Company Quick10K Filing
Quick10K
TOA Distribution Systems
10-Q 2018-12-31 Quarter: 2018-12-31
10-Q 2018-09-30 Quarter: 2018-09-30
10-Q 2018-06-30 Quarter: 2018-06-30
10-K 2018-03-31 Annual: 2018-03-31
10-Q 2017-12-31 Quarter: 2017-12-31
10-Q 2017-09-30 Quarter: 2017-09-30
10-Q 2017-06-30 Quarter: 2017-06-30
10-K 2017-03-31 Annual: 2017-03-31
10-Q 2016-12-31 Quarter: 2016-12-31
10-Q 2016-09-30 Quarter: 2016-09-30
10-Q 2016-06-30 Quarter: 2016-06-30
10-K 2016-03-31 Annual: 2016-03-31
10-Q 2015-12-31 Quarter: 2015-12-31
10-Q 2015-09-30 Quarter: 2015-09-30
10-Q 2015-06-30 Quarter: 2015-06-30
10-K 2015-03-31 Annual: 2015-03-31
10-Q 2014-12-31 Quarter: 2014-12-31
10-Q 2014-09-30 Quarter: 2014-09-30
10-Q 2014-06-30 Quarter: 2014-06-30
10-K 2014-03-31 Annual: 2014-03-31
10-Q 2013-12-31 Quarter: 2013-12-31
CQH Cheniere Energy Partners Holdings 6,956
AERO Aerogrow 84
IMAC IMAC Holdings 34
AMNL Applied Minerals 28
MNTR Mentor Capital 5
AVNI Arvana 0
TSPI Team 360 Sports 0
SFIV Sector 5 0
PTAD Postads 0
PAXH Preaxia Health Care Payment Systems 0
TOAD 2018-12-31
Part 1 - Financial Information
Item 1 - Financial Statements
Note 1.	Basis of Presentation
Note 2.	Going Concern
Note 2.	Going Concern (Cont'D)
Note 3.	Loans Payable
Note 4.	Equity
Note 5.	Agricultural Product Ageement
Note 5.	Agricultural Product Ageement (Con'D)
Item 2: Management's Discussion and Analysis or Plan of Operation
Item 3.Controls and Procedures
Part II - Other Information
Item 1. Legal Matters
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters To A Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports
Part 1 - Financial Information
Item 1 - Financial Statements
Note 1.	Basis of Presentation
Note 2.	Going Concern
Note 2.	Going Concern (Cont'D)
Note 3.	Loans Payable
Note 4.	Equity
Note 5.	Agricultural Product Ageement
Note 5.	Agricultural Product Ageement (Con'D)
Item 2: Management's Discussion and Analysis or Plan of Operation
Item 3.Controls and Procedures
Part II - Other Information
Item 1. Legal Matters
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters To A Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports
EX-31.1 exhibit31-1.htm
EX-32.1 exhibit32-1.htm

TOA Distribution Systems Earnings 2018-12-31

TOAD 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

10-Q 1 a10q.htm

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934

 

For the fiscal Quarter ended December 31, 2018

 

OR

 

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934

 

For the transition period from ____________ to ____________

 

TOA DISTRIBUTION SYSTEMS INC

(formerly Skyhigh Resources, Inc.)

(Exact Name of Registrant as Specified in its Charter)

44 Coyote Mountain Road, Suite 102, Santa Fe, NM 87505

(Address of principal executive offices)

 

505 919 8036

(Registrant's telephone number, including area code)

(formerly)

5700 University West Blvd, Suite 304, Albuquerque NM 87106

1791 Marcy Lynn Court, San Jose CA 95124)

 

Delaware 26-2746101

(State of other jurisdiction of (I.R.S. Employer

incorporation or organization) Identification No.)

 

 

Securities Registered Pursuant to Section 12(B) of the Act: None

 

Securities Registered Pursuant to Section 12(G) of the Act:

Common Stock, par value $.001 per share

 

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

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

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  þ  No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (section 229.405 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  þ  No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-Q or any amendment to this Form 10-Q.þ

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer or a smaller reporting company. See definition of "large accelerated filer," or a smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ¨Accelerated filer ¨Non-accelerated filer ¨Smaller reporting companyþ

Indicate by check mark if the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes   ¨ No  þ

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity.

As of the last business day of the registrant’s most recently completed fiscal quarter December 31, 2018, the common equity was sold at $0.0025

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date.

At February 12, 2019 we had 30,100,060 shares of $0.001 par value common Stock outstanding,

At February 12, 2019 we had 0 shares of 0.001 par value preferred stock outstanding.

Documents incorporated by reference - None

State issuer's revenues for its most recent fiscal year: Nil

 

Part 1 – FINANCIAL INFORMATION

 

Item 1:  FINANCIAL STATEMENTS F-1
Unaudited Condensed Balance Sheets as at December 31, 2018 and March 31, 2018 F-2
Unaudited Condensed Statements of Operations for the three and nine month periods ended December 31, 2018  and December 31, 2017 respectively F-3
Unaudited Condensed Statements Cash Flows for the nine months ended December 31, 2018 and December 31, 2017 respectively F-4
Notes to Unaudited Financial Statements F-5 - F-7
Item 2. Management’s Discussion and Analysis of Financial Conditions and Results of Operations

 

2

Item 3.  Controls And Procedures 3
   
PART II – OTHER INFORMATION  
   
Item 1.  Legal Procedures 4
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds   4
Item 3. Default Upon Senior Securities 4
Item 4. Submission Of Matters To A Vote Of Security Holders 4
Item 5. Other Information 4
Item 6. Exhibits 4
 Signatures 5

 

 

 



 

PART I - FINANCIAL INFORMATION

 

 

ITEM 1 - FINANCIAL STATEMENTS

 

 

 

TOA DISTRIBUTION SYSTEMS INC

INDEX TO CONDENSED STATEMENTS

 

(UNAUDITED)

 

 

 

Page

 

Unaudited Condensed Balance Sheets as at December 31, 2018 and March 31, 2018 F-2

 

Unaudited Condensed Statements of Operations for the three and nine month period ended

December 31, 2018 and December 31, 2017 respectively F-3

Unaudited Condensed Statements Cash Flows for the nine month ended

December 31, 2018 and December 31, 2017 respectively F-4

 

Notes to Unaudited Condensed Financial Statements ` F-5 to F-7

 

 

 
 

 

     
     
TOA Distribution Systems Inc    
(formerly known as Skyhigh Resources Inc)    
Balance Sheets    
Unaudited    
     
  At December At March
  31, 2018 31, 2018
     
ASSETS    
Total Current Assets  - -
     
LIABILITIES    
Current Liabilities    
Accounts Payable 500 -
Accrued Expenses - -
Loans Payable Related Parties- Principal (Note 3) 108,666 100,964
Loans Payable Related Parties- Accrued Interest (Note 3) 28,164 24,109
Total Current Liabilities  $           137,330  $          125,073
     
STOCKHOLDERS’ EQUITY    
Capital Stock    
Preferred Shares - 10,000,000 Shares Authorized, at $0.001  
per share - Zero shares Issued and Outstanding.    
Common Stock - 250,000,000 authorized at $0.001 par value  
30,100,060 issued and outstanding at December 31, 2018      
 and March 31, 2018, respectively 30,100 30,100
Additional paid-in capital 49,150 49,150
 Accumulated Deficit             (216,580)            (204,323)
Total Stockholders’ Equity (Deficit)  $         (137,330)  $        (125,073)
     
 Total Liabilities and Stockholders’ Equity  $                    -  $                   -
     
     
     
     
     
     
     
     
The accompanying notes are an integral part of these Financial Statements
                                                                              F-2    
     
