UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF [X] 1934
For the quarterly period ended September 30, 2016
or
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to ___________
Commission File Number 333-181259
AFC BUILDING TECHNOLOGIES INC.
(Exact name of registrant as specified in its charter)
Nevada | N/A |
(State or other jurisdiction of incorporation or | (IRS Employer Identification No.) |
organization) | |
101 Mary Street West, Whitby, ON, Canada | L1N 2R4 |
(Address of principal executive offices) | (Zip Code) |
(905) 430-6433
(Registrants telephone
number, including area code)
N/A
(Former name, former address and
former fiscal year, if changed since last report)
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 [X] NO
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small 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 [ ] | Smaller reporting company [X] |
(Do not check if a smaller reporting company) | Emerging growth company [X] |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Indicate by check mark whether the registrant is a shell
company (as defined in Rule 12b-2 of the Exchange Act)
[ ]
YES [X] NO
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Exchange Act
after the distribution of securities under a plan confirmed by a
court.
[ ] YES
[ ] NO
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the
issuers classes of common stock, as of the latest practicable
date.
34,760,008 common shares issued and outstanding as of May 12,
2017.
TABLE OF CONTENTS
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Our unaudited consolidated interim financial statements for the three and nine month periods ended September 30, 2016 and 2015 form part of this quarterly report. Unless otherwise specified our financial statements are expressed in United States Dollars (US$) and are prepared in accordance with United States generally accepted accounting principles with the instructions to Form 10-Q and Article 8 of Regulation S-X.
Operating results for the nine month period ended September 30, 2016 are not necessarily indicative of the results that can be expected for the year ending December 31, 2016.
AFC Building Technologies Inc.
Balance Sheets
(Expressed in US dollars)
September 30, | December 31, | |||||
2016 | 2015 | |||||
(Unaudited) | ||||||
ASSETS | ||||||
Current Assets | ||||||
Cash | $ | 37 | $ | 163 | ||
Total Assets | $ | 37 | $ | 163 | ||
LIABILITIES AND STOCKHOLDERS DEFICIT | ||||||
Current Liabilities | ||||||
Accounts payable and accrued liabilities | $ | 71,013 | $ | 68,304 | ||
Due to related party (Note 2) | 8,021 | 8,021 | ||||
Total Liabilities | 79,034 | 76,325 | ||||
Commitments and Contingencies (Note 1) | ||||||
Stockholders Deficit | ||||||
Preferred stock, $0.001 par value, 50,000,000 shares authorized, no shares issued and outstanding | | | ||||
Common stock, $0.001 par value, 200,000,000 shares authorized, 34,760,008 and 34,760,008 shares issued and outstanding, respectively | 34,760 | 34,760 | ||||
Additional paid in capital | 201,369 | 201,369 | ||||
Accumulated deficit | (315,126 | ) | (312,291 | ) | ||
Total Stockholders Deficit | (78,997 | ) | (76,162 | ) | ||
Total Liabilities and Stockholders Deficit | $ | 37 | $ | 163 |
(The accompanying notes are an integral part of these financial statements)
1
AFC Building Technologies Inc.
