Item 1. Organization and Business
The Company is fully reporting under The Securities Exchange Act of 1934. As a fully reporting company under The Securities Exchange Act of 1934, the Company is required to file quarterly and annual and certain event triggered reports with the Securities and Exchange Commission. These reporting requirements add to the expense and timeliness of certain business transactions which the Company may endeavor to undertake in the future -- suchFinotec Group Inc. (“Finotec”, “the Company”, “we”, “us”) has been dormant since November 2011. On March 16, 2020, as a merger or any other material business undertaking.
The Company's Common Stock trades on the OTCBB, under the trading symbol "FTGI.OB."
The public may read and copy this document, and any other materials the Company files with the Commission at the Commission's Public Reference Room, 450 Fifth Street, N.W., Washington, D.C. 20549. Information is available on the operationresult of a custodianship in Clark County, Nevada, Case Number: A-20-809716-B, Custodian Ventures LLC (“Custodian”) was appointed custodian of the
Public Reference Room by callingCompany.On 17st of March 2020, Custodian appointed David Lazar as the Commission at 1-800-SEC-0330. Additionally,Company’s Chief Executive Officer, President, Secretary, Chief Financial Officer, Chief Executive Officer and Chairman of the Commission maintains an internet site (http://www.sec.gov) that contains all reports, proxy and information statements, and other information regarding companies which file electronically.
The Company’s Fiscal year end is 31 January 31 2010. The Board of
DirectorsDirectors.David Lazar, 30, has been CEO and Chairman of the Company since May 16, 2018. David Lazar is a private investor. Mr. Lazar has approvedbeen a changepartner at Zenith Partners International since 2013, where he specializes in research and development, sales and marketing. From 2014 through 2015, David was the Company's fiscal year from January 31Chief Executive Officer of Dico, Inc., which was then sold to December 31. This change will be effective forPeekay Boutiques. Since February of 2018, Mr. Lazar has been the current fiscal year ending December 31, 2010. Consequentlymanaging member of Custodian Ventures LLC, where he specializes in assisting distressed public companies. Since March 2018, David has acted as the Company’s current fiscal year will end on December 31, 2010 insteadmanaging member of January 31, 2011. The month that would otherwise have been includedActivist Investing LLC, which specializes in fiscal year 2010 (i.e., January 1 to January 31 2011) will be includedactive investing in fiscal year 2011,distressed public companies. David has a diverse knowledge of financial, legal and the activities for those days will be included in the Company's quarterlyoperations management; public company management, accounting, audit preparation, due diligence reviews and annual reports for fiscal year 2011.
This change in the fiscal year end will have no material effect on the financial position ofSEC regulations.Business
Formerly the Company, and its consolidated subsidiaries, and the results of their operations and their cash flows for either fiscal year 2010 or fiscal year 2011.
Business
Finotec Group Inc. is a public company. The company, through its subsidiaries Finotec Trading Inc. and Finotec Trading UK Limited offersoffered financial market trading to professional and retail clients over its web-based live and real-time proprietary trading system. The state of the art web-based live and real-time proprietary trading system was developed for the company by its other subsidiary Finologic Ltd (formerly Forexcash Global Trading Ltd). The group’s website may be accessed on www.finotec.com.
Company Structure
Finotec Group, Inc. (the "Company" or "Finotec") was formed under the laws of Nevada on October 8, 1987, under the name "Condor West Corporation" for the purpose of implementing an initial distribution of its stock and thereafter to seek operating businesses as potential candidates for acquisition or other forms of combination. The Company had no operations for a period of over three years when it did a share for share merger and became Online International Corporation in September, 1999. As Online International Corporation the Company was in the business of designing, printing, and manufacturing lottery tickets and play slips for automated on-line contractors and on track and off-track betting until May 10, 2000 when the Board of Directors formalized its decision to discontinue operations. On July 17, 2000 the Company sold all of its assets for a combination of cash, notes and the assumption of debts by the purchasers. On August 9, 2001, the Company purchased Finotec, Ltd. (formerly known as Priory Marketing Ltd.) in exchange for 21,500,000 common shares, representing approximately 62% of the Company's issued and outstanding voting shares. The consideration paid by the Holding Company ("Finotec, Ltd.") in exchange for the stock of the Registrant was all of the outstanding capital stock of Finotec, Ltd., an Isle of Man company. Finotec, Ltd. owns 99.7% of the issued and outstanding shares of capital stock of Forexcash Global Trading Ltd. ("Forexcash"), an Israeli company, which is the owner of certain software, equipment, intellectual property and contracts. Via Forexcash, the Company is in the business of developing and marketing software for electronic trading of foreign currency through the Internet. In February, 2002, the Company changed its name to Finotec Group, Inc. to better reflect its current business operations.
Finotec Group Inc. is a holding company with no activities other than holding three wholly owned companies:
| 1. | Finotec Trading Inc. - marketing, sales, market trading and facilitation |
| 2. | Finologic Ltd (formerly Forexcash Global Trading Ltd) - financial technology development.Company |
| 3. | Fino Consulting Ltd - Financial advisory Company |
Finotec Trading Inc. owns three wholly owned subsidiaries:
1. Finotec Trading UK Limited (“FT UK”) , a Company registered in the United Kingdom. FT UK is approved and registered UK Financial Services Authority ("FSA"). for the purpose of to act as a market maker in Foreign Exchange and CFD's in the UK and Europe and provide investment management services. The FSA authorization allows Finotec UK to offer cross-border investment services within their the European Union
FTUK is the market-making arm of the corporation, distributing the live and instantaneously executable trading prices in global currencies, equities, indices, commodities and interest rate products through the group's online trading system. The centralized dealing room services clients, aggregates globally derived risk in real-time and hedges residual market exposure with the underlying markets.
2. Finotec Trading Cyprus Ltd (“FTC”) , a Company registered in Cyprus. FTC engages primarily in sales and marketing of the Company's products.
3. Finotec USA, Inc., a Delaware corporation,. Currently, this corporation has no activities.
Profile
Finotec Group Inc. is a financial services company, which has been operating since 1998 in the retail FX and CFD space. With trading operations based primarily in Europe, and a strong technology base in Israel, Finotec has become a leader in the world of real-time internet FX, equity and commodities trading.
Technology is what differentiates Finotec from its rivals. Finotec through its Israeli subsidiary Finologic has developed its own front to back trading system, including modules in sales, marketing, risk management and accounting, catering to OTC financial markets. These efforts led to an all-purpose, all-environment platform that not only provides customers with state-of-the-art front office GUIs (graphical users interface), but also enables Finotec to fine-tune its marketing campaigns, as well as back office parameters that are not normally followed in rival platforms.
Finotec constantly strives to improve and maintain its technological lead thanks to proprietary licenses and extensive technological development efforts. To date, Finotec operates one of the best integrated trading system and ERP in the industry and has launched new its leading edge Sky Trader Platforms for PC and mobiles such as Iphone , Blackberry, and 3G Nokia.
In particular, its proprietary quantitative marketing platform gives Finotec one of its major strengths. It allows the company to expand steadily and to remain a step-ahead of market expectations.
Finotec recently restructured of operations to have the flexibility to expand on new profit centers in the mid-term. Finotec is thus defined by three main business areas, is being developed under separate Brands:
· |  Finotec is the Brand of the groups Retail Fx Activities through Finotec Trading UK based in London and Finotec Trading Cyprus Ltd in Cyprus, spearheads the company’s trading and brokerage activities. The Groups UK Subsidiary, Finotec Trading UK Ltd is authorised under the UK’s Financial Services Authority (“FSA”). |
· |  FINOTRADE is the Brand of the group’s Institutional Fx and Commodities Activities through Finotec Trading UK Ltd based in London |
· |  FinoLogic based in Israel, is the brand of the underlying technology whose activities includes white labeling the company’s various proprietary technologies. |
Summary of method of Operations
The Company also operatesoperated an Internet-based brokerage firm for institutional, professional and serious active individual traders in the financial instruments markets, especially foreign currency and CFDs. The Company offersoffered an electronic trading platform which seamlessly integrates strategy trading tools, historical and streaming real-time market data, and direct-access order-routing and execution.
Customers can open accounts with Finotec Trading UK Ltd. by several methods;
| 1. | Directly with Finotec Trading UK Ltd. |
| 2. | Via affiliates and Introducing Brokers ("IB's") that sign commission sharing agreement with Finotec Trading UK Ltd. |
As part of its code of conduct, all customer monies arewere segregated in custodian accounts which have been set up in the United Kingdom and various other countries.
Since its inception Finotec has secured a number of IB contracts, with investment houses, financial institutions and high wealth individuals. Finotec'sFinotec’s website and trading system may be accessed on www.finotec.com. The system also provides a `demo'‘demo’ trading system and an e-learning center that may be accessed by registering on the website.
The Company currently develops, through its subsidiaries, markets and operatespreviously developed a software system delivering foreign exchange, commodities, and futures (CFDs) investment services to the public through the Internet.
Under our business model, we seek recurring revenues mainly by offering, through use of a software system developed by its subsidiary, FinoLogic, online real-time trading in financial instruments. Forexcash is a front and back office market maker application for online real-time trading in financial instruments. We use our capabilities to provide strategy trading tools, and the unique quality and functionality of those tools attracts our target customer base of institutional, professional and serious active individual traders. We market our services primarily through our subsidiaries that operate call centers and Internet sites. Brokerage Services
The Company also intends to promote white-label systems directly to financial institutions such as commercial banks. We also provide training in online trading
Risk Management
In addition, the Company operates an internal risk management module that guides the Company as to when to hedge positions or not and systems that provide real time management of equity positions and margin requirements. The Company also acts as a market maker in relevant jurisdictions.
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Recent Developments
In 2010, the Company announced that it is entering into Institutional Fx and Commodities trading under the brand name FINOTRADE (through Finotec Trading UK Ltd based in London). This is further introduced in the website www.finotrade.com
In addition in 2010, The Company has launched new trading platforms – Sky Trader for PC’s and mobile phones.
Industry Background
Over the past decade, the volume of trading in the world's foreign exchange market has grown dramatically. The average daily trading volume is estimated to be more than $3 trillion dollars. Recently, even more dramatic than the growth in the foreign exchange markets, has been the explosive growth of direct-access trading through electronic marketplaces. We believe that one of the reasons for this explosive growth is the growing presence of direct-access trading solutions.
We believe that technological innovation, including development of sophisticated trading software tools, increased use of and reliance upon the Internet, proliferation of online financial market data and information, and market acceptance of electronic brokerage services, including direct-access brokerage services, will continue to stimulate increased online trading activity. We believe it to be inevitable that over time almost all trading will be conducted electronically, in one form or another. We believe that direct access is expected to become the industry standard for online trading. The recent acquisitions by virtually every major online brokerage firm of direct-access technology underscore this reality.
The design of Fino has been focused on this "active trader" market, as well as professional and institutional traders, such as small-sized to mid-sized commercial banks.
With the proliferation of online brokerage services (and, now, the more powerful and efficient direct-access online brokerage services), the increased accessibility to market data, and the rapidly-growing capabilities of the Internet, we believe that serious, active traders, professional and non-professional, are demanding powerful, Internet-based, real-time strategy trading platforms that are seamlessly integrated with the best-available order execution technology and include analytical tools which support the design and testing of custom trading strategies.
The design of Sky Trader has been focused on this "active trader" market, as well as professional and institutional traders, such as small-sized to mid-sized commercial banks. The Sky Trader platform includes our strategy trading features and functions, streaming real-time charts and quotes, streaming news, state-of-the-art analytical charting, time and sales data, quote lists, option chains, market leaders’ data, profit/loss tracking, and wireless access
Brokerage Services
The Company, through its subsidiaries, offersoffered online brokerage services, in financial instruments (especially foreign currency and CFDs), using the Forexcash trading platform. Finotec'sFinotec’s targeted customer base for brokerage services includes active individual, professional and institutional traders.
Finotec earns the spread between the Bid and Ask price when there is some compensation inside the system, or the price difference between the customer’s transaction price and the bank price. Finotec also runs a small portfolio of uncovered customer transactions.
The Company attemptsattempted to reach its target customers through advertising campaigns for its products and services in local financial newspapers, articles providing in-depth market commentary on the specific Company products, one-day seminars, events and conventions. Finotec usesused the services of various advertising companies to reach targeted customers through advertising campaigns.
Online marketing includesincluded campaigns in Google, business portals, search engines and other financial websites.
Follow-up activities to the Company’s marketing campaigns arewere performed by the Company’s multi-lingual call center that directly contacts potential customers who have expressed an interest in the Company’s products and services and arranges meetings with account representatives, when appropriate.
The Company’s marketing strategy includesincluded the extension of its customer base through partnerships with relevant players in the financial markets. These partnerships include Franchising Agreements, Introducing Broker Agreements, Affiliate Agreements, White Label Agreements and Licensing Agreements with financial institutions whereby the institutions will referreferred clients to the Company and receive a commission from the Company for such referrals.
In addition to its direct contacts with its customers, the Company actively seekssought brokerage firms and other financial institutions to whose customers it can offer the ability to trade with Finotec’s dealing room while sharing the income generated from the trading activity of such customers. The Company aims to further develop this system of forging relationships with Introducing Brokers and Affiliates on an international level. This use of the trading platform would allow Introducing Brokers to provide their customers access to the foreign currency and other financial markets without the cost of running a trading room and developing an electronic trading system themselves.
Customer Money
All customer money is deposited in the Company’s custodian accounts in banks in the United Kingdom and other countries. All money is managed by the Company back office system in the FinoLogic proprietary Customer Relationship Management system.
In the US, HSBC holds client monies in trust in a segregated account and in the UK, HSBC and Royal bank of Scotland do the same.
Finologic (formerly Forexcash)
In January 2002, Finotec, via its subsidiary, FinoLogic, launched the Forexcash trading platform. The Forexcash service includes strategy trading features and functions, streaming real-time charts and quotes, streaming news, state-of-the-art analytical charting, time and sales data, quote lists, option chains, market leaders’ data, profit/loss tracking, and wireless access.
FinoLogic is a front and back office market maker and brokerage application for online real-time trading in the financial instruments markets. Forexcash gives spot and forward transaction prices with real-time execution capabilities for most kinds of currency pairs as well as CFDs, commodities, stocks and indices. Currently we have implemented the most liquid currency pairs.
FinoLogic's application servers were developed in Java Sun and PHP. We believe that these technologies are compatible with most operating systems and using them provides us the opportunity to offer numerous advantages, such as ready-to-use software where no installation is necessary. Using well-accepted Web technologies assists with the security of the data transfers, the offering of real-time information and the technical analysis capabilities. The communication in the system between the client systems and the servers are encrypted with the RSA protocol based on an algorithm that was developed internally.
Market data services
The real-time market data included in Finologic are licensed from different content suppliers that include Reuters and various stock exchanges around the world.
