UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 20172019

☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

EXCHANGE ACT

Commission File Number: 000-54953

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days☒Yes☐No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).☒Yes☐No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and, “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes NoX☐ No☒

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the registrant filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yes☐No☐

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: 69,322,426 shares of common stock as of March 21, 2018.October 28, 2019. 

JUDO CAPITAL CORP.

FORM 10-Q

TABLE OF CONTENTS

INFORMATION REGARDING FORWARD-LOOKING DISCLOSURE

This quarterly report on Form 10-Q contains forward-looking statements. Statements in this report that are not historical facts, including statements about management’s beliefs and expectations, constitute forward-looking statements. These statements are based on current plans, estimates and projections, and are subject to change based on a number of factors, including those outlined under Item 1A, Risk Factors, in our most recent annual report on Form 10-K, and any updated risk factors we include in our quarterly reports on Form 10-Q and other filings with the SEC. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update publicly any of them in light of new information or future events.

Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Such factors include, but are not limited to, the following:

•     risks arising from material weaknesses in our internal control over financial reporting, including material weaknesses in our control environment;

•     our ability to attract new clients and retain existing clients;

•     our ability to retain and attract key employees;

•     risks associated with assumptions we make in connection with our critical accounting estimates;

•     potential adverse effects if we are required to recognize impairment charges or other adverse accounting-related developments;

•     potential downgrades in the credit ratings of our securities;

•     risks associated with the effects of global, national and regional economic and political conditions, including fluctuations in economic growth rates, interest rates and currency exchange rates; and

•     developments from changes in the regulatory and legal environment for advertising and marketing and communications services companies around the world.

Investors should carefully consider these factors and the additional risk factors outlined in more detail under Item 1A, Risk Factors, in our 2016Annual2018 Annual Report on Form 10-K and other filings with the SEC.

PART I

ITEM 1     FINANCIAL STATEMENTS

JUDO CAPITAL CORP.

(FORMERLY CLASIC RULES JUDO CHAMPIONSHIPS, INC.)

UNAUDITED FINANCIAL STATEMENTS

September 30, 20172019

CONTENTS

Judo Capital Corp.

Notes to Consolidated Financial Statements

September 30, 20172019

(Unaudited)

NOTE A1 – ORGANIZATION AND NATURE OF BUSINESS

Judo Capital Corp. (“Judo”) was incorporated in the State of Delaware on November 16, 2005 under the name Blue Ribbon Pyrocool, Inc. (“Blue Ribbon”). Blue Ribbon changed its name to Classic Rules Judo Championships, Inc. on July 15, 2008 then to Judo Capital Corp on February 15, 2017. theThe entity is referred to as “the Company”. The Company formed a subsidiary in the State of Connecticut on August 13, 2008 named Classic Rules World Judo Championships, Inc. to develop an annual judo championship tournament. Collectively the entities are referredtournament, this subsidiary is no longer active and has ceased to as “the Company”.exist. On June 2, 2014, the Company ceased its principal activities of hosting and sponsoring judo tournaments. The Company had planned to operate in real estate investment activities focused in the New York City metropolitan area.  On February 28, 2018, the Company ceased its plans to operate in the real estate investment activities. The Company is seeking to consummate a merger or acquisition.

Unaudited Interim Financial Statements

The accompanying unaudited interim consolidated financial statements as of September 30, 2017, and for the three and nine months ended September 30, 2017 and 2016 have been prepared in accordance with accounting principles generally accepted for interim financial statement presentation and in accordance with the instructions to Form 10-Q. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statement presentation. They should be read in conjunction with the Company’s annual report on Form 10-K for the year ended December 31, 2016. In the opinion of management, the financial statements contain all adjustments (consisting only of normal recurring accruals) necessary to fairly present the financial position as of September 30, 2017 and the results of operations for the three and nine months ended September 30, 2017 and 2016 and cash flows for the nine months ended September 30, 2017 and 2016. The results of operations for the three and nine months ended September 30, 2017 are not necessarily indicative of the results to be expected for the full year.