Statements of Operations and
Comprehensive Loss
(Expressed in US dollars)
(Unaudited)
Three Months Ended | Nine Months Ended | |||||||||||
September 30, | September 30, | |||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||
Expenses | ||||||||||||
Bank charges and interest | $ | 42 | $ | 42 | $ | 126 | $ | 126 | ||||
Selling, marketing and administrative | 1,873 | | 2,709 | 3,555 | ||||||||
Total Operating Expenses | 1,915 | 42 | 2,835 | 3,681 | ||||||||
Loss Before Other Expenses | (1,915 | ) | (42 | ) | (2,835 | ) | (3,681 | ) | ||||
Other Expenses | ||||||||||||
Gain on foreign exchange | | 3,958 | | 6,933 | ||||||||
Income (Loss) before taxes | (1,915 | ) | 3,916 | (2,835 | ) | 3,252 | ||||||
Income taxes | | | | | ||||||||
Net Income (Loss) from continuing operations | (1,915 | ) | 3,916 | (2,835 | ) | 3,252 | ||||||
Discontinued Operations | ||||||||||||
Loss from discontinued operations | | | | (78,316 | ) | |||||||
Net Income (Loss) | (1,915 | ) | 3,916 | (2,835 | ) | (75,064 | ) | |||||
Foreign currency translation adjustments | | | | 14,671 | ||||||||
Comprehensive Income (Loss) | $ | (1,915 | ) | $ | 3,916 | $ | (2,835 | ) | $ | (60,393 | ) | |
Income (Loss) per common share: | ||||||||||||
Income (Loss) From Continuing | ||||||||||||
Operations Basic and Diluted | $ | (0.00 | ) | $ | 0.00 | $ | (0.00 | ) | $ | (0.00 | ) | |
Income (Loss) From Discontinued | ||||||||||||
Operations Basic and Diluted | $ | (0.00 | ) | $ | 0.00 | $ | (0.00 | ) | $ | (0.00 | ) | |
Weighted Average Shares Outstanding | 34,760,008 | 34,760,008 | 34,760,008 | 34,760,008 |
(The accompanying notes are an integral part of these financial statements)
2
AFC Building Technologies Inc.
Statements of Cash Flows
(Expressed in US dollars)
(Unaudited)
Nine Months Ended | ||||||
September 30, | ||||||
2016 | 2015 | |||||
Operating Activities | ||||||
Net Loss | $ | (2,835 | ) | $ | (75,064 | ) |
Adjustments to reconcile net loss to cash used in operating activities: | ||||||
Depreciation expense | | 142 | ||||
Changes in operating assets and liabilities: | ||||||
Prepaid expenses | | 2,915 | ||||
Inventories | | 236 | ||||
Accounts receivable | | (62,693 | ) | |||
Due to related party | | 11,925 | ||||
Accounts payable and accrued liabilities | 2,709 | (27,079 | ) | |||
Net Cash Used in Operating Activities | (126 | ) | (149,618 | ) | ||
Financing Activities | ||||||
Bank overdraft | | 31,616 | ||||
Net change in line of credit | | 76,148 | ||||
Net Cash Provided By Financing Activities | | 107,764 | ||||
Effect of Exchange Rate Changes on Cash | | (3,214 | ) | |||
Decrease In Cash | (126 | ) | (45,068 | ) | ||
Cash - Beginning of Period | 163 | 45,272 | ||||
Cash - End of Period | $ | 37 | $ | 204 | ||
Supplemental Disclosures | ||||||
Interest paid | $ | | $ | 5,542 | ||
Income taxes paid | $ | | $ | |
(The accompanying notes are an integral part of these financial statements)
3
AFC Building Technologies Inc.
