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TCCR Triccar

Filed: 20 Jul 21, 12:09pm
 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the year ended December 31, 2020

 

OR

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File No. 0-30746

 

TRICCAR INC.

(Exact name of registrant as specified in its charter)

 

Nevada 84-4250492
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
   

 

220 Travis Street, Suite 501, Shreveport, Louisiana

 71101
(Address of Principal Executive Offices) (Zip Code)

 

318-425-5000

 (Registrant’s telephone number, including area code)

 

 (Former name, former address and former fiscal year, if changed since last report)

 

Securities registered pursuant to Section 12(b) of the Act:

Title of each classTrading
Symbol(s)
  Name of each exchange on which registered
Common Stock, $0.0001 par value per shareTCCR NONE

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨   No   x

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨  No x

 

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

 

 
 

Indicate by check mark whether the registrant has submitted electronically 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 the registrant was required to submit such files). Yes   x     No ¨

 

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§232.405 of this chapter) is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10K.  Yes ¨     No  x

 

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

 

Large accelerated filer ¨ Accelerated filer ¨
Non-accelerated Filer x Smaller reporting company x

 

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

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨   No x

 

The aggregate market value of the registrant’s common stock held by non-affiliates computed by reference to the price at which the common stock was last sold as of July 30, 2020 was $2,695,910. 

 

The number of shares of the registrant’s common stock outstanding as of July 20, 2021 was 20,000,000.

 

Documents Incorporated by Reference

 

None

 

 

 

 

 
 

 

TABLE OF CONTENTS

 

TRICCAR INC.

INDEX

 

Part I  
   
Item 1.Business1
Item 1A.Risk Factors3
Item 1B.Unresolved Staff Comments8
Item 2.Description of Properties8
Item 3.Legal Proceedings8
   
Part II  
   
Item 5.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchase of Equity Securities8
Item 6.Selected Financial Data9
Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations9
Item 8.Consolidated Financial Statements and Supplemental Data11
 Report of Independent Registered Public Accounting FirmF-1
 Consolidated Balance SheetsF-2
 Consolidated Statements of OperationsF-3
 Consolidated Statements of Cash FlowsF-4
 Consolidated Statements of Changes in Stockholders’ DeficitF-5
 Notes to Consolidated Financial StatementsF-6
Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure12
Item 9A.Controls and Procedures12
Item 9B.Other Information13
   
Part III  
   
Item 10.Directors, Executive Officers and Corporate Governance13
Item 11.Executive Compensation14
Item 12.Security Ownership and Certain Beneficial Owners and Management and Related Stockholder Matters16
Item 13.Certain Relationships and Related Transactions and Director Independence18
Item 14.Principal Accounting Fees and Services18
   
Part IV  
   
Item 15.Exhibits, Financial Statement Schedules19
   
Signatures 20
   
Certificates 21

 

 
 

 

PART I

 

Forward Looking Statements

 

This annual report on Form 10-K includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which can be identified by the use of forward-looking terminology such as “may,” “can,” “believe,” “expect,” “intend,” “plan,” “seek,” “anticipate,” “estimate,” “will,” or “continue” or the negative thereof or other variations thereon or comparable terminology. All statements other than statements of historical fact included in this annual report on Form 10-K, including without limitation, the statements under “Item 1. Business” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and located elsewhere herein regarding the financial position and liquidity of the Company (defined below) are forward-looking statements. Although the Company believes the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Important factors with respect to any such forward-looking statements, including certain risks and uncertainties that could cause actual results to differ materially from the Company’s expectations (“Cautionary Statements”), are disclosed in this annual report on Form 10-K, including, without limitation, in conjunction with the forward-looking statements and under the caption “Risk Factors.” In addition, important factors that could cause actual results to differ materially from those in the forward-looking statements included herein include, but are not limited to, limited working capital, limited access to capital, changes from anticipated levels of sales, future national or regional economic and competitive conditions, changes in relationships with customers, difficulties in developing and marketing new products, marketing existing products, customer acceptance of existing and new products, , technological change, dependence on key personnel, availability of key component parts, vendors, contractors, product liability, casualty to or other disruption of the production facilities, delays and disruptions in the shipment of the Company’s products, and the ability of the Company to meet its stated business goals. All subsequent written and oral forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the Cautionary Statements. We do not undertake to update any forward-looking statements.

 

We do not have an operative web site upon which our periodic reports, proxy statements and Reports on Form 8-K appear. Our reports are available on the SEC’s EDGAR system and may be viewed at http://www.sec.gov.

