ITEM 5. MARKET FOR THE REGISTRANT’S COMMON
EQUITY AND RELATED STOCKHOLDER MATTERS
The Company’s common stock was approved
for trading on the OTC Bulletin Board on December 23, 2004 under the trading symbol CITC. Actual trading of our shares began on February
23, 2005. The following are the approximate high and low closing bid quotations on the OTC Bulletin Board since the first quarterly period
of trading as reported on the online resources of Market Watch and Yahoo! Finance. The quotations reflect inter-dealer prices, without
retail mark-up, mark-down, or commission and may not represent actual transactions.
| Period |
|
High Closing Bid |
|
Low Closing Bid |
| 1st Quarter 2009 |
|
$ |
0.75 |
|
$ |
0.65 |
| 2nd Quarter 2009 |
|
$ |
1.50 |
|
$ |
0.87 |
| 3rd Quarter 2009 |
|
$ |
0.97 |
|
$ |
0.74 |
| 4th Quarter 2009 |
|
$ |
0.76 |
|
$ |
0.51 |
| 1st Quarter 2008 |
|
$ |
2.28 |
|
$ |
0.58 |
| 2nd Quarter 2008 |
|
$ |
2.20 |
|
$ |
1.55 |
| 3rd Quarter 2008 |
|
$ |
1.60 |
|
$ |
1.30 |
| 4th Quarter 2008 |
|
$ |
0.88 |
|
$ |
0.65 |
Holders
As of December 31, 2009, there were 263 shareholders
of record. The Company’s transfer agent is Transfer Online, 317 SW Alder Street, 2nd Floor, Portland, OR 97204.
Dividend Policy
The Company has not paid any cash dividends on
its common stock since its inception and does not anticipate or contemplate paying cash dividends in the foreseeable future.
Securities Authorized For Issuance Under Equity Compensation Plans
None.
Recent Sales of Unregistered Securities
On August 18, 2008, 2,000,000 shares were issued
in the name of Randick, O’Dea & Tooliatos, LLP, a law firm representing TCI in various matters, as a pledge to cover up to $250,000
in services provided in the litigation with the Securities & Exchange Commission explained in Note 4, in accordance with the Pledge
Agreement and Promissory Note for $250,000 dated August 6, 2008 and due on August 6, 2009, also explained in Note 4. The 2,000,000 shares
are being held by Randick, O’Dea & Tooliatos as security for repayment of the loan, and are not deemed to carry voting rights
under Nevada law as they are held for the benefit of the Company until released in payment at the maturity of the loan. The issuance of
the 2,000,000 shares, increased the Company’s total issued and outstanding shares of common stock to 33,373,738 as of September
30, 2008 for the purposes of financial reporting.
No other new shares were issued by the Company during the period from
January 1, 2009 through the date of this report.
Definitive Stock Purchase Agreement
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION OR PLAN OF OPERATIONS
(Note: The following Plan of Operations constituted
our business plan during the 2007, and up to the end of fiscal 2009. After an analysis of the lack of progress, the Company filed a Form
15 with the SEC on July 28, 2010. The new Board has determined to seek other opportunities, and so the following Plan of Operations
is no longer effective.)
This report contains forward-looking statements
within the meaning of Section 21E of the Securities and Exchange Act of 1934 and Section 27A of the Securities Act of 1933. These forward-looking
statements involve a number of risks and uncertainties that may cause actual results to differ materially from those discussed in, or
implied by, such forward-looking statements. The Company’s future operating results are dependent upon many factors, including but
not limited to: (i) whether the Company is able to complete its sale to The Children’s Internet Holding Company, LLC; (ii) whether
the Company will settle the SEC Complaint (as defined below); (iii) whether the Company is able to obtain sufficient funding to fund its
operations and business; (iv) whether the Company is able to build the management and human resources and infrastructure necessary to
support the growth of its business; (v) competitive factors and developments in the industry in which the Company competes; (vi) intellectual
property protection; and (vii) any economic conditions that would negatively affect the Company’s business and expansion plans.
Forward-looking statements within this Form 10-KSB are identified by words such as “believes,” “anticipates,”
“expects,” “intends,” “may,” “will” and other similar expressions. However, these words
are not the only means of identifying such statements. We are not obligated and expressly disclaim any obligation to publicly release
any update to any forward-looking statement. Our actual results could differ materially from those anticipated in, or implied by, forward-looking
statements as a result of various factors. Readers are urged to carefully review and consider the various disclosures made by the Company
in this report and in our other reports filed with the SEC, and available on its website at www.sec.gov, that attempt to advise interested
parties of the risks and factors that may affect our business.