Notes to Financial
Statements
September 30, 2016 and 2015
1. |
Nature of Operations |
AFC Building Technologies Inc. (the Company) was incorporated under the laws of the State of Nevada on May 10, 2011. Effective January 10, 2014, the Company changed its name from Auto Tool Technologies Inc. to AFC Building Technologies Inc. The Company was engaged in the sales and distribution of hand tools in Canada. | |
On June 30, 2015, the Company decided that continuing the operations of its wholly-owned subsidiary, DSL Products Limited (DSL) would no longer be economically feasible. All of the shares of DSL held by the Company were returned to DSL for cancellation and as of June 30, 2015 the Company no longer held any interest in DSL. The Company determined the operations of DSL met the criteria of being reported as a discontinued operation. The results of operations from DSL are presented as Loss from discontinued operations in the Statements of Operations. Unless otherwise noted, the discussion in the notes to these Financial Statements relates solely to the Company's continuing operations. The Company is in the process of determining a new line of business. | |
Going Concern | |
These financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders and note holders, the ability of the Company to obtain necessary equity financing to continue operations, and ultimately the attainment of profitable operations. Since June 30, 2015, the Company has not generated any revenues, has a working capital deficit of $78,997, and has an accumulated deficit of $315,126. These factors raise substantial doubt regarding the Companys ability to continue as a going concern. These condensed financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. | |
Summary of Significant Accounting Policies | |
Basis of Presentation | |
The unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the Securities and Exchange Commission (SEC) instructions for companies filing Form 10-Q. In the opinion of management, the unaudited condensed financial statements have been prepared on the same basis as the annual financial statements and reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the financial position as of September 30, 2016, and the results of operations and cash flows for the periods ended September 30, 2016 and 2015. The financial data and other information disclosed in the notes to the interim financial statements related to the periods are unaudited. The results for the nine-month period ended September 30, 2016 are not necessarily indicative of the results to be expected for any subsequent quarter or the entire year ending December 31, 2016. The unaudited interim financial statements have been condensed and certain information and footnote disclosure normally included in financial statements in accordance with GAAP have been omitted pursuant to the Securities and Exchange Commission's rules and regulations and do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. Therefore, these unaudited interim financial statements should be read in conjunction with the Companys annual audited financial statements and notes thereto for the year ended December 31, 2015, included in the Companys Form 10-K filed on April 20, 2017 with the SEC. | |
Discontinued Operations | |
The results of discontinued operations are presented separately, net of tax, from the results of ongoing operations for all periods presented. The expenses included in the results of discontinued operations are the direct operating expenses incurred by the disposed components that may be reasonably segregated from the costs of the ongoing operations of the Company. The Company disposed of DSL on June 30, 2015. |
4
AFC Building Technologies Inc.
Notes to Financial
Statements
September 30, 2016 and 2015
Use of Estimates | |
The preparation of these consolidated financial statements in accordance with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to useful life and recoverability of long-lived assets, collectability of receivables and related bad debt expenses, inventory shrinkage and write off, deferred income tax asset valuations and loss contingencies. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Companys estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. | |
2. |
Related Party Transactions |
a) |
At September 30, 2016, the Company owed $8,021 (December 31, 2015 - $8,021) to the President of the Company. These were monies advanced for general working capital purposes, (i.e. accounting and professional fees) as required. The amount is unsecured, non-interest bearing and due on demand. | |
b) |
During the three months ended September 30, 2016, the Company incurred $1,873 (2015 - $27,640) of contractor expenses to the President of the Company. |
3. |
Discontinued Operations and Deconsolidation of Subsidiary |
On June 30, 2015, the Company discontinued the operations of its wholly-owned subsidiary DSL. DSL sold hand tools in Canada. All of the shares of DSL held by the Company were returned to DSL for cancellation and as of June 30, 2015 the Company no longer held any interest in DSL. The Company recorded the deconsolidation of the subsidiary as an equity transaction, which resulted in a charge of $65,068 to additional paid in capital. The Company has recognized the separation of DSL in accordance with Accounting Standards Codification (ASC) 205-20, Discontinued Operations. As such, the historical results of DSL have been classified as discontinued operations. | |
Summarized results of the discontinued operation are as follows for the nine months ended September 30, 2015: |
Nine Months | ||||
Ended | ||||
September 30, | ||||
2015 | ||||
Revenue | $ | 359,017 | ||
Cost of Sales | 265,888 | |||
Gross Profit | 93,129 | |||
Expenses | ||||
Bank charges and interest | 6,811 | |||
Selling, marketing and administrative | 136,290 | |||
Total Expenses | 143,101 | |||
Other Expenses | ||||
Gain (Loss) on foreign exchange | (28,344 | ) | ||
Net Income (Loss) from Discontinued Operations | ||||
$ | (78,316 | ) |
5
AFC Building Technologies Inc.