Technology Development
We believe that our success depends, in large part, on our ability to offer unique, Internet-based strategy trading technologies with state-of-the-art, intelligent direct-access order execution technologies, and continuously enhance those technologies, as well as develop and implement a well-designed and user-friendly all-in-one platform. We intend to consistently improve our system and implement new features and protocols. For instance, we are currently incorporating a new technology into our system that will give our system the benefit of more design capabilities in addition to not requiring downloads of plug-ins. By eliminating plug-ins, the customer will be able to access the trading platform through firewalls on the computer.
We are also working to improve the style of the trading platform, making it more user-friendly. A further technological development we have made is adding chat capabilities to our system.
To date, we have relied primarily on internal development of our products and services. We currently perform all quality assurance and develop user education and other training materials internally. In the future, we may continue to develop our technology internally or use outsourcing resources.
The market for strategy trading tools, streaming real-time market data and news services, and online order execution services is characterized by: rapidly changing technology; evolving industry standards in computer hardware, programming tools and languages, operating systems, database technology and information delivery systems; changes in customer requirements; and frequent new product and service introductions and enhancements. Our success will depend in part upon our ability to develop and maintain competitive technologies and to develop and introduce new products, services and enhancements in a timely and cost-effective manner that meets changing conditions such as evolving customer needs, existing and new competitive product and service offerings, emerging industry standards and changing technology. There can be no assurance tha t we will be able to develop and market, on a timely basis, if at all, products, services or enhancements that respond to changing market conditions or that will be accepted by customers. Any failure by us to anticipate or to respond quickly to changing market conditions, or any significant delays in the introduction of new products and services or enhancements could cause customers to delay or decide against the use of our products and services and could have a material adverse effect on our business, financial condition and results of operations.
Customer Support and Training
We provide client services and support and product-use training in the following ways:
CUSTOMER SERVICES AND SUPPORT. Finotec provides telephone customer services to its brokerage customers through its dealing room as well as call centers. Technical support to subscription and brokerage customers who use Forexcash is provided by Finotec's technical support team via telephone, electronic mail and fax.
PRODUCT-USE TRAINING. We consider user education important to try to help our customers enhance their ability to use our products and services fully and effectively. The majority of our training materials consist of extensive online documentation and technical assistance information on our Web sites so that our customers may learn to use and take full advantage of the sophisticated technology of Forexcash.
The market for online brokerage services is intensely competitive and rapidly evolving, and there appears to be substantial consolidation in the industry of online brokerage services, Internet-based real-time market data services, and trading analysis software tools. We believe that, due to the current and anticipated rapid growth of the market for integrated trading tools, real-time market data and online brokerage services, competition, as well as consolidation, will substantially increase and intensify in the future. We believe our ability to compete will depend upon many factors both within and outside our control, including, but not limited to,: pricing; the timing and market acceptance of new products and services and enhancements developed by us and our competitors; technological developments; product content; our ability to de signdesign and support efficient, materially error-free Internet-based systems; market conditions, such as volatility in currency fluctuations, stock prices, inflation and recession; product and service functionality; data availability; ease of use; reliability; customer service and support; and sales and marketing efforts.
We face direct competition from several publicly-traded and privately-held companies, principally online brokerage firms, including providers of direct-access order execution services. Our competitors include many foreign exchange online brokerage firms currently active in the United States and Europe. Many online brokerage firms currently offer direct-access service.
Many of our existing and potential competitors, which include online discount and traditional brokerage firms, and financial institutions that are focusing more closely on online services, including direct-access services for active traders, have longer operating histories, significantly greater financial, technical and marketing resources, greater name recognition and a larger installed customer base than we do. Furthermore, there is the risk that larger financial institutions which offer online brokerage services as only one of many financial services may decide to use extremely low pricing rates in the foreign currency market to acquire and accumulate customer accounts and assets to derive interest income and income from their other financial services. We do not currently offer other financial services; therefore, such pricing tech niques, should they become common in our industry, could have a material, adverse effect on our results of operations, financial condition and business model.
Generally, competitors may be able to respond more quickly to new or emerging technologies or changes in customer requirements or to devote greater resources to the development, promotion and sale of their products and services than we do. There can be no assurance that our existing or potential competitors will not develop products and services comparable or superior to those developed and offered by us or adapt more quickly than us to new technologies, evolving industry trends or changing customer requirements, or that we will be able to timely and adequately complete the implementation, and appropriately maintain and enhance the operation, of our business model. Increased competition could result in price reductions, reduced margins, failure to obtain any significant market share, or loss of market share, any of which could materia lly adversely affect our business, financial condition and results of operations. There can be no assurance that we will be able to compete successfully against current or future competitors, or that competitive pressures faced by us will not have a material adverse effect on our business, financial condition and results of operations.
Intellectual Property
Our success is and will be heavily dependent on proprietary software technology, including certain technology currently in development. We view our software technology as proprietary, and rely, and will be relying, on a combination of trade secret and trademark laws, nondisclosure agreements and other contractual provisions and technical measures to establish and protect our proprietary rights.
Despite efforts to protect our proprietary rights, unauthorized parties may copy or otherwise may obtain, use or exploit our software or technology independently. Policing unauthorized use of our software technology is difficult, and it is extremely difficult to determine the extent to which piracy of software technology exists. Piracy can be expected to be a persistent problem, particularly in international markets and as a result of the growing use of the Internet. In addition, effective protection of intellectual property rights may be unavailable or limited in certain countries, including some in which we may attempt to expand sales efforts. There can be no assurance that the steps taken by us to protect our proprietary rights will be adequate or that our competitors will not independently develop technologies that are substantial ly equivalent or superior to ours.
There has been substantial litigation in the software industry involving intellectual property rights. We do not believe that we are infringing, or that any technology in development will infringe, the intellectual property rights of others. The risk of infringement by us is heightened with respect to our business model technology, as that technology has not stood any significant test of time. There can be no assurance that infringement claims would not have a material adverse effect on our business, financial condition and results of operations. In addition, to the extent that we acquire or license a portion of the software or data included in our products or services from third parties (data is licensed from third parties), or market products licensed from others generally, our exposure to infringement actions may increase because w e must rely upon such third parties for information as to the origin and ownership of such acquired or licensed software or data technology. In the future, litigation may be necessary to establish, define, enforce and protect trade secrets, copyrights, trademarks and other intellectual property rights. We may also be subject to litigation to defend against claimed infringement of the rights of others or to determine the scope and validity of the intellectual property rights of others. Any such litigation could be costly and divert management's attention, which could have a material adverse effect on our business, financial condition and results of operations. Adverse determinations in such litigation could result in the loss of proprietary rights, subject us to significant liabilities, require us to seek licenses from third parties, which could be expensive, or prevent us from selling our products or services or using our trademarks, any one of which could have a material adverse effect on our business, fina ncial condition and results of operations.
Government Regulation
In November 2007, Finotec UK received authorization from the FSA to offer certain financial services in the UK. In connection therewith, Finotec has received regulatory approval to offer cross border investment services in various European countries, from its UK office.
In the Unites States, the Commodity Futures Trading Commission ("CFTC") regulates the foreign currency futures market.
Finotec's mode of operation and profitability may be directly affected by: additional legislation; changes in rules promulgated by the Commodity Futures Trading Commission, the National Futures Association, the Board of Governors of the Federal Reserve System, the FSA, the various stock and futures exchanges and other self-regulatory organizations; and changes in the interpretation or enforcement of existing rules and laws, particularly any changes focused on online brokerage firms that target an active trader customer base.
Governmental concern is focused in two basic areas: that the customer has sufficient trading experience and has sufficient risk capital to engage in active trading. Finotec requires a $200 opening balance to open an account with us. We believe Finotec's minimum suitability requirements, as well as the extensive user education documentation and tutorials offered on its Web site, are consistent with the rules and regulations concerning active trading.
It is possible that other agencies will attempt to regulate our current and planned online and other electronic service activities with rules that may include compliance requirements relating to record keeping, data processing, other operation methods, privacy, pricing, content and quality of goods and services as the market for online commerce evolves. Because of the growth in the electronic commerce market, Congress had held hearings on whether to regulate providers of services and transactions in the electronic commerce market. As a result, federal or state authorities could enact laws, rules or regulations, not only with respect to online brokerage services, but other online services we provide or may in the future provide. Such laws, rules and regulations, if and when enacted, could have a material adverse effect on our business, financial condition, results of operations and prospects. In addition, since the Company’s activities and customer base are international, regulatory developments in other countries, including those of which the Company is unaware, could have an effect on the Company and its operations.
As of January 31, 2010,November 9, 2020, we had 45 full-time employees. Ourno employees are not representedand our activities were being directed by any collective bargaining organization, and we have never experienced a work stoppage and consider our relations with our employees to be good.
Our future success depends, in significant part, upon the continued service of our key senior management, technology and sales and marketing personnel. The loss of the services of one or more of these key employees could have a material adverse effect on us. There can be no assurance that we will be able to retain our key personnel. Departures and additions of personnel, to the extent disruptive, could have a material adverse effect on our business, financial condition and results of operations.
Court-appointed custodian.
FORWARD-LOOKING STATEMENTS; BUSINESS RISKS
This report contains statements thatWe are forward-looking within the meaning of Section 27A of the Securities Act of 1993, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statementsa smaller reporting company are made pursuantnot required to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. When usedinclude this disclosure in this report, the words "believes," "estimates," "plans," "expects," "intends," "anticipates," "contemplates," "may," "will," "shall," "assuming," "prospect," "should," "could," "would," "looking forward" and similar expressions, to the extent used, are intended to identify the forward-looking statements. All forward-looking statements are based on current expectations and beliefs concerning future events that are subject to risks and uncertainties. Actual results may differ materially from t he results suggested in this report. Factors that may cause or contribute to such differences, and our business risks generally, include, but are not limited to, the items described below, as well as in other sections of this report and in our other public filings and our press releases.
Our business and results of operations could be seriously harmed by any of the following risks.
We have limited operating history upon which you may evaluate our operations.
Our e-commerce marketplaces are in the early stages of their development and we have limited operating history upon which you may evaluate our business and prospects. Because our management team as a unit is relatively new, it also has a very limited track record upon which you can make an evaluation. In addition, our revenue model is evolving and because of our lack of operating history, period-to-period comparisons of our results of operations will not be meaningful in the short term and should not be relied upon as indicators of future performance. Our business and prospects must be considered in light of the risk, expense and difficulties frequently encountered by companies in early stages of development, particularly companies in new and rapidly evolving markets such as e-commerce. Our failure to address these risks successfully cou ld materially and adversely affect our business and operations.
We may have difficulty obtaining future funding sources, if needed, and we might have to accept terms that would adversely affect shareholders.
Instability in the Middle East region may adversely affect our business.
Political, economic and military conditions in Israel directly affect the Company's operations. The Company could be adversely affected by hostilities involving Israel, the interruption or curtailment of trade between Israel and its trading partners, or a significant downturn in the economic or financial condition of Israel. These conditions could disrupt the Company's operations in Israel and its business, financial condition and results of operations could be adversely affected.
The Company's costs of operations have at times been affected by changes in the cost of its operations in Israel, resulting from changes in the value of the Israeli shekel relative to the United States dollar, and from difficulties in attracting and retaining qualified scientific, engineering and technical personnel in Israel, where the availability of such personnel has at times been severely limited. Changes in these cost factors have from time to time been significant and difficult to predict, and could in the future have a material adverse effect on the Company's results of operations.
The Company is closed during the Jewish Sabbath from Friday evening to Saturday evening and during all Jewish holidays which in certain events may adversely affect our business
The Company is closed on the Jewish Sabbath and during Jewish holidays from on the eve of the Shabbat or eves of holidays, as of two hours before the onset of Shabbat or the holiday, as well as during Shabbat and holidays. During these times there is either a limited amount of employees or no employees in the Company's offices. In the event of a power outage or any disruption of services during these times there would be no employee available to respond to the problem until the end of the Sabbath or Jewish holiday which could have a material adverse affect on the Company's operations. A serious disruption during such a time could disrupt the Company's operations and its business, financial condition and results of operations could be adversely affected.
Our success is dependent on retaining our current key personnel and attracting additional key and other personnel, particularly in the areas of management, technical services and customer support.
We believe that our success will depend on continued employment of our senior management team and key technical personnel for the development of our services. Their experience is important to the establishment of our business. The loss of any one of our key personnel could disrupt and negatively affect our business and operations. Our success also depends on having highly trained technical and customer support personnel.
We have had and may continue to have difficulty attracting and employing additional members to our senior management team and sufficient technical and customer support personnel to keep up with our growth needs. This shortage could limit our ability to increase sales and to sell services. Competition for personnel is intense. If we cannot hire and retain suitable personnel to meet our growth needs, our business and operations will be negatively affected.
Our success is dependent upon our receipt and maintenance of regulatory approvals in the major customer markets around the world.
The Company believes that its success, in large part, depends upon its ability to receive and retain regulatory approvals in the major markets around the world. Such approvals both expand the variety of services which the Company can offer and bolster the Company’s reputation among potential customers.
In November 2007, Finotec UK received authorization from the FSA to offer certain financial services in the UK. In connection therewith, Finotec has received regulatory approval to offer cross border investment services in the various European countries, from its UK office. In order to retain its FSA authorization, the Company must comply with numerous requirements, including financial covenants as well as those related to its ongoing operations. The Company’s failure to meet these ongoing obligations could lead to the loss of its FSA authorization which would have a material adverse effect on the Company and its operations.
Fluctuations in our quarterly results may adversely affect our stock price.
Our quarterly operating results will likely vary in the future. Our operating results will likely fall below the expectations of securities analysts or investors in some future quarter or quarters. Our failure to meet these expectations would likely adversely affect the market price of our common stock.
Our quarterly operating results may vary depending on a number of factors, including:
o demand of buyers and sellers to use and transact business on our platform
| o | actions taken by our competitors, including new product introductions, fee schedules, pricing policies and enhancements; |
| · | cash flow problems that may occur; |
| · | the quality and success of, and potential continuous changes in, sales or marketing strategies (which have undergone significant changes recently and are expected to continue to evolve) and the costs allocated to marketing campaigns and the timing of those campaigns; |
| · | the timing, completion, cost and effect of our development and launch of planned enhancements to the Finotec trading platform; |
| · | the size and frequency of any trading errors for which we ultimately suffer the economic burden, in whole or in part; |
| · | changes in demand for our products and services due to the rapid pace in which new technology is offered to customers in our industry; |
| · | costs or adverse financial consequences that may occur with respect to regulatory compliance or other regulatory issues, particularly relating to laws, rules or regulations that may be enacted with a focus on the active trader market; and |
| · | general economic and market factors that affect active trading, including changes in the securities and financial markets. |
our industry is intensely competitive, which makes it difficult to attract and retain customers
ReportThe markets for online brokerage services, client software and Internet-based trading tools, and real-time market data services are intensely competitive and rapidly evolving, and there has been substantial consolidation of those three products and services occurring in the industry. We believe that competition from large online brokerage firms and smaller brokerage firms focused on active traders, as well as consolidation, will substantially increase and intensify in the future. Competition may be further intensified by the size of the active trader market,. We believe our ability to compete will depend upon many factors both within and outside our control. These include: price pressure; the timing and market acceptance of new products and services and enhancements developed by us and o ur competitors; the development and support of efficient, materially error-free Internet-based systems; product and service functionality; data availability and cost; clearing costs; ease of use; reliability; customer service and support; and sales and marketing decisions and efforts.Item 1B. Unresolved Staff Comments
Copyright and patent risks; software license risks.