     



TOA Distribution Systems Inc        
(formerly known as Skyhigh Resources Inc)        
Statements of Operations        
Unaudited        
  For the three For the nine For the three For the nine
  months ended months ended months ended months ended
  December December December December
  31, 2018 31, 2018 31, 2017 31, 2017
Revenue        
Total Revenue $0 $0 $0 $0
         
Expenses        
General and Administrative 2,372 8,202 2,346 7,121
Total Expenses 2,372 8,202 2,346 7,121
         
Net Income (Deficit) from Operations              (2,372)             (8,202)         (2,346)         (7,121)
Other Income and (Expense)        

 

Interest

  ( 1,376)

 

(4,056)

(1,225)

 

(3,582)

Provision for Income Tax - - - -
Net Loss For The Period                 (3,748)              (12,258)            (3,571)         (10,703)
         
Basic And Diluted Loss Per Common Share $       (0.00) $       (0.00) $       (0.00) $       (0.00)
         
Weighted Average Number of Common Shares Outstanding 30,100,060 30,100,060 30,100,060 30,100,060
         
         
         
         
         
The accompanying notes are an integral part of these Financial Statements
         
F-3
         
 
 

 

TOA Distribution Systems Inc    
(formerly known as Skyhigh Resources Inc)    
Statements of Cash Flows    
Unaudited    
  For the nine For the nine
  months ended months ended
  December December
  31, 2018 31, 2017
     
Operating Activities    
  Net Income (Loss)               (12,258)            (10,703)
Adjustments To Reconcile Net Loss To Net Cash    
   Provided by Operations - -
   Company Expenses paid by Related Parties 7,702 7,756
Change in Assets and Liabilities   -
   Increase (decrease) accounts payable                      500 (135)
   Increase (decrease) in accrued expenses                          - (500)
   Increase (Decrease) in Accrued Interest-Related Party 4,056 3,582
   Increase (Decrease) in Loans Payable-Related Party                          -  -
Net Cash Provided (Used) by Continuing Operating Activities  -  -
Investing Activities    
Net Cash Provided (Used) by Investing Activities - -
Financing Activities    
  Stock Issued for Cash  - -
Net Cash Provided (Used) by Financing Activities - -
Increase (Decrease) in Cash from Continuing Operations  -  -
Cash and Cash Equivalents at Beginning of Period - -
Cash and Cash Equivalents at End of Period                          -  -
Supplemental Information    
Cash Paid For:    
Income Taxes  - -
Non-Cash Activities    
Interest                   4,056 3,582
     
     
     
     
The accompanying notes are an integral part of these Financial Statements
     
F-4
     
 
 

 

TOA Distribution Systems Inc

(formerly known as Skyhigh Resources Inc)

Notes to Financial Statements

December 31, 2018

Unaudited

 

NOTE 1. BASIS OF PRESENTATION

 

The Company was originally structured to engage in mining operations, targeting specifically gold and silver.

 

We owned two (2) mineral properties acquired in January 2008 by issuing stock to the related parties that owned the properties. The purchase price was fully impaired. In February 2012 these claims were deemed surplus and were sold in May 2012.

 

In mid-2009, the Company resolved to change its corporate focus, moving from mining and exploration into bottled drinking water distribution.

 

In August 2009 the Company initiated a number of corporate changes, including 1), a name change to TOA Distribution Systems Inc, (formerly known as Skyhigh Resources Inc, 2) approved a 10 for 1 roll forward of its issued and outstanding common stock, 3), increased it authorized par value $0.001 common shares to 250,000,000 shares (formerly 50,000,000), and 4), authorized 10,000,000 par value $0.001 preferred shares.

 

On September 2, 2009 the Company entered into to a Sub-Distribution agreement with Taste of Aruba (US), Inc to distribute bottled water products produced in Aruba by Taste of Aruba-Premium Aruban Water. The territory in which the Company can distribute these products include the United States and all its territories and insular areas in the Caribbean and Pacific such as but not limited to Puerto Rico, U.S. Virgin Islands, Marshall Islands, and Guam, and all of Canada. In January 2016, the Company and Taste of Aruba agreed to cancel the Sub-Distribution agreement on a no loss no gain basis for either party. Taste of Aruba was unable to confirm when its products would be available for resale. The 17,000,000 shares issued to cover the cost of the Sub-Distribution Agreement have been returned and were cancelled on January18, 2016. This transaction which included full impairment was reversed in the financial records for the year ended March 31, 2016.

 

On September 3, 2018 we signed a non-disclosure with a Canadian firm owned by a closely associated person. The entry into the Non-disclosure allows us to further study a new grow system the Canadian firm has in development. The grow system targets the indoor growing of a wide variety of agricultural products. More details of the product are provided in Note 5-Agricultural Product Agreement.

 

Interim financial statements are condensed and should be read in conjunction with the company’s latest annual financial statements. In the opinion of management, the accompanying balance sheets and related statements of income, cash flows, and stockholders' equity include all adjustments, consisting only of normal recurring items, necessary for their fair presentation in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”).”

 

NOTE 2. GOING CONCERN

 

The accompanying financial statements have been prepared in conformity with generally accepted accounting principles (GAAP) in the United States of America, which contemplates continuation of the Company as a going concern.  However, the Company has no business operations to date, accumulated losses amounting to $216,580 and must secure additional financing to commence the Company’s plan of operations, which means there is substantial concern about the Company’s ability to continue as a going concern.

 

 

NOTE 2. GOING CONCERN (Cont’d)

 

The Company intends to acquire additional operating capital through equity offerings to the public to fund its business plan or loans from shareholders and others. Although we have a commitment from related parties to fund our minimum ongoing operations, there is no assurance that equity offerings will be successful or loans will be received to provide sufficient funds to commence operations or to assure the eventual profitability of the Company.

 

 

NOTE 3. LOANS PAYABLE

 

Loans payable to related parties, were received from a director of the Company and others closely associated persons or businesses. These funds were provided as cash loans to cover operating expenses and as payment for services provided.

 

Loans payable to the past and current presidents totaled $7,128 made up of principal amounting to $3,742 and accrued interest of $3,386

 

Loans payable to a closely associated business totaled $129,702 made up of principal amounting to $104,924 and accrued interest amounting to $24,778

 

In aggregate, Loans Payable Related Parties to December 31, 2018 totaled $136,830 made up of $108,666 for principal and $28,164 for accrued interest.

 

NOTE 4. EQUITY

 

At December 31. 2018 we had zero preferred stock issued and outstanding and had 30,100,060 common shares issued and outstanding, which were issued on the dates and for the purposes listed below.

 

- 15,000,000 common shares issued to a director for cash at $0.0001 on December 13, 2007

- 600,000 common shares issued for services at $0.0025 on December 13, 2007

- 2,000,000 common shares issued for a mining property at $0.01 on January10, 2007

- 2,400,000 common shares issued for cash on May 11, 2009

- 4,285,000 common shares issued for accounts payable on June 1, 2009

- 3,315,000 common shares issued to a related party for loan payable on June 13, 2009

- 2,500,000 common shares issued for a mining property on June 15, 2009

- 17,000,000 common shares issued for a sub-distribution agreement on Sept 2, 2009

- (17,000,000) common shares returned for cancelled sub-distribution agreement January18, 2016

NOTE 5. AGRICULTURAL PRODUCT AGEEMENT

On September 3rd, 2018, the non-disclosure agreement that we entered into provided us an opportunity to view the technology and to evaluate the detailed design concepts of this agricultural products growing system. The system design concept includes a building designed together with the equipment as an integral part of the system. Together this provides a cost effective method to grow a wide range of agricultural products throughout the year without regard to its geographical location.