Notes to Financial
Statements
September 30, 2016 and 2015
Cash flows from discontinued operations:
Nine Months | ||||
Ended | ||||
September 30, | ||||
2015 | ||||
Operating cash flows | $ | (149,490 | ) | |
Investing cash flows | | |||
Financing cash flows | 107,765 | |||
Net cash flows used by discontinued operations | $ | (41,725 | ) |
4. |
Licensing Agreement |
On June 30, 2015, the Company entered into a license agreement with a shareholder of the Company. Pursuant to the agreement, the Company received an exclusive worldwide license in regards to 15 domain names related to the automotive e-commerce business for a period of 40 years. In consideration for the granting of the license, the Company will pay to the licensor a royalty of 2.5% of gross sales for any revenue derived from the use of the licensed domains. | |
5. |
Subsequent Events |
Management has evaluated subsequent events pursuant to ASC Topic 855, and has determined there are no subsequent events to disclose. |
6
Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
This quarterly report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as may, should, expects, plans, anticipates, believes, estimates, predicts, potential or continue or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our or our industrys actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.
Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
Unless otherwise specified our financial statements are expressed in United States Dollars (US$) and are prepared in accordance with United States generally accepted accounting principles.
In this quarterly report, unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to common shares refer to the common shares in our capital stock.
As used in this quarterly report and unless otherwise indicated, the terms we, us, our and our company mean AFC Building Technologies Inc., a company incorporated under the laws of the state of Nevada, and our formerly wholly-owned subsidiary, DSL Products Limited, a company incorporated under the laws of the Province of Ontario, Canada, unless otherwise indicated.
General Overview
We were incorporated under the laws of the state of Nevada on May 10, 2011. Our fiscal year end is December 31. Our business offices are currently located at 101 Mary Street West, Whitby, Ontario, Canada, L1N 2R4. The address of agent for service in Nevada and registered corporate office is c/o National Registered Agents, Inc. of Nevada, 100 East William Street, Suite 204, Carson City, NV, 89701. Our telephone number is (905) 430-6433.
Our Current Business
7
On June 30, 2015, we decided that continuing the operations of our wholly-owned subsidiary, DSL Products Limited (DSL) would no longer be economically feasible. All of the shares of DSL held by us were returned to DSL for cancellation and as of June 30, 2015 we no longer held any interest in DSL. Concurrently with the discontinuation of the DSL operations, we entered into a license agreement for an exclusive worldwide license in regards to 15 domain names related to the automotive e-commerce business. In consideration for the granting of the license, we will pay to the licensor a royalty of 2.5% of gross sales for any revenue derived from the use of the licensed domains. Consistent with our historical operations in this area, we intend to continue to pursue automotive e-commerce opportunities.
Cash Requirements
Based on our planned expenditures, we will require approximately $30,000 over the next 12 months. In order to provide funds, we plan to pursue additional equity financing from private investors or possibly a registered public offering. We do not currently have any definitive arrangements in place for the completion of any further private placement financings and there is no assurance that we will be successful in completing any further private placement financings. If we are unable to achieve the necessary additional financing, then we plan to reduce the amounts that we spend on our business activities and administrative expenses in order to be within the amount of capital resources that are available to us.
We have not investigated the availability of commercial loans or other debt financing to supplement or meet our cash requirements. In the uncertain event that any such debt financing alternatives were available to us on acceptable terms, they would increase our liabilities and future cash commitments.
Future Financings
We will continue to rely on equity sales of our common shares and funding from directors and shareholders in order to continue to fund our business operations. Issuances of additional shares will result in dilution to existing stockholders. There is no assurance that we will achieve any additional sales of the equity securities or arrange for debt or other financing to fund our operations and other activities.
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 that is material to stockholders.
Results of Continuing Operations
The following summary of our results of operations should be read in conjunction with our financial statements for the quarter ended September 30, 2016, which are included herein.
