UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2017
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to ___________
Commission file number 000-55657
TYG SOLUTIONS CORP.
(Name of small business issuer in its charter)
Delaware |
| 46-2645343 |
| 7374 |
(State or Other Jurisdiction of Incorporation or Organization) |
| IRS Employer Identification Number |
| Primary Standard Industrial Classification Code Number |
550 West C Street, Suite 2040
San Diego, CA 92101
(858) 883-2642
(Address and telephone number of principal executive offices)
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes [ ] No [X]
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.
Yes [ ] No [X]
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 [X] No [ ]
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes [ ] No [X]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K 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-K or any amendment to this Form 10-K. [X]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | [ ] |
| Accelerated filer | [ ] |
Non-accelerated filer | [ ] (Do not check if a smaller reporting company) |
| Smaller reporting company | [X] |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. As of May 9, 2018, there were 9,530,000 shares of common stock, par value $0.0001 outstanding.
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2017
INDEX |
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| PAGE |
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| PART I |
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ITEM 1. |
| Business. |
| 3 |
ITEM 1A. |
| Risk Factors. |
| 4 |
ITEM 1B. |
| Unresolved Staff Comments. |
| 4 |
ITEM 2. |
| Properties. |
| 4 |
ITEM 3. |
| Legal Proceedings. |
| 4 |
ITEM 4. |
| Mine Safety Disclosures. |
| 5 |
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| PART II |
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ITEM 5. |
| Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. |
| 5 |
ITEM 6. |
| Selected Financial Data. |
| 5 |
ITEM 7. |
| Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
| 5 |
ITEM 7A. |
| Quantitative and Qualitative Disclosures About Market Risk. |
| 8 |
ITEM 8. |
| Financial Statements and Supplementary Data. |
| 8 |
ITEM 9. |
| Changes in and Disagreements With Accountants on Accounting and Financial Disclosure. |
| 8 |
ITEM 9A. |
| Controls and Procedures. |
| 8 |
ITEM 9B. |
| Other Information. |
| 9 |
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| PART III |
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ITEM 10. |
| Directors, Executive Officers and Corporate Governance. |
| 9 |
ITEM 11. |
| Executive Compensation |
| 10 |
ITEM 12. |
| Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. |
| 11 |
ITEM 13. |
| Certain Relationships and Related Transactions, and Director Independence. |
| 11 |
ITEM 14. |
| Principal Accounting Fees and Services. |
| 12 |
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| PART IV |
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ITEM 15. |
| Exhibits, Financial Statement Schedules |
| 13 |
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| SIGNATURES |
| 14 |
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FORWARD LOOKING STATEMENTS
This Annual Report on Form 10-K, the other reports, statements, and information that the Company has previously filed with or furnished to, or that we may subsequently file with or furnish to, the SEC and public announcements that we have previously made or may subsequently make include, may include, or may incorporate by reference certain statements that may be deemed to be “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, and that are intended to enjoy the protection of the safe harbor for forward-looking statements provided by that Act. To the extent that any statements made in this report contain information that is not historical, these statements are essentially forward-looking. Forward-looking statements can be identified by the use of words such as “anticipate”, “estimate”, “plan”, “project”, “continuing”, “ongoing”, “expect”, “believe”, “intend”, “may”, “will”, “should”, “could”, and other words of similar meaning. These statements are subject to risks and uncertainties that cannot be predicted or quantified and, consequently, actual results may differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, without limitation, marketability of our products; legal and regulatory risks associated with trading publicly; our ability to raise additional capital to finance our activities; the future trading of our common stock; our ability to operate as a public company; our ability to protect our proprietary information; general economic and business conditions; the volatility of our operating results and financial condition; our ability to attract or retain qualified senior management personnel and research and development staff; and other risks detailed from time to time in our filings with the SEC, or otherwise.
Information regarding market and industry statistics contained in this report is included based on information available to us that we believe is accurate. It is generally based on industry and other publications that are not produced for purposes of securities offerings or economic analysis. Forecasts and other forward-looking information obtained from these sources are subject to the same qualifications and the additional uncertainties accompanying any estimates of future market size, revenue and market acceptance of products and services. We do not undertake any obligation to publicly update any forward-looking statements. As a result, investors should not place undue reliance on these forward-looking statements.
PART I
Item 1. Business.
Overview
TYG Solutions Corp. was incorporated in the State of Delaware on March 25, 2013. Our original business plan was to develop iPhone and Android smartphone apps for companies who need an app for their internal and external operations. Currently, we are focusing our operation on offering corporate website design services.
The Company’s fiscal year end is December 31. The Company’s principal executive office and mailing address is 550 West C Street, Suite 2040, San Diego, CA 92101. Our telephone number is (858) 883-2642
On June 1, 2014, we entered into an Application Development Agreement with a client to develop an inventory app. The company has completed the app and delivered the completed app to the client. The total price we charged the client for our services was $7,500, the client has paid the Company the full amount.
On March 20, 2015, the Company entered into an Application Development Agreement with a client, whereby the client agreed to pay the company to develop certain iPhone and Android applications that include a Package tracking app, Voice recording app, Compare prices app, File sharing app, Screen recorder app, Puzzle game, Card game, Adventure game, News template app and a Weather broadcast app. The total price we charged the client for our services was $90,000. The Company completed the apps and delivered the files to client. The client paid the Company the full amount.