Plan of Operations
This plan of future operations contains forward-looking
statements that involve risks, uncertainties, and assumptions. The actual results may differ materially from those anticipated in these
forward-looking statements as a result of certain factors, including, but not limited to, those described elsewhere in this report.
This plan of future operations provides a summary
of the intended operations of the Company’s interim management following the closing of the DSPA.
The Product—The Children’s Internet®
On September 10, 2002, we entered into the Licensing
Agreement with Two Dog Net for an exclusive worldwide license to market and sell The Children’s Internet® service. The agreement
provides for us to be the exclusive marketers of Two Dog Net’s proprietary secured Internet service for pre-school to junior high
school aged children called The Children’s Internet®. The Company released The Children’s Internet®, version 9.0,
to the market on March 2, 2006, but as discussed in this report, took the product offline in January 2008 to streamline business operations
until we have the resources to market and operate it effectively. We believe The Children’s Internet® provides a comprehensive,
smart solution to the problems inherent to a child’s unrestricted and unsupervised Internet access. It offers a protected online
service and “educational super portal” specifically designed for children, pre-school to junior high, providing them with
safe, real-time access to the World Wide Web; access to hundreds of thousands of the best pre-selected, pre-approved educational and entertaining
web pages accessed through a secure propriety browser and search engine.
Under the terms of the DSPA, TCI Holding commenced
funding the Company’s operations in October 2007, and as a result, the technology on which the product is based was updated and
the functionality of the service was improved. The Company, through Two Dog Net also substantially upgraded the underlying system infrastructure
by increasing redundant servers and improving control procedures which in turn increased the reliability of the service. Additionally,
during 2007, where appropriate, the Company contracted with third party companies to outsource administrative support services and effectively
put in place the infrastructure to support operations.
We intend to sell the product for $9.95 per month
to the consumer. The user must already have internet access, either through dial-up, DSL or cable broadband. We utilize both retail and
wholesale channels of distribution.
Sales and Marketing Plan
Although The Children’s Internet® service
is not currently being offered, upon closing the DSPA, we intend to affect a broad based Sales and Marketing Plan. We will focus on establishing
long term, value-driven relationships with:
| |
· |
The School Market: School Administrators and Teachers |
| |
· |
Major ISP’s such as Comcast, Yahoo, AOL, etc. |
| |
· |
Non-profit organizations such as religious groups, Boy Scouts and Girl Scouts, etc. |
| |
· |
ISP customers with an interest in protecting their families |
We will focus our sales and marketing programs
on five distinct areas where we can produce revenue:
| |
1. |
Consumer Sales- We intend to sell monthly subscriptions of the service directly to consumers via a nationwide Sales Agent program. Consumers may also acquire the product directly from the Company via our website at: www.thechildrensinternet.com. Previously, through grassroots efforts during 2006 the Company entered into sales agent agreements with ten individuals. In 2007, these agreements automatically terminated. |
| |
2. |
Wholesalers- We intend to sell the Children’s Internet® to independent distributors, resellers and ISPs who will sell it as a value-added service to their current customer base. Targets would include companies such as Comcast, AT&T, EarthLink and the hundreds of “local” ISPs throughout the United States. In these situations, the business model changes dramatically as we would not be engaged in billing, collecting, customer service or level one technical support. |
| |
3. |
Charitable organizations- We intend to “partner” with non-profit organizations to have them market the product. Targets would include large religious organizations, various scout programs, Internet safety activists, law enforcement agencies, etc. Moreover, we may offer any age-appropriate school, public or private, 20 free licenses for a year. From there, we expect Parent Teacher Associations to use the product as a fund raiser, deepening our penetration into the homes of children. |
Channels of Distribution
The Children’s Internet, Inc. will also
employ both direct and indirect sales channels.
Subject to securing financing in addition to the
funds raised under the DSPA, we will hire a direct sales force. The primary targets of our direct sales force will be the largest Internet
Service Providers as well as other national organizations that market to the most appropriate demographic for our service. We believe
one or more of the largest ISPs in the United States will recognize the first mover advantage opportunity and will use The Children’s
Internet to not only offer this product to their existing customers, but also to take significant market share from their competition.
We also believe that almost any company that markets to our demographic will want to seize the public relations good will that will accrue
to any company offering our service.
The indirect channel, composed of non-salaried
independent sales agents and wholesale distributors, will target a wide range of opportunities, from local charities to national organizations
where they may have an influential contact. These sales agents may have the opportunity to employ secondary resellers to work for them,
but we will not market using a multi-level marketing plan.
