Reference is made to the Financial Statements,
the notes thereto, and the Report of Independent Public Accountants thereon commencing at page F-1 of this Report, which Financial
Statements, notes and report are incorporated herein by reference.
Report of Independent Registered Public
Accounting Firm
To the shareholders and the board of
directors of Finotec Group, Inc.
Opinion on the Financial Statements
We have audited the accompanying balance
sheets of Finotec Group, Inc. (the "Company") as of January 31, 2020 and 2019, the related statements of operations,
stockholders' equity (deficit), and cash flows for the years then ended, and the related notes (collectively referred to as the
"financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial
position of the Company as of January 31, 2020 and 2019, and the results of its operations and its cash flows for the years then
ended, in conformity with accounting principles generally accepted in the United States.
Basis for Opinion
These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit.
We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB")
and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance
with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required
to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are
required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion
on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures
to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures
that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures
in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable
basis for our opinion.
Substantial Doubt about the Company’s
Ability to Continue as a Going Concern
The accompanying financial statements
have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements,
the Company’s minimal activities raise substantial doubt about its ability to continue as a going concern. The financial
statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ BF Borgers CPA PC
BF Borgers CPA PC
We have served as the Company's auditor since
2020
Lakewood, CO
November 17, 2020
NOTES TO FINANCIAL STATEMENTS
NOTE 1 – ORGANIZATION AND DESCRIPTION
OF BUSINESS
The Company’s accounting year-end
is January 31.
On July 20, 2020 Custodian Ventures, LLC
was appointed as the custodian of the Company by the Eighth Judicial Court of Nevada pursuant to Case No. A-20-816267-B.
NOTE 2 – SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
Basis of Presentation
The accompanying financial statements have
been prepared in accordance with the Financial Accounting Standards Board (“FASB”) “FASB Accounting Standard
Codification™” (the “Codification”) which is the source of authoritative accounting principles recognized
by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with generally accepted
accounting principles (“GAAP”) in the United States.
Going Concern
The accompanying financial statements have
been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business for the twelve-month period following the date of these financial statements. The
Company has incurred operating losses since inception. As of January 31, 2020 the Company had a working capital deficit of $2,675
and negative retained earnings of 13,564,223
Because the Company does not expect that
existing operational cash flow will be sufficient to fund presently anticipated operations, this raises substantial doubt about
the Company’s ability to continue as a going concern. Therefore, the Company will need to raise additional funds and is currently
exploring alternative sources of financing. The Company is currently being funded by David Lazar who is extending interest free
demand loans to the Company. Historically, the Company has raised capital through private placements, as an interim measure to
finance working capital needs and may continue to raise additional capital through the sale of common stock or other securities
and obtaining some short-term loans. The Company will be required to continue to so until its operations become profitable. Also,
the Company has, in the past, paid for consulting services with its common stock to maximize working capital, and intends to continue
this practice where feasible.
Use of Estimates
The preparation of financial statements
in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of liabilities,
the liability for the excess share issuance, and disclosure of contingent assets and liabilities at the date of the financial statements.
The most significant estimates relate to income taxes and contingencies. The Company bases its estimates on historical experience,
known or expected trends and various other assumptions that are believed to be reasonable given the quality of information available
as of the date of these financial statements. The results of these assumptions provide the basis for making estimates about the
carrying amounts of assets and liabilities that are not readily apparent from other sources. Actual results could differ from these
estimates.
Revenue Recognition
On
July 1, 2018, the Company adopted Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with
Customers (“ASC 606”). Results for reporting periods beginning after January 1, 2018, are presented under ASC 606. As
of and for the year ended April 30, 2020 the financial statements were not impacted due to the application of Topic 606 because
the Company had no revenues.
Cash and cash equivalents
The Company considers all highly liquid
temporary cash investments with an original maturity of three months or less to be cash equivalents. On January 31, 2020, and January
31, 2019, the Company’s cash equivalents totaled $-0- and $-0- respectively.
Income taxes
The Company accounts for income taxes under
FASB ASC 740, “Accounting for Income Taxes”. Under FASB ASC 740, deferred tax assets and liabilities are
recognized for the future tax consequences attributable to 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.
Under FASB ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period
that includes the enactment date. FASB ASC 740-10-05, “Accounting for Uncertainty in Income Taxes” prescribes
a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken
or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be
sustained upon examination by taxing authorities.
The amount recognized is measured as the
largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. The Company assesses
the validity of its conclusions regarding uncertain tax positions quarterly to determine if facts or circumstances have arisen
that might cause it to change its judgment regarding the likelihood of a tax position’s sustainability under audit.
Stock-based Compensation
The Company accounts for stock-based compensation
using the fair value method following the guidance outlined in Section 718-10 of the FASB Accounting Standards Codification for
disclosure about Stock-Based Compensation. This section requires a public entity to measure the cost of employee services received
in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That
cost will be recognized over the period during which an employee is required to provide service in exchange for the award- the
requisite service period (usually the vesting period). No compensation cost is recognized for equity instruments for which employees
do not render the requisite service.
Net Loss per Share
Net loss per common share is computed by
dividing net loss by the weighted average common shares outstanding during the period as defined by Financial Accounting Standards,
ASC Topic 260, “Earnings per Share.” Basic earnings per common share (“EPS”) calculations are determined
by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per
common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common
share equivalents outstanding.
Recent Accounting Pronouncements
In February 2016, the FASB issued ASU No.
2016-02, Leases (Topic 842), which establishes a new lease accounting model for lessees. The updated guidance requires
an entity to recognize assets and liabilities arising from financing and operating leases, along with additional qualitative and
quantitative disclosures. The amended guidance is effective for fiscal years, and interim periods within those years, beginning
after December 15, 2018, with early adoption permitted. In March 2019, the FASB issued ASU 2019-01, Codification Improvements,
which clarifies certain aspects of the new lease standard. The FASB issued ASU 2018-10, Codification Improvements to Topic
842, Leases in July 2018. Also in 2018, the FASB issued ASU 2018-11, Leases (Topic 842) Targeted Improvements, which
provides an optional transition method whereby the new lease standard is applied at the adoption date and recognized as an adjustment
to retained earnings. The amendments have the same effective date and transition requirements as the new lease standard.
We intend to adopt ASC 842 on July 1, 2020.
The adoption of this guidance is not expected to have any impact on our financial statements.
Stockholders’ Equity and
Accrued Liability Excess stock Issuance
The Company has authorized 300,000,000
shares of Common Stock with a par value of $0.001. As of January 31, 2020, and January 31, 2019, respectively, there were 300,000,000
shares of Common Stock issued and outstanding, respectively.
NOTE 4 – COMMITMENTS AND CONTINGENCIES
The Company did not have any contractual
commitments of January 31, 2020, and 2019
NOTE 5 –NOTES PAYABLE-RELATED
PARY
Mr. Lazar, the principal member of the
Company’s Court-appointed custodian is considered a related party. During the year ended January 31, 2020, he extended $2,675
in interest free demand loans to the Company. These management services provided by Mr. Lazar, the Company’s only employee,
are to manage the day to day operations of the Company; and take the necessary actions to enable the Company to become a viable
operating entity
NOTE 6 – SUBSEQUENT EVENTS
On April 27, 2020 the Company filed a Certificate
of Designation with the State of Nevada to authorize 10,000,000 shares of Series A Preferred Stock (“Series A”). Each
share of Series A is convertible into 20 shares of Common Stock. April 28, 2020 the Company awarded 10,000,000 shares of Series
A to Custodian Ventures, LLC. managed by David Lazar in return for services provided