10-Q
2012-03-31
false
HITOR GROUP, INC.
0001224006
--12-31
69231218
Smaller Reporting Company
No
No
No
2012
Q1
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<!--egx--><p style="MARGIN:0in 31.7pt 0pt 0.5in"><b>Note 1 - Organization and summary of significant accounting policies: </b></p> <p style="MARGIN:0in 0in 10pt 0.5in">In the opinion of management, all adjustments considered necessary for a fair presentation, consisting solely of normal recurring adjustments, have been made. Operating results for the three months ended March 31, 2012 are not necessarily indicative of the results that may be expected for the year ending December 31, 2012.</p> <p style="MARGIN:0in 31.7pt 0pt 0.5in">Following is a summary of the Company’s organization and significant accounting policies: </p> <p style="LINE-HEIGHT:12.8pt; MARGIN:0in 31.5pt 13.15pt 0.5in"><b>Organization and nature of business –Hitor Group Inc.</b>, formerly Nano-Jet Corp. (“We,” or “the Company”) is a Nevada corporation incorporated on July 15, 2005. Effective December 6, 2007, the Company changed its name to Hitor Group Inc. </p> <p style="LINE-HEIGHT:12.8pt; MARGIN:0in 31.5pt 13.15pt 0.5in">The Company’s product is anticipated to allow owners and operators of both gasoline and diesel powered vehicles to potentially increase fuel efficiency while reducing fuel emissions into the environment. In addition, the Company intends to operate three other subsidiaries. One will focus on oil extraction, transport and storage solutions. The other will focus on alternative powered private and commercial vehicles. The Company owns a proprietary technology and currently is applying for patents and has hired patent attorneys for this technology worldwide.</p> <p style="MARGIN:0in 31.7pt 0pt 0.5in">The Company is also in the process of substantially changing their business plan. The company will operate two distinct sections, the one that allows fuel and energy efficiency and a new telecom division which will allow the company to offer voice over internet protocol (VoIP). See note 9 for more.</p> <p style="MARGIN:0in 31.7pt 0pt 0.5in"> </p> <p style="LINE-HEIGHT:12.8pt; MARGIN:0in 0.5in 13.15pt"><b>Basis of presentation – </b>Our accounting and reporting policies conform to U.S. generally accepted accounting principles applicable to development stage enterprises. Changes in classification of 2010 amounts have been made to conform to current presentations. </p> <p style="LINE-HEIGHT:12.8pt; MARGIN:0in 0.5in 13.15pt"><b>Use of estimates -</b>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 amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. </p> <p style="MARGIN:0in 0.5in 0pt"><b>Cash and cash equivalents -</b>For purposes of the statement of cash flows, we consider all cash in banks, money market funds, and certificates of deposit with a maturity of less than three months to be cash equivalents. </p> <p style="MARGIN:0in 31.7pt 0pt 0.5in"><b> </b></p> <p style="MARGIN:0in 31.7pt 0pt 0.5in"><b>Inventory – </b>Inventory is recorded at lower of cost or market, cost is computed on a first-in first-out basis. The inventory consists of imported parts.</p> <p style="MARGIN:0in 31.7pt 0pt 0.5in"> </p> <p style="LINE-HEIGHT:12.8pt; MARGIN:0in 0.5in 13.15pt"><b>Property and Equipment</b> – The Company values its investment in property and equipment at cost less accumulated depreciation. Depreciation is computed primarily by the straight line method over the estimated useful lives of the assets ranging from five to thirty-nine years. </p> <p style="LINE-HEIGHT:12.8pt; MARGIN:0in 0.5in 13.15pt"><b>Fair value of financial instruments and derivative financial instruments</b> – We have adopted Accounting Standards Codification regarding <i>Disclosure About Derivative Financial Instruments and Fair Value of Financial Instruments</i>. The carrying amounts of cash, accounts payable, accrued expenses, and other current liabilities approximate fair value because of the short maturity of these items. These fair value estimates are subjective in nature and involve uncertainties and matters of significant judgment, and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect these estimates. We do not hold or issue financial instruments for trading purposes, nor do we utilize derivative instruments in the management of foreign exchange, commodity price or interest rate market risks. </p> <p style="LINE-HEIGHT:12.8pt; MARGIN:0in 0.5in 13.15pt"><b>Federal income taxes</b> - Deferred income taxes are reported for timing differences between items of income or expense reported in the financial statements and those reported for income tax purposes in accordance with Accounting Standards Codification regarding <i>Accounting for Income Taxes</i>, which requires the use of the asset/liability method of accounting for income taxes. Deferred income taxes and tax benefits are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and for tax loss and credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred taxes are provided for the estimated future tax effects attributable to temporary differences and carryforwards when realization is more likely than not. </p> <p style="LINE-HEIGHT:12.8pt; MARGIN:0in 0.5in 13.15pt"><b>Net income per share of common stock</b> – We have adopted Accounting Standards Codification regarding <i>Earnings per Share</i>, which requires presentation of basic and diluted EPS on the face of the income statement for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. In the accompanying financial statements, basic earnings per share of common stock is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period. We do not have a complex capital structure requiring the computation of diluted earnings per share. </p>
<!--egx--><p style="MARGIN:0in 31.7pt 0pt 0.5in"><b>Note 2 - Uncertainty, going concern: </b></p> <p style="LINE-HEIGHT:12.55pt; MARGIN:0in 0.5in 13.15pt">At March 31, 2012, we were engaged in a business and had suffered losses from development stage activities to date. In addition, current liabilities exceed current assets, and we have minimal operating funds. Although management is currently attempting to identify business opportunities and is seeking additional sources of equity or debt financing, there is no assurance these activities will be successful. Accordingly, we must rely on our officers to perform essential functions without compensation until a business operation can be commenced. No amounts have been recorded in the accompanying financial statements for the value of officers’ services, as it is not considered material. </p><font style="LINE-HEIGHT:115%">These factors raise substantial doubt about the ability of the Company to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. </font>
<!--egx--><p style="MARGIN:0in 0.5in 0pt"><b>Note 4 - Federal income tax: </b></p> <p style="MARGIN:0in 0.5in 0pt">We follow Accounting Standards Codification regarding <i>Accounting for Income Taxes</i>. Deferred income taxes reflect the net effect of (a) temporary difference between carrying amounts of assets and liabilities for financial purposes and the amounts used for income tax reporting purposes, and (b) net operating loss carryforwards. No net provision for refundable Federal income tax has been made in the accompanying statement of loss because no recoverable taxes were paid previously. Similarly, no deferred tax asset attributable to the net operating loss carryforward has been recognized, as it is not deemed likely to be realized. </p> <p style="MARGIN:0in 0.5in 0pt"> </p> <p style="MARGIN:0in 0.5in 6pt">The provision for refundable Federal income tax consists of the following: </p> <p style="TEXT-INDENT:7.25pt; MARGIN:0in 31.7pt 0pt 352.75pt"><b>12/31/2010 12/31/2011</b></p> <p style="TEXT-INDENT:9.25pt; MARGIN:0in 31.7pt 0pt 26.75pt">Refundable Federal income tax attributable to: </p> <p style="TEXT-INDENT:9.25pt; MARGIN:0in 31.7pt 0pt 26.75pt">Current operations $(44,831) $( 92,188)</p> <p style="TEXT-INDENT:9.25pt; MARGIN:0in 31.7pt 0pt 26.75pt">Less, Nondeductible expenses -0- -0-</p> <p style="TEXT-INDENT:-5.6pt; MARGIN:0in 31.7pt 0pt 26.75pt"> -Less, Change in valuation allowance 44,831 92,188</p> <p style="TEXT-INDENT:9.25pt; MARGIN:0in 31.7pt 0pt 26.75pt"> Net refundable amount -0- -0-</p> <p style="LINE-HEIGHT:12.8pt; MARGIN:0in 0.5in 13.15pt"> </p> <p style="LINE-HEIGHT:12.8pt; MARGIN:0in 0.5in 13.15pt">The cumulative tax effect at the expected rate of 34% of significant items comprising our net deferred tax amount is as follows: </p> <p style="LINE-HEIGHT:12.8pt; TEXT-INDENT:7.25pt; MARGIN:0in 31.7pt 0pt 352.75pt"><b> 12/31/2010 12/31/11</b></p> <p style="TEXT-INDENT:9.25pt; MARGIN:0in 31.7pt 0pt 26.75pt">Deferred tax asset attributable to: </p> <p style="TEXT-INDENT:9.25pt; MARGIN:0in 31.7pt 0pt 26.75pt"> Net operating loss carryover $536,183 $ 628,371 </p> <p style="TEXT-INDENT:9.25pt; MARGIN:0in 31.7pt 0pt 26.75pt">Less, Valuation allowance ( 536,183) ( 628,371) </p> <p style="LINE-HEIGHT:12.4pt; TEXT-INDENT:0.5in; MARGIN:0in 31.7pt 13.15pt 0in"> Net deferred tax asset -0- -0-</p> <p style="LINE-HEIGHT:12.8pt; MARGIN:0in 0.5in 13.15pt">At December 31, 2011, an unused net operating loss carryover approximating $1,848,149 is available to offset future taxable income; it expires beginning in 2018. Due to the change of control of the Company, the use of the net operating loss may be limited in the future. </p>