8
Three Months Ended September 30, 2016 and September 30, 2015
Our operating results for the three months ended September 30, 2016 and September 30, 2015 are summarized as follows:
Three | Three | |||||
Months | Months | |||||
Ended | Ended | |||||
September 30, | September 30, | |||||
2016 | 2015 | |||||
Revenue | $ | - | $ | - | ||
Cost of sales | - | - | ||||
Bank charges and interest | 42 | 42 | ||||
Selling, marketing and administrative | 1,837 | - | ||||
Gain on foreign exchange | - | 3,958 | ||||
Net Income (Loss) from continuing operations | (1,915 | ) | 3,916 | |||
Loss from discontinued operations | - | - | ||||
Net Income (Loss) | $ | (1,915 | ) | $ | 3,916 |
Our financial statements report a net loss of $1,915 for the three month period ended September 30, 2016 compared to a net income of $3,916 for the three month period ended September 30, 2015. Our net income during the three months ended September 30, 2015 resulted entirely from continuing operations, and specifically from a gain on foreign exchange. By comparison our net loss for the three months ended September 30, 2016 resulted primarily from selling, marketing and administrative expenses incurred in continuing operations, without any offsetting gains.
Nine Months Ended September 30, 2016 and September 30, 2015
Our operating results for the nine months ended September 30, 2016 and September 30, 2015 are summarized as follows:
Nine | Nine | |||||
Months | Months | |||||
Ended | Ended | |||||
September 30, | September 30, | |||||
2016 | 2015 | |||||
Revenue | $ | - | $ | - | ||
Cost of sales | - | - | ||||
Bank charges and interest | 126 | 126 | ||||
Selling, marketing and administrative | 2,709 | 3,555 | ||||
Gain on foreign exchange | - | 6,933 | ||||
Net Income (Loss) from continuing operations | (2,835 | ) | 3,252 | |||
Income (Loss) from discontinued operations | - | (78,316 | ) | |||
Net Loss | $ | (2,835 | ) | $ | (75,064 | ) |
9
Our financial statements report a net loss of $2,835 for the nine month period ended September 30, 2016 compared to a net loss of $75,064 for the nine-month period ended September 30, 2015. Our net loss for the nine months ended September 30, 2016 has decreased approximately 96% from the same period in 2015, primarily as a result of our discontinuation and disposal of DSL as of June 30, 2015, whereupon all of the revenues and expenses for DSL were reclassified and shown as Loss from discontinued operations on the statement of operations.
For the nine months ended September 30, 2016 we incurred a net loss from continuing operations of $2,835 compared to net income of $3,252 from continuing operations during the same period in 2015. Our net income from continuing operations during the nine months ended September 30, 2015 resulted entirely from a gain on foreign exchange. By comparison our net loss from continuing operations for the nine months ended September 30, 2016 resulted primarily from selling, marketing and administrative expenses incurred in continuing operations, without any offsetting gains.
Liquidity and Financial Condition
Working Capital
At | At | |||||
September | December | |||||
30, | 31, | |||||
2016 | 2015 | |||||
Current assets | $ | 37 | $ | 163 | ||
Current liabilities | 79,034 | 76,325 | ||||
Working capital (deficit) | $ | 78,997 | $ | 76,162 |
Our total current assets as of September 30, 2016 were $37 as compared to total current assets of $163 as of December 31, 2015. The increase in liabilities during the period ended September 30, 2016 resulted entirely from an increase accounts payable and accrued liabilities without an increase in liabilities due to related parties.
Cash Flows
Nine | Nine | |||||
Months | Months | |||||
Ended | Ended | |||||
September 30, | September 30, | |||||
2016 | 2015 | |||||
Net cash used in operating activities | $ | (126 | ) | $ | (149,618 | ) |
Net cash provided by financing activities | - | 107,764 | ||||
Decrease cash during period | $ | (126 | ) | $ | (45,068 | ) |
10
Operating Activities
Net cash used in operating activities was $126 in the nine months ended September 30, 2016 compared with net cash used in operating activities of $149,618 in the nine months ended September 30, 2015. This significant net cash used in operating activities during the six months ended June 30, 2015 resulted from the discontinuation of our subsidiary, DSL, during that period, and the reclassification of all of the revenues and expenses for DSL as a loss from operations.