 

The system was originally designed to provide a fully controlled method for growing marijuana. Marijuana’s rapidly expanding market opportunity was created when the Government of Canada announced plans to legalize recreational marijuana. This became effective on October 17, 2018. In the USA, nine States and the District of Columbia have approved its recreational use and 30 other states have approved marijuana for medical use. This legalization has created a large market opportunity.

 

 

NOTE 5. AGRICULTURAL PRODUCT AGEEMENT (Con’d)

After signing of the non-disclosure and memorandum of understanding, we continued to study the application of this system. While agricultural uses are many, the system can as well be employed in industrial applications like storage, marshalling, production picking system, and smaller residential application. In December we completed negotiations with the developer and inventor, and agreed to terms and conditions for a territory license The licensed territory includes the USA, Canada, Mexico, the Caribbean islands (not including Cuba,) and the Marshall Islands. The agreement also include provisions for sub-licensing within the licensed territory and the opportunity to add additional territories. The benefits derived by using of the system in these many industries are considerable and are the compelling reasons for concluding the negotiations. On January10, 2019 the official documents were delivered and the signing was concluded by the parties.

 

In anticipation of entering into this agreement, the Company secured and purchased the domain name www.VerticGrow.com and will soon commence work on the development of the website.

 

The developers and the Company believe the VerticGrow system is patentable and had planned to submit an application mid-January 2019, however some added features have delayed filing. The developer and inventor are committed to file with the US Patent Office (USPO) by February 28, 2019. This will be followed by a filing with the World Intellectual Property Organization (WIPO), as soon as practicable thereafter.

 

The Land area required to build a VerticGrow system grow facility building is significantly smaller. The size is variable and contingent on building height and buyers special design consideration and are somewhat crop specific. Comparing the VerticGrow system to a facility growing a taller plant like marijuana; growers planting directly on the open ground or in most greenhouses facilities will have a land-use area or building footprint about (5.7) times larger than a VerticGrow systems’ footprint. As well, subject only to the type of marijuana crop being grown, the VerticGrow system will produce up to six (6) crops per year, independent of the hemispheric location of the facility. By comparison, a greenhouse facility is highly dependent on hemispheric location. In a northern locations it will grow one (1) or two (2) crops per year whereas in a more southern location three (3) to five (5) crops per year may be achieved.

 

The cost of the Exclusive License is highly dependent on the success of the patenting process detailed below. All payment will be made to the seller and the Inventor and, will be made in Company common and preferred shares as follows.

Upon the filing of a Provisional Patent Application with the US Patent Office

(a) Payable to UVST– Stage 1

UVST and TOA agree that on the filing of a provisional patent application with the US Patent Office, the cost of this License Technology will be Two hundred and Fifty Thousand US Dollars, (US$250,000.00), paid in full by the issuance of Ten Million (10,000,000) shares of TOA’s par value $0.001 common stock.

(b) Payable to Inventor – Stage 1

TOA and the Inventor agree that on the filing of a provisional patent application with the US Patent Office, to issue to the Inventor or Inventor designee, Two hundred and Fifty Thousand (250,000) preferred shares with each preferred share convertible on demand into twenty (20) of TOA’s par value $0.001 common voting stock,

 

 

 

NOTE 5. AGRICULTURAL PRODUCT AGEEMENT (Con’d)

(c) Shares Issuances to UVST and Inventor for Stage 1

The Parties and Inventor agree that all shares for Stage 1, will be issued within thirty (30) days of the filing of the provisional patent and upon receipt by TOA of a certified copy of the provisional patent application. All shares shall be issued as fully paid and non-assessable and in accordance with Regulation S – Rules governing offers and sales made outside the United States without registration under the Securities Act of 1933

Following Issuance of a Patent Pending notification from the US Patent Office

(a) Payable to UVST– Stage 2

UVST and TOA agree, following receipt of a US Patent Office patent pending notice, the cost of this License Technology will be increased by an additional Two hundred and Fifty Thousand US Dollars, (US$250,000.00), paid in full by the issuance of Ten Million (10,000,000) shares of TOA’s par value $0.001 common stock.

(b) Payable to Inventor – Stage 2

TOA and Inventor agrees, following receipt of a US Patent Office patent pending notice, to issue to the Inventor or Inventor designee ,an additional Two hundred and Fifty Thousand (250,000) preferred shares with each preferred share convertible on demand into twenty (20) of TOA’s par value $0.001 common voting stock,

(c) Shares Issuances to UVST and Inventor for Stage 2

The Parties and Inventor agree that that following receipt of a certified copy of the patent pending notice issued by the US Patent Office, all shares for Stage 2, will be issued within thirty (30) days All share shall be issued as fully paid and non-assessable and in accordance with Regulation S – Rules governing offers and sales made outside the United States without registration under the Securities Act of 1933

 

 

NOTE 6. SUBSEQUENT EVENTS

The Company has evaluated subsequent events through the date that the financial statements were issued. There were no significant subsequent events that need to be disclosed.

 

 

 
 

 

 

ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

 

PLAN OF OPERATION

 

In an effort to make available the facilities of the public market to our funding requirements, the Company intends to make application through a market maker and FINRA for the Company’s shares to be quoted on the OTCBB, the OTCQX, the OTCQB or the OTCPINK. The Company’s application to FINRA will consist of current corporate information, financial statements and other documents as required by Rule 15c211 of the Securities Exchange Act of 1934.

 

In the period ended September 30, 2018 we were in discussions and had signed a Non-Disclosure agreement with a company having a product directed at the cannabis and indoor agricultural products industry. We continued these discussions during this current period and on October 15, the Company signed a memorandum of understanding (“MOU’) to exclusively license the worldwide right for the system. Discussion continued and concluded on January 10, 2019 with the signing of an exclusive license agreement.

 

The License Agreement includes the United States, Canada, Mexico and the 26 country islands nations located within the Caribbean Ocean (not including Cuba). It was purchased from a Canadian company; UV Systems Technology Inc (UVST) and the inventor, a senior manager and shareholder of UVST. UVST and the inventor are in the process of completing an application with the US Patent Office for a provisional patent. This filing of this patent application and the receipt of a patent pending designation are important milestones in our Agreement.

 

The License Agreement covers a vertical rotating type equipment named the VerticGrow System. It is designed together with the building to form a cohesive and synergistic unit. Applications for the VerticGrow System are varied and target many industries including agricultural, warehouse storage and retrieval, manufacturing and production, and small units designed for residential uses.

 

When comparing the land required for a VerticGrow System verses a warehouse, a greenhouse or an on-the-land growing facility the amount of land needed is reduced by ratio of about five (5) to one (1) or more) depending on the height of the selected building.

 

In an industrial application warehouses constructed for product storage, retrieval, and marshalling of an extensive variety of items will include space for office, services and ancillary uses. Materials storage and marshalling warehouses design heights are limited as a result of the limited lifting height of materials handling equipment. Access to pallets and storage shelves require maneuvering and turning space. In calculating actual space available for product storage, retrieval, delivery and marshalling, studies have shown that the ratio of space available for product storage, retrieval and marshalling is about 22% to 27% of a buildings floor space, leaving 78 % to 73% unusable for that purpose. A building and equipment system like the VerticGrow System that will provide addition space for its intended purpose, at little or no additional capital cost would provide a positive impact to the business owner.