<!--egx--><p style="MARGIN:0in 0.5in 0pt"><b>Note 3 – Advance from Lantz Financial, Inc.: </b></p> <p style="LINE-HEIGHT:12.55pt; MARGIN:0in 0.5in 13.15pt">On March 6, 2006, April 20, 2005 and November 28, 2005, we obtained loans of $10,000, $8,500 and $6,000 respectively from Lantz Financial, Inc., a Panamanian company. Lantz is a non-affiliate of the Company (not associated with any officer, director, or 5% shareholder). The loans are not evidenced by a note, do not bear interest, and are unsecured. They are due on demand. The lender has indicated that it may want to convert the debt into shares in the future, but there is no agreement to that effect and no understanding as to any other terms. </p> <p style="MARGIN:0in 0.5in 0pt"><b>Note 5 – Cumulative sales of stock: </b></p> <p style="MARGIN:0in 0.5in 0pt">Since its inception, we have issued shares of common stock as follows: </p> <p style="MARGIN:0in 0.5in 0pt"> </p> <p style="MARGIN:0in 31.7pt 0pt 0.5in">On July 15, 2005, the Company issued 81,005,000 founder shares for services rendered in the amount of $81,005.</p> <p style="MARGIN:0in 0.5in 0pt"> </p> <p style="MARGIN:0in 0.5in 0pt">On September 30, 2006 the Company completed a reverse merger with LFG International, Inc. The Company issued 67,133 shares for the outstanding shares of LFG International, Inc. As part of the recapitalization of the reverse merger the Company rolled forward a reverse 2:1 stock split. The effect of this reverse split was a reduction of the outstanding shares of 40,435,367.</p> <p style="MARGIN:0in 0.5in 0pt"> </p> <p style="MARGIN:0in 0.5in 0pt">On June 19, 2007, the Company’s convertible notes payable were called. The company issued 1,000,000 shares in exchange for $700,000 of the convertible notes.</p> <p style="MARGIN:0in 0.5in 0pt"> </p> <p style="MARGIN:0in 0.5in 0pt">On July 12, 2007 the Company issued 100,000 shares of common stock in exchange for consulting services rendered.</p> <p style="MARGIN:0in 0.5in 0pt"> </p> <p style="MARGIN:0in 0.5in 0pt">On March 31, 2008 the Company issued 15,000 shares of common stock for $15,000.</p> <p style="MARGIN:0in 0.5in 0pt"> </p> <p style="MARGIN:0in 0.5in 0pt">On February 26, 2010 the Company issued 20,000 shares of common stock for $20,000.</p> <p style="MARGIN:0in 0.5in 0pt"> </p> <p style="MARGIN:0in 0.5in 0pt">On December 22, 2010 the Company issued 275,000 shares of common stock for $55,000.</p> <p style="MARGIN:0in 0.5in 0pt"> </p> <p style="MARGIN:0in 0.5in 0pt">In September and October of 2011, The Company issued 2,150,000 shares of stock for $244,400.</p> <p style="MARGIN:0in 0.5in 0pt">In December 2011, The Company issued 107,673 as part of a convertible debenture. </p> <p style="MARGIN:0in 0.5in 0pt"> </p> <p style="MARGIN:0in 0.5in 0pt">During 2012, the Company issued 2,833,218 shares of stock for $266,682. These issuances are part of convertible debentures that were immediately converted.</p> <p style="MARGIN:0in 0.5in 0pt"> </p> <p style="MARGIN:0in 0.5in 0pt">During the first quarter of 2012, the Company issued 400,000 shares of stock for $40,000 to two individuals.</p> <p style="MARGIN:0in 0.5in 0pt"> </p> <p style="LINE-HEIGHT:12.8pt; MARGIN:0in 31.7pt 0pt 0.5in"><b>Note 6 – Convertible Notes Payable:</b></p> <p style="MARGIN:0in 0.5in 0pt">On December 12, 2006 the Company issued a convertible notes payable in the amount of $300,000. $200,000 of the loan was advanced in December, 2006. In March 2007, the additional $100,000 was received. The note is due one year from the date of issue and bears interest at the rate of 5% per annum compounded annually. The terms of the note allow the holder to convert the note into shares of the company’s stock at the rate of one share per $1 of debt including unpaid interest. The balance of the convertible notes payable at March 31, 2012 and December 31, 2011 was $300,000.</p> <p style="MARGIN:0in 0.5in 0pt"> </p> <p style="MARGIN:0in 0.5in 0pt">The Company issued additional convertible notes payable in July of 2009 in the amount of $100,000. The note is due one year from the date of issue and bears interest at a rate of 5% per annum compounded annually. The terms of the note allow the holder to convert the note into shares of the Company’s stock at a rate of one share per $1 of debt including unpaid interest. The balance of this note is $100,000 at March 31, 2012 and December 31, 2011.</p> <p style="MARGIN:0in 0.5in 0pt"> </p> <p style="MARGIN:0in 31.7pt 0pt 0.5in">On January 24, 2012, The Company entered into a Note Purchase Agreement with Asher Enterprises, Inc. in which the Company issued to Asher Enterprises a convertible promissory note in the amount of $42,500. These notes are convertible into shares of the Company’s common stock based on 55% of the lowest trade price in the 10 days pervious to the conversion. The Notes have a maturity of 10 months and each bear an 8% interest rate. As of March 31, 2012, the Company has issued and received $42,500. Additionally, the company recorded the intrinsic value of the 45% discount on conversion factor. The Company recorded bond discount of $34,773 with a remaining balance at March 31, 2012 of $31,248.</p> <p style="MARGIN:0in 0.5in 0pt"> </p> <p style="MARGIN:0in 0.5in 0pt"><b>Note 7 – Notes Payable</b></p> <p style="MARGIN:0in 0.5in 0pt">The Company has a non-interest bearing note payable with one of its officers and shareholders. The balance of this note at March 31, 2012 was $53,127 and $61,887 at December 31, 2011.</p> <p style="MARGIN:0in 0.5in 0pt"> </p> <p style="MARGIN:0in 0.5in 0pt">The Company also has a note payable dated September 30, 2010 in the amount of $17,908. The note carries an interest rate of 12% and a one year maturity rate. The note is secured by inventory. </p> <p style="MARGIN:0in 0.5in 0pt"> </p>