Future products and services
In the future, we anticipate generating revenues
via advertising sold to the purveyors of children goods and services. After successfully distributing our core service, we intend to engage
in the merchandising of The Children’s Internet® themed products, from clothing to toys to books.
Future Staff and Employees
Where practicable we plan to contract with third
party companies to outsource administrative support services that effectively support the growth of the business. These outsource providers
will handle technical support, telemarketing and the order taking process and media placement. We intend to hire employees where their
contributions to our business will be the most significant, such as in technology development and management.
Market Share, Cash Flow and Profitability
Although market data is not exact, and varies
depending on the source, with a mix of business generated from the respective channels of distribution, we believe that, subject to the
closing of the DSPA, we can be cash flow positive and profitable within eighteen months of closing the DSPA. This estimate is based on
data that indicates that in the United States alone, there are approximately 48 million homes with internet access with children under
the age of 16. However, as discussed in the MD&A section above, if the DSPA fails to close or we are unsuccessful in securing the
additional capital needed to continue operations within the time required, we will not be in a position to continue operations. In this
event, we would attempt to sell the Company or file for bankruptcy.
We accomplished none of these goals in the fiscal year 2009.
Management’s Discussion and Analysis of Financial Condition
and Results of Operations
Overview
Management’s discussion and analysis of financial condition and
results of operations, or MD&A, is provided as a supplement to the consolidated financial statements and notes included elsewhere
in this Form 10-K and are designed to provide an understanding of our results of operations, financial condition and changes in financial
condition. Our MD&A is comprised of:
| · |
Introduction. This section provides a general description of our business. This section also includes a table of selected financial data. |
| · |
Results of Operations. This section provides our analysis of the significant line items on our consolidated statements of operations. |
| · |
Going Concern Uncertainty. This section provides a discussion of our uncertainty to continue as a going concern. |
| · |
Critical Accounting Policies. This section discusses the accounting policies we consider important to our financial condition and results of operations and that require us to exercise subjective or complex judgments in their application. This section also includes a discussion about recent accounting pronouncements and the impact those pronouncements are expected to have on our financial condition and results of operations. |
| · |
Liquidity and Capital Resources, Debt and Lease Obligations. This section provides an analysis of our liquidity and cash flows as well as a discussion of our outstanding debt and commitments as of December 31, 2008. |
Introduction
We were incorporated in the State of Nevada on
September 25, 1996 as D.W.C. Installations, Inc. We changed our name to The Children’s Internet, Inc. on December 27, 2002. After
an analysis of the lack of progress, the Company filed a Form 15 with the SEC on July 28, 2010. On October 20, 2010, the Company applied
for a Certificate of Domestication and filed Articles of Domestication in the office of the Secretary of State of Wyoming. On February
15, 2015, the Company filed an Articles of Amendment for a change of name to FLASHZERO CORP. We are a development stage company and currently
have no significant revenues, no marketing budget, only minimal assets, and have incurred losses since our inception.
Results of Operations
The Company has no revenue for the years ended December 31, 2009 and
2008. For the year ended December 31, 2008, the Company has accumulated deficit of $5,987,791 compared to $5,717,998 for the year ended
December 31, 2008. As of December 31, 2009, the Company lacks business operation, Management or offices.
Our total expenses decreased by $124,323
for the year ended December 31, 2009, as compared to the year ended December 31, 2008. The decrease was primarily due to the decrease
in general and administrative expenses.
Net loss for the year ended December 31, 2009
was $269,793 compared to $401,629 for the year ended December 31, 2008.
Going Concern Uncertainty
Based on our financial history since inception,
our auditor has expressed substantial doubt as to our ability to continue as a going concern. As reflected in the accompanying financial
statements, as of December 31, 2009, we had an accumulated deficit totaling $5,987,791. This raises substantial doubts about our ability
to continue as a going concern.
Critical Accounting Policies and Estimates
The Company’s financial statements have
been prepared in accordance with accounting principles generally accepted in the United States of America, which contemplate continuation
of the Company as a going concern. The preparation of these financial statements requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those
estimates.
Liquidity and Capital Resources, Debt and Lease Obligations
Cash flows
generated from operating activities were not enough to support all working capital requirements for the years ended December 31, 2009
and 2008.
We used
($104) and ($727,607), respectively, in cash for operating activities for the years ended December 31, 2009 and 2008.
Cash flows
provided from investing activities were $0 and ($14,956), respectively, for the years ended December 31, 2009 and 2008 primarily related
to the acquisition of equipment.