While we seek to protect our technology, it is not possible for us to detect all possible infringements of our software, text, designs and other works of authorship. Also, copyright protection does not extend to functional features of software and will not be effective to prevent third parties from duplicating our software's capabilities through engineering research and development. In addition, our technology and intellectual property may receive limited or no protection in some countries, and the global nature of the Internet makes it impossible to control the ultimate destination of our work.
We have not conducted searches to determine if our software infringes on any patents of third parties. If our software is found to infringe on the copyrights or patents of a third party, the third party or a court or other administrative body could require us to pay royalties for past use and for continued use, or to modify or replace the software to avoid infringement. We cannot assure you that we would be able to modify or replace the software.
Any of these claims, with or without merit, could subject us to costly litigation, divert our technical and management personnel and materially and adversely affect our business and operations.
Trademarks and service marks risks.
Proprietary rights are important to our success and our competitive position. Our actions may be inadequate to protect any trademarks and other proprietary rights or to prevent others from claiming violations of their trademarks and other proprietary rights. We may not be able to protect our domain names for our websites as trademarks because those names may be too generic or perceived as describing a product or service or its attributes rather than serving a trademark function.
If we are unable to protect our proprietary rights in trademarks, service marks and other indications of origin, competitors will be able to use names and marks that are identical to ours or sufficiently similar to ours to cause confusion among potential customers. This confusion may result in the diversion of business to our competitors, the loss of customers and the degradation of our reputation. Litigation against those who infringe upon our service marks, trademarks and similar rights may be expensive. Because of the difficulty in proving damages in trademark litigation, it may be very difficult to recover damages.
Except for a search for the names Finotec Group and Finotec Trading, we have not conducted searches to determine whether our service marks, trademarks and similar items may infringe on the rights of third parties. Despite having searched a mark, there may be a successful assertion of claims of trademark or service mark infringement. If a third party successfully asserts claims of trademark, service mark or other infringement, the third party or a court or other administrative body may require us to change our service marks, trademarks, company names, the design of our sites and materials and our Internet domain name (web address), as well as to pay damages for any infringement. A change in service marks, trademarks, company names, the design of our sites and materials and Internet domain names may cause difficulties for our customers in locating us or cause them to fail to connect our new names and marks with our prior names and marks, resulting in loss of business.
The nature of our business results in potential liability to customers
Many aspects of the securities brokerage business, including online trading services, involve substantial risks of liability. In recent years there has been an increasing incidence of litigation involving the securities brokerage industry, including class action and other suits that generally seek substantial damages, including in some cases punitive damages. In particular, our proprietary order routing technology is designed to automatically locate, with immediacy, the best available price in completing execution of a trade triggered by programmed market entry and exit rules. There are risks that the electronic communications and other systems upon which these products and services rely, and will continue to rely, or our products and services themselves as a result of flaws or other i mperfections in their designs or performance, may operate too slowly, fail or cause confusion or uncertainty to the user. Major failures of this kind may affect all customers who are online simultaneously. Any such litigation could have a material adverse effect on our business, financial condition, results of operations and prospects.
We may not be able to make future acquisitions and new strategic alliances, and, even if we do, such acquisitions and alliances may disrupt or otherwise negatively affect our business.
Our business plan contemplates that we may make investments in complementary companies, technologies and assets. Future acquisitions are subject to the following risks:
| o | we may not be able to agree on the terms of the acquisition or alliance, such as the amount or price of our acquired interest; |
| o | acquisitions and alliances may cause a disruption in our ongoing business, distract our relatively new management team and make it difficult to implement or maintain our systems, controls and procedures; |
| o | we may acquire companies or make strategic alliances in markets in which we have little experience; |
| o | we may not be able successfully to integrate the services, products and personnel of any acquisition or new alliance into our operations;
|
| o | we may be required to incur debt or issue equity securities to pay for acquisitions, which may be dilutive to existing shareholders, or we may not be able to finance the acquisitions at all; and |
| o | our acquisitions and strategic alliances may not be successful, and we may lose our entire investment. |
In addition, we face competition from other parties, including large public and private companies, venture capital firms, and other companies, in our search for suitable acquisitions and alliances. Many of the companies we compete with for acquisitions have substantially greater name recognition and financial resources than we have, which may limit our opportunity to acquire interests in new companies, technologies and assets or create strategic alliances. Even if we are able to find suitable acquisition candidates or develop acceptable strategic alliances, doing so may require more time and expense than we expect because of intense competition.
We must maintain positive brand name awareness.
We believe that establishing and maintaining our brand names is essential to expanding business. We also believe that the importance of brand name recognition will increase in the future because of the growing number of online companies that will need to differentiate themselves. Promotion and enhancement of our brand names will depend largely on our ability to provide consistently high quality software and related technology. If we are unable to provide software and technology of comparable or superior quality to those of our competition, the value of our brand name may suffer.
The international nature of our business adds additional complexity and risks to our business.
The nature of the foreign currency business brings us into contact with different countries and markets. We hope to expand further in international markets. Our international business may be subject to a variety of risks, including:
o market risk or loss of uncovered transactions;
o governmental regulation and political instability;
o collecting international accounts receivable and income;
o the imposition of barriers to trade and taxes; and
o difficulties associated with enforcing contractual obligations and intellectual property rights.
These factors may have a negative effect on any future international operations and may adversely affect our business and operations.
The interests of our significant shareholders may conflict with our interests and the interests of our other shareholders.
Directors, officers and holders of more than 5% of the outstanding shares of Finotec common stock collectively own a significant share of the outstanding common stock. As a result of their stock ownership, one or more of these shareholders may be in a position to affect significantly our corporate actions, including, for example, mergers or takeover attempts, in a manner that could conflict with the interests of our public shareholders.
Anti-takeover provisions and our right to issue preferred stock could make a third party acquisition of us difficult.
Finotec is a Nevada corporation. Anti-takeover provisions of Nevada law may make it difficult for a third party to acquire control of us, even if a change in control would be beneficial to our shareholders. In addition, our board of directors may issue preferred stock with voting or conversion rights that may have the effect of delaying, deferring or preventing a change of control. Preventing a change of control could adversely affect the market price of Finotec common stock and the voting and other rights of holders of Finotec common stock.
Our common stock price is likely to be highly volatile.
The market price of our common stock is likely to be highly volatile, as the stock market in general, and the market for Internet-related and technology companies in particular, has been highly volatile. Our shareholders may not be able to resell their shares of our common stock following periods of volatility because of the market's adverse reaction to this volatility.
Factors that could cause this volatility may include, among other things:
| o | announcements of technological innovations and the creation and failure of B2B marketplaces; |
| o | actual or anticipated variations in quarterly operating results; |
| o | new sales formats or new products or services; |
| o | changes in financial estimates by securities analysts; |
| o | conditions or trends in the Internet, B2B and other industries; |
| o | changes in the market valuations of other Internet companies; |
| o | announcements by us or our competitors of significant acquisitions, strategic partnerships or joint ventures; |
| o | changes in capital commitments; |
| o | additions or departures of key personnel; |
| o | sales of our common stock; and |
| o | general market conditions. |
Many of these factors are beyond our control.
Service of process and enforcement of civil liabilities on us and our officers may be difficult to obtain.
We are organized under the laws of the State of Nevada and will be subject to service of process in the United States. However, most of our assets are located outside the United States. In addition, certain of our directors and officers are residents of Israel.
There is doubt as to the enforceability of civil liabilities under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, in original actions instituted in Israel. As a result, it may not be possible for investors to enforce or effect service of process upon these directors and executive officers or to judgments of U.S. courts predicated upon the civil liability provisions of U.S. laws against our assets, as well as the assets of these directors and executive officers. In addition, awards of punitive damages in actions brought in the U.S. or elsewhere may be unenforceable in Israel.
Risks Relating to Our E-Commerce Marketplaces
Our success depends on the development of the e-commerce market, which is uncertain.
We rely on the Internet for the success of our businesses, as do other e-commerce marketplaces. The development of the e-commerce market is in its early stages. Our long-term success depends on widespread market acceptance of B2B e-commerce. A number of factors could prevent such acceptance, including the following:
| o | the unwillingness of business to shift from traditional processes to e-commerce processes; |
| o | the necessary network infrastructure for substantial growth in usage of e-commerce may not be adequately developed; |
| o | increased governmental regulation or taxation may adversely affect the viability of e-commerce; |
| o | insufficient availability of telecommunication services or changes in telecommunication services could result in slower response time for users of e-commerce; and |
| o | concern and adverse publicity with respect to, and failure of, security of e-commerce. |
We may not be able to compete effectively with other providers of e-commerce services.
Competition for Internet products and services and e-commerce business is intense. If the market for e-commerce grows, we expect that competition will intensify, and Finotec will continue to compete with other technology companies and traditional service providers that seek to integrate on-line business technologies with their traditional service mix. Barriers to entry into the e-commerce environment are minimal, and competitors can launch websites and offer products and services at relatively low costs. The companies with which Finotec competes often have significantly greater name recognition and financial, marketing and other resources than Finotec which may place our e-commerce marketplaces at a disadvantage in responding to competitors' pricing strategies, technological advances, advertising campaigns, strategic partnerships and other initiative. If Finotec fails to differentiate itself from other Internet industry participants, the value of its brand name could decline, it may be unable to attract a critical mass of buyers and sellers, and its prospects for future growth would diminish, which could materially and adversely affect our business and operations.
Concerns regarding security of transactions and transmitting confidential information over the Internet may adversely affect our e-commerce business.
We believe that concern regarding the security of confidential information transmitted over the Internet, including, for example, business requirements, credit card numbers and other forms of payment methods, prevents many potential customers from engaging in online trading. If we do not add sufficient security features to future product releases, our services may not gain market acceptance or we may face additional legal exposure.
Despite the measures we have taken in the areas of encryption and password or other authentication software devices, our infrastructure, like others, is potentially vulnerable to physical or electronic break-ins, computer viruses, hackers or similar problems caused by employees, customers or other Internet users. If a person circumvents our security measures, that person could misappropriate proprietary information or cause interruptions in our operations. Security breaches that result in access to confidential information could damage our reputation and expose us to a risk of loss or liability. These risks may require us to make significant investments and efforts to protect against or remedy security breaches, which would increase the costs of maintaining our websites.
Our e-commerce capability depends on real-time accurate product information.
We may be responsible for loading information into our database and categorizing the information for trading purposes. This process entails a number of risks, including dependence on our suppliers both to provide us in a timely manner with accurate, complete and current information and to update this information promptly when it changes. If our suppliers do not provide us in a timely manner with accurate, complete and current information, our database may be less useful to our customers and users and may expose us to liability. We cannot guarantee that the information available in our database will always be accurate, complete and current or comply with governmental regulations either due to third-party or internal errors. This could expose us to liability or result in decreased acceptance of our products and services, which could hav e a material and adverse affect on our business and operations. We are aware of cases in which the data provided to us by third parties has not been consistently accurate and, as a result of which, we have experienced customer dissatisfaction and lawsuits by customers. In addition, our contracts with the third-party data suppliers must be renewed on a regular basis and the costs for such information may increase, with the Company having little or no negotiating influence in such a situation.
Our market is characterized by rapid technological change, and we may not be able to keep up with such change in a cost-effective way.
The e-commerce market is characterized by rapid technological change and frequent new product announcements. Significant technological changes could render our existing technology obsolete. If we are unable to respond successfully to these developments or do not respond in a cost-effective way, our business and operations will suffer. To be successful, we must adapt to our rapidly changing market by continually improving the responsiveness, services and features of our products and services, by developing or acquiring new features to meet customer needs and by successfully developing and introducing new versions of our Internet-based e-commerce business software on a timely basis. The life cycles of the software used to support our e-commerce services are difficult to predict because the market for our e-commerce is new and emerging a nd is characterized by changing customer needs and industry standards. The introduction of on-line products employing new technologies and industry standards could render our existing system obsolete and unmarketable. If a new software language becomes the industry standard, we may need to rewrite our software to remain competitive, which we may not successfully accomplish in a timely and cost-effective manner.
In addition, as traffic in our e-commerce business increases, we may need to expand and upgrade our technology, transaction processing systems and network hardware and software. We may not be able to project accurately the rate of growth in our on-line businesses. We also may not be able to expand and upgrade our systems and network hardware and software capabilities to accommodate increased use of our on-line businesses, which would have a material and adverse affect on our business and operations.
An unexpected event, such as a power or telecommunications failure, fire or flood, or physical or electronic break-in at any of our facilities or those of any third parties on which we rely, could cause a loss of critical data and prevent us from offering services. If our hosting and information technology services were interrupted, including from failure of other parties' software that we integrate into our technology, our business and the businesses of our e-commerce marketplaces using these services would be disrupted, which could result in decreased revenues, lost customers and impaired business reputation for us and them. As a result, we could experience greater difficulty attracting new customers. A failure by us or any third parties on which we rely to provide these services satisfactorily would impair our ability to support th e operations of our services and could subject us to legal claims.
In addition, to a large extent, the Company’s profits are dependent upon the operation of its internal risk management system. There is no guarantee that such system will operate successfully in every eventuality.
Limited Internet infrastructure may affect service.
The accelerated growth and increasing volume of Internet traffic may cause performance problems, slowing the adoption of our Internet-based services. The growth of Internet traffic due to very high volumes of use over a relatively short period of time has caused frequent periods of decreased Internet performance, delays and, in some cases, system outages. This decreased performance is caused by limitations inherent in the technology infrastructure supporting the Internet and the internal networks of Internet users. In addition, recently, there have been several instances of entire countries losing Internet access as a result of natural disasters or accidents. If Internet usage continues to grow rapidly, the infrastructure of the Internet and its users may be unable to support the demands of growing e-commerce usage, and the Internet's performance and reliability may decline. If our existing or potential customers experience frequent or continuing outages or delays on the Internet, the adoption or use of our Internet-based products and services may grow more slowly than we expect or even decline. Our ability to increase the speed and reliability of our Internet-based business model is limited by and depends upon the reliability of both the Internet and the internal networks of our existing and potential customers. As a result, if improvements in the infrastructure supporting both the Internet and the internal networks of our customers and suppliers are not made in a timely fashion, we may have difficulty obtaining new customers, or maintaining our existing customers, either of which could reduce our potential revenues and have a negative impact on our business and operations.