Principles of Consolidation

The consolidated financial statements include the accounts of Judo Capital Corp. and its wholly owned subsidiary Classic Rules World Judo Championships, Inc. All intercompany balances and transactions have been eliminated in consolidation.

NOTE B2 – GOING CONCERN

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As of September 30, 2017,2019, the Company had a working capital deficit of $42,492$81,682 and accumulated deficit of $390,639.$432,803. These circumstances raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

The Company needs to raise additional capital in order to fully develop its business plan. Failure to raise adequate capital and generate adequate revenues could result in the Company having to curtail or cease operations. Additionally, even if the Company does raise sufficient capital to support its operating expenses and generate adequate revenues, there can be no assurance that the revenue will be sufficient to enable it to develop business to a level where it will generate profits and adequate cash flows from operations.

NOTE 3.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited interim financial statements as of September 30, 2019, and for the nine months ended September 30, 2019 and 2018 have been prepared in accordance with accounting principles generally accepted for interim financial statement presentation and in accordance with the instructions to Form 10-Q. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statement presentation. They should be read in conjunction with the Company’s annual report on Form 10-K for the year ended December 31, 2018. In the opinion of management, the financial statements contain all adjustments (consisting only of normal recurring accruals) necessary to fairly present the financial position as of September 30, 2019 and the results of operations for the three and nine months ended September 30, 2019 and 2018 and cash flows for the nine months ended September 30, 2019 and 2018. The results of operations for the three months ended September 30, 2019 are not necessarily indicative of the results to be expected for the full year.

Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and expenses during the reporting period. On an on-going basis, the Company evaluates its estimates. Actual results and outcomes may differ materially from the estimates as additional information becomes known.

Reclassifications

Certain reclassifications have been made to the presentation for the three and nine months ended September 30, 2018 to make them comparable to the current years presentation.

 Cash and Cash Equivalents

Cash and cash equivalents includes highly liquid investments with original maturities of nine months or less. On occasion, the Company has amounts deposited with financial institutions in excess of federally insured limits. 

Judo Capital Corp.

Notes to Financial Statements

September 30, 2019

(Unaudited)

 Fair Value of Financial Instruments

The Company measures certain financial assets and liabilities at fair value based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. The carrying value of cash and cash equivalents and accounts payable approximate their fair value because of the short-term nature of these instruments and their liquidity. Management is of the opinion that the Company is not exposed to significant interest or credit risks arising from these financial instruments.

Income Taxes

Deferred income tax assets and liabilities are determined based on the estimated future tax effects of net operating loss and credit carryforwards and temporary differences between the tax basis of assets and liabilities and their respective financial reporting amounts measured at the current enacted tax rates. The Company records an estimated valuation allowance on its deferred income tax assets if it is not more likely than not that these deferred income tax assets will be realized.

The Company recognizes a tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. As of the previous years ended December 31, 2018 and 2017, the Company has not recorded any unrecognized tax benefits.

Segment Reporting

The Company’s business currently operates in one segment.

Net Loss per Share

The computation of basic net loss per common share is based on the weighted average number of shares that were outstanding during the year. The computation of diluted net loss per common share is based on the weighted average number of shares used in the basic net loss per share calculation plus the number of common shares that would be issued assuming the exercise of all potentially dilutive common shares outstanding using the treasury stock method. See Note 4. Net Loss Per Share.

Recently Issued Accounting Pronouncements

The Company reviews new accounting standards as issued. Although some of these accounting standards issued or effective after the end of the Company’s previous fiscal year may be applicable to the Company, it has not identified any standards that it believes merit further discussion. The Company does not expect the adoption of any recently issued accounting pronouncements to have a significant impact on its financial position, results of operations, or cash flows.