Financing Activities
Net cash provided by financing activities was $0 in the nine months ended September 30, 2016 compared to $107,764 provided by financing activities in the nine months ended September 30, 2015. Funds provided during the nine months ended September 30, 2016 were from a bank overdraft and a line of credit. We did not draw on our bank overdraft or line of credit during the nine months ended September 30, 2016
Going Concern
Our consolidated financial statements for the nine month period ended September 30, 2016 have been prepared on a going concern basis and contain an additional explanatory paragraph which identifies issues that raise substantial doubt about our ability to continue as a going concern. Our financial statements do not include any adjustments that might result from the outcome of this uncertainty.
The continuation of our company as a going concern is dependent upon the continued financial support from our shareholders and note holders, the ability of our company to obtain necessary equity financing to continue operations, and ultimately the attainment of profitable operations. As at September 30, 2016, our company has not generated any revenues, has a working capital deficit of $78,997, and has an accumulated deficit of $315,126. These factors raise substantial doubt regarding our companys ability to continue as a going concern. These condensed consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should our company be unable to continue as a going concern.
Critical Accounting Policies
These financial statements and related notes are expressed in US dollars. The consolidated financial statements include the accounts of the Company and its formerly wholly-owned subsidiary, DSL Products Limited. All inter-company accounts and transactions have been eliminated. The Companys fiscal year-end is December 31.
11
Item 3. Quantitative and Qualitative Disclosures About Market Risk
As a smaller reporting company, we are not required to provide the information required by this Item.
Item 4. Controls and Procedures
Managements Report on Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer (our principal executive officer, principal financial officer and principle accounting officer) to allow for timely decisions regarding required disclosure.
As of the end of our quarter covered by this report, we carried out an evaluation, under the supervision and with the participation of our chief executive officer and chief financial officer (our principal executive officer, principal financial officer and principle accounting officer), of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our chief executive officer and chief financial officer (our principal executive officer, principal financial officer and principle accounting officer) concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this quarterly report.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting during the quarterly period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II OTHER INFORMATION
Item 1. Legal Proceedings
We know of no material, existing or pending legal proceedings against us, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our company.
Item 1A. Risk Factors
As a smaller reporting company, we are not required to provide the information required by this Item.
12
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
Not applicable.
Item 6. Exhibits
Exhibit | Description |
Number | |
(3) |
Articles of Incorporation and Bylaws |
3.1 |
Articles of Incorporation (incorporated by reference from our Registration Statement on Form S-1 filed on May 9, 2012) |
3.2 |
By-laws (incorporated by reference from our Registration Statement on Form S-1 filed on May 9, 2012) |
3.3 |
Certificate of Amendment ((incorporated by reference to our Current Report on Form 8-K filed on January 13, 2014) |
(10) |
Material Contracts |
10.1 |
Consulting Agreement dated December 30, 2011 between our company and Cindy Kelly & Associates (incorporated by reference from our Registration Statement on Form S-1 filed on May 9, 2012) |
10.2 |
Share Purchase Agreement dated December 30, 2011 between our company and Rossland Asset Management Ltd. (incorporated by reference from our Registration Statement on Form S-1 filed on May 9, 2012) |
(21) |
Subsidiaries of the Registrant |
21.1 |
DSL Products Limited, a wholly-owned Ontario corporation |
(31) |
Rule 13a-14(a)/15d-14(a) Certifications |
31.1* | |
(32) |
Section 1350 Certifications |
32.1* | |
101* |
Interactive Data File |
101.INS | |
101.SCH | |
101.CAL | |
101.DEF | |
101.LAB | |
101.PRE |
* |
Filed herewith. |
** |
Furnished herewith. Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of any registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, and otherwise are not subject to liability under those sections. |
13
SIGNATURES
Pursuant to the requirements of 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.