Internet governance, regulation and administration are uncertain and may adversely affect our business.
The future success of our business is dependent on our ability to use the Internet to implement our e-commerce growth strategy. Because the original role of the Internet was to link the government's computers with academic institutions' computers, the Internet was historically administered by organizations that were involved in sponsoring research. Over time, private parties have assumed larger roles in the enhancement and maintenance of the Internet infrastructure. Therefore, it is unclear what organization, if any, will govern the administration of the Internet in the future, including the authorization of domain names.
The lack of an appropriate organization to govern the administration of the Internet infrastructure and the legal uncertainties that may follow pose risks to the commercial Internet industry and our specific website business. In addition, the effective operation of the Internet and our business is also dependent on the continued mutual cooperation among several organizations that have widely divergent interests, including the government, Internet service providers and developers of system software and software language. These organizations may find that achieving a consensus may become difficult, impossible, time-consuming and costly.
Changes in the regulatory environment governing the Internet, either in the US or abroad, could have a significant effect on our business.
We cannot predict whether or to what extent any new regulation affecting e-commerce will occur. New regulations could increase our costs or restrict our activities in a materially adverse manner. One or more states or countries may seek to impose sales tax collection obligations on out-of-state/foreign companies like ours that engage in or facilitate e-commerce. A successful assertion by one or more states or any foreign country that we should collect sales and other taxes on our system could increase costs that we could have difficulty recovering from users of our websites.
Governmental agencies and their designees regulate the acquisition and maintenance of web addresses generally. For example, in the United States, the National Science Foundation had appointed Network Solutions, Inc. as the exclusive registrar for the ".com," ".net" and ".org" generic top-level addresses. Although Network Solutions no longer has exclusivity, it remains the dominant registrar. The regulation of web addresses in the United States and in foreign countries is subject to change. As a result, we may not be able to acquire or maintain relevant web addresses in all countries where we conduct business that are consistent with our brand names and marketing strategy. Furthermore, the relationship between regulations governing website addresses and laws protecting trademarks is unclear.
We may be subject to legal liability for publishing or distributing content over the Internet.
Our e-commerce businesses may be subject to legal claims relating to the content of our on-line websites, or the distribution of content. Providers of Internet products and services have been sued in the past, sometimes successfully, based on the content of material. The representations as to the origin and ownership of licensed content that we generally obtain may not adequately protect us.
In addition, we draw some of the content provided in our on-line business communities from data compiled by other parties. This data may have errors. If our content is improperly used or if we supply incorrect information, it could result in unexpected liability. Our insurance may not cover claims of this type or may not provide sufficient coverage. We are aware of cases in which the data provided to us by third parties has not been consistently accurate and, as a result of which, we have experienced customer dissatisfaction and lawsuits by customers. Costs from these claims could damage our business and limit our financial resources. In addition, there can be no assurance that we will not make internal errors that could result in liability.
None.
The Company's UK subsidiary and dealing room is located at 70 Grace Church 2nd Floor, London EC3, England, UK. There the Company rents 4,640 square feet of office space.
The company Israel’s subsidiary - FinoLogic has offices in Jerusalem at 13 Hartom Street, Jerusalem, 97775, Israel. There the Company rents approximately 490 square meters of office space.
The Company also rents 197 square meters of offices in Limassol, Cyprus at 1 Griva Digheni& Chrysanthou Street.
Rent expense for the fiscal year ended January 31, 2010 was approximately $532,982. This included a penalty for early termination of an office lease.
None
Item 3. Legal Proceedings
In the normal courseWe are not involved in any material legal proceedings, nor are we aware of business, a few Finotec clients have claims for alleged trading profitsany legal proceedings threatened or losses that these clients are considered to due to them. The current amounts in question are in no more than US$ 200,000. Finotec’s view is that there is in-sufficient basis for these claims
Management does not expectwhich any director or officer or any of these claimstheir affiliates is a party adverse to haveour Company or has a material effect on the Company's financial position or results of operations
interest adverse to us.Item 4. Mine Safety Disclosures
Not applicable.
.
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Market for the Registrant'sRegistrant’s Common Stock andEquity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
(a) Market Information.001
Our shares of common stock are currently quoted on the OTC Pink under the symbol “FTGI”.
The following table sets forth the high and low bid price for our common stock for each quarter during the past two fiscal years. The prices reflect inter-dealer quotations, do not include retail mark-ups, markdowns or commissions and do not necessarily reflect actual transactions.
| | | High | | | Low | |
| April 30, 2018 | | $ | 0.00850 | | | $ | 0.00370 | |
| July 3, 2018 | | $ | 0.00371 | | | $ | 0.00100 | |
| October 31, 2018 | | $ | 0.00330 | | | $ | 0.00250 | |
| January 31, 2019 | | $ | 0.00260 | | | $ | 0.00200 | |
| | | | | | | | | |
| April 30, 2019 | | $ | 0.00200 | | | $ | 0.00150 | |
| July 31, 2019 | | $ | 0.00200 | | | $ | 0.00150 | |
| October 31, 2019 | | $ | 0.00200 | | | $ | 0.00120 | |
| January 30, 2020 | | $ | 0.00190 | | | $ | 0.00090 | |
(b) Holders
As of November 9, 2020, a total of 300,000,000 shares of the Company’s common stock are currently outstanding held by 1,118 shareholders of record. This figure does not take into account those shareholders whose certificates are held in the name of broker-dealers or other nominees.
(c) Dividends
We have not declared or paid any dividends on our common stock and intend to retain any future earnings to fund the development and growth of our business. Therefore, we do not anticipate paying dividends on our common stock for the foreseeable future. The payment of dividends in the future will depend upon, among other factors, our earnings, capital requirements, and operating financial conditions.
Item 6. Selected Financial Data
We are a smaller reporting company are not required to include this disclosure in this Report.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Business Overview
The Finotec Group Inc. has been dormant since November 2011. On March 16, 2020, as a result of a custodianship in Clark County, Nevada, Case Number: A-20-809716-B, Custodian Ventures LLC (“Custodian”) was appointed custodian of the Company.
On 17st of March 2020, Custodian appointed David Lazar as the Company’s Chief Executive Officer, President, Secretary, Chief Financial Officer, Chief Executive Officer and Chairman of the Board of Directors.
Management’s Plan of Operation
The following discussion contains forward-looking statements. Forward-looking statements give our current expectations or forecasts of future events. You can identify these statements by the fact that they do not relate strictly to historical or current facts. They use of words such as “anticipate”, “estimate”, “expect”, “project”, “intend”, “plan”, “believe”, and other words and terms of similar meaning in connection with any discussion of future operating or financial performance. From time to time, we also may provide forward-looking statements in other materials we release to the public.
Overview
The Company’s current business objective is to seek a business combination with an operating company. We intend to use the Company’s limited personnel and financial resources in connection with such activities. The Company will utilize its capital stock, debt or a combination of capital stock and debt, in effecting a business combination. It may be expected that entering into a business combination will involve the issuance of restricted shares of capital stock. The issuance of additional shares of our capital stock:
(a) | The Company's Common Stock is quoted on● | may significantly reduce the OTC Bulletin Board )OTCBB( under the symbol "FTGI.OB" The following table sets forth the high and low bid prices as reported by the National Associationequity interest of Securities Dealers (NASD) for the periods ending January 31, 2010. These quotations reflect inter-dealer prices, without retail mark-up, mark-down or commissions, and may not reflect actual transactions.our stockholders; |
| 2009 | | | | |
| | | | High | Low |
| First Quarter | | 0.41 | 0.10 |
| Second Quarter | 0.35 | 0.11 |
| Third Quarter | 0.31 | 0.10 |
| Fourth Quarter | 0.17 | 0.07 |
| | | | | |
| | | | | |
| 2008 | | | | |
| | | | High | Low |
| First Quarter | | 1.01 | 0.65 |
| Second Quarter | 0.85 | 0.26 |
| Third Quarter | 0.90 | 0.20 |
| Fourth Quarter | 0.52 | 0.15 |
| | | | | |
| ● | will likely cause a change in control if a substantial number of our shares of capital stock are issued, and most likely will also result in the resignation or removal of our present officer and director; and |
| ● | may adversely affect the prevailing market price for our common stock. |
Similarly, if we issued debt securities, it could result in:
| ● | default and foreclosure on our assets if our operating revenues after a business combination were insufficient to pay our debt obligations; |
| ● | acceleration of our obligations to repay the indebtedness even if we have made all principal and interest payments when due if the debt security contained covenants that required the maintenance of certain financial ratios or reserves and any such covenants were breached without a waiver or renegotiations of such covenants; |
| ● | our immediate payment of all principal and accrued interest, if any, if the debt security was payable on demand; and |
| ● | our inability to obtain additional financing, if necessary, if the debt security contained covenants restricting our ability to obtain additional financing while such security was outstanding. |
Liquidity and Capital Resources
As of January 31, 2010, we had approximately 1,100 holders of record of our common stock.
(b) | No dividends were paid during the fiscal year ending January 31, 2010. The Articles of Merger restrict the Company's ability to pay dividends. The Company may not pay dividends if doing so would result in a consolidated current ratio of less than two, that is, current assets equaling less than twice current liabilities. |
Item 6.
FINOTEC GROUP, INC. AND SUBSIDIARY MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
CAUTIONS ABOUT FORWARD-LOOKING STATEMENTS
The following discussion of2020, the financial conditionCompany has no business operations and results of operationsno cash resources other than that provided by Management. We are dependent upon interim funding provided by Management or an affiliated party to pay professional fees and expenses. Our Management and an affiliated party have agreed to provide funding as may be required to pay for accounting fees and other administrative expenses of the Company should be read in conjunction withuntil the Consolidated Financial Statements and Notes thereto included elsewhere in this Form 10-K. Certain of the statements contained in this Form 10-K which are not statements of historical fact are forward-looking statements that involve risks and uncertainties. Such forward-looking statements are made only as of the date of this Form 10-K. The Company's actual results could differ materially from those contained in the forward-looking statements. Factors that may cause such
differences include, but are not limited to, those discussed under "Risk Factors" as well as those discussed elsewhere in this Form 10-K.
BUSINESS OVERVIEW
Company enters into a business combination. The Company
currently develops, through its subsidiaries, markets and operateswould be unable to continue as a
software system delivering foreign exchange, commodities, and futures (CFDs) investment servicesgoing concern without interim financing provided by Mr. Lazar, the Court appointed custodian.If we require additional financing, we cannot predict whether equity or debt financing will become available at terms acceptable to the public through the Internet.us, if at all. The Company also operatesdepends upon services provided by Management and an Internet-based brokerage firm for institutional, professional and serious active individual traders inaffiliated party to fulfill its filing obligations under the financial instruments markets, especially foreign currency and CFDs. The Company offers an electronic trading platform which seamlessly integrates strategy trading tools, historical and streaming real-time market data, and direct-access order-routing and execution. In addition, the Company operates an internal risk management module that guides the Company as to when to hedge positions or not and systems that provide real time management of equity positions and margin requirements . The Company also acts as a market maker.
Under our business model, we seek recurring revenues mainly by offering, through use of a software system developed by its subsidiary, FinoLogic, online real-time trading in financial instruments. FinoLogic is a front and back office market maker application for online real-time trading in financial instruments. We use our capabilities to provide strategy trading tools, and the unique quality and functionality of those tools attracts our target customer base of institutional, professional and serious active individual traders. We market our services primarily through our subsidiaries that operate call centers and Internet sites. The Company also intends to promote white-label systems directly to financial institutions such as commercial banks. We also provide training in online trading.
With the proliferation of powerful and efficient direct-access online brokerage services, the increased accessibility to market data, and the rapidly-growing capabilities of the Internet, we believe that serious, active traders, professional and non-professional, are demanding powerful, Internet-based, real-time strategy all-in-one trading platforms that are seamlessly integrated with the best-available order execution technology and include analytical tools which support the design and testing of custom trading strategies.
To achieve profitability,Exchange Act. At present, the Company has
embarked on a policyno financial resources to
diversify its business, capitalizing on its strong technology base via Finologic and the position of its Brokerage Business through Finotec Trading UK Ltd (“FT UK”), who is registered by the UK’s Financial Services Authority. To this extent pay for such services.The Company has entereddoes not currently engage in any business activities that provide cash flow. The costs of investigating and analyzing business combinations, maintaining the Institutional Fxfiling of Exchange Act reports, the investigation, analyzing, and Commodities Activities. Not onlyconsummation of an acquisition for an unlimited period of time will this enablebe paid from additional money contributed by David Lazar, our sole officer and director, or an affiliated party.
During the Company to reach a broader customer base, itnext 12 months we anticipate incurring costs related to:
| ● | filing of Exchange Act reports. |
| ● | franchise fees, registered agent fees, legal fees and accounting fees, and |
| ● | investigating, analyzing and consummating an acquisition or business combination. |
We estimate that these costs will allow the company’s existing retail clients to obtain better prices and liquidity. The Company is currently recruiting institutional sales representatives to increase the Company’s customers, network of affiliates and IBs. The Company will offer clients to trade through Sky Trader or through the Currenex Trading Platform. The Company may raise fi nancingbe in the upcomingrange of $10,000-$15,000 per year, in orderand that we will be able to finance the expansionmeet these costs as necessary, to be advanced/loaned to us by Management and/or an affiliated party.
We had a negative cash flow from operations of its business lines.
RESULTS OF OPERATIONS
Our current expense levels are based upon our expectations concerning future revenue. However, such revenue levels cannot be guaranteed. Thus, quarterly revenue and results of operations are difficult to project.
OVERALL
Net gain from foreign currency future operations for the year ended January 31, 2010 was $2,797,619 (Prior Year $ $2,641,116)
OPERATING EXPENSES
RESEARCH AND DEVELOPMENT. Research and development expenses include expenses associated with the development of new products, services and technology; enhancements to existing products, services and technology; testing of products and services; and the creation of documentation and other training and educational materials. The Company’s subsidiary, FinoLogic Ltd., owns all intellectual property rights relating to our business. Research and development expenses for the year ended January 31, 2010 was $628,429 (Prior Year $ 308,893).This increase is due increased R&D in new products.
GENERAL AND ADMINISTRATIVE. General and administrative expenses include expenses relating to employees cars and travel . General and administrative expenses were for the year ended January 31, 2010 was $422,056 (Prior Year $798,571). This decrease is due cost cutting measures affected.
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash balance increased by $2,600,523 from a cash balance as of January 31, 2009 of $5,108,144 to $7,708,667 as of January 31, 2010. The increase is primarily attributable to a significant increase in cash required for operating activities offset by an increase in cash provided by financing activities.
Net cash used in operating activities amounted to $4,541,836 for the year ended January 31, 2010, while net cash used by operating activities was $7,767,822 for the year ended January 31, 2009, a decrease of $3,322,959. The decrease in net cash used in operating activities primarily resulted from a decrease in operating expenses.