 NOTE C4 – STOCKHOLDERS’ DEFICIT

Preferred Stock

The Company is authorized to issue 50,000,000 shares of preferred stock with a par value of $0.001 per share. There were no shares of preferred stock issued or outstanding at September 30, 20172019 or December 31, 2016.2018.

Common Stock

The Company is authorized to issue 100,000,000 shares of common stock with a par value of $0.001 per share. There were 69,322,426 shares issued and outstanding at September 30, 20172019 and December 31, 2016.2018.

Judo Capital Corp.

Notes to Consolidated Financial Statements

September 30, 20172019

(Unaudited)

On September 1, 2017, the Company entered into two separate convertible notes payable with a related party, who is an officer of the Company, one for $400,000 and another for $200,000, for the purchase of four certain liens on real estate properties.There is no assets recorded as a result of the transaction. The transaction is recorded as an increase in debt and a reduction in additional paid in capital.

NOTE D–5 – RELATED PARTY TRANSACTIONS AND NOTE PAYALBEPAYABLE

In 2017, the Company received loans from a related party totaling $30,000. The loans payable bear interest at an annual rate of 10% interest and are due on demand. There was $30,000 due as principal and $5,156 in interest for these notes due to a related party as of December 31, 2018. There was $30,000 due as principal and $7,400 in interest for these notes due to a related party as of September 30, 2019.

During the nine months ended September 30, 2017,2019, the Company terminated its credit line facility with its Chief Executive Officer, Lorenzo DeLuca thatreceived advances from a related party totaling $11,885. During the nine months ended September 30, 2018, the Company received advances from a related party totaling $300. The advances are non-interest bearing and due on demand. There was entered into$12,185 and $300 in October 2015. The Company had not drawn on the credit facilityaccounts payable - related party as of September 30, 2019 and there was no principal or accrued interest due at the time of termination.December 31, 2018, respectively.

During the nine months ended September 30, 2017,2019, the Company entered into two separate notes payablereceived loans from a related party totaling $30,000 with its Chief Executive Officer, Lorenzo DeLuca. The notes accrue interest at$7,050. During the nine months ended September 30, 2018, the Company received a rate of 10% per annumloan from a related party totaling $9,000. These loans are non-interest bearing and are due within ten days ofon demand. There was $30,000 of principal$16,050 and accrued interest totaling $1,400$9,000 due as non-interest bearing loans to a related party as of September 30, 2017.

As discussed in Note C, the Company entered into two separate convertible notes payable with related party who is an officer of the Company totaling $400,0002019 and $200,000 respectively, for the purchase of liens on real estate properties. The convertible note payable accrues interest at 3% per annum and is due on September 1, 2021. The notes may be converted to common stock of the Company effective January 1,December 31, 2018, at a rate equal to the lower of $1.00 or the price of the Company’s equity that are sold in any offering in excess of $100,000. Additionally, the note holders are entitled to 40% of any amounts collected from real estate liens in excess of the notes principal. The principal and accrued interest on the notes payable is payable only if the Company successfully collects on the liens discussed in Note C. There was $600,000 of principal and $1,500 of accrued interest due as of September 30, 2017. On February 28, 2018, the Company entered into an agreement with a related party whereby the convertible notes payable were cancelled and all amounts owing, including accrued interest, cancelled. Additionally, the Company returned the real estate liens to the related party.

The Company analyzed the conversion options in the convertible loan payables for derivative accounting consideration under ASC 815, Derivative and Hedging, and determines that the transactions do not qualify for derivative treatment. The Company then analyzed these convertible notes for Beneficial Conversion Features (BCF) and concluded there were no BCF on these loan payable convertible notes.respectively.

The Company currently operates out of an office of a related party free of rent.

NOTE E – COMMITMENTS AND CONTINGENCIES

On February 2, 2017, the Company entered into three separate non-exclusive agreements whereby it engaged agents to assist in the purchase of distressed real estate properties on behalf of the Company. The Company has agreed to compensate each party a minimum of 1% of the aggregate purchase price of the property Due to the cancellation agreement the Company returned real estate liens and is no longer intends to be in the real estate investment business.