AFC BUILDING TECHNOLOGIES INC. | ||
(Registrant) | ||
Dated: May 15, 2017 | By: | /s/ Cindy Lee Kelly |
Cindy Lee Kelly | ||
President, Chief Executive Officer, Chief Financial | ||
Officer, Secretary, Treasurer and Director | ||
(Principal Executive Officer, Principal Financial | ||
Officer and Principal Accounting Officer) | ||
14
EXHIBIT 31.1
CERTIFICATION PURSUANT TO
18 U.S.C. ss 1350, AS
ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Cindy Lee Kelly, certify that:
1. |
I have reviewed this annual report on Form 10-Q of AFC Building Technologies Inc.; |
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. |
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
(b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
(c) |
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
(d) |
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. |
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and | |
(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: May 15, 2017 | |
/s/ Cindy Lee Kelly | |
Cindy Lee Kelly | |
President, Chief Executive Officer, Chief Financial | |
Officer, Secretary, Treasurer and Director | |
(Principal Executive Officer, Principal Financial | |
Officer and Principal Accounting Officer) |
EXHIBIT 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED
PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Cindy Lee Kelly, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) |
the Quarterly Report on Form 10-Q of AFC Building Technologies Inc. for the three and nine months ended September 30, 2016 (the Report) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) |
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of AFC Building Technologies Inc. |
Dated: May 15, 2017
/s/ Cindy Lee Kelly | |
Cindy Lee Kelly | |
President, Chief Executive Officer, Chief Financial Officer, | |
Secretary, Treasurer and Director | |
(Principal Executive Officer, Principal Financial Officer and | |
Principal Accounting Officer) | |
AFC Building Technologies Inc. |
A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to AFC Building Technologies Inc. and will be retained by AFC Building Technologies Inc. and furnished to the Securities and Exchange Commission or its staff upon request.
Document and Entity Information - shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2016 |
May 12, 2017 |
|
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2016 | |
Trading Symbol | afct | |
Entity Registrant Name | AFC BUILDING TECHNOLOGIES INC. | |
Entity Central Index Key | 0001533030 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 34,760,008 | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Well Known Seasoned Issuer | No | |
Document Fiscal Year Focus | 2016 | |
Document Fiscal Period Focus | Q3 |
Consolidated Balance Sheets - USD ($) |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Current Assets | ||
Cash | $ 37 | $ 163 |
Total Assets | 37 | 163 |
Current Liabilities | ||
Accounts payable and accrued liabilities | 71,013 | 68,304 |
Due to related party | 8,021 | 8,021 |
Total Liabilities | 79,034 | 76,325 |
Commitments and Contingencies | 0 | 0 |
Stockholders' Deficit | ||
Preferred stock, $0.001 par value, 50,000,000 shares authorized, no shares issued and outstanding | 0 | 0 |
Common stock, $0.001 par value, 200,000,000 shares authorized, 34,760,008 and 34,760,008 shares issued and outstanding, respectively | 34,760 | 34,760 |
Additional paid in capital | 201,369 | 201,369 |
Accumulated deficit | (315,126) | (312,291) |
Total Stockholders' Deficit | (78,997) | (76,162) |
Total Liabilities and Stockholders' Deficit | $ 37 | $ 163 |
Consolidated Balance Sheets (Parenthetical) - $ / shares |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Preferred Stock, Par Value Per Share | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Authorized | 50,000,000 | 50,000,000 |
Common Stock, Par Value Per Share | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 200,000,000 | 200,000,000 |
Common Stock, Shares, Issued | 34,760,008 | 34,760,008 |