Net cash used in investing activities for the year ended January 31, 20109, was $267,675 while it was $136,7039 used in investing activities for the year ended January 31, 2009, an increase of $130,972 The cash used in investing activities for the year ended January 31, 2010, primarily resulted from the acquisition of property and equipment.
The Company had cash provided in financing activities of $7,399,284$2,675 during the year ended January 31,
2010 compared2020. We financed our negative cash flow from operations during this period through advances made by our CEO amounting to
net cash provided by$2,675.The Company has no capital. Additional financing activities of $4,468,123 duringis necessary for the yearCompany to continue as a going concern. Our independent auditors have issued an unqualified audit opinion for the years ended January 31, 2009,2020 and 2019 with an increaseexplanatory paragraph on going concern.
Off-Balance Sheet Arrangements
As of $2,931,161. This increase primarily reflects the purchase by several investors of shares of the Company in a private placement.
Our future capital requirementsJanuary 31, 2020 and the adequacy of available funds will depend on numerous factors, including the successful commercialization of our products, competing technological and market developments, and the development of new business lines in Instructional FX and Commodities. The Company has sufficient funds to satisfy its cash requirements until June 2010, assuming monthly expenses of the Company at $500,000 and no revenue generation by the Company. The Company intends to try to obtain additional funds through equity or debt financing, strategic alliances with corporate partners and others, or through other sources. In the event Finotec's plans change or its assumptions change or prove to be inaccurate or the funds available prove to be insufficient to fund operation s at the planned level (due to further unanticipated expenses, delays, and problems or otherwise), Finotec could be required to obtain additional funds earlier than expected. Finotec does2019, we did not have any committed sourcesoff-balance sheet arrangements as defined in Item 303(a)(4)(ii) of additional financing,Regulation S-K promulgated under the Securities Act of 1934.Contractual Obligations and there can be no assurance that additional funding, if necessary, will be available on acceptable terms, if at all. If adequate fundsCommitments
As of January 31, 2020 and 2019, we did not have any contractual obligations.
Critical Accounting Policies
Our significant accounting policies are described in the notes to our financial statements for the years ended January 31, 2020 and 2019, and are included elsewhere in this amended registration statement.
Item 7a. Quantitative And Qualitative Disclosures About Market Risk.
We are a smaller reporting company and are not available, we may be required to further delay, scale-back, or eliminate certain aspects of our operations or attemptprovide the information under this item pursuant to obtain funds through arrangements with collaborative partners or others that may require us to relinquish rights to certain of our technologies, product candidates, products, or potential markets. If adequate funds are not available, Finotec's business, financial condition, and results of operations will be materially and adversely affected.
Finotec expects that its operating results will fluctuate significantly from quarter to quarter in the future and will depend on a number of factors, most of which are outside Finotec's control.
Item 7.ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Reference is made to the Financial Statements, the notes thereto, and Supplementary Data
FINOTEC GROUP, INC.
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED
JANUARY 31, 2010 AND 2009
the Report of Independent Public Accountants thereon commencing at page F-1 of this Report, which Financial Statements, notes and report are incorporated herein by reference.Index to Consolidated Financial Statements
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Report of Independent Registered Public Accounting FirmTo the Stockholders'shareholders and the Boardboard of Directorsdirectors of Finotec Group, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheetsheets of Finotec Group, Inc. and its Subsidiaries (collectively, the(the "Company") as of January 31, 20102020 and 2009, and2019, the related consolidated statements of operations, stockholders' equity (deficit), and cash flows for eachthe years then ended, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the twoCompany as of January 31, 2020 and 2019, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the period ended January 31, 2010. United States.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidatedthe Company's financial statements based on our audit.
We did not auditare a public accounting firm registered with the financial statements of Finotec Trading UKPublic Company Accounting Oversight Board (United States) ("PCAOB") and Finotec Trading (Cyprus) for the year ended January 31,2010, which statement reflect total revenues constituting 60 percent of consolidated total revenues for the year ended January 31,2010. Such financial statements were audited by other auditors whose report has been furnishedare required to us and our opinion insofar as it relatesbe independent with respect to the amount included for Finotec Trading UKCompany in accordance with the U.S. federal securities laws and Cyprus for the year ended January 31, 2010, is based solely onapplicable rules and regulations of the report of such other auditors.
Securities and Exchange Commission and the PCAOB.We conducted our auditsaudit in accordance with the standards of the Public Company Accounting Oversight Board (United States).PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. OurAs part of our audits included considerationwe are required to obtain an understanding of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company'sCompany’s internal control over financial reporting. Accordingly, we express no such opinion. An
Our audit includesincluded performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence supportingregarding the amounts and disclosures in the financial statements and assessingstatements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statement presentation.statements. We believe that our audit provides a reasonable basis for our opinion.
Substantial Doubt about the Company’s Ability to Continue as a Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company’s minimal activities raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ BF Borgers CPA PC
BF Borgers CPA PC
We have served as the Company's auditor since 2020
Lakewood, CO
November 17, 2020
FINOTEC GROUP, INC.
BALANCE SHEETS
| | | January 31, | | | January 31, | |
| | | 2020 | | | 2019 | |
| | | | | | | |
| ASSETS | | | | | | |
| Total Assets | | $ | - | | | $ | - | |
| | | | | | | | | |
| LIABILITIES & STOCKHOLDERS’ DEFICIT | | | | | | | | |
| | | | | | | | | |
| Note payable related parties | | | 2,675 | | | | - | |
| Total liabilities | | | 2,675 | | | | - | |
| | | | | | | | | |
| Commitments and Contingencies | | | - | | | | - | |
| | | | | | | | | |
| Stockholders’ Equity | | | | | | | | |
| Common stock, $0.001 par value; 300,000,000 shares authorized, 300,000,000 shares issued and outstanding January 31, 2020 and January 31, 2019 | | | 300,000 | | | | 300,000 | |
| Additional paid in capital | | | 13,261,548 | | | | 13,261,548 | |
| Retained earnings (deficit) | | | (13,564,223 | ) | | | (13,561,548 | ) |
| Total Stockholders’ (Deficit) | | | (2,675 | ) | | | - | |
| Total Liabilities and Stockholders’ (Equity) | | $ | - | | | $ | - | |
The accompanying notes are an integral part of these financial statements.
In our opinion, based on our audits and the report
FINOTEC GROUP, INC.
STATEMENTS OF OPERATIONS
| | | YEARS ENDED | |
| | | January 31, | | | January 31, | |
| | | 2020 | | | 2019 | |
| Revenue | | $ | - | | | $ | - | |
| | | | | | | | | |
| Operating Expenses: | | | | | | | | |
| Administrative expenses -related party | | | 2,675 | | | | - | |
| Total operating expenses | | | 2,675 | | | | - | |
| (Loss) from operations | | | (2,675 | ) | | | - | |
| Other expense | | | | | | | | |
| Other (expense) net | | | - | | | | - | |
| Income (loss) before provision for income taxes | | | (2,675 | ) | | | - | |
| Provision for income taxes | | | - | | | | - | |
| Net (Loss) | | $ | (2,675 | ) | | $ | - | |
| | | | | | | | | |
| Basic and diluted earnings(loss) per common share | | $ | (0.00 | ) | | $ | - | |
| | | | | | | | | |
| Weighted average number of shares outstanding | | | 300,000,000 | | | | 300,000,000 | |
The accompanying notes are an integral part of these financial statements.
FINOTEC GROUP, INC
STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
| | | | | | | | | Additional | | | | | | Total | |
| | | Common Stock | | | Paid-in | | | Accumulated | | | Stockholders’ | |
| | | Shares | | | Value | | | Capital | | | Deficit | | | Equity | |
| Balance, January 31, 2018 | | | 300,000,000 | | | $ | 300,000 | | | $ | 13,261,548 | | | $ | (13,561,548 | ) | | $ | - | |
| | | | | | | | | | | | | | | | | | | | | |
| Net loss | | | | | | | | | | | | | | | - | | | | - | |
| | | | | | | | | | | | | | | | | | | | | |
| Balance, January 31, 2019 | | | 300,000,000 | | | $ | 300,000 | | | $ | 13,261,548 | | | $ | (13,561,548 | ) | | $ | - | |
| | | | | | | | | | | | | | | | | | | | | |
| Net loss | | | | | | | | | | | | | | | (2,675 | ) | | | (2,675 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| Balance, Janaury 31, 2020 | | | 300,000,000 | | | $ | 300,000 | | | $ | 13,261,548 | | | $ | (13,564,223 | ) | | $ | (2,675 | ) |
The accompanying notes are an integral part of the other auditors, such consolidatedfinancial statements.
FINOTEC GROUP, INC.
STATEMENTS OF CASH FLOWS
| | | January 31, | | | January 31, | |
| | | 2020 | | | 2019 | |
| Cash Flows From Operating Activities: | | | | | | |
| Net loss | | $ | (2,675 | ) | | $ | - | |
| Adjustments to reconcile net income to net cash provided by (used for) operating activities | | | | | | | | |
| Net cash provided by (used for) operating activities | | | (2,675 | ) | | | - | |
| | | | | | | | | |
| Cash Flows From Investing Activities: | | | | | | | | |
| Net cash provided by (used for) investing activities | | | - | | | | - | |
| | | | | | | | | |
| Cash Flows From Financing Activities: | | | | | | | | |
| Proceeds from related party loans | | | 2,675 | | | | | |
| Net cash provided by (used for) financing activities | | | 2,675 | | | | - | |
| | | | | | | | | |
| Net Increase (Decrease) In Cash | | | - | | | | - | |
| Cash At The Beginning Of The Period | | | - | | | | - | |
| Cash At The End Of The Period | | $ | - | | | $ | - | |
| | | | | | | | | |
| Supplemental disclosure of cash flow information: | | | | | | | | |
| Cash paid for interest | | $ | - | | | $ | - | |
The accompanying notes are an integral part of these financial statements.
FINOTEC GROUP INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS
The Company’s accounting year-end is January 31.
On July 20, 2020 Custodian Ventures, LLC was appointed as the custodian of the Company by the Eighth Judicial Court of Nevada pursuant to Case No. A-20-816267-B.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying financial statements referredhave been prepared in accordance with the Financial Accounting Standards Board (“FASB”) “FASB Accounting Standard Codification™” (the “Codification”) which is the source of authoritative accounting principles recognized by the FASB to above present fairly, in all material respects, the financial position of the Company. as of January 31, 2010 and 2009 and the results of its operations and its cash flows for each of the two yearsbe applied by nongovernmental entities in the period ended January 31, 2010,preparation of financial statements in conformity with generally accepted accounting principles generally accepted(“GAAP”) in the United StatesStates.
Going Concern
The accompanying financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of America.
| /S/ Gvilli & Co. |
| Gvilli &Co. |
| April 25, 2010 |
| Casarea, Israel |
FINANCIAL STATEMENTS
FOR THE YEAR ENDED JANUARY 31, 2010
Page | |
| |
F-2 | Consolidated Balance sheet |
| |
F-3 | Statement of Income |
| |
F-4 | Statement of Stockholders' equity |
| |
F-5 | Statement of cash flow operations |
FINOTEC GROUP, INC.
CONSOLIDATED BALANCE SHEET
| | | | U.S Dollars | |
| | | | January 31 , 2010 | | | January 31 , 2009 | |
| | | | (Unaudited) | | | (Audited) | |
| | | | | | | | |
| ASSETS | | | | | | | |
| | | | | | | | |
| Current Assets | | | | | | |
| Cash and cash equivalents | | | 7,708,667 | | | | 5,108,144 | |
| Prepaid and other current assets | | | 228,311 | | | | 472,662 | |
| | Total Current Assets | | | 7,936,978 | | | | 5,580,806 | |
| | | | | | | | | | |
| Property and Equipment, Net | | | 377,717 | | | | 599,879 | |
| Forward transaction-Hedging | | | - | | | | 441,090 | |
| | | | | | | | | | |
| | Total Assets | | | 8,314,695 | | | | 6,621,775 | |
| | | | | | | | | | |
| | | | | | | | | | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | |
| | | | | | | | | | |
| Current Liabilities | | | | | | | | |
| short term bank credit | | | - | | | | 216 | |
| Accounts payable and accrued expenses | | | 1,033,675 | | | | 995,820 | |
| Customers deposits | | | 2,904,900 | | | | 4,924,316 | |
| Forward transaction-Customers and Hedging | | | 17,679 | | | | 27,649 | |
| Provision for severance | | | 291,483 | | | | 261,063 | |
| | Total current Liabilities | | | 4,247,737 | | | | 6,209,064 | |
| | | | | | | | | | |
| Stockholders' Equity | | | | | | | | |
| Common stock, $0.001 par value, 300,000,000 shares authorized, | | | | | |
121,030,936 shares issued and outstanding | | | 121,031 | | | | 92,098 | |
| Treasury stock | | | | | | | | |
| Additional paid-in capital | | | 13,223,250 | | | | 5,858,059 | |
| Foreign currency translation adjustment | | | (678,876 | ) | | | (732,344 | ) |
| Retained earnings | | | (8,598,447 | ) | | | (4,805,102 | ) |
| | Total Stockholders' Equity | | | 4,066,958 | | | | 412,711 | |
| | Total Liabilities and Stockholders' Equity | | | 8,314,695 | | | | 6,621,775 | |
| | | | | | | | | | |
| See accompanying notes to consolidated financial statements. | | | | | |
FINOTEC GROUP, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
| | | Year ended | |
| | | Jan 31 | | | Jan 31 | |
| | | 2010 | | | 2009 | |
| | | U.S Dollars | |
| | | | | | | |
| Revenues | | | | | | |
| Net (losses) gain from foreign currency future operations | | | 2,797,619 | | | | 2,641,116 | |
| Consulting | | | 2,145 | | | | 5,746 | |
| | | | | | | | | |
| Total Revenues | | | 2,799,764 | | | | 2,646,862 | |
| | | | | | | | | |
| Operating Expenses | | | | | | | | |
| General and Administrative | | | 422,056 | | | | 798,571 | |
| Salaries | | | 2,275,840 | | | | 2,948,013 | |
| Rent and office | | | 532,982 | | | | 255,054 | |
| Research and Development | | | 628,429 | | | | 308,935 | |
| Technology and computer | | | 336,617 | | | | 859,896 | |
| Bonuses & cash back-with holding | | | 0 | | | | 132,941 | |
| Marketing | | | 670,287 | | | | 1,608,866 | |
| Professional fees | | | 660,925 | | | | 710,772 | |
| Financial data fees | | | 205,256 | | | | 232,754 | |
| Depreciation | | | 310,708 | | | | 265,378 | |
| Exceptional | | | 0 | | | | 224,323 | |
| Other expense | | | 128,499 | | | | 570,106 | |
| Total Operating Expenses | | | 6,171,598 | | | | 5,506,569 | |
| Operating P&L | | | (3,371,835 | ) | | | (2,859,707 | ) |
| | | | | | | | | |
| Financing Expenses | | | | | | | | |
| Interest income | | | 1,803 | | | | 79,300 | |
| Finance Charges | | | (159,840 | ) | | | (460,615 | ) |
| Financing P&L | | | (158,037 | ) | | | 31,366 | |
| | | | | | | | | |
| Net Income (Loss) | | | (3,529,872 | ) | | | (5,741,835 | ) |
| | | | | | | | | |
| Weighted average number of shares outstanding | | | | | |
| Basic | | | 103,876,381 | | | | 73,197,381 | |
| Diluted | | | 130,120,823 | | | | 89,941,246 | |
| | | | | | | | | |
| Net Income per common share- Basic | | $ | -0.03 | | | $ | -0.08 | |
| Net Income per common share - diluted | | $ | -0.03 | | | $ | -0.06 | |
| | | | | | | | | |
| See accompanying notes to consolidated financial statements. | |
FINOTEC GROUP, INC.