Cash flows
from financing activities were $0 and $742,463 for the years ended December 31, 2009 and 2008, respectively.
Off-Balance Sheet Arrangements
None.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
FLASHZERO CORP.
fka The Children’s Internet, Inc.
AUDITED FINANCIAL STATEMENTS
For the years ended December 31, 2009 and 2008
TABLE OF CONTENTS
Report of Independent
Registered Public Accounting Firm
To
the shareholders and the board of directors of FLASHZERO CORP.
Opinion on the Financial Statements
We have audited the accompanying balance sheets
of Flashzero Corp. (the "Company") as of December 31, 2009, and 2008 and
the related statements of operations, changes in shareholders' equity and cash flows, for
each of the two years in the period ended December 31, 2009, 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 December 31, 2009, and 2008, and the results of its operations
and its cash flows for the years ended December 31, 2009, and 2008, in conformity with U.S. generally accepted accounting principles.
Going Concern
The accompanying financial statements have been
prepared assuming the company will continue as a going concern as disclosed in Note 3 to the financial statement, the Company incurred
loss from operation of $230,872 for the year ended December 31, 2009, and an accumulated deficit of $5,987,791 at December 31, 2009. The
continuation of the Company as a going concern through December 31, 2009, is dependent upon improving the profitability and the continuing
financial support from its stockholders. Management believes the existing shareholders or external financing will provide the additional
cash to meet the Company’s obligations as they become due.
These factors raise substantial doubt about the
company ability to continue as a going concern. These financial statements do not include any adjustments that might result from the outcome
of the uncertainty.
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 audits. 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 audits 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. Our audits 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 audits 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 audits provide a reasonable basis for our opinion. 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
OLAYINKA OYEBOLA & CO.
(Chartered Accountants)
We have served as the Company's auditor since February 2022.
May 19th, 2022.
Lagos Nigeria
FLASHZERO CORP.
(Formerly Children’s Internet Inc)
BALANCE SHEETS
| | |
December 31,
2009 | | |
December 31,
2008 | |
| ASSETS | |
| | | |
| | |
| Current Assets: | |
| | | |
| | |
| | |
| | | |
| | |
| Cash and cash equivalent | |
$ | 37,378 | | |
$ | 37,381 | |
| Total Current Assets | |
| 37,378 | | |
| 37,381 | |
| | |
| | | |
| | |
| Fixed Assets | |
| 21,836 | | |
| 21,836 | |
| Total Assets | |
$ | 59,214 | | |
$ | 59,217 | |
| | |
| | | |
| | |
| LIABILITIES AND STOCKHOLDERS' DEFICIT | |
| | | |
| | |
| Current Liabilities: | |
| | | |
| | |
| Account Payables | |
$ | 1,154,390 | | |
$ | 854,570 | |
| Accrued Salaries | |
| 719,289 | | |
| 749,319 | |
| Total Liabilities | |
| 1,873,679 | | |
| 1,603,889 | |
| | |
| | | |
| | |
| Stockholders' Deficit: | |
| | | |
| | |
| Common stock, $0.001 par value; 75,000,000 shares authorized, 48,286,306, and 48,286,306 shares issued and outstanding | |
| 48,286 | | |
| 48,286 | |
| Additional paid-in capital | |
| 4,125,040 | | |
| 4,125,040 | |
| Accumulated deficit | |
| (5,987,791 | ) | |
| (5,717,998 | ) |
| | |
| | | |
| | |
| Total Stockholders’ Deficit | |
| (1,814,465 | ) | |
| (1,544,672 | ) |
| | |
| | | |
| | |
| Total Liabilities and Stockholders' Deficit | |
$ | 59,214 | | |
$ | 59,217 | |
The accompanying notes are an integral part
of these financial statements.
FLASHZERO CORP.
(Formerly Children’s Internet Inc)
STATEMENTS OF OPERATIONS
| | |
For the Years Ended | |
| | |
December 31, | |
| | |
2009 | | |
2008 | |
| Revenue | |
$ | – | | |
$ | – | |
| | |
| | | |
| | |
| Operating Expenses: | |
| | | |
| | |
| General & administrative expenses | |
| 230,872 | | |
| 355,195 | |
| Total operating expenses | |
| 230,872 | | |
| 355,195 | |
| | |
| | | |
| | |
| Loss from operations | |
| (230,872 | ) | |
| (355,195 | ) |
| | |
| | | |
| | |
| Other Income / (Expense) | |
| (38,921 | ) | |
| (46,429 | ) |
| | |
| | | |
| | |
| Net Income / (loss) | |
$ | (269,793 | ) | |
$ | (401,629 | ) |
| | |
| | | |
| | |
| Basic and diluted loss per share | |
$ | (0.001 | ) | |
$ | (0.001 | ) |
| | |
| | | |
| | |
| Basic and diluted weighted average shares | |
| 48,286,306 | | |
| 48,286,306 | |
The accompanying notes are an integral part
of these financial statements.