NOTE F6 – SUBSEQUENT EVENTS

On February 28, 2018, theThe Company entered into an agreement with a related party whereby the convertible notes payable as discussed in Note D were cancelled andhad evaluated all amounts owing, including accrued interest, forgiven. Additionally, the Company returned the real estate liensevents occurring subsequent to the related party.balance sheet date and determined there are no additional events to disclose.

Item 2.     Management's Discussion and Analysis of Financial Condition and Results of Operations

Forward-looking Information

This Form 10-Q quarterly report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. All statements other than statements of historical facts, included in this Form 10-Q that address activities, events, or developments that we expect or anticipate will or may occur in the future, including such things as future capital expenditures (including the amount and nature thereof), business strategy and measures to implement strategy, competitive strength, goals, expansion and growth of our business and operations, plans, references to future success, reference to intentions as to future matters, and other such matters are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential," or "continue," or the negative of such terms or other comparable terminology. These statements are only predictions. Actual events or results may differ materially. These statements are based upon certain assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments as well as other factors that we believe are appropriate in the circumstances. However, whether actual results and developments will conform to our expectations and predictions is subject to a number of risks, uncertainties, and other factors, many of which are beyond our control.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. Moreover, we do not assume responsibility for the accuracy and completeness of such forward-looking statements. We are under no duty to update any of the forward-looking statements after the date of this report to conform such statements to actual results.

Results of Operations

Comparison of the three months ended September 30, 20172019 and 20162018

Revenues.The Company had no revenue during the three months ended September 30, 20172019 or 2016.2018.

Cost of Revenues. The Company had no cost of revenue for the three months ended September 30, 20172019 or 2016.2018.

General and Administrative expenses. The Company incurred $6,209$48 of general and administrative expenses during the three months ended September 30, 20172019 compared to $4,100$641 during the same period in 2016.2018. The increasedecrease in general and administrative expenses is the result of the Company incurring legal costs associated with its public filings during the prior period that were not incurred during the current period.

Professional fees. The Company incurred $1,352 of professional fees during the three months ended September 30, 2019 compared to $0 during the same period to affect a name change which wasin 2018. The increase in professional fees is the result of the Company incurring costs associated with Accountants, Auditors and Attorneys that were not incurred during 2016.the current period.

Loss From Operation . The Company incurred an operating loss of $1,400 during the three months ended September 30, 2019 compared to $641 during the same period in 2018. The increase in net loss is a result of increased professional fees as discussed previously.

Other Income (Expense). The Company incurred interest expense of $756 during the three months ended September 30, 2019 compared to $756 during the three months ended September 30, 2018.

Net Loss . The Company incurred a net loss of $2,156 during the three months ended September 30, 2019 compared to $1,397 during the same period in 2018. The increase in net loss is a result of increased professional fees as discussed previously.

Comparison of the nine months ended September 30, 2019 and 2018

Revenues . The Company had no revenue during the nine months ended September 30, 2019 or 2018.

Cost of Revenues . The Company had no cost of revenue for the nine months ended September 30, 2019 or 2018.

General and Administrative expenses. The Company incurred $817 of general and administrative expenses during the nine months ended September 30, 2019 compared to $1,434 during the same period in 2018. The decrease in general and administrative expenses is the result of the Company incurring costs associated with its public filings during the prior period that were not incurred during the current period. 

Professional fees. The Company incurred $12,891 of professional fees during the nine months ended September 30, 2019 compared to $11,085 during the same period in 2018. The increase in professional fees is the result of the Company incurring costs associated with accountants and auditors.

Loss From Operations. The Company incurred an operating loss of $6,209$13,708 during the threenine months ended September 30, 20172019 compared to $4,100$12,519 during the same period in 2016.2018. The increasedecrease in net loss is a result of decreased general and administrative expenses as discussed previously.