 

For the immediate future it is the Company’s plan to target the agricultural industry, more specifically the growers of marijuana and other high value crops. A major benefit gained by using the VerticGrow System is facility cost reduction achieved by the reduced size of the land and building needed for a crop growing facility

 

The VerticGrow System offers many improvements over methods currently being used in the agricultural industry for growing crops. VerticGrow System is equipped with a variable number of container type pods, each pod being totally independent and autonomous of the other. In agricultural applications, each pod will be a self-contained, fully autonomous, automated growing unit (enabling full control of the grow cycles from a remote control room). The pods are fully insulated to meet the climatic conditions of their hemispheric location allowing a grower to grow crops continually throughout the years, unlike conventional green houses or on-the land applications, where the number of crop possible is totally limited by its geographic location.

Each container type pod is equipped with all needed services, including electrical power, monitors, controlled aeroponic or hydroponic feed , HVAC, positive internal pressure to eliminate pests infestation and untreated air ingress, optimized CO2 levels. Their frame mounted grow lights are adjustable for intensity, on–off time cycles and movable up or down for setting an optimum height above the crop. Multiple layer of crop can be grown in each pod, and each pod may contain a different crops. A facility growing cannabis, hemp or other tall plants, the pod would provide height for a one level crop but is capable of producing crops per year.

 

 

The cost of the Exclusive License is highly dependent on the success of patenting process detailed below. All payment will be made to the seller and the Inventor and, will be made in Company common and preferred shares as follows.

Upon the filing of a Provisional Patent Application with the US Patent Office

(a) Payable to UVST– Stage 1

UVST and TOA agree that on the filing of a provisional patent application with the US Patent Office, the cost of this License Technology will be Two hundred and Fifty Thousand US Dollars, (US$250,000.00), paid in full by the issuance of Ten Million (10,000,000) shares of TOA’s par value $0.001 common stock.

(b) Payable to Inventor – Stage 1

TOA and the Inventor agree that on the filing of a provisional patent application with the US Patent Office, to issue to the Inventor or Inventor designee, Two hundred and Fifty Thousand (250,000) preferred shares with each preferred share convertible on demand into twenty (20) of TOA’s par value $0.001 common voting stock,

(c) Shares Issuances to UVST and Inventor for Stage 1

The Parties and Inventor agree that all shares for Stage 1, will be issued within thirty (30) days of the filing of the provisional patent and upon receipt by TOA of a certified copy of the provisional patent application. All shares shall be issued as fully paid and non-assessable and in accordance with Regulation S – Rules governing offers and sales made outside the United States without registration under the Securities Act of 1933

Following Issuance of a Patent Pending notification from the US Patent Office

(a) Payable to UVST– Stage 2

UVST and TOA agree, following receipt of a US Patent Office patent pending notice, the cost of this License Technology will be increased by an additional Two hundred and Fifty Thousand US Dollars, (US$250,000.00), paid in full by the issuance of Ten Million (10,000,000) shares of TOA’s par value $0.001 common stock.

(b) Payable to Inventor – Stage 2

TOA and Inventor agrees, following receipt of a US Patent Office patent pending notice, to issue to the Inventor or Inventor designee ,an additional Two hundred and Fifty Thousand (250,000) preferred shares with each preferred share convertible on demand into twenty (20) of TOA’s par value $0.001 common voting stock,

(c) Shares Issuances to UVST and Inventor for Stage 2

The Parties and Inventor agree that that following receipt of a certified copy of the patent pending notice issued by the US Patent Office, all shares for Stage 2, will be issued within thirty (30) days All share shall be issued as fully paid and non-assessable and in accordance with Regulation S – Rules governing offers and sales made outside the United States without registration under the Securities Act of 1933

 

 

 
 

 

 

 

RESULTS OF OPERATIONS

 

Interim Periods:

 

No sales or income was recorded for the period ended September 30, 2017

 

Operating Costs and Expenses for three and nine month periods ended December 31, 2018 compared to the same periods ended in December 31, 2017.

 

For the three-month period ended at December 31, 2018 compared to the same periods ended in 2017.

 

Net losses incurred during the three month period ending December 31, 2018 were $3,748, an increase of $177 compared to $3,571 for the same period ended December 31, 2017.

 

General administrative expenses for three-month ended December 31, 2018 were $2,372, compared to the amount of $2,346 for the same period ended December 31, 2017, an increase of $26.

 

Interest cost for the three-month period ended December 31, 2018 were $1,376 an increase of $151 over the interest costs of $1,225 recorded for the three-month ending December 31, 2017. The increase was as a result of the larger loan principal amount upon which interest was calculated.

 

For the nine-month period ended at December 31, 2018 compared to the same periods ended in 2017.

 

Net losses incurred during the nine-month period December 31, 2018 were $12,258, an increase of $1,555 compared to $10,703 for the same period ended December 31, 2017

 

General administrative expenses for nine-month period ended December 31, 2018 were 8,202, an increase of $1,081 compared to the amount of $7,121 for the same period ended December 31, 2017. The increase resulted mainly from an increase in professional fees amounting to $560 and the delayed receipt-recording of a filing fee invoice in the December 31, 2017 in the amount of $500,

 

Interest cost for the nine-month period ended December 31, 2018 were $4,056 an increase of $474 over the interest costs of $3,582 recorded for the nine-month ending December 31, 2017. The increase was as a result of the larger loan principal amount upon which interest was calculated.

 

 

SELECTED FINANCIAL INFORMATION

December 31, 2018

-----------------       

Current Assets $ -

Total Assets $ -

Current Liabilities $ (137,330)

Stockholders' Equity $ (137,330)

 

LIQUIDITY AND CAPITAL RESOURCES

 

Our cash balance was nil on December 31, 2018. During this nine month period ended December 31, 2018 we received loans from related parties amounting to $7,702 and have a commitment for any additional funds required to fund our limited levels of operations through March 31, 2019. We have not generated any revenue to date.

 

We have loans payable including interest amounting to $136,830 at December 31, 2018.

 

Our auditor has issued a going concern opinion. This means that there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay our bills. This is because we have not generated revenues and no revenues are anticipated for the immediate future. There is no assurance we will ever reach that stage.

 

OFF-BALANCE SHEET ARRANGEMENTS

 

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

 
 

 

 

ITEM 3.CONTROLS AND PROCEDURES

 

EVALUATION OF DISCLOSURE CONTROLS

 

As of the end of the period covered by this report, we conducted an evaluation, under the supervision and with the participation of our chief executive officer and chief financial officer, of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act). Based upon this evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures are ineffective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Security and Exchange Commission's rules and forms.

 

There has been no change in our internal control over financial reporting during the current quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

EVALUATION OF AND REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

 

Our management is responsible for establishing and maintaining adequate internal control over financial reporting for the company. Internal control over financial reporting is to provide reasonable assurance regarding the reliability of our financial reporting purposes accordance with accounting principles generally accepted in the United States of America. Internal control over financial reporting includes maintaining records that in reasonable detail accurately and fairly reflect our transaction; providing reasonable assurance that transactions are recorded as necessary for preparations of our financial statements; providing reasonable assurance that receipts and expenditures of company assets are made in accordance with management authorization; and providing reasonable assurance that unauthorized acquisitions, use or disposition of company assets that could have a material effect on our financial statements would be prevented or detected.

 

Management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation management concluded that the Company's internal control over financial reporting was ineffective as of December 31, 2018. There were no changes in our internal controls over financial reporting during the period ended December 31, 2018 that have materially affected, or are reasonable likely to materially affect our internal control over financial reporting.

 

PART II - OTHER INFORMATION

 

ITEM 1. LEGAL MATTERS

 

None

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

On March 25, 2009 our Registration Statement on Form S-1, commission file number 333-153863, became effective and qualified under Rule 144 for the sale of 1,000,000 shares of the Company’s common sold in accordance with the requirements of Section 4(2) offering under the Securities Act of 1933, as amended and Rule 506 promulgated thereunder. The offering was fully subscribed by June 25, 2009 raising a total of $25,000. There were no underwriters for this offering.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

None.

