August 31, 2018.  The proceeds of the loan were used to pay $27,244 to IOU Financial to pay the note dated March 30, 2018 in full.  And the remaining amount $47,776 was added to working capital.  During the period ended August 31, 2019, the Company repaid $74,400 in principal on the note in cash leaving a balance on the note of $16,999 owed as of August 31, 2019. The note had interest of $7,917 as of August 31, 2019. This note was paid in full on December 12, 2019.

 

NOTE 5- RELATED PARTY TRANSACTIONS

 

Preferred Stock Issued for Services

 

On July 25, 2017, the Articles of Incorporation were amended to increase the voting rights of preferred shares to 100,000 votes per share. The Series A share amendments valued according to the additional voting rights and dividend rights assigned. The value assigned to the dividend rights was derived from a model utilizing future economic value of the dividends and was $0 which was recorded on the grant date as stock-based compensation.  The value assigned to the voting rights was derived from a model utilizing control premiums to value the voting control of the preferred stock and was $54,000 which was recorded on the grant date as stock-based compensation.

 

On December 4, 2017, the Company granted 50,000 additional Series A Preferred Stock shares to Robert Cashman, a related party.  The value assigned to the new shares was derived from a model utilizing control premiums to value the voting control of the preferred stock and was $1,000 which was recorded on the grant date as stock-based compensation.
 

NOTE 6 – INCOME TAXES
 

The Company accounts for income taxes under standards issued by the FASB. Under those standards, deferred tax assets and liabilities are recognized for future tax benefits or consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided for significant deferred tax assets when it is more likely than not that such assets will not be realized through future operations.
 

No provision for federal income taxes has been recorded due to the net operating loss carry forwards totaling approximately $858,102 as of November 30, 2019, that will be offset against future taxable income.  The available net operating loss carry forwards will expire in various years through 2035. Future tax benefits which may arise as a result of these losses have not been recognized in these financial statements, as their realization is determined not likely to occur and accordingly, the Company has recorded a valuation allowance for the future tax loss carry forwards.

20 
 

 

 

The actual income tax provisions differ from the expected amounts calculated by applying the statutory income tax rate to the Company's loss before income taxes.  The components of these differences are as follows at November 30, 2019 and August 31, 2019:

 

    11/30/19   8/31/19
 Net tax loss carry-forwards   $ 858,102     $ 844,216  
 Statutory rate     21 %     21 %
 Expected tax recovery     180,201       177,285  
 Change in valuation allowance   $ (180,201 )   $ (177,285 )
 Income tax provision     —         —    
                 
 Components of deferred tax asset:                
 Non capital tax loss carry forwards     180,201       177,285  
 Less: valuation allowance   $ (180,201 )   $ (177,285 )
 Net deferred tax asset     —         —    

 

NOTE 7 – COMMITMENTS AND CONTINGENCIES

 

Litigation

 

None.
 

Operating Leases


Service Team Inc. leased a building at 1818 East Rosslynn Avenue, Fullerton, California 92834 effective October 1, 2015.  The lease is for a period of 72 months with an option to extend the lease for an additional 72 months.   The new facility is a 25,000 square foot concrete industrial building located on approximately two acres of land.  This new facility is approximately double the size of the prior facility.  Rent for the new facility is $10,000 per month for the first six months; and then $14,000 per month thereafter.  The Company is responsible for the property taxes and insurance on the building.  As of November 30, 2019, the deferred rent related to this lease was $7,333 and is included in accrued expenses.

 

NOTE 8 – SUBSEQUENT EVENTS

 

Except as noted below, management has evaluated subsequent events to the requirements of ASC 855, and there are currently no subsequent events to report.

 

On January 22, 2020 the company filed a Form 15 with the Securities and Exchange Commission.

 

 

21 
 

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

 

Overview of Our Company

 

Service Team Inc. (the "Company") was incorporated pursuant to the laws of the State of Nevada on June 6, 2011.  The Company was organized to comply with the warranty obligations of electronic devices manufactured by companies outside of the United States.  The business proved to be unprofitable and the Company eliminated its warranty and repair operations.  On June 5, 2013, Service Team Inc. acquired 25,000 common shares of Trade Leasing, Inc., representing 100% ownership, for 4,000,000 shares of its common stock; in addition, both entities are under common control.  Trade Leasing, Inc., a California corporation, was incorporated on November 1, 2011, and commenced business January 1, 2012.