FLASHZERO CORP.
(Formerly Children’s Internet Inc)
STATEMENT OF CHANGES IN EQUITY (DEFICIT)
For the Year Ended December 31, 2009, and 2008
| | |
| | |
| | |
Additional | | |
| | |
Total | |
| | |
Common Stock | | |
Paid in | | |
Accumulated | | |
Shareholders' | |
| | |
Shares | | |
Amount | | |
Capital | | |
Deficit | | |
Deficit | |
| Balance – January 1, 2008 | |
| 31,373,738 | | |
$ | 31,374 | | |
$ | 2,364,660 | | |
$ | (5,316,374 | ) | |
$ | (2,920,340 | ) |
| Stock issue for cash | |
| 16,775,284 | | |
| 16,775 | | |
| 7,750 | | |
| – | | |
| 24,525 | |
| Extinguishment of debts to adjudged parties | |
| – | | |
| – | | |
| 1,752,630 | | |
| – | | |
| 1,752,630 | |
| Stock issue for services | |
| 137,284 | | |
| 137 | | |
| – | | |
| – | | |
| 137 | |
| Loss for the year | |
| – | | |
| – | | |
| – | | |
| (401,624 | ) | |
| (401,624 | ) |
| Balance - December 31, 2008 | |
| 48,286,306 | | |
| 48,286 | | |
| 4,125,040 | | |
| (5,717,998 | ) | |
| (1,544,672 | ) |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Common stock issue for services | |
| – | | |
| – | | |
| – | | |
| – | | |
| 14,775 | |
| Net loss for the year | |
| – | | |
| – | | |
| – | | |
| (269,793 | ) | |
| (269,793 | ) |
| Balance - December 31, 2009 | |
| 48,286,306 | | |
$ | 48,286 | | |
$ | 4,125,040 | | |
$ | (5,987,791 | ) | |
$ | (1,814,465 | ) |
The accompanying notes are an integral part
of these financial statements.
FLASHZERO CORP.
(Formerly Children’s Internet Inc)
STATEMENTS OF CASH FLOWS
| | |
For the Years Ended | |
| | |
December 31, | |
| | |
2009 | | |
2008 | |
| Cash flows from operating activities: | |
| | | |
| | |
| | |
| | | |
| | |
| Net loss | |
$ | (269,793 | ) | |
$ | (401,624 | ) |
| Adjustments to reconcile net loss to net cash used in operating activities: | |
| | | |
| | |
| Depreciation | |
| 2,359 | | |
| 3,267 | |
| | |
| | | |
| | |
| Changes in assets and liabilities: | |
| | | |
| | |
| Utility Deposit | |
| – | | |
| 2,118 | |
| Account payable and accrued expense | |
| 297,360 | | |
| 14,658 | |
| Accrued Salary | |
| (30,030 | ) | |
| 20,000 | |
| Note payable to TCI Holding company | |
| – | | |
| (264,504 | ) |
| Loan payable to related parties | |
| – | | |
| (101,518 | ) |
| | |
| | | |
| | |
| Net cash used in operating activities | |
| (104 | ) | |
| (727,607 | ) |
| | |
| | | |
| | |
| Cash flows from investing activities: | |
| – | | |
| – | |
| Acquisition of Equipment | |
| – | | |
| (14,956 | ) |
| | |
| | | |
| | |
| Cash flows from financing activities: | |
| | | |
| | |
| Common stock | |
| – | | |
| 10,914 | |
| Advance from majority shareholder | |
| – | | |
| (1,028,831 | ) |
| Additional paid in capital | |
| – | | |
| 1,760,380 | |
| Net cash provided by financing activities | |
| – | | |
| 742,463 | |
| | |
| | | |
| | |
| Net increase (decrease) in cash | |
| (104 | ) | |
| (101 | ) |
| | |
| | | |
| | |
| Cash, beginning of year | |
| 37,482 | | |
| 37,482 | |
| | |
| | | |
| | |
| Cash, end of year | |
$ | 37,378 | | |
$ | 37,381 | |
The accompanying notes are an integral part
of these financial statements.
FLASHZERO
CORP.