Other Income (Expense). The Company incurred interest expense with related parties of $1,193 and non related parties of $1,000 during the three months ended September 30, 2017 compared to $0 during the three months ended September 30, 2016. The increase in interest expense is due to the outstanding balance under the Company’s related parties loan payable and convertible notes payable that were present during the three months ended September 30, 2017 but not 2016.

NetLoss. The Company incurred a net loss of $8,402 during the three months ended September 30, 2017 compared to $4,100 during the same period in 2016. The increase in net loss is a result of increased general and administrative and other expenses as discussed previously.

Comparison of the nine months ended September 30, 2017 and 2016

Revenues.The Company had no revenue$2,244 during the nine months ended September 30, 2017 or 2016.

Cost of Revenues. The Company had no cost of revenue for the nine months ended September 30, 2017 or 2016.

General and Administrative expenses. The Company incurred $39,824 of general and administrative expenses2019 compared to $2,244 during the nine months ended September 30, 2017 compared to $12,435 during the same period in 2016. The increase in general and administrative expenses is the result of the Company incurring costs during the current period to catch up and maintain its filings with the SEC which it was not performing during 2016.

Loss From Operations. The Company incurred an operating loss of $39,824 during the nine months ended September 30, 2017 compared to $12,435 during the same period in 2016. The increase in net loss is a result of decreased general and administrative expenses as discussed previously.

Other Income (Expense). The Company incurred interest expense with related parties of $1,900 and non-related parties of $1,000 during the nine months ended September 30, 2017 compared to $0 during the nine months ended September 30, 2016. The increase in interest expense is due to the outstanding balance under the Company’s related parties loan payable and convertible notes payable that were present during the nine months ended September 30, 2017 but not 2016.2018.

Net Loss. The Company incurred a net loss of $42,724$15,952 during the nine months ended September 30, 20172019 compared to $12,435$14,763 during the same period in 2016.2018. The increasedecrease in net loss is a result of decreased general and administrative and other expenses as discussed previously.

Liquidity and Capital Resources

At September 30, 2017,December 31, 2018, the Company had current assets of $4,500$231 and current liabilities totaling $46,992$65,935 creating a working capital deficit of $42,492.$65,704. Current assets consisted of $3,250$231 of cash and $1,250 of prepaid expenses.cash. Current liabilities consisted of accounts payable and accrued liabilities totaling $14,092,$21,479, interest payable to related parties of $1,900, interest$5,156, loans payable to related parties of $1,000$39,000 and a related party payable of $30,000.$300.

At September 30, 2019, the Company had current assets of $26 and current liabilities totaling $81,682 creating a working capital deficit of $81,656. Current assets consisted of $26 of cash. Current liabilities consisted of accounts payable and accrued liabilities totaling $15,947, interest payable to related parties of $7,400, loans payable to related parties of $46,050 and a related party payable of $12,285.

Cash Flows

Net cash used in operating activities was $31,537$7,255 and $2,980$9,138 during the nine months ended September 30, 20172019 and 2016,2018, respectively. Net cash used in operating activities during the nine months ended September 30, 2017 consisted of a net loss of $42,724 offset by changes in working capital of $11,187 Net cash used in operating activities during the nine months ended September 30, 2016 consisted of a net loss of $12,435 which was offset by a positive change in working capital of $9,455.

Net cash provided by financing activities were $30,000was $7,050 and $0$9,000 during the nine months ended September 30, 20172019 and 2016, respectively. Net cash provided by financing activities2018, respectively, which consisted of a $7,050 loan from a related party during the nine months ended September 30, 2017 consisted of $30,000 of proceeds2019 and a $9,000 loan from a related party loans.during the nine months ended September 30, 2018.