On March 20, 2015, the Company entered into an Application Development Agreement with a client, whereby the client agreed to pay the Company to develop a Photo Viewer app. The total price we charged the client for our services was $15,000. The Company completed the apps and delivered the files to client. The client paid the Company the full amount.
On March 31, 2015, the Company entered into an Application Development Agreement with a client, whereby the client agreed to pay the company to develop certain iPhone and Android that include a Video editor app, Group chat app, Video surveillance app and a Trivia game. The total price we charged the client was $40,000. The Company completed the apps and delivered the files to client.
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On November 19, 2015, the Company entered into an Application Development Agreements with a client, whereby the client agreed to pay the Company to develop certain iPhone and Android applications. The total adjusted price we charged the client was $20,000. The Company completed the apps and delivered the files to client. The client paid the Company the full amount.
On December 15, 2015, the Company entered into an Application Development Agreement with a client, whereby the client agreed to pay the Company to develop certain iPhone and Android applications. The total price we charged the client was $15,000. The Company completed the apps and delivered the files to client.
We are currently a development stage company. We may require additional capital to implement our business and fund our operations. See “Management’s Discussion and Analysis”.
Target Market
We plan to target mid-size to large companies as app development is suitable for all types of companies that want to modernize their operations. In addition, we plan to target mid-size companies for our website design services.
Marketing and Sales
Currently, our officer and director handles all marketing and sales efforts. Within the next 12 months, we hope to have generated enough revenue to develop a marketing campaign to promote and publicize our website and services.
We do not have any specific marketing channels in place at this point to be able to market our services to potential customers. However, in the next twelve months, we hope to attend conferences, advertise by word of mouth and possible reach out to local businesses to sell our services. We do expect that the biggest part of our marketing and sales strategy will be from word of mouth advertising. Referrals from people that were pleased with our level of service will be our most efficient form of marketing.
Competition
The app development and website design industry is highly competitive because the barrier to entry is very low. Additionally, the market is very fragmented with many small companies competing against each other. We expect to be able to compete by providing responsive and knowledgeable consultants at reasonable prices.
Services Pricing
We anticipate that our fees would start at $5,000 for easier, simpler applications and get more expensive as detail and complexity increase. To date, we have entered into agreements with six (6) clients and have charged them each flat fees ranging from $7,500 to $90,000.
Employees
We presently have no employees apart from our officer and director. Our officer and director devotes about 20 hours per week to our affairs.
Item 1A. Risk Factors.
Smaller reporting companies are not required to provide the information required by this item.
Item 1B. Unresolved Staff Comments.
None.
Item 2. Properties.
Our principal executive office is located at 550 West C Street, Suite 2040, San Diego, CA 92023
Item 3. Legal Proceedings.
We are not a party to or otherwise involved in any pending legal proceedings.
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Item 4. Mine Safety Disclosures.
Not applicable.
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
The Company's shares are currently quoted on the OTC Markets Pink Sheets, but there is no active trading market in our securities.
Holders of Capital Stock
As of the date of this Annual Report, we had 6 holders of our common stock.
Rule 144 Shares
As of the date of this Annual Report, 2,030,000 shares of our common stock are held by non-affiliates, and were registered in our S-1 Registration Statement, which was effective on July 18, 2016. These registered shares are free trading. The remaining 7,500,000 shares are held by one affiliate, are marked control shares, and bear a standard Rule 144 restricted legend at the Company’s transfer agent.
Stock Option Grants
We do not have a stock option plan in place and have not granted any stock options at this time.
Recent Sales of Unregistered Securities
None.
Dividends
No dividends were declared on our common stock in the year ended December 31, 2017 or 2016, and it is anticipated that cash dividends will not be declared on our common stock in the foreseeable future. Our dividend policy is subject to the discretion of our board of directors and depends upon a number of factors, including operating results, financial condition and general business conditions. Holders of common stock are entitled to receive dividends as, if and when declared by our board of directors out of funds legally available therefor. We may pay cash dividends if net income available to stockholders fully funds the proposed dividends, and the expected rate of earnings retention is consistent with capital needs, asset quality and overall financial condition.
Securities Authorized for Issuance under Equity Compensation Plan
None.
Item 6. Selected Financial Data.
As a smaller reporting company, we are not required to provide the information required by this item.
Item 7. Management’s Discussion and Analysis of Financial Conditions and Results Of Operations.
The following plan of operation provides information which management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read along with our financial statements and notes thereto. This section includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our predictions.
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RESULTS OF OPERATIONS
Fiscal Year Ended December 31, 2017 compared to Fiscal Year Ended December 31, 2016
Revenue
During the fiscal year ended December 31, 2017, the Company earned $1,154 in revenues compared to the fiscal year ended December 31, 2016, when the Company earned $34,970 in revenue. Revenues decreased due to the Company’s inability to obtain additional client contracts.
Cost of Revenue
During the fiscal year ended December 31, 2017, the Company’s cost of revenue was $0 compared to the fiscal year ended December 31, 2016, when the Company’s cost of revenue was $21,000. Generally, cost of revenue consists of developmental fees paid to third parties that assist in the development of the Company’s apps.