 

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

 

None

 

ITEM 5. OTHER INFORMATION

 

None

 

ITEM 6. EXHIBITS AND REPORTS

 

The following exhibits are included herein, except for the exhibits marked with a footnote, which are incorporated herein by reference and can be found in the appropriate document referenced.

3.1   Articles and By-Laws as filed with the Delaware Secretary of State April 02, 2007*
    Amendment to By-Laws dated August 13, 2009*
99.2   Geologist Report*
31.1   Rule 13a-14(a)/15d-14(a) Certification by the Principal Executive Officer**
     
31.2   Rule 13a-14(a)/15d-14(a) Certification by the Principal Financial Officer**
     
32.1   Section 1350 Certification by the Principal Executive Officer**
     
32.2   Section 1350 Certification by the Principal Financial Officer**

 

*       Incorporated by reference to the Registrant's Registration Statement on Form S-1, filed on October 6, 2008.

** Filed herewith

 

SIGNATURES

 

In accordance with Section 13 or 15 (d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

In accordance with the requirements of the Securities Act, this 10-Q has been signed by the following persons in the capacities and on the dates stated.

 

 

SIGNATURE   TITLE   DATE
TOA DISTRIBUTION SYSTEMS INC.        
/s/ Andy Ruppanner   Chief Executive Officer, Chief Financial Officer, Secretary, Director   February 13, 2019
Andy Ruppanner   (Principal Executive Officer)    
 
 

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934

 

For the fiscal Quarter ended December 31, 2018

 

OR

 

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934

 

For the transition period from ____________ to ____________

 

TOA DISTRIBUTION SYSTEMS INC

(formerly Skyhigh Resources, Inc.)

(Exact Name of Registrant as Specified in its Charter)

44 Coyote Mountain Road, Suite 102, Santa Fe, NM 87505

(Address of principal executive offices)

 

505 919 8036

(Registrant's telephone number, including area code)

(formerly)

5700 University West Blvd, Suite 304, Albuquerque NM 87106

1791 Marcy Lynn Court, San Jose CA 95124)

 

Delaware 26-2746101

(State of other jurisdiction of (I.R.S. Employer

incorporation or organization) Identification No.)

 

 

Securities Registered Pursuant to Section 12(B) of the Act: None

 

Securities Registered Pursuant to Section 12(G) of the Act:

Common Stock, par value $.001 per share

 

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

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

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  þ  No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (section 229.405 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  þ  No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-Q or any amendment to this Form 10-Q.þ

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer or a smaller reporting company. See definition of "large accelerated filer," or a smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ¨Accelerated filer ¨Non-accelerated filer ¨Smaller reporting companyþ

Indicate by check mark if the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes   ¨ No  þ

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity.

As of the last business day of the registrant’s most recently completed fiscal quarter December 31, 2018, the common equity was sold at $0.0025

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date.

At February 12, 2019 we had 30,100,060 shares of $0.001 par value common Stock outstanding,

At February 12, 2019 we had 0 shares of 0.001 par value preferred stock outstanding.

Documents incorporated by reference - None

State issuer's revenues for its most recent fiscal year: Nil

 

Part 1 – FINANCIAL INFORMATION

 

Item 1:  FINANCIAL STATEMENTS F-1
Unaudited Condensed Balance Sheets as at December 31, 2018 and March 31, 2018 F-2
Unaudited Condensed Statements of Operations for the three and nine month periods ended December 31, 2018  and December 31, 2017 respectively F-3
Unaudited Condensed Statements Cash Flows for the nine months ended December 31, 2018 and December 31, 2017 respectively F-4
Notes to Unaudited Financial Statements F-5 - F-7
Item 2. Management’s Discussion and Analysis of Financial Conditions and Results of Operations

 

2

Item 3.  Controls And Procedures 3
   
PART II – OTHER INFORMATION  
   
Item 1.  Legal Procedures 4
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds   4
Item 3. Default Upon Senior Securities 4
Item 4. Submission Of Matters To A Vote Of Security Holders 4
Item 5. Other Information 4
Item 6. Exhibits 4
 Signatures 5

 

 

 



 

PART I - FINANCIAL INFORMATION

 

 

ITEM 1 - FINANCIAL STATEMENTS

 

 

 

TOA DISTRIBUTION SYSTEMS INC

INDEX TO CONDENSED STATEMENTS

 

(UNAUDITED)

 

 

 

Page

 

Unaudited Condensed Balance Sheets as at December 31, 2018 and March 31, 2018 F-2

 

Unaudited Condensed Statements of Operations for the three and nine month period ended

December 31, 2018 and December 31, 2017 respectively F-3

Unaudited Condensed Statements Cash Flows for the nine month ended

December 31, 2018 and December 31, 2017 respectively F-4

 

Notes to Unaudited Condensed Financial Statements ` F-5 to F-7

 

 

 
 

 

     
     
TOA Distribution Systems Inc    
(formerly known as Skyhigh Resources Inc)    
Balance Sheets    
Unaudited    
     
  At December At March
  31, 2018 31, 2018
     
ASSETS    
Total Current Assets  - -
     
LIABILITIES    
Current Liabilities    
Accounts Payable 500 -
Accrued Expenses - -
Loans Payable Related Parties- Principal (Note 3) 108,666 100,964
Loans Payable Related Parties- Accrued Interest (Note 3) 28,164 24,109
Total Current Liabilities  $           137,330  $          125,073
     
STOCKHOLDERS’ EQUITY    
Capital Stock    
Preferred Shares - 10,000,000 Shares Authorized, at $0.001  
per share - Zero shares Issued and Outstanding.    
Common Stock - 250,000,000 authorized at $0.001 par value  
30,100,060 issued and outstanding at December 31, 2018      
 and March 31, 2018, respectively 30,100 30,100
Additional paid-in capital 49,150 49,150
 Accumulated Deficit             (216,580)            (204,323)
Total Stockholders’ Equity (Deficit)  $         (137,330)  $        (125,073)
     
 Total Liabilities and Stockholders’ Equity  $                    -  $                   -
     
     
     
     
     
     
     
     
The accompanying notes are an integral part of these Financial Statements
                                                                              F-2    
     
     



TOA Distribution Systems Inc        
(formerly known as Skyhigh Resources Inc)        
Statements of Operations        
Unaudited        
  For the three For the nine For the three For the nine
  months ended months ended months ended months ended
  December December December December
  31, 2018 31, 2018 31, 2017 31, 2017
Revenue        
Total Revenue $0 $0 $0 $0
         
Expenses        
General and Administrative 2,372 8,202 2,346 7,121
Total Expenses 2,372 8,202 2,346 7,121
         
Net Income (Deficit) from Operations              (2,372)             (8,202)         (2,346)         (7,121)
Other Income and (Expense)        

 

Interest

  ( 1,376)

 

(4,056)

(1,225)

 

(3,582)

Provision for Income Tax - - - -
Net Loss For The Period                 (3,748)              (12,258)            (3,571)         (10,703)
         
Basic And Diluted Loss Per Common Share $       (0.00) $       (0.00) $       (0.00) $       (0.00)
         
Weighted Average Number of Common Shares Outstanding 30,100,060 30,100,060 30,100,060 30,100,060
         
         
         
         
         
The accompanying notes are an integral part of these Financial Statements
         
F-3
         
 
 

 

TOA Distribution Systems Inc    
(formerly known as Skyhigh Resources Inc)    
Statements of Cash Flows    
Unaudited    
  For the nine For the nine
  months ended months ended
  December December
  31, 2018 31, 2017
     