(Formerly Children’s
Internet Inc)
Notes to the Financial Statements
December 31, 2009 and 2008
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
Children's Internet,
Inc. (the Company) was incorporated under the laws of the State of Nevada on September 25, 1996 under the name D.W.C. Installations. At
that date, 2,242,000 shares were issued to a small group of shareholders. The Company was primarily inactive until July 3, 2002 when Shadrack
Films, Inc. (Shadrack) purchased 2,333,510 newly-issued shares of the Company’s common stock for $150,000, thereby obtaining a majority
ownership interest. The total issued and outstanding shares of the Company was increased to 4,575,510 shares as a result of this sale
to Shadrack. On December 27, 2002, the Company’s name was changed from D.W.C. Installations to The Children’s
Internet, Inc.
On 15th day of February 2015, the company
filed an article of amendment for a change of name to FLASHZERO CORP
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The Company’s financial statements have
been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
Use of Estimates
The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Significant estimates include the estimated useful lives of property and equipment.
Actual results could differ from those estimates.
Concentrations of Credit Risk
Financial instruments that potentially expose
the Company to concentration of credit risk consist primarily of cash and accounts receivable. The Company’s cash is deposited with
major financial institutions. At times, such deposits may be in excess of the Federal Deposit Insurance Corporation insurable amount.
Cash and Cash Equivalents
The
Company considers all cash accounts, which are not subject to withdrawal restrictions or penalties, and all highly liquid debt instruments
purchased with a maturity of three months or less as cash and cash equivalents. The carrying amount of financial instruments included
in cash and cash equivalents approximates fair value because of the short maturities for the instruments held. There were $37,378
and $37,381 cash equivalents for the years ended December 31, 2009, and 2008.
Fair Value of Financial Instruments
Fair value is defined as the exchange price that
would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset
or liability in an orderly transaction between market participants on the measurement date. ASC Topic No. 820 establishes a fair value
hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels, as described below:
Level 1: Level 1 inputs
are unadjusted quoted prices in active markets for identical assets or liabilities.
Level 2: Level 2 inputs
are inputs other than quoted prices included in Level 1 that are observable, either directly or indirectly. Level 2 inputs include quoted
prices for similar assets, quoted prices in markets that are not considered to be active, and observable inputs other than quoted prices
such as interest rates.
Level 3: Level 3 inputs
are unobservable inputs.
The following required disclosure of the estimated
fair value of financial instruments has been determined by the Company using available market information and appropriate valuation methodologies.
However, considerable judgment is required to interpret market data to develop the estimates of fair value. Accordingly, the use of different
market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.
The methods and assumptions used to estimate the
fair values of each class of financial instruments are as follows: Accounts Receivable, and Accounts Payable. The items are generally
short-term in nature, and accordingly, the carrying amounts reported on the consolidated balance sheets are reasonable approximations
of their fair values.
The carrying amounts of Notes Payable approximate
the fair value as the notes bear interest rates that are consistent with current market rates.
Income Taxes
We follow ASC 740-10-30, which requires recognition
of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements
or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and
tax bases of assets and liabilities using enacted tax rates in effect for the fiscal year in which the differences are expected to reverse.
Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets
will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in
the fiscal years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities
of a change in tax rates is recognized in the Statements of Income in the period that includes the enactment date.
We adopted ASC 740-10-25 (“ASC 740-10-25”)
with regard to uncertainty income taxes. ASC 740-10-25 addresses the determination of whether tax benefits claimed or expected to
be claimed on a tax return should be recorded in the financial statements. Under ASC 740-10-25, we may recognize the tax benefit
from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing
authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a
position should be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement.
ASC 740-10-25 also provides guidance on derecognition, classification, interest and penalties on income taxes, and accounting in interim
periods and requires increased disclosures. We had no material adjustments to our liabilities for unrecognized income tax benefits
according to the provisions of ASC 740-10-25.
Net income (loss) per common share
Net income (loss) per common share is computed
pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic net income (loss) per common share is computed by dividing
net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per
common share is computed by dividing net income (loss) by the weighted average number of shares of common stock and potentially outstanding
shares of common stock during the period. The weighted average number of common shares outstanding and potentially outstanding common
shares assumes that the Company incorporated as of the beginning of the first period presented. For the years ended December 31, 2009
and 2008, the diluted loss per share is the same as the basic loss per shares as the inclusion of any potentially dilutive shares would
result in anti- dilution due to the net loss incurred by the Company
Recent Accounting Pronouncements
The Company has implemented all applicable accounting
pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise
disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have
a material impact on its financial position or results of operations.