Operating Expenses
During the Fiscal Year Ended December 31, 2017, we incurred general and administrative expenses of $23,597 compared to $45,994 during the Fiscal Year Ended December 31, 2016. General and administrative expenses incurred generally related to corporate overhead, financial and administrative contracted services, such as legal, accounting, and marketing expenses. Expenses decreased due to the Company’s decreased revenues.
Net loss
Our net loss for the Fiscal Year Ended December 31, 2017 was $22,443 compared to $32,024 during the Fiscal Year Ended December 31, 2016 due to the factors discussed above. Net loss decreased due to the Company’s decreased revenues and expenses.
LIQUIDITY AND CAPITAL RESOURCES
As of December 31, 2017, our current assets were $1,887 compared to $10,028 in current assets at December 31, 2016. As at December 31, 2017, our current liabilities were $50,705 compared to $36,403 as of December 31, 2016.
Stockholder’s deficit was $48,818 as of December 31, 2017, compared to $26,375 as of December 31, 2016.
Cash Flows from Operating Activities
For the fiscal year ended December 31, 2017, net cash flows used in operating activities was $23,276 compared to $50,176 for the fiscal year ended December 31, 2016.
Cash Flows from Investing Activities
We neither used, nor provided cash flow from investing activities during the fiscal year ended December 31, 2017 and 2016.
Cash Flows from Financing Activities
Cash flows provided by financing activities during the fiscal year ended December 31, 2017 were $25,005, consisting of advances from a related party compared to $2,378 for the fiscal year ended December 31, 2016.
PLAN OF OPERATION AND FUNDING
We expect that working capital requirements will continue to be funded through a combination of sales revenue and further issuances of securities. Our working capital requirements are expected to increase in line with the growth of our business.
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Revenues, further advances and debt instruments, and anticipated cash flow are expected to be adequate to fund our operations over the next twelve months. We have no lines of credit or other bank financing arrangements. Generally, we have financed operations to date through the proceeds of the private placement of equity and debt instruments. In connection with our business plan, management anticipates additional increases in operating expenses and capital expenditures. We intend to finance these expenses with further issuances of securities, and debt issuances. Thereafter, we expect we will need to raise additional capital and generate revenues to meet long-term operating requirements. Additional issuances of equity or convertible debt securities will result in dilution to our current shareholders. Further, such securities might have rights, preferences or privileges senior to our common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, we may not be able to take advantage of prospective new business endeavors or opportunities, which could significantly and materially restrict our business operations.
OFF-BALANCE SHEET ARRANGEMENTS
As of the date of this Annual Report, we do not have any 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 that are material to investors.
Critical Accounting Policies and Estimates
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
As of December 31, 2017, the carrying value of loans approximated fair value due to the short-term nature and maturity of these instruments.
Recent Accounting Pronouncements
The Company will adopt Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (Topic 606)” as of January 1, 2018. ASU 2014-09 will replace most existing revenue recognition guidance in US GAAP when it becomes effective. Management has evaluated the impact of the Company’s adoption of ASU 2014-09 on its financial statements and does not expect the new standard to have a significant impact on its financial position, results of operations and related disclosures. To make this determination, management has identified the contract with its customer, identified the performance obligations, determined the transaction price, allocated the transaction price to the performance obligations in the contract, and recognized revenue when the Company satisfies the performance obligation.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements.
Contractual Obligations
We do not have any contractual obligations at this time.
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Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
Smaller reporting companies are not required to provide the information required by this item.
Item 8. Financial Statements and Supplementary Data.
The full text of the Company's audited consolidated financial statements for the fiscal years ended December 31, 2017 and 2016, begins on page F-1 of this Annual Report on Form 10-K.
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.
None.
Item 9A. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended (“Exchange Act”), the Company carried out an evaluation, with the participation of the Company’s management, including the Company’s Chief Executive Officer (“CEO”) (the Company’s principal executive officer) and Chief Financial Officer (“CFO”) (the Company’s principal financial and accounting officer), of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the Company’s CEO and CFO concluded that the Company’s disclosure controls and procedures are not effective to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Company’s CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.
Management's Annual Report on Internal Control Over Financial Reporting.
The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. Our internal control system was designed to, in general, provide reasonable assurance to the Company’s management and board regarding the preparation and fair presentation of published financial statements, but because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
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Our management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2017. The framework used by management in making that assessment was the criteria set forth in the document entitled “ Internal Control – Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on that assessment, our management has determined that as of December 31, 2017, the Company’s internal control over financial reporting was ineffective for the purposes for which it is intended.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company's annual or interim financial statements will not be prevented or detected on a timely basis. In its assessment of the effectiveness of internal control over our financial reporting as of December 31, 2017 the Company determined that the following items constituted a material weakness:
The Company does not have an independent audit committee that can review and approve significant transactions and the reporting process and provide independent oversight of the Company.
The Company is dependent on related parties for funding and decision making, which is provided on a very limited basis, therefore accurate accounting, record retention and financial disclosures are not performed in a timely and efficient manner.
This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm as we are a smaller reporting company and not required to provide the report.
Changes in Internal Controls over Financial Reporting
No change in our system of internal control over financial reporting occurred during the period covered by this report, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Item 9B. Other Information.