CONSOLIDATED STATEMENT OF CASHFLOWS
| | | U.S Dollars | |
| For the year ended | | January 31 | | | January 31 | |
| | | 2010 | | | 2009 | |
| | | | | | | |
| Cash Flows from Operating Activities | | | | | | |
| Net Income ( Loss) | | | (3,529,872 | ) | | | (6,650,062 | ) |
| | | | | | | | | |
| Adjustment to reconcile Net Loss to | | | | | | | | |
| Net cash Used in Operating Activities | | | | | | | | |
| Depreciation | | | 263,680 | | | | 265,378 | |
| Loss on sold assets | | | | | | | 19,593 | |
| | | | | | | | | |
| Changes in Operating Assets and Liabilities | | | | | | | | |
| Decrease (increase) in prepaid and other current assets | | | 244,351 | | | | (179,098 | ) |
| Increase in accrued expenses | | | 37,854 | | | | 424 | |
| Decrease in other current liabilities | | | | | | | 50,246 | |
| Increase in accrued severance payable | | | 30,420 | | | | 72,905 | |
| Increase (decrease) in receivable forward Clients Trs | | | 441,090 | | | | (86,990 | ) |
| Increase (decrease) in payable forward Hedging Trs/option | | | (9,970 | ) | | | (518,929 | ) |
| Decrease (increase) in marketable securities | | | 0 | | | | 486,151 | |
| Increase (decrease) in customers Deposits | | | (2,019,416 | ) | | | (1,227,439 | ) |
| Net cash provided by (used in) Operating Activities | | | (4,541,863 | ) | | | (7,767,822 | ) |
| | | | | | | | | |
| Cash Flows from Investing Activities | | | | | | | | |
| Purchase of fixed Assets | | | (41,519 | ) | | | (170,660 | ) |
| Selling of fixed Assets | | | | | | | 33,957 | |
| Net cash provided by Investing Activities | | | (41,519 | ) | | | (136,703 | ) |
| | | | | | | | | |
| Cash Flows from Financing Activities | | | | | | | | |
| Short term bank credit | | | (216 | ) | | | (22,277 | ) |
| Proceeds from treasury shares | | | | | | | | |
| Stock issuance | | | 7,394,124 | | | | 4,490,400 | |
| Net cash provided by (used in) Financing Activities | | | 7,393,908 | | | | 4,468,123 | |
| | | | | | | | | |
| Effect of Foreign Currency Translation | | | (210,006 | ) | | | (591,045 | ) |
| | | | | | | | | |
| Net increase (decrease) in Cash and Cash Equivalent | | | 2,600,523 | | | | (4,027,447 | ) |
| | | | | | | | | |
| Cash and Cash Equivalents- beginning of year | | | 5,108,144 | | | | 9,135,591 | |
| | | | | | | | | |
| Cash and Cash Equivalents- Ending | | | 7,708,667 | | | | 5,108,144 | |
FINOTEC GROUP, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY
| | | Common Stock | | | | | | | | | | | | | | | | |
| | | Shares | | | Amount | | | Additional
Paid in
capital | | | Deficit
Accumulated | | | Accumulated
Other
Comprehensive
income | | | Treasury
Stock | | | Total | |
| | | | | | | | | | | | | | | | | | | | | | |
| Balance at January 31, 2008 | | | 65,516,224 | | | | 65,516 | | | | 1,545,378 | | | | 1,844,960 | | | | (159,916 | ) | | | (156,513 | ) | | | 3,139,425 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net Income (Loss) | | | | | | | | | | | | | | | (6,650,062 | ) | | | | | | | | | | | (6,650,062 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Shares issued from Treasury Stock | | | | | | | | | | | | | | | | | | | | 156,513 | | | | 156,513 | |
| New shares issuing | | | 21,205,601 | | | | 21,206 | | | | 4,312,681 | | | | | | | | | | | | | | | | 4,333,887 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Foreign currency translation | | | | | | | | | | | | | | | | (572,428 | ) | | | | | | | (572,428 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Balance at January 31, 2009 | | | 86,721,825 | | | | 86,722 | | | | 5,858,059 | | | | (4,805,103 | ) | | | (732,344 | ) | | | 0 | | | | 407,335 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net Income (Loss) | | | | | | | | | | | | | | | (3,529,872 | ) | | | | | | | | | | | (3,529,872 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| New shares issuing | | | 3,200,000 | | | | 3,200 | | | | 396,800 | | | | | | | | | | | | | | | | 400,000 | |
| New shares issuing | | | 11,111,111 | | | | 11,111 | | | | 1,988,889 | | | | | | | | | | | | | | | | 2,000,000 | |
| New shares issuing | | | 2,780,000 | | | | 2,780 | | | | 692,220 | | | | | | | | | | | | | | | | 695,000 | |
| New shares issuing | | | 8,000,000 | | | | 8,000 | | | | 1,992,000 | | | | | | | | | | | | | | | | 2,000,000 | |
| New shares issuing | | | 9,218,000 | | | | 9,218 | | | | 2,295,282 | | | | | | | | | | | | | | | | 2,304,500 | |
| Total issued : 34,309,111 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Foreign currency translation | | | | | | | | | | | | (263,473 | ) | | | 53,468 | | | | | | | | (210,005 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Balance at January 31, 2010 | | | 121,030,936 | | | | 121,031 | | | | 13,223,250 | | | | -8,598,448 | | | | -678,876 | | | | 0 | | | | 4,066,958 | |
FINOTEC GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. | Description of | |
| Business | Finotec Group, Inc. (“Finotec, Inc.), a Nevada corporation, is principally engaged, through its wholly-owned subsidiaries, in offering foreign currency market trading to professionals and retail clients over its web-based trading system. |
| | |
| | Shares in Finotec began trading on the Over the Counter Bulletin Board listings. (OTCBB: FTGI). |
| | |
| | Finotec Group's United Kingdom subsidiary, Finotec Trading UK, Limited, has been authorized by the UK’s Financial Services Authority (FSA) to act as a Market Maker, as defined by the FSA, in the United Kingdom. As of November 9, 2007, Finotec Trading UK, Limited, is approved by the FSA as a Market Maker and Principal, and thus Finotec Trading UK, Limited, may now offer UK clients certain regulated investment instruments such as Commodity Futures, Commodity options and options on commodity futures, Contract for Differences, Futures, Options, Rights to or interests in investments, Rolling spot Forex contracts, and Spread Bets. |
| | |
| Risk Management | |
| | These Finotec Group activities give rise to risks which are monitored and managed as follows: |
| | |
| | Credit risk |
| | Clients are required to deposit cleared funds as margin before they can trade. If the client margin falls below the minimum required to maintain a position, they will be notified that they are on margin call and can only reduce their positions or provide additional funds. At any time the client is on margin call, the company may, at its discretion, liquidate some or all of that client's positions in order to bring them back into line with their margin requirements. |
| | |
| | The company also has potential credit risk exposure to market counterparties with which it hedges and with banks. The company has a defined risk appetite for exposure to each market counterparty and bank to which it has credit exposure. |
| | |
| | Liquidity risk |
| | The company has significant net cash balances as at the balance sheet date and continually monitors its capital adequacy. |
| | |
| | Foreign currency risk |
| | The company has financial instruments which are denominated predominantly in US dollars. The gains and losses arising from the company's exposure are recognised in the profit and loss account. |
| | |
| | Market price risk |
| | Market risk arises from open contracts with customers and counterparties. Exposure to market risk is closely monitored in accordance with limits and reduced through hedging. |
FINOTEC GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2. | Summary of Significant Accounting Policies |
| | |
| Principles of | |
| Consolidation | The consolidated financial statements include the accounts of Finotec Inc. and its wholly owned subsidiaries, Finotec Trading, Inc. (“Finotec Trading”) and its owned subsidiaries Finotec Trading Cyprus Ltd. Finotec USA Inc., Finotec Trading UK Ltd, and Finotec Group Inc 99.7% owned subsidiary, FinoLogic formerly Forexcash Global Trading Ltd. (“FinoLogic”) (collectively referred to as the “Company”, unless otherwise indicated). All material inter company transactions and balances have been eliminated in consolidation. |
| | |
| | Since the liabilities of Finologic exceed its assets, and the owner of the 0.3% minority interest has no obligation to supply additional capital, no minority interest has been recorded in the consolidated financial statements. |
| | |
| | |
| Fixed Assets | Fixed assets are stated at cost, less accumulated depreciation. Office furniture and equipment are depreciated using the straight-line method over seven years. Computer equipment and software are depreciated using the straight-line method over three years. Leasehold improvements are amortized on a straight-line basis over the lesser of the useful life or the life of the lease. Repairs and maintenance costs are expensed as incurred. |
| | Costs of software acquired along with payroll costs and consulting fees relating to the development of internal use software, including that used to provide internet solutions, are capitalized. Once the software is placed in service, the costs are amortized over the estimated useful life. |
| | |
| Cash and Cash | |
| Equivalents | The Company considers all highly liquid debt instruments purchased with original maturities of three months or less to be cash equivalents. |
| | |
| Revenue recognition | |
| | Finotec acts as a market maker for its customers based on the prices traded in the inter bank market, and recognizes a loss or revenue both when customers close transactions in foreign currencies and also on the open customer positions showing gain or loss. When there is no Compensation inside the system with its customers, Finotec turns to other institutions to clear the contracts and recognizes a loss or revenue from actions in derivative financial instruments.
|
| | |
| Income Taxes | Deferred taxes are determined based on the differences between financial reporting and tax basis of assets and liabilities, and are estimated using the tax rates and laws in effect when the differences are expected to reverse. A valuation allowance is provided based on the weight of available evidence, if it is considered more likely than not that some portion of or all of, the deferred tax assets will not be realized. |
INOTEC GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2.Summaryassets and the satisfaction of Significant Accounting Policies (Continued)
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 certain reported amounts and disclosures. Actual results could differ from those estimates. |
| |
| |
Translation of Foreign | |
Currencies | Finologic Ltd. Fino Consulting Ltd and Finotec Trading Cyprus Ltd, Finotec Trading UK Ltd and are operated primarily in local currencies, which represent the functional currencies of those subsidiaries. Forexcash Ltd, Finotec Trading UK Ltd and Finotec Trading Cyprus Ltd encompass substantial part of the Company's operations. All assets and liabilities of Finologic Ltd. Fino Consult Ltd, Finotec Trading Cyprus Ltd and Finotec Trading UK Ltd were translated into U.S. dollars using the exchange rate prevailing at the balance sheet date, while income and expense amounts were translated at average exchange rates during the year. Translation adjustments are included in accumulated other comprehensive income (loss), a separate component of stockholders’ equity. |
| |
| |
Fair Value of Financial | |
Instruments | SFAS No. 107, Disclosures About Fair Value of Financial Instruments, requires disclosure of the fair value of certain financial instruments. The carrying value of financial instruments, which include cash and cash equivalents, loans payable, customer deposits and accrued expenses, approximate their fair values due to the short-term nature of these financial instruments. The carrying value of the Company’s note receivable approximates its fair value based on management’s best estimate of future cash collections.
|
| |
Earning Per Common | |
Share | Basic earnings per share is based on the weighted effect of all common shares issued and outstanding, and is calculated by dividing net income (loss) by the weighted average shares outstanding during the period. Diluted earnings per share is calculated by dividing net income (loss) by the weighted average number of common shares used in the basic earnings per share calculation plus the number of common shares that would be issued assuming exercise or conversion of all stock options. The dilutive effect of stock options was not assumed for the years ended January 31, 2010 and 2009, because the effect of these securities is anti-dilutive. |
FINOTEC GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Derivative Financial | |
Instruments | The Company follows SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, and its related amendments to account for its derivative transactions. The Company accounts for its forward foreign currency exchange contracts as derivative financial instruments. The Company uses derivative instruments as part of its asset/liability management activities to meet the risk management needs of its clients as part of its trading activity for its own account. These derivative financial instruments are carried at fair value, with realized and unrealized gains and losses included in net gain from foreign currency future operations.
|
| |
| A summary of significant accounting policies is included in Note 2 to the accompanying financial statements. We believe that the application of these policies on a consistent basis enables our company to provide useful and reliable financial information about the company's operating results and financial condition. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates. |
| |
| We account for stock options issued to employees in accordance with the provisions of SFAS No. 123(R), "Share-Based Payment". In December 2004, the FASB issued SFAS No. 123(R) which replaces SFAS No. 123 and supersedes APB Opinion No. 25. Under SFAS No. 123(R), companies are required to measure the compensation costs of share based compensation arrangements based on the grant date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Share based compensation arrangements include stock options, restricted share plans, performance based awards, share appreciation rights and employee share purchase plans. |
| |
| In March 2005 the SEC issued Staff Accounting Bulletin No. 107, or "SAB107". SAB 107 expresses views of the staff regarding the interaction between SFAS No. 123(R) and certain SEC rules and regulations and provides the staff's views regarding the valuation of share based payment arrangements for public companies. SFAS No. 123(R) permits public companies to adopt its requirements using one of two methods. On April 14, 2005, the SEC adopted a new rule amending the compliance dates for SFAS 123R. Companies may elect to apply this statement either prospectively, or on a modified version of retrospective application under which financial statements for prior periods are adjusted on a basis consistent with the pro forma disclosures required for those periods under SFAS123. Effective January 1, 2007, we fully adopted the provisions of SFAS No . 123R and related interpretations as provided by SAB 107. As such, compensation cost is measured on the date of grant as the excess of the current market price of the underlying stock over the exercise price. Such compensation amounts, if any, are amortized over the respective vesting periods of the option grant. We apply this statement prospectively. The valuation of such share based payments requires significant judgment. We exercise our judgment in determining the various assumptions associated with the associated share based payments as well as the expected volatility related to their fair value. We base our estimate of the share based payments on our interpretation of the underlying agreements and historical volatility of our stock price. |
FINOTEC GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3. Other accounting policies (continued)
| We account for our investment in equity securities pursuant to Statement of Financial Accounting Standards ("SFAS") No.115. This standard requires such investments in equity securities that have readily determinable fair values be measured at fair value in the balance sheet and that unrealized holding gains and losses for investments in available for sale equity securities and investments in trading equity securities be recorded as a component of stockholders' equity and statement of operations, respectively. Furthermore, it provides that if factors lead us to determine that the fair value of certain financial instruments is impaired, that we should adjust the carrying value of such investments to its fair value. Marketable securities consist principally of corporate stocks. Management has classified the Company’s mark etable securities as available for sale securities in the accompanying consolidated financial statements. |
| |
| |
Marketable Securities | Available-for-sale securities are carried at fair value, with unrealized gains and losses reported as a separate component of stockholders’ equity. Realized gains and losses on available-for-sale securities are included in interest income. Gains and losses, both realized and unrealized, are measured using the specific identification method. Market value is determined by the most recently traded price of the security at the balance sheet date. As of January 31, 2010 the market value of the security equals its cost.