NOTE 3 - GOING CONCERN
The accompanying financial statements have been
prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course
of business. The Company has no revenue and has accumulated deficit of (5,987,791) as of December 31, 2009. The Company requires capital
for its contemplated operational activities. The Company’s ability to raise additional capital through the future issuances of common
stock is unknown. The obtainment of additional financing, the successful development of the Company’s contemplated plan of operations,
and its transition, ultimately, to the attainment of profitable operations are necessary for the Company to continue operations. These
conditions and the ability to successfully resolve these factors raise substantial doubt about the Company’s ability to continue
as a going concern. The financial statements of the Company do not include any adjustments that may result from the outcome of these uncertainties.
NOTE 4 – INCOME TAXES
Deferred taxes are provided on a 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 of the deferred tax assets will not be realized. Deferred tax assets and liabilities
are adjusted for the effects of changes in tax laws and rates on the date of enactment. The U.S. federal income tax rate of 21% is being
used.
Net deferred tax assets consist of the following
components as of:
| | |
| December 31, 2009 | | |
| December 31, 2008 | |
| Federal income tax benefit attributable to: | |
| | | |
| | |
| Current Operations | |
$ | – | | |
$ | – | |
| Less: valuation allowance | |
| – | | |
| – | |
| Net provision for Federal income taxes | |
$ | – | | |
$ | – | |
The income tax provision differs from the amount of income tax determined
by applying the U.S. federal income tax rate to pretax income from continuing operations for the fiscal years ending, due to the following:
| | |
December 31, 2009 | | |
December 31, 2008 | |
| Deferred tax asset attributable to: | |
| | | |
| | |
| Net operating loss carryover | |
$ | (5,987,791 | ) | |
$ | (5,717,998 | ) |
| Less: valuation allowance | |
| 5,987,791 | | |
| 5,717,998 | |
| Net deferred tax asset | |
$ | – | | |
$ | – | |
At December 31, 2009, the Company had net operating
loss carry forwards of approximately $269,793 that may be offset against future taxable income. No tax benefit has been reported in the
December 31, 2009, financial statements since the potential tax benefit is offset by a valuation allowance of the same amount.
Due to the change in ownership provisions of the
Tax Reform Act of 1986, net operating loss carry forwards for Federal Income tax reporting purposes are subject to annual limitations.
Should a change in ownership occur, net operating loss carry forwards may be limited as to use in future years. With few exceptions, the
Company is no longer subject to U.S. federal, state and local income tax examinations by tax authorities for years before 2015.
NOTE 5 – SUBSEQUENT EVENTS
In accordance with SFAS 165 (ASC 855-10) management
has performed an evaluation of subsequent events through the date that the financial statements were issued and has identified the following
events to disclose in these financial statements.
On 15th day of February 2015, the company
filed an article of amendment for a change of name to FLASHZERO CORP
On April 1, 2022, CS Diagnosis of Germany acquired
the majority control of FlashZero. CS Diagnostics is a pharmaceutical international wholesaler and manufacturer of medical technology
with all necessary licenses. For more than 10 years we have been supplying national and international specialists, practices, clinics
as well as ministries of health and working close with universities, experts and opinion leaders. CS Diagnostics is offering access to
international pharmaceutical markets and the service of approval of medical products. Furthermore, CS Diagnostics is developing own products
with the aim of maximizing patient benefit. We guarantee the fulfillment of our product promises by means of our own post-market studies
and by providing support to customers and users through our experts.”
ITEM 9A. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures
As of the end of the period covered by this report,
we carried out an evaluation, under the supervision and with participation of management, including our Chief Executive Officer and Chief
Financial Officer, of the effectiveness of our disclosure controls and procedures, as such term is defined under Rules 13a-15(e) and 15d-15(e)
promulgated under the Exchange Act. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that
our disclosure controls and procedures were ineffective, as of the end of the period covered by this report, to provide reasonable assurance
that material information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in SEC rules and forms.
In making this evaluation, our Chief Executive
Officer and Chief Financial Officer considered the material weaknesses discussed in Management’s Report on Internal Control
Over Financial Reporting. Based on this evaluation, we concluded that our disclosure controls and procedures were not effective at
a reasonable assurance level as of December 31, 2009 because of the identification of material weaknesses in our internal control over
financial reporting. The lack of an effective control environment has been identified as a material weakness contributing to the
inadequacy of the Company’s disclosure controls and procedures as further discussed below with respect to the weaknesses in the
Company’s internal control over financial reporting.