PART III
Item 10. Directors, Executive Officers and Corporate Governance
The following table sets forth the names and ages of officers and director as of the date of this Report. Our executive officers are elected annually by our Board of Directors. Our executive officers hold their offices until they resign, are removed by the Board, or his successor is elected and qualified.
Name |
| Age |
| Position |
Robert Malasek |
| 50 |
| President, Chief Executive Officer, Chief Financial Officer, Secretary and Director |
Set forth below is a brief description of the background and business experience of our executive officer and director for the past five years.
Robert Malasek - Chief Financial Officer, Secretary
Mr. Malasek’s experience includes serving as the Assistant Controller for Starwood Hotel & Resorts Worldwide, Inc., Controller for Pacific Crest Equity Partners (a private equity company), and Chief Financial Officer for NatureWell, Inc. From 2011 to 2015, Robert served as the Chief Financial Officer, Secretary, Treasurer and a Director of Liberty Coal Energy Corp. Since 2015, Robert has served as the Chief Financial Officer of Cannalink, Inc. Robert received his Bachelor of Science in Accountancy from San Diego State University.
Term of Office
Our director is appointed for a one-year term to hold office until the next annual general meeting of our shareholders or until removed from office in accordance with our bylaws. Our officers are appointed by our board of directors and hold office until removed by the board.
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Director Independence and Board Committees
We do not have any independent directors on our board of directors. Our board of directors solely consists of Robert Malasek our sole officer and director. Our board of directors does not have any committees. However, if, at such time in the future, we appoint independent directors on our board we expect to form the appropriate board committees.
We currently do not have a standing audit, nominating or compensation committee. Our board of directors handles functions that would otherwise be handled by each of the committees. We believe that there is not a need for a nominating committee at this time because our board of directors consists of solely one director who is not independent and who is the only decision maker. At such point when we have independent board of directors we will need to establish a nomination committee.
Code of Ethics
We have not adopted a code of ethics that applies to our principal executive officer and principal financial officer. We intend to adopt a Code of Ethics as we develop our business.
Compliance with Section 16(A) of the Exchange Act.
Section 16(a) of the Exchange Act requires the Company’s officers and directors, and persons who beneficially own more than 10% of a registered class of the Company’s equity securities, to file reports of ownership and changes in ownership with the Securities and Exchange Commission and are required to furnish copies to the Company. To the best of the Company’s knowledge, any reports required to be filed were timely filed in fiscal year ended December 31, 2017.
Item 11. Executive Compensation.
The following summary compensation table sets forth all compensation awarded to, earned by, or paid to the named executive officers paid by us during the fiscal year ended December 31, 2017:
Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($) | Option Awards ($) | Non- Equity Incentive Plan Compensation ($) | Non- Qualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Totals ($) |
Natan Barmatz, President, Chief Executive Officer and Director | 2017
2016 | -
- | -
- | -
- | -
- | -
- | -
- | -
- | -
- |
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Robert Malasek, Chief Financial Officer, Secretary | 2017 | - | - | - | - | - | - | - | - |
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Eliakim Gabay, Secretary and Director | 2017 2016 | - - | - - | - - | - - | - - | - - | - - | - - |
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Option Grants Table
There were no individual grants of stock options to purchase our common stock made to the executive officers named in the Summary Compensation Table for the fiscal year ended December 31, 2017.
Aggregated Option Exercises and Fiscal Year-End Option Value Table
There were no stock options exercised during the fiscal year ended December 31, 2017, by the executive officers named in the Summary Compensation Table.
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Long-Term Incentive Plan (“LTIP”) Awards Table
There were no awards made to a named executive officer in the last completed fiscal year under any LTIP.
Compensation of Directors
Directors are permitted to receive fixed fees and other compensation for their services as directors. The Board of Directors has the authority to fix the compensation of directors. No amounts have been paid to, or accrued to, directors in such capacity.
Employment Agreements
Currently, we do not have any employment agreements in place with our officers and directors.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matter
The following table sets forth certain information regarding our common stock beneficially owned as of December 31, 2017:
(i)each stockholder known by us to be the beneficial owner of five (5%) percent or more of our outstanding common stock;
(ii)each of our officers and directors; and
(iii)all executive officers and directors as a group.
This information as to beneficial ownership was furnished to the Company by or on behalf of each person named. As at December 31, 2017, there were 9,530,000 shares of our common stock issued and outstanding.
Title of Class |
| Name and Address of Beneficial Owner |
| Amount and Nature of Beneficial Ownership |
| Percentage of Class |
|
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|
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|
Common Stock |
| Robert Malsek |
| - |
| - |
Common Stock |
| Kettner Investments, LLC |
| 7,500,000 |
| 79% |
Common Stock |
| All Directors and Officers as a Group |
| 7,500,000 |
| 79% |
Beneficial ownership is determined in accordance with the rules and regulations of the SEC. The number of shares and the percentage beneficially owned by each individual listed above include shares that are subject to options held by that individual that are immediately exercisable or exercisable within 60 days from the date of this Report and the number of shares and the percentage beneficially owned by all officers and directors as a group includes shares subject to options held by all officers and directors as a group that are immediately exercisable or exercisable within 60 days from the date of this Report.