As of September 30, 2017,2019, the Company was primarily relying on its corporate officers, directors, and outside investors for the funding needed for the implementation of its business plan. The Company’s management is currently looking for the capital needed to complete its corporate objectives. The Company cannot predict the extent to which its liquidity and capital resources will be available prior to executing its business plan or whether it will have sufficient capital to fund typical operating expenses.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Item 3.     Quantitative and Qualitative Disclosures about Market Risk

Smaller reporting companies are not required to provide the information required by this item.

Item 4.     Controls and Procedures

Evaluation of Disclosure Controls and Procedures.Procedures

The Securities and Exchange Commission defines the term "disclosure controls and procedures" to mean a company's controls and other procedures of an issuer that are designed to ensure that information required to be disclosed in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Securities Exchange Act of 1934 is accumulated and communicated to the issuer's management, including its chief executive and chief financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. The Company maintains such a system of controls and procedures in an effort to ensure that all information which it is required to disclose in the reports it files under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified under the SEC's rules and forms and that information required to be disclosed is accumulated and communicated to its chief executive and chief financial officers to allow timely decisions regarding disclosure.

As of the end of the period covered by this report, we carried out an evaluation, underUnder the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer, Craig Burton, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures.procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), as of the end of the period covered by this quarterly report. Based on this evaluation theCraig Burton, our Chief Executive Officer and Chief Financial Officer have concluded that the Company'sas of October 28, 2019, our disclosure controls and procedures were not effective such that the information required to be disclosed in our United States Securities and Exchange Commission (the “SEC”) reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as of such date.appropriate to allow timely decisions regarding required disclosure.

The material weakness identified relates to the lack of proper segregation of duties. The Company believes that the lack of proper segregation of duties is due to the Company’s limited resources.

Changes in Internal Control overControls Over Financial Reporting

There were no changes in our internal control over financial reporting that occurred duringidentified in connection with our evaluation of these controls as of the periodend of our last fiscal quarter as covered by this report on September 30, 2019 that havehas materially affected, or areis reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

The Company's management does not expect that its disclosure controls or its internal control over financial reporting will prevent or detect all error or all fraud and is not effective. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system's objectives will be met. 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. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or management override of the controls. The design of any system of controls is based in part on 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.

PARTPART II - OTHER INFORMATION

Item 1.        Legal Proceedings

From time to time, the Company may be a party to litigation or other legal proceedings that we consider to be part of the ordinary course of our business. At present, there are no pending legal proceedings to which the Company is a party or in which any director, officer or affiliate of the Company, any owner of record or beneficially of more than 5% of any class of voting securities of the Company, or security holder is a party adverse to the Company or has a material interest adverse to the Company. The Company’s property is not the subject of any pending legal proceedings.

Item 1A.     Risk Factors

An investment in our shares is speculative and involves a high degree of risk. Therefore, you should not invest in our shares unless you are able to bear a loss of your entire investment. You should carefully consider the following factors as well as those set forth in our annual report on Form 10-K for the year ended December 31, 20152018 and the other information contained herein before deciding to invest in our shares. Factors that could cause actual results to differ from our expectations, statements or projections include the risks and uncertainties relating to our business described above. The fact that some of the risk factors may be the same or similar to our past filings, means only that the risks are present in multiple periods. We believe that many of the risks detailed here and in our SEC filings are part of doing business in our industry and will likely be present in all periods reported. The fact that certain risks are endemic to our industry does not lessen the significance of the risk. We urge you to carefully consider the following discussion of risks as well as other information regarding our common stock. This report and statements that we may make from time to time may contain forward-looking information. There can be no assurance that actual results will not differ materially from our expectations, statements or projections.

Smaller reporting companies are not required to provide the information required by this item.

Item 2.        Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3.         Defaults Upon Senior Securities

None.

Item 4.         Mine Safety Disclosures

N/A

Item 5.         Other Information

None.

Item 2.        Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3.         Defaults Upon Senior Securities

None.

Item 4.         Mine Safety Disclosures

N/A

Item 5.         Other Information

None.

Item 6.         Exhibits

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.