Common Stock, Shares, Outstanding | 34,760,008 | 34,760,008 |
Consolidated Statements of Cash Flows - USD ($) |
9 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Operating Activities | ||
Net Loss | $ (2,835) | $ (75,064) |
Adjustments to reconcile net loss to cash used in operating activities: | ||
Depreciation expense | 0 | 142 |
Changes in operating assets and liabilities: | ||
Prepaid expenses | 0 | 2,915 |
Inventories | 0 | 236 |
Accounts receivable | 0 | (62,693) |
Due to related party | 0 | 11,925 |
Accounts payable and accrued liabilities | 2,709 | (27,079) |
Net Cash Used in Operating Activities | (126) | (149,618) |
Financing Activities | ||
Bank overdraft | 0 | 31,616 |
Net change in line of credit | 0 | 76,148 |
Net Cash Provided By Financing Activities | 0 | 107,764 |
Effect of Exchange Rate Changes on Cash | 0 | (3,214) |
Decrease In Cash | (126) | (45,068) |
Cash - Beginning of Period | 163 | 45,272 |
Cash - End of Period | 37 | 204 |
Supplemental Disclosures | ||
Interest paid | 0 | 5,542 |
Income taxes paid | $ 0 | $ 0 |
Nature of Operations |
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Nature of Operations [Text Block] |
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Related Party Transactions |
9 Months Ended | |||||||||||
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Sep. 30, 2016 | ||||||||||||
Related Party Transactions [Text Block] |
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Discontinued Operations and Deconsolidation of Subsidiary |
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Discontinued Operations and Deconsolidation of Subsidiary [Text Block] |
Cash flows from discontinued operations:
|
Licensing Agreement |
9 Months Ended | ||||||||
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Sep. 30, 2016 | |||||||||
Licensing Agreement [Text Block] |
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Subsequent Events |
9 Months Ended | ||||||
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Sep. 30, 2016 | |||||||
Subsequent Events [Text Block] |
|
Discontinued Operations and Deconsolidation of Subsidiary (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Disposal Groups Including Discontinued Operations Income Statement Disclosures [Table Text Block] |
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Schedule Of Disposal Groups Including Discontinued Operations Cash Flows Disclosures [Table Text Block] |
|
Nature of Operations (Narrative) (Details) |
9 Months Ended |
---|---|
Sep. 30, 2016
USD ($)
| |
Nature Of Operations 1 | $ 78,997 |
Nature Of Operations 2 | $ 315,126 |
Related Party Transactions (Narrative) (Details) |
9 Months Ended |
---|---|
Sep. 30, 2016
USD ($)
| |
Related Party Transactions 1 | $ 8,021 |
Related Party Transactions 2 | 8,021 |
Related Party Transactions 3 | 1,873 |
Related Party Transactions 4 | $ 27,640 |
Discontinued Operations and Deconsolidation of Subsidiary (Narrative) (Details) |
9 Months Ended |
---|---|
Sep. 30, 2016
USD ($)
| |
Discontinued Operations And Deconsolidation Of Subsidiary 1 | $ 65,068 |
Licensing Agreement (Narrative) (Details) |
9 Months Ended |
---|---|
Sep. 30, 2016
yr
| |
Licensing Agreement 1 | 15 |
Licensing Agreement 2 | 40 |
Licensing Agreement 3 | 2.50% |
Schedule Of Disposal Groups Including Discontinued Operations Cash Flows Disclosures (Details) |
9 Months Ended |
---|---|
Sep. 30, 2016
USD ($)
| |
Discontinued Operations And Deconsolidation Of Subsidiary Schedule Of Disposal Groups Including Discontinued Operations Cash Flows Disclosures 1 | $ (149,490) |
Discontinued Operations And Deconsolidation Of Subsidiary Schedule Of Disposal Groups Including Discontinued Operations Cash Flows Disclosures 2 | 0 |
Discontinued Operations And Deconsolidation Of Subsidiary Schedule Of Disposal Groups Including Discontinued Operations Cash Flows Disclosures 3 | 107,765 |
Discontinued Operations And Deconsolidation Of Subsidiary Schedule Of Disposal Groups Including Discontinued Operations Cash Flows Disclosures 4 | $ (41,725) |