Item 13. Certain Relationships and Related Transactions, and Director Independence.
As of December 31, 2017 and 2016, loans and advances from related parties amounted to $44,590 and $19,585, respectively. The balances represent working capital advances from a shareholder of the Company and are unsecured, non-interest bearing, and due on demand.
Director Independence
We do not have any independent directors. Because our common stock is not currently listed on a national securities exchange, we have used the definition of “independence” of The NASDAQ Stock Market to make this determination. NASDAQ Listing Rule 5605(a)(2) provides that an “independent director” is a person other than an officer or employee of the company or any other individual having a relationship which, in the opinion of the Company’s Board of Directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. The NASDAQ listing rules provide that a director cannot be considered independent if:
the director is, or at any time during the past three years was, an employee of the company;
the director or a family member of the director accepted any compensation from the company in excess of $120,000 during any period of 12 consecutive months within the three years preceding the independence determination (subject to certain exclusions, including, among other things, compensation for board or board committee service);
a family member of the director is, or at any time during the past three years was, an executive officer of the company;
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the director or a family member of the director is a partner in, controlling stockholder of, or an executive officer of an entity to which the company made, or from which the company received, payments in the current or any of the past three fiscal years that exceed 5% of the recipient’s consolidated gross revenue for that year or $200,000, whichever is greater (subject to certain exclusions);
the director or a family member of the director is employed as an executive officer of an entity where, at any time during the past three years, any of the executive officers of the company served on the compensation committee of such other entity; or
the director or a family member of the director is a current partner of the company’s outside auditor, or at any time during the past three years was a partner or employee of the company’s outside auditor, and who worked on the company’s audit.
We do not currently have a separately designated audit, nominating or compensation committee.
Item 14. Principal Accounting Fees and Services.
Audit Fees
The aggregate fees billed during the fiscal years ended December 31, 2017 and 2016 for professional services rendered by Weinberg & Baer LLC, with respect to the audits of our 2017 and 2016 financial statements, as well as their quarterly reviews of our interim financial statements and services normally provided by the independent accountant in connection with statutory and regulatory filings or engagements for these fiscal periods, were as follows:
|
| Year Ended December 31, 2017 |
| Year Ended December 31, 2016 |
Audit Fees and Audit Related Fees | $ | 12,000 | $ | 12,250 |
Tax Fees |
| - |
| - |
All Other Fees |
| - |
| - |
TOTAL | $ | 12,000 | $ | 12,250 |
In the above table, "audit fees" are fees billed by our Company's former external auditor for services provided in auditing our Company's annual financial statements for the subject year. "Audit-related fees" are fees not included in audit fees that are billed by the auditor for assurance and related services that are reasonably related to the performance of the audit review of our company's financial statements. "Tax fees" are fees billed by the auditor for professional services rendered for tax compliance, tax advice and tax planning.
“All other fees" are fees billed by the auditor for products and services not included in the foregoing categories.
Pre-Approval Policies and Procedures
We do not have a separately designated Audit Committee. The Board of Directors pre-approves all services provided by our independent auditors. All of the above services and fees were reviewed and approved by the Board of Directors either before or after the respective services were rendered.
-12-
Item 15. Exhibits, Financial Statement Schedules.
Please see the below Exhibit Index and the Index to Financial Statements and related notes to financials which follows the signature page to this annual report on Form 10-K and which is incorporated by reference herein.
Exhibits | Exhibit # | Incorporated by Reference (Form Type) | Filing Date | Filed with This Report |
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Certificate of Incorporation, as filed with the Delaware Secretary of State on March 25, 2013. | 10-K | 03/30/2017 |
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Amended and Restated Certificate of Incorporation of TYG Solutions Corp., as filed with the Delaware Secretary of State on May 1, 2018. | 8-K | 5/04/2018 |
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Certificate of Designation of Series A Preferred Stock of TYG Solutions Corp. as filed with the Delaware Secretary of State on May 3, 2018. | 8-K | 5/04/2018 |
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Certificate of Designation of Series B Preferred Stock of TYG Solutions Corp. as filed with the Delaware Secretary of State on May 3, 2018. | 8-K | 5/04/2018 |
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Bylaws of TYG Solutions, Inc. | 10-K | 3/30/2017 |
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Amended and Restated Bylaws of TYG Solution Corp. | 8-K | 5/04/2018 |
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Convertible Note dated February 16, 2018. |
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| X | |
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Convertible Note Purchase Agreement dated February 16, 2018. |
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| X | |
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Application Development Agreement Dated June 1, 2014. | S-1/A | 6/22/2016 |
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Application Development Agreement Dated February 16, 2016. | S-1/A | 6/22/2016 |
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Application Development Agreement Dated February 20, 2016. | S-1/A | 6/22/2016 |
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Application Development Agreement Dated February 24, 2016. | S-1/A | 6/22/2016 |
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Application Development Agreement Dated November 19, 2016. | S-1/A | 6/22/2016 |
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Application Development Agreement Dated December 15, 2016. | S-1/A | 6/22/2016 |
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Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
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| X | |
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Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
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| X | |
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XBRL Instance Document | 101.INS |
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| X |
XBRL Taxonomy Extension Schema Document | 101.SCH |
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| X |
XBRL Taxonomy Extension Calculation Linkbase Document | 101.CAL |
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| X |
XBRL Taxonomy Extension Definition Linkbase Document | 101.DEF |
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| X |
XBRL Taxonomy Extension Label Linkbase Document | 101.LAB |
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| X |
XBRL Taxonomy Extension Presentation Linkbase Document | 101.PRE |
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| X |
-13-
Signatures
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereto duly authorized.