Operating Activities    
  Net Income (Loss)               (12,258)            (10,703)
Adjustments To Reconcile Net Loss To Net Cash    
   Provided by Operations - -
   Company Expenses paid by Related Parties 7,702 7,756
Change in Assets and Liabilities   -
   Increase (decrease) accounts payable                      500 (135)
   Increase (decrease) in accrued expenses                          - (500)
   Increase (Decrease) in Accrued Interest-Related Party 4,056 3,582
   Increase (Decrease) in Loans Payable-Related Party                          -  -
Net Cash Provided (Used) by Continuing Operating Activities  -  -
Investing Activities    
Net Cash Provided (Used) by Investing Activities - -
Financing Activities    
  Stock Issued for Cash  - -
Net Cash Provided (Used) by Financing Activities - -
Increase (Decrease) in Cash from Continuing Operations  -  -
Cash and Cash Equivalents at Beginning of Period - -
Cash and Cash Equivalents at End of Period                          -  -
Supplemental Information    
Cash Paid For:    
Income Taxes  - -
Non-Cash Activities    
Interest                   4,056 3,582
     
     
     
     
The accompanying notes are an integral part of these Financial Statements
     
F-4
     
 
 

 

TOA Distribution Systems Inc

(formerly known as Skyhigh Resources Inc)

Notes to Financial Statements

December 31, 2018

Unaudited

 

NOTE 1. BASIS OF PRESENTATION

 

The Company was originally structured to engage in mining operations, targeting specifically gold and silver.

 

We owned two (2) mineral properties acquired in January 2008 by issuing stock to the related parties that owned the properties. The purchase price was fully impaired. In February 2012 these claims were deemed surplus and were sold in May 2012.

 

In mid-2009, the Company resolved to change its corporate focus, moving from mining and exploration into bottled drinking water distribution.

 

In August 2009 the Company initiated a number of corporate changes, including 1), a name change to TOA Distribution Systems Inc, (formerly known as Skyhigh Resources Inc, 2) approved a 10 for 1 roll forward of its issued and outstanding common stock, 3), increased it authorized par value $0.001 common shares to 250,000,000 shares (formerly 50,000,000), and 4), authorized 10,000,000 par value $0.001 preferred shares.

 

On September 2, 2009 the Company entered into to a Sub-Distribution agreement with Taste of Aruba (US), Inc to distribute bottled water products produced in Aruba by Taste of Aruba-Premium Aruban Water. The territory in which the Company can distribute these products include the United States and all its territories and insular areas in the Caribbean and Pacific such as but not limited to Puerto Rico, U.S. Virgin Islands, Marshall Islands, and Guam, and all of Canada. In January 2016, the Company and Taste of Aruba agreed to cancel the Sub-Distribution agreement on a no loss no gain basis for either party. Taste of Aruba was unable to confirm when its products would be available for resale. The 17,000,000 shares issued to cover the cost of the Sub-Distribution Agreement have been returned and were cancelled on January18, 2016. This transaction which included full impairment was reversed in the financial records for the year ended March 31, 2016.

 

On September 3, 2018 we signed a non-disclosure with a Canadian firm owned by a closely associated person. The entry into the Non-disclosure allows us to further study a new grow system the Canadian firm has in development. The grow system targets the indoor growing of a wide variety of agricultural products. More details of the product are provided in Note 5-Agricultural Product Agreement.

 

Interim financial statements are condensed and should be read in conjunction with the company’s latest annual financial statements. In the opinion of management, the accompanying balance sheets and related statements of income, cash flows, and stockholders' equity include all adjustments, consisting only of normal recurring items, necessary for their fair presentation in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”).”

 

NOTE 2. GOING CONCERN

 

The accompanying financial statements have been prepared in conformity with generally accepted accounting principles (GAAP) in the United States of America, which contemplates continuation of the Company as a going concern.  However, the Company has no business operations to date, accumulated losses amounting to $216,580 and must secure additional financing to commence the Company’s plan of operations, which means there is substantial concern about the Company’s ability to continue as a going concern.

 

 

NOTE 2. GOING CONCERN (Cont’d)

 

The Company intends to acquire additional operating capital through equity offerings to the public to fund its business plan or loans from shareholders and others. Although we have a commitment from related parties to fund our minimum ongoing operations, there is no assurance that equity offerings will be successful or loans will be received to provide sufficient funds to commence operations or to assure the eventual profitability of the Company.

 

 

NOTE 3. LOANS PAYABLE

 

Loans payable to related parties, were received from a director of the Company and others closely associated persons or businesses. These funds were provided as cash loans to cover operating expenses and as payment for services provided.

 

Loans payable to the past and current presidents totaled $7,128 made up of principal amounting to $3,742 and accrued interest of $3,386

 

Loans payable to a closely associated business totaled $129,702 made up of principal amounting to $104,924 and accrued interest amounting to $24,778

 

In aggregate, Loans Payable Related Parties to December 31, 2018 totaled $136,830 made up of $108,666 for principal and $28,164 for accrued interest.

 

NOTE 4. EQUITY

 

At December 31. 2018 we had zero preferred stock issued and outstanding and had 30,100,060 common shares issued and outstanding, which were issued on the dates and for the purposes listed below.

 

- 15,000,000 common shares issued to a director for cash at $0.0001 on December 13, 2007

- 600,000 common shares issued for services at $0.0025 on December 13, 2007

- 2,000,000 common shares issued for a mining property at $0.01 on January10, 2007

- 2,400,000 common shares issued for cash on May 11, 2009

- 4,285,000 common shares issued for accounts payable on June 1, 2009

- 3,315,000 common shares issued to a related party for loan payable on June 13, 2009

- 2,500,000 common shares issued for a mining property on June 15, 2009

- 17,000,000 common shares issued for a sub-distribution agreement on Sept 2, 2009

- (17,000,000) common shares returned for cancelled sub-distribution agreement January18, 2016

NOTE 5. AGRICULTURAL PRODUCT AGEEMENT

On September 3rd, 2018, the non-disclosure agreement that we entered into provided us an opportunity to view the technology and to evaluate the detailed design concepts of this agricultural products growing system. The system design concept includes a building designed together with the equipment as an integral part of the system. Together this provides a cost effective method to grow a wide range of agricultural products throughout the year without regard to its geographical location.

 

The system was originally designed to provide a fully controlled method for growing marijuana. Marijuana’s rapidly expanding market opportunity was created when the Government of Canada announced plans to legalize recreational marijuana. This became effective on October 17, 2018. In the USA, nine States and the District of Columbia have approved its recreational use and 30 other states have approved marijuana for medical use. This legalization has created a large market opportunity.

 

 

NOTE 5. AGRICULTURAL PRODUCT AGEEMENT (Con’d)

After signing of the non-disclosure and memorandum of understanding, we continued to study the application of this system. While agricultural uses are many, the system can as well be employed in industrial applications like storage, marshalling, production picking system, and smaller residential application. In December we completed negotiations with the developer and inventor, and agreed to terms and conditions for a territory license The licensed territory includes the USA, Canada, Mexico, the Caribbean islands (not including Cuba,) and the Marshall Islands. The agreement also include provisions for sub-licensing within the licensed territory and the opportunity to add additional territories. The benefits derived by using of the system in these many industries are considerable and are the compelling reasons for concluding the negotiations. On January10, 2019 the official documents were delivered and the signing was concluded by the parties.

 

In anticipation of entering into this agreement, the Company secured and purchased the domain name www.VerticGrow.com and will soon commence work on the development of the website.

 

The developers and the Company believe the VerticGrow system is patentable and had planned to submit an application mid-January 2019, however some added features have delayed filing. The developer and inventor are committed to file with the US Patent Office (USPO) by February 28, 2019. This will be followed by a filing with the World Intellectual Property Organization (WIPO), as soon as practicable thereafter.