|
| |
| |
4. Advertising Expense | The Company expenses advertising costs as incurred. Advertising expenses included in the profit and losses in the total amount of Marketing for the years ended January 31, 2010 and 2009 amounted to $670,387 and $1,608,866, respectively. |
FINOTEC GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
5. | Property and | |
| Equipment | Consist of the following: |
liabilities in the normal course of business for the twelve-month period following the date of these financial statements. The Company has incurred operating losses since inception. As of January 31, 2010
| | | Estimated
Useful
Life | | | January 31 ,
2010 | |
| | | years | | | (audited) | |
| | | | | | | |
| Computer equipment | | | 3 | | | $ | 771,703 | |
| Purchased software | | | 3 | | | $ | 184,951 | |
| Office furniture and equipment | | | 7 | | | $ | 518,844 | |
| Leasehold improvements | | | 10 | | | $ | 0 | |
| | | | | | | | | |
| Total Property and Equipment at Cost | | | | | | $ | 1,475,498 | |
| | | | | | | | | |
| Less accumulated depreciation and amortization | | | $ | 1,097,781 | |
| | | | | | | | | |
| Property and Equipment - Net | | | $ | 377,717 | |
Because the Company does not expect that existing operational cash flow will be sufficient to fund presently anticipated operations, this raises substantial doubt about the Company’s ability to continue as a going concern. Therefore, the Company will need to raise additional funds and is currently exploring alternative sources of financing. The Company is currently being funded by David Lazar who is extending interest free demand loans to the Company. Historically, the Company has raised capital through private placements, as an interim measure to finance working capital needs and may continue to raise additional capital through the sale of common stock or other securities and obtaining some short-term loans. The Company will be required to continue to so until its operations become profitable. Also, the Company has, in the past, paid for consulting services with its common stock to maximize working capital, and intends to continue this practice where feasible.
Use of Estimates
The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of liabilities, the liability for the excess share issuance, and disclosure of contingent assets and liabilities at the date of the financial statements. The most significant estimates relate to income taxes and contingencies. The Company bases its estimates on historical experience, known or expected trends and various other assumptions that are believed to be reasonable given the quality of information available as of the date of these financial statements. The results of these assumptions provide the basis for making estimates about the carrying amounts of assets and liabilities that are not readily apparent from other sources. Actual results could differ from these estimates.
Revenue Recognition
On July 1, 2018, the Company adopted Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”). Results for reporting periods beginning after January 1, 2018, are presented under ASC 606. As of and for the year ended April 30, 2020 the financial statements were not impacted due to the application of Topic 606 because the Company had no revenues.
Cash and cash equivalents
The Company considers all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents. On January 31, 2020, and January 31, 2019, the Company’s cash equivalents totaled $-0- and $-0- respectively.
6. Related Party | |
Transactions/Loans | Finotec Inc. is a holding Company which operates via its wholly owned subsidiaries and their subsidiaries. Within the Group there are various inter- company agreements setting out the different undertakings of the companies and the commissions paid in such transactions. |
| |
| The Company has in place from timeIncome taxes The Company accounts for income taxes under FASB ASC 740, “Accounting for Income Taxes”. Under FASB ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to time inter-company loans which are granted at interest rates which the Company believes reflect market conditions at such time. |
FINOTEC GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
7.Stockholders’ Equity
| |
| |
| On April 30, 2009 the Company entered into a definitive agreement for the sale of 3,200,000 shares of Common Stock at a price of $0.125 per share for a total of $ 400,000. The shares of Common Stock sold in the private placement offering have not been registered and may not be offered or sold absent registration or an applicable exemption from such registration requirements. All such shares are subject as well to a registration rights agreement. The offering closed on April 30, 2009.
|
| |
| On September 2, 2009, the Company entered into definitive agreements for the sale of 17,218,000 Common Shares at a price of $0.25 per share. The shares of Common Stock sold in the private placement offering have not been registered under the Act and may not be offered or sold absent registration or an applicable exemption from such registration requirements. All such shares are subject as well to a registration rights agreement. The summary description of the financing described above does not purport to be complete and is qualified in its entirety by reference to the Stock Purchase Agreement filed as an Exhibit hereto. The offering closed on September 2, 2009.
|
| |
| On July 31 2009, the Company entered into a definitive agreement for the sale of 11,111,111 Common Shares at a price of $0.18 per share as well as 2,780,000 Common Shares at a price of $0.25 per share. The shares of Common Stock sold in the private placement offering have not been registered under the Act and may not be offered or sold absent registration or an applicable exemption from such registration requirements. All such shares are subject as well to a registration rights agreement. The transaction closed on July 31st 2009. |
| |
| |
8.Stock Options
| |
| During the year 2007, the Board of Directors of Finotec Group, Inc. (the "Company") approved a resolution to authorise up 18,000,000 shares of Common Stock to make these option grants under the Company’s Amended and Restated 2007 Equity Incentive Plan (the “Plan”) available to be issued the companies employees , excluding any Shareholder with more than xx% of the company. The Board intends that such options have an exercise price per share not less than the market price per share of the Company’s Common Stock. As of January 31, 2010, no options were issued to the employees. During the year 2010, 2,000,000 shares have been approved for issue to the employees.
|
| |
| In summary, the Company has issued Common shares and Warrants as follows (excluding the above plan): |
| | 2010 | | | 2009 | |
| Common Shares Issued | | 121,030,936 | | | | 86,721,825 | |
| Warrants Issued | | 27,244,442 | | | | 25,244,442 | |
| Total | | 148,275,378 | | | | 111,966,267 | |
| The warrants are exercisable at an average of 38 cents per share.
|
FINOTEC GROUP, INC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
9. | Derivative Financial | |
| Instruments | Derivative financial instruments consist of the Company’s forward foreign exchange currency contracts, which are agreements to exchange specific amounts of currencies at a future date, at a specific rate of exchange. Foreign exchange contracts are entered into primarily to meet the foreign exchange risk management needs of the Company’s clients. |
| | The major risk associated with this instrument is that foreign exchange rates could change in an unanticipated manner, resulting in a loss in the underlying value of the instrument. The Company mitigates this risk by using hedging techniques that limit the exchange rate exposure. As the Company accounts for the foreign exchange contracts as fair value hedges (per FASB No. 133), all gains and losses are recognized in earnings and the fair value of the instruments are reported as other assets/liabilities on the consolidated balance sheet. |
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10 | Legal Proceedings. | |
| | In the normal course of business, a few Finotec clients have claims for alleged trading profits or losses that these clients are considered to due to them. The current amounts in question are in no more than US$ 200,000. Finotec’s view is that there is in-sufficient basis for these claims
|
| | |
| | Management does not expect any of these claims to have a material effect on the Company's financial position or results of operations. |
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| | |
11. | Commitments | FinoLogic Ltd, Finotec Trading (Cyprus) Ltd and Finotec Trading UK Ltd lease their offices space facilities with a lease period of two to three years. |
| | Rent expense included in the profit and losses in the total amount of Selling, General and Administrative for the years ended January 31, 2010 and 2009 amounted to $532,982 and $255,054 respectively. |
| | |
| | |
12. | Income Taxes | Realization of the future tax benefits related to the deferred tax assets is dependent on many factors including the Company’s ability to generate taxable income within the net operating loss carry forward period. The Company has provided a valuation allowance for the full amount of its net deferred tax assets due to the uncertainty of generating future profits that would allow for the realization of such deferred tax asset. |
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13. | Subsequent Events | See Note 10 regarding legal proceedings. |
PART III
Item 8. Changes in
the years in which those temporary differences are expected to be recovered or settled. Under FASB ASC 740, the effect on deferred tax assets and
Disagreementsliabilities of a change in tax rates is recognized in income in the period that includes the enactment date. FASB ASC 740-10-05, “Accounting for Uncertainty in Income Taxes” prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities.The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. The Company assesses the validity of its conclusions regarding uncertain tax positions quarterly to determine if facts or circumstances have arisen that might cause it to change its judgment regarding the likelihood of a tax position’s sustainability under audit.
Stock-based Compensation
The Company accounts for stock-based compensation using the fair value method following the guidance outlined in Section 718-10 of the FASB Accounting Standards Codification for disclosure about Stock-Based Compensation. This section requires a public entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award- the requisite service period (usually the vesting period). No compensation cost is recognized for equity instruments for which employees do not render the requisite service.
Net Loss per Share
Net loss per common share is computed by dividing net loss by the weighted average common shares outstanding during the period as defined by Financial Accounting Standards, ASC Topic 260, “Earnings per Share.” Basic earnings per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding.
Recent Accounting Pronouncements
In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which establishes a new lease accounting model for lessees. The updated guidance requires an entity to recognize assets and liabilities arising from financing and operating leases, along with Accountantsadditional qualitative and quantitative disclosures. The amended guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, with early adoption permitted. In March 2019, the FASB issued ASU 2019-01, Codification Improvements, which clarifies certain aspects of the new lease standard. The FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases in July 2018. Also in 2018, the FASB issued ASU 2018-11, Leases (Topic 842) Targeted Improvements, which provides an optional transition method whereby the new lease standard is applied at the adoption date and recognized as an adjustment to retained earnings. The amendments have the same effective date and transition requirements as the new lease standard.
We intend to adopt ASC 842 on AccountingJuly 1, 2020. The adoption of this guidance is not expected to have any impact on our financial statements.
Stockholders’ Equity and
Financial Disclosure.
There Accrued Liability Excess stock IssuanceThe Company has authorized 300,000,000 shares of Common Stock with a par value of $0.001. As of January 31, 2020, and January 31, 2019, respectively, there were 300,000,000 shares of Common Stock issued and outstanding, respectively.
NOTE 4 – COMMITMENTS AND CONTINGENCIES
The Company did not have been no changes in or disagreements withany contractual commitments of January 31, 2020, and 2019
NOTE 5 –NOTES PAYABLE-RELATED PARY
Mr. Lazar, the Company's accountants on accounting and financial disclosure forprincipal member of the Company’s Court-appointed custodian is considered a related party. During the year ended January 31, 2010.
NOTE 6 – SUBSEQUENT EVENTS
On April 27, 2020 the Company filed a Certificate of Designation with the State of Nevada to authorize 10,000,000 shares of Series A Preferred Stock (“Series A”). Each share of Series A is convertible into 20 shares of Common Stock. April 28, 2020 the Company awarded 10,000,000 shares of Series A to Custodian Ventures, LLC. managed by David Lazar in return for services provided
Item 14. Changes In And Disagreements With Accountants On Accounting And Financial Disclosure
In its two most recent fiscal years, the Company has had no disagreements with its independent accountants.
Item 9. Changes In And Disagreements With Accountants On Accounting And Financial Disclosure
None
ITEM 9A. CONTROLS AND PROCEDURES
Item 8A Controls and Procedures.
(a) Evaluation of Disclosure Controls and Procedures
Management of the Company,Disclosure Controls and Procedures–Our management, with the participation of theour Chief Executive Officer and the Chief Financial Officer, have evaluated the effectiveness of the design and operation of the Company’sour disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of the end of the period covered by this Report.
These controls are designed to ensure that information required to be disclosed in the reports we file or submit pursuant to the Securities Exchange Act), asAct of January 2010. 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission, and that such information is accumulated and communicated to our management, including our CEO and CFO, to allow timely decisions regarding required disclosure.
Based uponon this evaluation, the Chief Executive Officerour management, including our CEO and the Chief Financial Officer hasCFO, concluded that the certain of Company’sour disclosure controls and procedures arewere not effective as of January 31, 2010.2020, at reasonable assurance levels
We believe that our financial statements presented in this annual report on Form 10-K fairly present, in all material respects, our financial position, results of operations, and cash flows for all periods presented herein.
Inherent Limitations – Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. The design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdown can occur because of simple error or mistake. In particular, many of our current processes rely upon manual reviews and processes to ensure that neither human error nor system weakness has resulted in erroneous reporting of financial data.
Changes in Internal Control over Financial Reporting – There are material weaknesseswere no changes in our internal control over financial reporting as described below.
(b)during our fiscal year ended January 31, 2020, which were identified in conjunction with management’s evaluation required by paragraph (d) of Rules 13a-15 and 15d-15 under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.This Annual Report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only management’s report in this Annual Report.
Management Report on Internal Control over Financial Reporting
Management of the CompanyOur management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) ofor 15d-15(f) promulgated under the Exchange Act. Those rules define internal control over financial reporting as a process designed 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 and includes those policies and procedures that:
| ● | Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company; |
| ● | Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and the receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the Company; and |
| ● | Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisitions, use or disposition of the company’s assets that could have a material effect on the financial statements. |
Because of its inherent limitations, internal controlcontrols over financial reporting may not prevent or detect misstatements. Also, projectionsProjections 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.
A material weakness represents a significant deficiency (as defined in the Public Company Accounting Oversight Board’s Auditing Standard No. 5), or a combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.
Management conducted an assessment ofassessed the effectiveness of the Company’sour internal control over financial reporting as of JanuaryDecember 31, 2010 based on2019. In making this assessment, our management used the framework publishedcriteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Tread wayTreadway Commission Internal Control — Integrated Framework. Management (COSO) 2013.
Based on its assessment, management has identified the following material weaknesses in the Company’sconcluded that as of December 31, 2019, our disclosure controls and procedures and internal control over financial reporting as of January 31, 2010.