Date: July 23, 2018
/s/ Robert Malasek
Robert Malasek
Chief Executive Officer
Chief Financial Officer (Principal Accounting Officer)
Secretary
Director
-14-
TYG SOLUTIONS CORP
INDEX TO FINANCIAL STATEMENTS
DECEMBER 31, 2017
|
| Page |
Financial Statements- |
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|
|
Report of Independent Registered Public Accounting Firm |
| F-2 |
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|
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Balance Sheets as of December 31, 2017 and 2016 |
| F-3 |
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Statements of Operations for the Years Ended December 31, 2017 and 2016 |
| F-4 |
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Statement of Stockholders' Deficit for the Years Ended December 31, 2017 and 2016 |
| F-5 |
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Statements of Cash Flows for the Years Ended December 31, 2017 and 2016 |
| F-6 |
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|
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Notes to Financial Statements |
| F-7 |
F-1
F-2
TYG SOLUTIONS CORP. | |||||
Balance Sheets | |||||
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| December 31, |
| December 31, |
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|
| 2017 |
| 2016 |
ASSETS |
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Current Assets: |
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|
|
|
|
Cash |
| $ | 1,757 | $ | 28 |
Accounts receivable |
|
| - |
| 10,000 |
Receivable related party |
|
| 130 |
| - |
Total current assets |
|
| 1,887 |
| 10,028 |
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|
|
|
|
|
Total assets |
| $ | 1,887 | $ | 10,028 |
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|
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|
|
LIABILITIES AND STOCKHOLDERS' DEFICIT |
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|
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Current Liabilities: |
|
|
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|
|
Loan and advances payable - related party |
| $ | 44,590 | $ | 19,585 |
Accounts payable |
|
| 1,115 |
| 16,818 |
Other current liability |
|
| 5,000 |
| - |
Total current liabilities |
|
| 50,705 |
| 36,403 |
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|
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Commitments and Contingencies |
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|
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Stockholders' Deficit: |
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|
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|
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Common stock, 200,000,000 shares authorized, par value $0.0001, |
|
|
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|
|
9,530,000 shares issued and outstanding |
|
| 953 |
| 953 |
Additional paid in capital |
|
| 34,797 |
| 34,797 |
Accumulated Deficit |
|
| (84,568) |
| (62,125) |
Total stockholders' deficit |
|
| (48,818) |
| (26,375) |
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|
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|
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Total liabilities and stockholders' deficit |
| $ | 1,887 | $ | 10,028 |
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The accompanying notes are an integral part of these financial statements. | |||||
F-3
TYG SOLUTIONS CORP. | |||||
Statements of Operations | |||||
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| For The |
| For The |
|
|
| Year Ended |
| Year Ended |
|
|
| December 31, |
| December 31, |
|
|
| 2017 |
| 2016 |
|
|
|
|
|
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Revenue |
| $ | 1,154 | $ | 34,970 |
Cost of revenues |
|
| - |
| 21,000 |
Gross profit |
|
| 1,154 |
| 13,970 |
|
|
|
|
|
|
Sales and Marketing expenses |
|
| - |
| 15,730 |
General and Administrative expenses |
|
| 23,597 |
| 30,264 |
Total operating expenses |
|
| 23,597 |
| 45,994 |
|
|
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Operating loss |
|
| (22,443) |
| (32,024) |
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|
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Loss before income taxes |
|
| (22,443) |
| (32,024) |
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|
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Provision for Income Taxes |
|
| - |
| - |
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Net Loss |
| $ | (22,443) | $ | (32,024) |
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Basic and Diluted |
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|
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|
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Earnings (Loss) Per Common Share |
| $ | (0.00) | $ | (0.00) |
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|
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Weighted Average Number of |
|
|
|
|
|
Common Shares Outstanding |
|
| 9,530,000 |
| 9,530,000 |
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|
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The accompanying notes are an integral part of these financial statements. | |||||
F-4
TYG SOLUTIONS CORP. | |||||||||
Statement of Stockholders' Deficit | |||||||||
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| Additional Paid in Capital |
| Accumulated Deficit |
| Total Stockholders' Equity (Deficit) |
| Common Stock |
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| |||||
| Shares |
| Amount |
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| |||
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Balance - December 31, 2015 | 9,530,000 | $ | 953 | $ | 34,797 | $ | (30,101) | $ | 5,649 |
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|
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Net loss | - |
| - |
| - |
| (32,024) |
| (32,024) |
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Balance - December 31, 2016 | 9,530,000 |
| 953 |
| 34,797 |
| (62,125) |
| (26,375) |
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Net loss | - |
| - |
| - |
| (22,443) |
| (22,443) |
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Balance - December 31, 2017 | 9,530,000 | $ | 953 | $ | 34,797 | $ | (84,568) | $ | (48,818) |
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The accompanying notes are an integral part of these financial statements. | |||||||||
F-5
TYG SOLUTIONS CORP. | ||||
Statements of Cash Flows | ||||
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| For The |
| For The |
|
| Year Ended |
| Year Ended |
|
| December 31, |
| December 31, |
|
| 2017 |
| 2016 |
|
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|
|
OPERATING ACTIVITIES: |
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|
|
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Net loss | $ | (22,443) | $ | (32,024) |