<!--egx--><p style="MARGIN:0in 0.5in 0pt"><b>Note 8 – Stock Subscriptions</b></p> <p style="MARGIN:0in 0.5in 0pt">On March 22, 2007 the Company issued a stock subscription in the amount of $700,000. The subscription is for 1,000,000 shares at a rate of $0.70 per share. Among other provisions the subscription holder has exclusive selling rights to the Company’s product in Poland and responsibilities to sell preset amounts of product.</p> <p style="MARGIN:0in 31.7pt 0pt 0.5in"> </p> <p style="MARGIN:0in 31.7pt 0pt 0.5in">In January 2012, the Company issued a stock option to Makirys Management Group Inc. in the amount of $300,000 or 3,000,000 shares at $0.10 per share. The incentive is to entice the Company to expand the product lines into different countries and increase the market share in Canada. </p>
<!--egx--><p style="MARGIN:0in 0.5in 0pt"><b>Note 9 - New accounting pronouncements: </b></p> <p style="MARGIN:0in 31.7pt 0pt 0.5in"> </p> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt 0.5in">In December 2010, the FASB issued updated guidance on when and how to perform certain steps of the periodic goodwill impairment test for public entities that may have reporting units with zero or negative carrying amounts. This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2010, with early adoption prohibited. The adoption of this standard update did not impact the Company’s consolidated financial statements.</p> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt 0.5in"> </p> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt 0.5in">In May 2011, the FASB issued guidance to amend certain measurement and disclosure requirements related to fair value measurements to improve consistency with international reporting standards. This guidance is effective prospectively for public entities for interim and annual reporting periods beginning after December 15, 2011, with early adoption by public entities prohibited. The Company is currently evaluating this guidance, but does not expect its adoption will have a material effect on its consolidated financial statements.</p> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt 0.5in"> </p> <p style="MARGIN:0in 0in 10pt 0.5in">In June 2011, the FASB issued new guidance on the presentation of comprehensive income that will require a company to present components of net income and other comprehensive income in one continuous statement or in two separate, but consecutive statements. There are no changes to the components that are recognized in net income or other comprehensive income under current GAAP. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2011, with early adoption permitted. The Company is currently evaluating this guidance, but does not expect its adoption will have a material effect on its consolidated financial statements</p>
<!--egx--><p style="MARGIN:0in 0.5in 0pt"><b>Note 12 – Marketing Contract and Restatement: </b></p> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt 0.5in">Prior to the issuance of the September 30, 2012 financial statements, management determined that it had not recorded a consulting agreement between Turon Capital Partners, Inc. and the Company. The agreement was effective on March 2, 2012 and will result in a restatement for both the March 31, 2012 and June 30, 2012 financial statements. The agreement between the parties was for ongoing consulting and support assistance for the marketing of all the Company’s products. The term of the agreement is for a period of twelve months but can be canceled by either party with a sixty day written notice by certified/registered mail. Compensation provided to Turon Capital Partners, Inc. was in the form of an issuance of 3,142,750 common shares. Furthermore, the Company has agreed to advance $50,000 upon the approval of a ninety day marketing plan that has yet to be finalized. </p> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 31.7pt 0pt 0.5in">The following table represents the effects of the restated statements as of March 31, 2012 and June 30, 2012:</p> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 31.7pt 0pt 0.5in"></p> <p style="TEXT-ALIGN:center; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="center"> </p> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"> </p>
0001224006
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2011-01-01
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0001224006
2010-12-31
0001224006
2011-03-31
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iso4217:USD
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