Material weaknesses identified in Finotec Group, Inc are as follows:
were effective. .ITEM 9B. OTHER INFORMATION
None
Audit Committee, Internal Audit and Entity Level Controls:
| · | The Audit Committee is not fully active. |
| · | The internal controller /audit function is not fully active. |
| · | Management does perform a periodic check of the access rights of all users to ensure that their access is suitable to their positions and functions. Segregation rights still need be further fine-tuned. |
Remediation Plan:
| · | The Audit Committee will be fully activated. |
| · | The Company has appointed an internal controller / auditor who have commenced a review and enforcement of the required tasks. . |
| · | The CFO will extract from the information system an access list for all employees and ensure that each function, screen and field is suitable to the employee's job description. |
| · | The CFO will ensure that the access rights are adequately segregated. |
Information Technology:
| · | The Company does have adequate permission and access right tables specifying group authorizations. Some employees have more authorizations than their role definition. There is no authorization procedure. |
| · | The Company does have password complexity procedure. User passwords require complexity, and there is a requirement for password change. |
| · | No adequate formal system development, acquisition and program change policies and procedures exist for development/acquisitions of new systems and changes to existing systems. |
| · | The developers have access to the production. |
Remediation Plan:
| · | The Company will continue to examine and minimize user rights and will prepare permissions table and access rights that includes group permissions and prepare access to programs and data procedures. |
| · | The Company will update "Access to Programs and Data" procedure. Passwords to the database will be managed. |
| · | The Company will write a methodology for system development, acquisitions and change management. |
| · | The Company will prevent the developers from accessing the production environment. |
Item 9. Directors, Executive Officers, Promoters, and Control Persons.
The officers of the Company are as follows:
NAME | POSITION(S) | TERM OF OFFICE |
Didier Essemini (38) | President, Director | 1 year |
Guy Senbel (57) | Secretary, Director | 1 year |
Gil Ovadia (44) | Director | 1 year |
Phillip Laurent Levy (46) | Director | 1 year |
Vacant | Director | 1 year |
Didier Essemini
Mr. Essemini is the President and a Director for the Company. Mr. Essemini graduated from the Sorbonne University in Paris with an MBA. He worked at Bank Hapoalim in Israel from 1994 to 1998. In 1998 Mr. Essemini started a brokerage company and implemented a front end internet solution for currency trading known as "Forexcash". Today Forexcash is a fully owned subsidiary of the Company.
Guy Senbel
Mr. Senbel is the Secretary and a Director for the Company. Mr. Senbel was President of the holding company of BS Decoration. Mr. Senbel attended University in France.
Gil Ovadia
Mr. Ovadia is a director of the Company. Mr. Ovadia graduated with degrees in Law & Economics from Keele University (UK). Mr. Ovadia has worked as a Solicitor in London for the last 12 years. Mr. Ovadia founded Silvergate Management Ltd. a property and financial services company which provides property and corporate management services.
Philip Laurent Levy
Mr. Levy is a serial entrepreneur who successfully founded and ran eleven companies in the past two decades, in France, Belgium, Monaco, and Turkey. He has extensive experience in finance, business development and IT. He is currently CEO of B-Wide Business, a VC fund and consulting firm that assists young Israeli companies in funding and management to turn them into global players. Mr. Levy holds an MBA from Sorbonne University in Paris, where he completed the curriculum for a Ph.D. in information systems.
Code of Conduct
The Company has adopted a Code of Conduct for its employees which will be made available, without charge, upon written request to ir@finotec.com.
PART III
ITEM 10. MANAGEMENT REMUNERATION
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEThe following table sets forth information regarding our executive officers and directors:
| Name | | Age | | Position |
| David Lazar | | 30 | | Chief Executive Officer, President, and Chairman of the Board |
The above-listed officers and directors will serve until the next annual meeting of the shareholders or until their death, resignation, retirement, removal, or disqualification, or until their successors have been duly elected and qualified. Vacancies in the existing Board of Directors are filled by majority vote of the remaining Directors. Officers serve at the will of the Board of Directors.
David Lazar, 30, has been CEO and Chairman of the Company since May 16, 2018. David Lazar is a private investor with business experience. Mr. Lazar has been a partner at Zenith Partners International since 2013, where he specializes in research and development, sales and marketing. Since February of 2018, Mr. Lazar has been the managing member of Custodian Ventures LLC, where he specializes in assisting distressed public companies. Since March 2018, David has acted as the managing member of Activist Investing LLC, which specializes in active investing in distressed public companies. David has a diverse knowledge of financial, legal and operations management; public company management, accounting, audit preparation, due diligence reviews and SEC regulations.
Board Committees
As of the date of this Report, we do not have any committees of our Board of Directors. We expect to appoint outside Directors to serve on our Board in the near future, but as of the date of this Report, we have not identified such prospective Directors. Once appointed and we become a reporting company, of which there is no assurance, we expect to form an Audit Committee, a Compensation Committee, a Corporate Governance Committee, and a Nominating Committee.
Family Relationships
There are no family relationships between any of our Directors or executive officers.
Involvement in Certain Legal Proceedings
To our knowledge, our directors and executive officers have not been involved in any of the following events during the past ten years:
| ● | Any bankruptcy petition filed by or against such person or any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; |
| ● | Any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); |
| ● | Being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from or otherwise limiting his involvement in any type of business, securities or banking activities or to be associated with any person practicing in banking or securities activities; |
| ● | Being found by a court of competent jurisdiction in a civil action, the SEC or the Commodity Futures Trading Commission to have violated a Federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated; |
| ● | Being subject of, or a party to, any Federal or state judicial or administrative order, judgment decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of any Federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or |
| ● | Being subject of or party to any sanction or order, not subsequently reversed, suspended, or vacated, of any self-regulatory organization, any registered entity or any equivalent exchange, association, entity, or organization that has disciplinary authority over its members or persons associated with a member. |
Director Independence
Our Board is currently composed of three members. Our Common Stock is not currently listed for trading on a national securities exchange and, as such, we are not subject to any director independence standards. No member of our Board of Directors is considered an independent director. We evaluated independence in accordance with the rules of The New York Stock Exchange, Inc., which generally provides that a director is not independent if: (i) the director is, or in the past three years has been, an employee of ours; (ii) a member of the director’s immediate family is, or in the past three years has been, an executive officer of ours; (iii) the director or a member of the director’s immediate family has received more than $120,000 per year in direct compensation from us other than for service as a director (or for a family member, as a non-executive employee); (iv) the director or a member of the director’s immediate family is, or in the past three years has been, employed in a professional capacity by our independent public accountants, or has worked for such firm in any capacity on our audit; (v) the director or a member of the director’s immediate family is, or in the past three years has been, employed as an executive officer of a company where one of our executive officers serves on the compensation paidcommittee; or (vi) the director or a member of the director’s immediate family is an executive officer of a company that makes payments to, or receives payments from, us in an amount which, in any twelve-month period during the fiscalpast three years, exceeds the greater of $1,000,000 or 2% of that other company’s consolidated gross revenues.
Once we achieve trading status, of which there can be no assurance, we will insure that our committees, as well as our Board of Directors, complies with all the requirements of a public company under the auspices of the OTC Marketplace.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 (the “34 Act”) requires our officers and directors and persons owning more than ten percent of the Common Stock, to file initial reports of ownership and changes in ownership with the Securities and Exchange Commission (“SEC”). Additionally, Item 405 of Regulation S-K under the 34 Act requires us to identify in our Form 10-K and proxy statement those individuals for whom one of the above-referenced reports was not filed on a timely basis during the most recent year or prior years. To our best knowledge, there has been no change in the holdings of any of our affiliates and no reports were required to be filed.
Code of Ethics
Our board of directors has not adopted a code of ethics but plans to do so in the near future.
ITEM 11. EXECUTIVE COMPENSATION
The following table sets forth information concerning all cash and non-cash compensation awarded to, earned by or paid to our executive officers. We do not currently have an established policy to provide compensation to members of our Board of Directors for their services in that capacity, although we may choose to adopt a policy in the future.
SUMMARY COMPENSATION TABLE
No compensation was granted ot David Lazar during the years ended January 31, 2010,2020 and January 31, 2019.
Salaries are established by our Board of Directors. We currently do not have a Compensation Committee but expect to have one in place in the Company's Chief Executive Officerfuture once we have independent directors. None of our employees are employed pursuant to an employment agreement.
Outstanding Equity Awards at Fiscal Year-End
The table below summarizes all unexercised options, stock that has not vested, and equity incentive plan awards for each named executive officer as of January 31, 2020.
None
Compensation of Directors
Other than the Company'scompensation described above in the Summary Compensation Table, our officers and directors. No other person received compensation equaldirectors are reimbursed for actual expenses incurred.
None
Stock Plan
We have not adopted a stock plan.
Employment Agreements
David Lazar is not party to or exceeding $100,000 in fiscal 2010.
| | Annual Compensation | Awards | | Payouts | | |
| | | | | | | | |
| | | | | | | | |
| Name | Position | Salary | Bonus | Other annual
compensation | Restricted
Stock
Option
Awards | Securities
underlying
options/SAR | LTIP
Payout |
| | | $ | $ | $ | $ | # | $ |
| Didier Essemini | President , Director | 307,000 | 0 | 0 | 0 | 0 | 0 |
| Guy Senbel | Director | 0 | 0 | 0 | 0 | 0 | 0 |
| | Director | 0 | 0 | 0 | 0 | 0 | 0 |
| Phillip Laurent Levy | Director | 0 | 0 | 0 | 0 | 0 | 0 |
| Vacant | Director | 0 | 0 | 0 | 0 | 0 | 0 |
Item 11.an employment agreement with us. ITEM 12. SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSThe following table sets forth certain information known to the Company regarding the beneficial ownership of Common Stock and Preferred Stock voting with the Common Stock as of January 31, 2010,the date of this Report by (i) each Directorperson known to us to own more than 5% of our outstanding Common Stock as of the Company,date of this Report, (ii) each of our directors, (iii) each of our executive officerofficers, and (iv) all of the Company, (iii) allour directors and executive officers as a group,group. Unless otherwise indicated, all shares are owned directly and (iv) eachthe indicated person known to the Company to be the beneficial owner of more than 5% of its outstanding shares of Common Stock.
Shares Beneficially Owned
(1) Percentage of ownershiphas sole voting and investment power. The information provided is based on 121,030,936 shares ofupon 300,000,000 Common StockShares issued and outstanding as of January 31, 2010. This % does not include Options.
| Directors and Executive Officers | Shares | Warrant | Owned (1) |
| | | | | |
| Didier Essemini | | 34,075,983 | | 28.2% |
| Guy Senbel | | 2,032,650 | | 1.7% |
| Gil Ovadia | | | 100,000 | |
| Phillip Laurent Levy | | 4,933,333 | 8,666,666 | 4.1% |
| | | | | |
| Total Directors | | 41,041,966 | 8,766,666 | 33.9% |
BENEFICIAL OWNERS OF OVER 5%
| | | Shares | Warrants | Owned (1) |
| Miranda Handling Ltd | | 11,111,111 | 0 | 9.2% |
| Jacob Mizrachi | | 10,780,000 | 0 | 8.9% |
| Inter Dealer Specialist Risk Arbitrage Markets Inc. | 9,218,000 | 0 | 7.6% |
| Tableland | | 7,222,222 | 2,888,888 | 6.0% |
| Gan Paradis | | 6,115,000 | 0 | 5.1% |
3,057,500the date of Didier Essemini 34,075,983 shares consist of his 50% ownership of Gan Paradis Ltd.
.
Item 12.this Report. | Class of Shares | | Name and Address | | # of Shares | | | % of Class | |
| Preferred | | David Lazar, Chief Executive Officer and Director (1)(2)
1185 Avenue of the Americas, 3rd Floor.
New York, New York 10036 | | | 10,000,0000 | (2) | | | 40.1 | % |
| | | | | | | | | | | |
| Common | | | | | | | | | | |
| | | | | | | | | | | |
| Common | | All Officers and Directors as a Group (1 persons) | | | | | | | | |
| | | | | | | | | | | |
| Common | | Other 5% Shareholders | | | | | | | | |
| | | | | | | | | | | |
| Common | | Didier Essemini | | | 31,018,483 | | | | | |
| | | | | | | | | | | |
| Common | | Yedidya Capital Group Inc. | | | 177,203,069 | | | | | |
| (1) | Officer and director of our Company. |
| (2) | Each share of Series A Preferred Stock convertible to 20 shares of Common Stock. Also includes 466,849 shares of common stock |
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
TRANSACTIONS WITH MANAGEMENT AND OTHERS
DIRECTOR INDEPENDENCERelated Party Transactions
There have beenare no other materialrelated party transactions series of similar transactions, or currently proposed transactions, to which the Company was or isthat are required to be disclosed pursuant to Regulation S-K promulgated under the Securities Act of 1933, as amended.
Director Independence
None of our current directors are deemed “independent” pursuant to SEC rules. We anticipate appointing independent directors in the foreseeable future.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.
Fees Paid to Independent Registered Public Accounting Firms
The following table presents fees for professional audit services rendered by B F Borgers CPA PC, our independent auditors, during our fiscal years ended January 31, 2020 and 2019:
| | December 31, 2019 | | | December 31, 2018 | |
| Audit Fees | | $ | - | | | $ | - | |
| Tax Fees | | | | | | | | |
| All Other Fees | | | | | | | | |
| Total | | $ | - | | | $ | - | |
Audit Fees. Consist of amounts billed for professional services rendered for our annual financial statements our Annual Report on Forms 10-K for our fiscal years ended January 31, 2020 and 2019, respectively, and for reviews of our interim financial statements included in our Quarterly Reports on Form 10-Q.
Tax Fees. Consists of amounts billed for professional services rendered for tax return preparation, tax planning, and tax advice.
All Other Fees. Consists of amounts billed for services other than Audit Fees.
We do not have an audit committee and as a party, in whichresult, our entire Board of Directors performs the amount involved exceeds $60,000duties of an audit committee. Our Board of Directors evaluates the scope and in which any director or executive officer, or any security holder who is known to the Company to own of record or beneficially more than five percentcost of the Company's Common Stock, or any memberengagement of an auditor before the auditor renders audit and non-audit services.
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
The following exhibits are included herewith:
Following are a list of exhibits which we previously filed in other reports which we filed with the SEC, including the Exhibit No., description of the immediate family of anyexhibit and the identity of the foregoing persons, had a material interest.Report where the exhibit was filed.
12
Item 13. EXHIBITS, FINANCIAL STATEMENTS SCHEDULES AND REPORTS ON FORM 8-K
(a) All required exhibits are incorporated herein by reference from the Company's Form 10K- and Amendments thereto.
Pursuant toIn accordance with 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.
DATE: April 30, 2010 | By: /s/ Didier EsseminiFinotec Group, Inc.
|
| (Registrant) |
| |
| Date: November 18, 2020 | Didier Essemini |
| By: | President |
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and dates indicated.
Signature | | Title | Date | /s/ David Lazar |
| | | | | |
| | | | |
/s/ Didier Essemini | | | | |
Didier Essemini | | President,David Lazar, CEO and a Director | April 30, 2010 | |
| | | | |
/s/ Guy Senbel | | | | |
Guy Senbel | | Secretary and a Director | April 30, 2010 | |
| | | | |
/s/ Gil Ovadia | | | | |
Gil Ovadia | | Director | April 30, 2010 | |
| | | | |
/s/ | | | | |
Phillip Laurent Levy | | Director | April 30, 2010 | CFO |
32