Adjustments to reconcile net loss to cash used |
|
|
|
|
in operating activities: |
|
|
|
|
Decrease (increase) in accounts receivable |
| 10,000 |
| (10,000) |
Increase in related party receivable |
| (130) |
| - |
Increase (decrease) in accounts payable |
| (15,703) |
| 16,818 |
Increase in other current liability |
| 5,000 |
| - |
Decrease in customer advances |
| - |
| (24,970) |
Net cash used in operating activities |
| (23,276) |
| (50,176) |
|
|
|
|
|
FINANCING ACTIVITIES: |
|
|
|
|
Proceeds from related party loans |
| 25,005 |
| 2,378 |
Cash provided by financing activities |
| 25,005 |
| 2,378 |
|
|
|
|
|
Net change in cash |
| 1,729 |
| (47,798) |
|
|
|
|
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Cash, Beginning of Period |
| 28 |
| 47,826 |
|
|
|
|
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Cash, End of Period | $ | 1,757 | $ | 28 |
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|
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|
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SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION |
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Cash paid during the period for: |
|
|
|
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Interest | $ | - | $ | - |
Income taxes | $ | - | $ | - |
|
|
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|
|
The accompanying notes are an integral part of these financial statements. | ||||
F-6
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2017
NOTE 1. GENERAL ORGANIZATION AND BUSINESS
TYG Solutions Corp (“the Company”) was incorporated under the laws of the state of Delaware on March 25, 2013. The Company began limited operations on May 30, 2013.
The Company is engaged in mobile app development and corporate website design.
The Company’s activities are subject to significant risks and uncertainties including failure to increase sales revenue and secure additional funding to properly execute the company’s business plan.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES
Basis of Presentation
The accompanying financial statements have been prepared in accordance with GAAP. The Company’s year-end is December 31.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents
The Company considers all highly liquid investments with maturity of three months or less when purchased to be cash equivalents.
Accounts Receivable
Credit is extended to customers based upon an evaluation of the customer’s financial condition. Accounts receivable are recorded at net realizable value. The Company utilizes a specific identification accounts receivable reserve methodology based on a review of outstanding balances and previous activities to determine the allowance for doubtful accounts. The Company charges off uncollectible receivables at the time the Company determines the receivable is no longer collectible. The Company does not require collateral or other security to support financial instruments subject to credit risk.
F-7
TYG SOLUTIONS CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2017
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES (CONTINUED)
As of December 31, 2017 and 2016, the carrying value of loans approximated fair value due to the short-term nature and maturity of these instruments.
Revenue recognition
The Company recognizes revenues in accordance with ASC No. 605-10-S99, (SEC Staff Accounting Bulletin (“SAB”) No. 104, “Revenue Recognition”), when (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been rendered to the customer, (iii) the fee is fixed or determinable, and (iv) collectability is reasonably assured.
In situations with multiple deliverables, the Company recognizes revenue upon the delivery of the separate elements to the customer and when the Company receives customer acceptance or is otherwise released from its customer acceptance obligations. The Company allocates revenue consideration, based on the relative selling prices of the separate units of accounting contained within an arrangement containing multiple deliverables. Relative selling prices are determined using vendor specific objective evidence, if it exists; otherwise third-party evidence or the Company’s best estimate of selling price is used for each deliverable.
Sales and Marketing
The Company recognizes sales and marketing expense as it is incurred. For the years ended December 31, 2017 and 2016, the Company incurred zero and $15,730, respectively, of sales and marketing expense.
Income Taxes
A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carry forwards. Deferred tax expense (benefit) results from the net change during the year of deferred tax assets and liabilities. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
When required, the Company records a liability for unrecognized tax positions, defined as the aggregate tax effect of differences between positions taken on tax returns and the benefits recognized in the financial statements. Tax positions are measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. No tax benefits are recognized for positions that do not meet this threshold. The Company has no uncertain tax positions that require the Company to record a liability. The federal income tax returns of the Company are subject to examination by the IRS, generally for three years after they are filed.
The Company recognizes penalties and interest associated with tax matters as part of the income tax provision and includes accrued interest and penalties with the related tax liability in the balance sheet. The Company had no accrued penalties and interest as of December 31, 2017 or 2016.
Earnings (Loss) per Share
The basic earnings (loss) per share is calculated by dividing our net income available to common shareholders by the number of common shares during the year. The diluted earnings (loss) per share is calculated by dividing our net income (loss) available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted as of the first of the year for any potentially dilutive debt or equity. The Company has not issued any potentially dilutive debt or equity securities.
Recently issued accounting pronouncements
The Company will adopt Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (Topic 606)” as of January 1, 2018. ASU 2014-09 will replace most existing revenue recognition guidance in US GAAP when it becomes effective. Management has evaluated the impact of the Company’s adoption of ASU 2014-09 on its financial statements and does not expect the new standard to have a significant impact on its financial position, results of operations and related disclosures. To make this determination, management has identified the contract with its customer, identified the performance obligations, determined the transaction price, allocated the transaction price to the performance obligations in the contract, and recognized revenue when the Company satisfies the performance obligation.