 

The Land area required to build a VerticGrow system grow facility building is significantly smaller. The size is variable and contingent on building height and buyers special design consideration and are somewhat crop specific. Comparing the VerticGrow system to a facility growing a taller plant like marijuana; growers planting directly on the open ground or in most greenhouses facilities will have a land-use area or building footprint about (5.7) times larger than a VerticGrow systems’ footprint. As well, subject only to the type of marijuana crop being grown, the VerticGrow system will produce up to six (6) crops per year, independent of the hemispheric location of the facility. By comparison, a greenhouse facility is highly dependent on hemispheric location. In a northern locations it will grow one (1) or two (2) crops per year whereas in a more southern location three (3) to five (5) crops per year may be achieved.

 

The cost of the Exclusive License is highly dependent on the success of the patenting process detailed below. All payment will be made to the seller and the Inventor and, will be made in Company common and preferred shares as follows.

Upon the filing of a Provisional Patent Application with the US Patent Office

(a) Payable to UVST– Stage 1

UVST and TOA agree that on the filing of a provisional patent application with the US Patent Office, the cost of this License Technology will be Two hundred and Fifty Thousand US Dollars, (US$250,000.00), paid in full by the issuance of Ten Million (10,000,000) shares of TOA’s par value $0.001 common stock.

(b) Payable to Inventor – Stage 1

TOA and the Inventor agree that on the filing of a provisional patent application with the US Patent Office, to issue to the Inventor or Inventor designee, Two hundred and Fifty Thousand (250,000) preferred shares with each preferred share convertible on demand into twenty (20) of TOA’s par value $0.001 common voting stock,

 

 

 

NOTE 5. AGRICULTURAL PRODUCT AGEEMENT (Con’d)

(c) Shares Issuances to UVST and Inventor for Stage 1

The Parties and Inventor agree that all shares for Stage 1, will be issued within thirty (30) days of the filing of the provisional patent and upon receipt by TOA of a certified copy of the provisional patent application. All shares shall be issued as fully paid and non-assessable and in accordance with Regulation S – Rules governing offers and sales made outside the United States without registration under the Securities Act of 1933

Following Issuance of a Patent Pending notification from the US Patent Office

(a) Payable to UVST– Stage 2

UVST and TOA agree, following receipt of a US Patent Office patent pending notice, the cost of this License Technology will be increased by an additional Two hundred and Fifty Thousand US Dollars, (US$250,000.00), paid in full by the issuance of Ten Million (10,000,000) shares of TOA’s par value $0.001 common stock.

(b) Payable to Inventor – Stage 2

TOA and Inventor agrees, following receipt of a US Patent Office patent pending notice, to issue to the Inventor or Inventor designee ,an additional Two hundred and Fifty Thousand (250,000) preferred shares with each preferred share convertible on demand into twenty (20) of TOA’s par value $0.001 common voting stock,

(c) Shares Issuances to UVST and Inventor for Stage 2

The Parties and Inventor agree that that following receipt of a certified copy of the patent pending notice issued by the US Patent Office, all shares for Stage 2, will be issued within thirty (30) days All share shall be issued as fully paid and non-assessable and in accordance with Regulation S – Rules governing offers and sales made outside the United States without registration under the Securities Act of 1933

 

 

NOTE 6. SUBSEQUENT EVENTS

The Company has evaluated subsequent events through the date that the financial statements were issued. There were no significant subsequent events that need to be disclosed.

 

 

 
 

 

 

ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

 

PLAN OF OPERATION

 

In an effort to make available the facilities of the public market to our funding requirements, the Company intends to make application through a market maker and FINRA for the Company’s shares to be quoted on the OTCBB, the OTCQX, the OTCQB or the OTCPINK. The Company’s application to FINRA will consist of current corporate information, financial statements and other documents as required by Rule 15c211 of the Securities Exchange Act of 1934.

 

In the period ended September 30, 2018 we were in discussions and had signed a Non-Disclosure agreement with a company having a product directed at the cannabis and indoor agricultural products industry. We continued these discussions during this current period and on October 15, the Company signed a memorandum of understanding (“MOU’) to exclusively license the worldwide right for the system. Discussion continued and concluded on January 10, 2019 with the signing of an exclusive license agreement.

 

The License Agreement includes the United States, Canada, Mexico and the 26 country islands nations located within the Caribbean Ocean (not including Cuba). It was purchased from a Canadian company; UV Systems Technology Inc (UVST) and the inventor, a senior manager and shareholder of UVST. UVST and the inventor are in the process of completing an application with the US Patent Office for a provisional patent. This filing of this patent application and the receipt of a patent pending designation are important milestones in our Agreement.

 

The License Agreement covers a vertical rotating type equipment named the VerticGrow System. It is designed together with the building to form a cohesive and synergistic unit. Applications for the VerticGrow System are varied and target many industries including agricultural, warehouse storage and retrieval, manufacturing and production, and small units designed for residential uses.

 

When comparing the land required for a VerticGrow System verses a warehouse, a greenhouse or an on-the-land growing facility the amount of land needed is reduced by ratio of about five (5) to one (1) or more) depending on the height of the selected building.

 

In an industrial application warehouses constructed for product storage, retrieval, and marshalling of an extensive variety of items will include space for office, services and ancillary uses. Materials storage and marshalling warehouses design heights are limited as a result of the limited lifting height of materials handling equipment. Access to pallets and storage shelves require maneuvering and turning space. In calculating actual space available for product storage, retrieval, delivery and marshalling, studies have shown that the ratio of space available for product storage, retrieval and marshalling is about 22% to 27% of a buildings floor space, leaving 78 % to 73% unusable for that purpose. A building and equipment system like the VerticGrow System that will provide addition space for its intended purpose, at little or no additional capital cost would provide a positive impact to the business owner.

 

For the immediate future it is the Company’s plan to target the agricultural industry, more specifically the growers of marijuana and other high value crops. A major benefit gained by using the VerticGrow System is facility cost reduction achieved by the reduced size of the land and building needed for a crop growing facility

 

The VerticGrow System offers many improvements over methods currently being used in the agricultural industry for growing crops. VerticGrow System is equipped with a variable number of container type pods, each pod being totally independent and autonomous of the other. In agricultural applications, each pod will be a self-contained, fully autonomous, automated growing unit (enabling full control of the grow cycles from a remote control room). The pods are fully insulated to meet the climatic conditions of their hemispheric location allowing a grower to grow crops continually throughout the years, unlike conventional green houses or on-the land applications, where the number of crop possible is totally limited by its geographic location.

Each container type pod is equipped with all needed services, including electrical power, monitors, controlled aeroponic or hydroponic feed , HVAC, positive internal pressure to eliminate pests infestation and untreated air ingress, optimized CO2 levels. Their frame mounted grow lights are adjustable for intensity, on–off time cycles and movable up or down for setting an optimum height above the crop. Multiple layer of crop can be grown in each pod, and each pod may contain a different crops. A facility growing cannabis, hemp or other tall plants, the pod would provide height for a one level crop but is capable of producing crops per year.

 

 

The cost of the Exclusive License is highly dependent on the success of patenting process detailed below. All payment will be made to the seller and the Inventor and, will be made in Company common and preferred shares as follows.

Upon the filing of a Provisional Patent Application with the US Patent Office

(a) Payable to UVST– Stage 1

UVST and TOA agree that on the filing of a provisional patent application with the US Patent Office, the cost of this License Technology will be Two hundred and Fifty Thousand US Dollars, (US$250,000.00), paid in full by the issuance of Ten Million (10,000,000) shares of TOA’s par value $0.001 common stock.