Management’s Annual Report on Internal Control Over Financial
Reporting
Management of The Children’s Internet, Inc.
is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f)
and 15d-15(f)). Internal control over financial reporting is the process designed by, or under the supervision of, our CEO and CFO, and
effected by our board of directors, management and other personnel, 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
(“GAAP”).
All internal control systems, no matter how well
designed, have inherent limitations, including the possibility of the circumvention or overriding of controls. Therefore, even a system
determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Further,
because of changes in conditions, internal control effectiveness may vary over time.
Interim management conducted an assessment of
the effectiveness of the company’s internal control system as of December 31, 2008. In making this assessment, interim management
used the criteria set forth in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission (COSO). Based on this assessment, interim management has concluded that internal control over financial reporting
was not effective as of December 31, 2009.
A material weakness is a deficiency, or a combination
of deficiencies, that results in a reasonable possibility that a material misstatement of the annual or interim financial statements
will not be prevented or detected. Interim management identified the following material weaknesses in our internal control over financial
reporting as of December 31, 2009:
Ineffective Control Environment
The Company did not maintain an effective control
environment based on criteria established in the COSO framework. Specifically, the Company:
| |
(1) |
did not effectively train personnel on compliance with the company’s Code of Ethics. |
| |
(2) |
did not create or implement a written fraud prevention policy. |
| |
(3) |
did not establish an audit committee. |
| |
(4) |
did not maintain a majority of independent directors. |
| |
(5) |
did not ensure the Board of Directors understood and exercised oversight and responsibility related to financial reporting and related internal control. |
| |
(6) |
did not establish clearly articulated financial reporting objectives including those related to internal controls. |
| |
(7) |
did not establish and implement written human resource policies and procedures. |
Our evaluation concluded that, although policies
and procedures appropriate for operating control activities were designed, and in large part instituted, the Company has not been successful
in designing and implementing polices for the control environment. The control environment sets the tone of an organization, influences
the control consciousness of its people, and is the foundation of all other components of internal control over financial reporting. A
material weakness in the control environment affects all other internal control components.
Management believes these deficiencies in internal
control did not result in material inaccuracies or omissions of material fact and, to the best of its knowledge, believes that the consolidated
financial statements for the year ended December 31, 2009 fairly present in all material respects the financial condition and results
of operations for the Company in conformity with generally accepted accounting principles. There is however, a reasonable possibility
that a material misstatement of the annual or interim financial statements would not have been prevented or detected as a result of the
control environment weaknesses.
Management’s assessment of the effectiveness
of the Company’s internal control over financial reporting has not been audited by OLAYINKA OYEBOLA & CO., an independent registered
public accounting firm, as stated in their report which is included herein.
Changes in Internal Control Over Financial Reporting
There were no changes in the Company’s internal
control over financial reporting as of December 31, 2009 that materially affected, or are reasonably likely to materially affect, the
Company’s internal control over financial reporting.
Interim management is currently taking corrective
action to remedy the internal control weaknesses. See “Remediation of Material Weaknesses in Internal Control over Financial Reporting”
described below.
Remediation of Material Weaknesses in Internal Control over Financial
Reporting
Interim management is committed to remediating
each of the material weaknesses identified above by implementing changes to the Company’s internal control over financial reporting.
Interim management has implemented, or is in the process of implementing, the following changes to the Company’s internal control
systems and procedures:
| · |
Formation of a new Board of Directors containing a majority of members who are independent directors as set forth by SEC Corporate Governance Standards. |
| · |
Establishment of an audit committee per Sarbanes Oxley requirements including implementing audit committee best practices as recommended by the Treadway Commission, NASDAQ, AMEX and the NYSE. |
| · |
Updating of the company code of ethics including the creation of an active anti-fraud program. Creation of a written, clearly articulated statement of the company’s core values and mission. |
| · |
Creation of education and training programs for all employees covering ethics, company policies and procedures, and good business practices in general. |
| · |
Creation of additional guidelines with respect to senior management’s responsibilities for SEC filings, financial reports, budgets and maintenance of controls over assets and expenditures. |
| · |
Establishment of a Human Resource department. |
Interim management is committed to creating and
implementing an effective internal control system for each of the five internal control components set forth in the Internal Control
- Integrated Framework issued by COSO. In this regard, we are consulting with legal and accounting professionals to support us in
the development of internal controls that are built into our business infrastructure and part of the every day consciousness of our organization.
This annual report does not include an attestation
report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s
report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the Securities
and Exchange Commission that permit the Company to provide only management’s report in this annual report.