 

Trade Leasing Inc dba Delta Stag Manufacturing is involved in the manufacture and repair of truck bodies.  The Company manufactures truck bodies that are attached to a truck chassis which consists of an engine, drive train, a frame with wheels, and in some cases, a cab.  The truck chassis is manufactured by third parties that are major automotive or truck companies.  These companies do not typically build specialized truck bodies.  The company is also involved in other products used by the trucking industry.   The company operates a complete manufacturing and repair facility in South Gate, California.  The facility manufactures both custom and standard production truck bodies in approximately 70 different models designed to fill the specialized demands of the user.   The vans are available for hauling dry freight or refrigerated freight.  The refrigerated vans are built with two to four inches of foam insulating that is sprayed in place for hauling refrigerated products such as meats, vegetables, flowers and similar products.  The Company installs different types of cooling systems in the trucks.  This varies from motor driven units installed outside the van body or refrigeration units driven off the engine of the truck.  Some refrigerated trucks use a system called "cold plate" where a large metal plate is cooled by power while the truck is parked.  The power is then unplugged and the truck will stay cool for many hours.  The Company's customers are auto dealers and users of trucks; such as dairies, food distributors and local delivery. The company has approximately 400 customers. One customer South Bay Ford represented more than 10% of sale in the last 12 months. The company is not dependent on a few major customers. Trade Leasing purchases raw materials from approximately 75 suppliers.  There are several hundred similar suppliers of comparable materials in the local area. Trade Leasing Inc. purchases refrigeration units from Thermoking Corporation a division of United Technologies and Carrier Corporation, a division of Ingersol Rand Corporation. The two companies represent more than 80% of the refrigeration unit market. There are several other manufactures of refrigeration units that represent a small part of the market. Trade Leasing Inc. employs 43 factory workers and four management personnel.  The management personnel make all of the sales and manage the factory. The company has all of the government licenses necessary to conduct its business. These include 9 different city, county and state licenses covering vehicle transportation, air quality, hazard waste (Paint), land or building use, and sales tax.

 

22 
 

 

Liquidity and Capital Resources

 

As of November 30, 2019, we had assets of $568,872 including current assets of $399,438.   We have accounts payable of $109,162, and convertible notes payable – third party of $136,632.   Accrued interest and expenses of $152,908.    Accrued expenses are for work performed by employees during the organizational and operational stages of the Company. There is no firm date for which these are to be paid. It is to be repaid when we have funds available.  Since inception we have also raised $354,382 from the sale of our common stock.   We believe our ability to achieve commercial success and continued growth will be dependent upon our continued access to capital either through additional sale of our equity or cash generated from operations. We will seek to obtain additional working capital through the sale of our securities. We will attempt to obtain additional capital through bank lines of credit; however, we have no agreements or understandings with third parties at this time.

  

Results of Operations

 

Three Months Ended November 30, 2018 compared to the Three Months Ended November 30, 2017

 

Sales during the three month period ended November 30, 2018, were $993,889 compared to $994,625 for the three month period ending November 30, 2019.   Our cost of sales for the three month period ending November 30, 2018 was $717,017, compared to $824,002 for the three month period ending November 30, 2019. Our operating expenses for the three month period ending November 30, 2018, were $130,666 compared to $178,706 for the three month period ending November 30, 2019.  We had a net income during the three month period ending November 30, 2018, of $113,526; and a net loss of $(17,165) during the three month period ending November 30, 2019.

 

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.

 

Not Applicable

 

Item 4.  Controls and Procedures.

 

Evaluation of Disclosure Controls and Procedures

 

We carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a – 15(c) and 15d – 15(e)). Based upon that evaluation, our principal executive officer concluded that, as of the end of the period covered in this report, our disclosure controls and procedures were not effective to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the required time periods and is accumulated and communicated to our management, including our principal executive officer, as appropriate to allow timely decisions regarding required disclosure.

 

23 
 

Inherent Limitations of Internal Controls

 

Our Principal Executive Officer does not expect that our disclosure controls or internal controls will prevent all error and all fraud. Although our disclosure controls and procedures were designed to provide reasonable assurance of achieving their objectives, a control system, no matter how well conceived and operated, can provide only reasonable, not absolute assurance that the objectives of the system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented if there exists in an individual a desire to do so. There can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

 

Changes in Internal Control over Financial Reporting

 

There were no changes in our internal control over financial reporting, other than those stated above, during our most recent quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

PART II—OTHER INFORMATION

Item 1.  Legal Proceedings.

 

None

 

Item 1A. Risk Factors.

 

Not applicable.

 

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.

 

None.

 

Item 3. Defaults Upon Senior Securities.

 

None.

 

Item 4.  Mine Safety Disclosures.

 

Not applicable.

    

24 
 

Item 5. Other Information.

 

None

 

Item 6. Exhibits.

(a)   The following exhibits are filed with this report.

 

31.1  Certification by Chief Executive Officer pursuant to Sarbanes Oxley Section 302.

 

31.2  Certification by Chief Financial Officer pursuant to Sarbanes Oxley Section 302.

 

32.l  Certification by Chief Executive Officer pursuant to 18 U.S.C. Section 1350.

 

32.2  Certification by Chief Financial Officer pursuant to 18 U.S.C. Section 1350.

 

101   Interactive Data Files

 

 

 

SIGNATURES

 

 Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Date:  January 22, 2020

 

SIGNATURE   TITLE   DATE
         
/s/ Karen J. Fowler   President, Chief Executive Officer   January 22, 2020
    (principal executive officer)    
         
/s/ Karen J. Fowler  

Secretary, Chief Financial Officer,

Chief Accounting Officer

  January 22, 2020

 

       

 

 

25 
 

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