F-8
TYG SOLUTIONS CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2017
NOTE 3. INCOME TAXES
There is no current or deferred income tax expense or benefit allocated to continuing operations for the years ended December 31, 2017 and 2016.
The Company uses the liability method, where deferred tax assets and liabilities are determined based on the expected future tax consequences of temporary differences between the carrying amounts of assets and liabilities for financial and income tax reporting purposes. As of December 31, 2017 and 2016, applying the statutory income tax rate the Company had deferred tax assets of approximately $28,753 and $21,122 related to net operating losses, respectively. A valuation allowance was recorded against the tax assets to reduce the carrying value to zero.
As of December 31, 2017, the Company had net operating loss carry-forwards totaling approximately $84,568 which will begin expiring in 2037.
The Company has no uncertain tax positions that require the Company to record a liability.
The Company had no accrued penalties and interest related to taxes as of December 31, 2017 or 2016.
NOTE 4. STOCKHOLDERS’ EQUITY
The Company is authorized to issue 200,000,000 shares of $0.0001 par value common stock. All common stock shares have equal voting rights, are non-assessable and have one vote per share. Voting rights are not cumulative and, therefore, the holders of more than 50% of the common stock could, if they choose to do so, elect all of the directors of the Company.
NOTE 5. CONFLICTS OF INTEREST
The officers and directors of the Company are involved in other business activities and may, in the future, become involved in other business opportunities. If a specific business opportunity becomes available, such persons may face a conflict in selecting between the Company and their other business interests. The Company has not formulated a policy for the resolution of such conflicts.
NOTE 6 – RELATED PARTY LOANS AND TRANSACTIONS
As of December 31, 2017 and 2016, loans and advances from related parties amounted to $44,590 and $19,585, respectively. The loans represent working capital advances from shareholders, are unsecured, non-interest bearing, and due on demand.
NOTE 7 – CONCENTRATION RISKS
The Company has generated revenues from three customers with costs of two subcontractors. It is considered at least reasonably possible that any customer or subcontractor will be lost in the near term.
F-9
NOTE 8 – SUBSEQUENT EVENTS
On February 16, 2018, the Company issued a Convertible Note to a shareholder, face value $500,000, in exchange for $500,000 in cash. The Note is unsecured, bears interest at the rate of 3% per annum and matures on February 16, 2030. The Note is convertible into common stock of the Company at any time at the option of the holder subject to a 4.9% blocking provision which prohibits the holder from converting into common stock of the Company if such conversion results in the holder owning greater than 4.9% of the outstanding common stock of the Company after giving effect to the conversion.
Amended and Restated Certificate of Incorporation
Effective May 1, 2018, the Company’s Certificate of Incorporation was amended and restated to: (i) increase the total stock the Company is authorized to issue to 205,000,000 shares consisting of (a) 200,000,000 shares of Common stock, $0.0001 par value per share (“Common Stock”), and (b) 5,000,000 shares of Preferred stock, $0.0001 par value per share (“Preferred Stock”); (ii) authorize the directors of the Company to designate the shares and series of the Preferred Stock; (iii) provide indemnification for representatives of the Company; and (iv) in the event that any stockholder owns more than 5% of any class of equity security of the Company, require the approval of 75% of the voting securities of the Company for any proposed merger, consolidation or sale of substantially all of the assets of the Company.
Amended and Restated Bylaws
Effective May 2, 2018, the Company’s Bylaws were amended and restated to amend the Company’s stockholder voting procedures, increase the size of the Company’s Board of Directors from two members to seven directors comprised of up to four Series A Directors and up to three Series B Directors, provide greater indemnification by the Company of its officers, directors and employees, and define procedures for any future amendments to the Company’s Bylaws.
Certificate of Designation of Series A Preferred Stock
Effective May 3, 2018, the Company’s Board of Directors authorized and designated 75 shares of the Company’s Preferred Stock as Series A Preferred Stock. Each share of the Series A Preferred Stock in entitled to a liquidation preference of $1,000 per share and is convertible into 1,000 shares of the Company’s Common Stock. The holders of a majority of the Series A Preferred Stock are entitled to elect up to four (4) directors to the Company’s board of directors and any annual or special meeting and have preferential rights in regard to the election of Series A directors. In all other voting matters, the holders of Series A Preferred Stock are entitled to cast 1,000 votes per share.
Certificate of Designation of Series B Preferred Stock
Effective May 3, 2018, the Company’s Board of Directors authorized and designated 75 shares of the Company’s Preferred Stock as Series B Preferred Stock. Each share of the Series B Preferred Stock in entitled to a liquidation preference of $1,000 per share and is convertible into 1,000 shares of the Company’s Common Stock. The holders of a majority of the Series B Preferred Stock are entitled to elect up to three (3) directors to the Company’s board of directors and any annual or special meeting and have preferential rights in regard to the election of Series B directors. In all other voting matters, the holders of Series B Preferred Stock are entitled to cast 1,000 votes per share.
F-10