(b) Payable to Inventor – Stage 1

TOA and the Inventor agree that on the filing of a provisional patent application with the US Patent Office, to issue to the Inventor or Inventor designee, Two hundred and Fifty Thousand (250,000) preferred shares with each preferred share convertible on demand into twenty (20) of TOA’s par value $0.001 common voting stock,

(c) Shares Issuances to UVST and Inventor for Stage 1

The Parties and Inventor agree that all shares for Stage 1, will be issued within thirty (30) days of the filing of the provisional patent and upon receipt by TOA of a certified copy of the provisional patent application. All shares shall be issued as fully paid and non-assessable and in accordance with Regulation S – Rules governing offers and sales made outside the United States without registration under the Securities Act of 1933

Following Issuance of a Patent Pending notification from the US Patent Office

(a) Payable to UVST– Stage 2

UVST and TOA agree, following receipt of a US Patent Office patent pending notice, the cost of this License Technology will be increased by an additional Two hundred and Fifty Thousand US Dollars, (US$250,000.00), paid in full by the issuance of Ten Million (10,000,000) shares of TOA’s par value $0.001 common stock.

(b) Payable to Inventor – Stage 2

TOA and Inventor agrees, following receipt of a US Patent Office patent pending notice, to issue to the Inventor or Inventor designee ,an additional Two hundred and Fifty Thousand (250,000) preferred shares with each preferred share convertible on demand into twenty (20) of TOA’s par value $0.001 common voting stock,

(c) Shares Issuances to UVST and Inventor for Stage 2

The Parties and Inventor agree that that following receipt of a certified copy of the patent pending notice issued by the US Patent Office, all shares for Stage 2, will be issued within thirty (30) days All share shall be issued as fully paid and non-assessable and in accordance with Regulation S – Rules governing offers and sales made outside the United States without registration under the Securities Act of 1933

 

 

 
 

 

 

 

RESULTS OF OPERATIONS

 

Interim Periods:

 

No sales or income was recorded for the period ended September 30, 2017

 

Operating Costs and Expenses for three and nine month periods ended December 31, 2018 compared to the same periods ended in December 31, 2017.

 

For the three-month period ended at December 31, 2018 compared to the same periods ended in 2017.

 

Net losses incurred during the three month period ending December 31, 2018 were $3,748, an increase of $177 compared to $3,571 for the same period ended December 31, 2017.

 

General administrative expenses for three-month ended December 31, 2018 were $2,372, compared to the amount of $2,346 for the same period ended December 31, 2017, an increase of $26.

 

Interest cost for the three-month period ended December 31, 2018 were $1,376 an increase of $151 over the interest costs of $1,225 recorded for the three-month ending December 31, 2017. The increase was as a result of the larger loan principal amount upon which interest was calculated.

 

For the nine-month period ended at December 31, 2018 compared to the same periods ended in 2017.

 

Net losses incurred during the nine-month period December 31, 2018 were $12,258, an increase of $1,555 compared to $10,703 for the same period ended December 31, 2017

 

General administrative expenses for nine-month period ended December 31, 2018 were 8,202, an increase of $1,081 compared to the amount of $7,121 for the same period ended December 31, 2017. The increase resulted mainly from an increase in professional fees amounting to $560 and the delayed receipt-recording of a filing fee invoice in the December 31, 2017 in the amount of $500,

 

Interest cost for the nine-month period ended December 31, 2018 were $4,056 an increase of $474 over the interest costs of $3,582 recorded for the nine-month ending December 31, 2017. The increase was as a result of the larger loan principal amount upon which interest was calculated.

 

 

SELECTED FINANCIAL INFORMATION

December 31, 2018

-----------------       

Current Assets $ -

Total Assets $ -

Current Liabilities $ (137,330)

Stockholders' Equity $ (137,330)

 

LIQUIDITY AND CAPITAL RESOURCES

 

Our cash balance was nil on December 31, 2018. During this nine month period ended December 31, 2018 we received loans from related parties amounting to $7,702 and have a commitment for any additional funds required to fund our limited levels of operations through March 31, 2019. We have not generated any revenue to date.

 

We have loans payable including interest amounting to $136,830 at December 31, 2018.

 

Our auditor has issued a going concern opinion. This means that there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay our bills. This is because we have not generated revenues and no revenues are anticipated for the immediate future. There is no assurance we will ever reach that stage.

 

OFF-BALANCE SHEET ARRANGEMENTS

 

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

 
 

 

 

ITEM 3.CONTROLS AND PROCEDURES

 

EVALUATION OF DISCLOSURE CONTROLS

 

As of the end of the period covered by this report, we conducted an evaluation, under the supervision and with the participation of our chief executive officer and chief financial officer, of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act). Based upon this evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures are ineffective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Security and Exchange Commission's rules and forms.

 

There has been no change in our internal control over financial reporting during the current quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

EVALUATION OF AND REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

 

Our management is responsible for establishing and maintaining adequate internal control over financial reporting for the company. Internal control over financial reporting is to provide reasonable assurance regarding the reliability of our financial reporting purposes accordance with accounting principles generally accepted in the United States of America. Internal control over financial reporting includes maintaining records that in reasonable detail accurately and fairly reflect our transaction; providing reasonable assurance that transactions are recorded as necessary for preparations of our financial statements; providing reasonable assurance that receipts and expenditures of company assets are made in accordance with management authorization; and providing reasonable assurance that unauthorized acquisitions, use or disposition of company assets that could have a material effect on our financial statements would be prevented or detected.

 

Management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation management concluded that the Company's internal control over financial reporting was ineffective as of December 31, 2018. There were no changes in our internal controls over financial reporting during the period ended December 31, 2018 that have materially affected, or are reasonable likely to materially affect our internal control over financial reporting.

 

PART II - OTHER INFORMATION

 

ITEM 1. LEGAL MATTERS

 

None

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

On March 25, 2009 our Registration Statement on Form S-1, commission file number 333-153863, became effective and qualified under Rule 144 for the sale of 1,000,000 shares of the Company’s common sold in accordance with the requirements of Section 4(2) offering under the Securities Act of 1933, as amended and Rule 506 promulgated thereunder. The offering was fully subscribed by June 25, 2009 raising a total of $25,000. There were no underwriters for this offering.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

None.

 

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

 

None

 

ITEM 5. OTHER INFORMATION

 

None

 

ITEM 6. EXHIBITS AND REPORTS

 

The following exhibits are included herein, except for the exhibits marked with a footnote, which are incorporated herein by reference and can be found in the appropriate document referenced.

3.1   Articles and By-Laws as filed with the Delaware Secretary of State April 02, 2007*
    Amendment to By-Laws dated August 13, 2009*
99.2   Geologist Report*
31.1   Rule 13a-14(a)/15d-14(a) Certification by the Principal Executive Officer**
     
31.2   Rule 13a-14(a)/15d-14(a) Certification by the Principal Financial Officer**
     
32.1   Section 1350 Certification by the Principal Executive Officer**
     
32.2   Section 1350 Certification by the Principal Financial Officer**

 

*       Incorporated by reference to the Registrant's Registration Statement on Form S-1, filed on October 6, 2008.

** Filed herewith

 

SIGNATURES

 

In accordance with Section 13 or 15 (d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

In accordance with the requirements of the Securities Act, this 10-Q has been signed by the following persons in the capacities and on the dates stated.

 

 

SIGNATURE   TITLE   DATE
TOA DISTRIBUTION SYSTEMS INC.        
/s/ Andy Ruppanner   Chief Executive Officer, Chief Financial Officer, Secretary, Director   February 13, 2019
Andy Ruppanner   (Principal Executive Officer)