 

Item 1. Business

 

Our Business

 

TRICCAR, Inc. formerly known as Frontier Oilfield Services, Inc. a Nevada corporation (and collectively with its subsidiaries, “we”, “our”, “TRICCAR”, “Frontier”, “FOSI”, or the “Company”), was organized on March 24, 1995. The accompanying consolidated financial statements include the accounts of the Company as well as:

 

Frontier Acquisition I, Inc., and its direct and indirect subsidiaries Chico Coffman Tank Trucks, Inc. (“CTT”) and Coffman Disposal, LLC; and
Frontier Income and Growth, LLC (FIG) and its subsidiaries Trinity Disposal & Trucking, LLC and Trinity Disposal Wells, LLC.

 

We operate in the oilfield service industry and more specifically have a focus on saltwater disposal wells (“SWDs”) located in Wise County Texas and the Barnett Shale region in north central Texas.

 

We have an operating and management agreement with Elysian Fields Disposal LLC (“Elysian Fields”) to serve as operator, management and consultant of various field operational assets. Under the contract agreement, Elysian Fields has the authority to operate the wells and provide accounting, regulatory compliance filings, and operating services through itself or qualified sub-contractors. This agreement remains in place and the three SWD wells continue to be operated pursuant to the terms of the operating and management agreement.

 

 

The significant quantity of oil and gas wells in the Barnett Shale of Texas combined with the presence of produced water (salt water) and other fluids in the production process creates demand for disposal services such as those services provided by us.

 

Recent Developments

 

On December 12, 2019, we entered into a Reorganization and Stock Purchase Agreement (the “Agreement”) to change our corporate domicile from Texas to Nevada, assume the name TRICCAR, Inc. (“TRICCAR”), and to acquire 100% of the issued and outstanding equity of TRICCAR Holdings, Inc., a Nevada Corporation (“TRICCAR Holdings”).

 

TRICCAR acquired 100% of the issued and outstanding equity of TRICCAR Holdings. TRICCAR issued 80,000,000 shares of stock to acquire all the issued and outstanding equity stock of TRICCAR Holdings while TRICCAR shareholders retained 20,000,000 shares of stock.

 

The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries.

 

Through May 14, 2021, TRICCAR was a biomedical research, development, and marketing firm whose focus was to develop, acquire, and partner to bring bioceutical solutions (not requiring FDA approval) and pharmaceutical drugs (requiring FDA approval) to the market. The Company was in the development stage of bioceutical and pharmaceutical products designed to support the well-being of humans and animals that have common diseases.

On May 14, 2021, TRICCAR and TRICCAR Holdings entered into a Mutual Rescission Agreement and General Release (“Rescission Agreement”), pursuant to which the Reorganization and Stock Purchase Agreement (“Agreement”) entered into by and between the TRICCAR and TRICCAR Holdings on December 12, 2019 was rescinded. Pursuant to the terms of the Rescission Agreement, the 80,000,000 shares that were to be issued to the shareholders of TRICCAR Holdings will be returned by the shareholders of TRICCAR Holdings and in exchange therefor, TRICCAR will return the shares of TRICCAR Holdings it received to the shareholders of TRICCAR Holdings and the Company will disclaim any right, title and/or interest in or to any shares of capital stock of TRICCAR Holdings.

 

Effective December 31, 2019, the Company entered into an asset exchange and purchase agreement with Kenneth Owens, a note holder and stockholder of the Company at the time of the transaction, for the transfer of all our assets located in Wise County, Texas in exchange for the cancellation of $4.6 million in debt owed to Mr. Owens by the Company and the return of 2,701,168 shares of our common stock owned by Mr. Owens.

At the closing of the transaction, Mr. Owens did not accept the transfer of three of the SWD wells located in Wise County, Texas.  The SWD’s are as follows: Trull 1, Trull 2 and CSWU 1202. As a result, the Company never transferred these three SWD wells to Mr. Owens. The leases for these three SWD wells are in default and there is no current disposal activity or revenues from these SWDs. We are in the process of entering into negotiations with the lessors to restart these leases. The Company has continued to provide regulatory compliance reporting and maintenance services for these three SWD wells. On December 31, 2019, the Company had an existing operating and management agreement with Elysian Fields Disposal LLC to serve as operator, management and consultant of various field operational assets. Under the contract agreement, Elysian Fields has the authority to operate the wells and provide accounting and regulatory compliance reporting services through itself or other qualified sub-contractors. While the SWD wells are not commercially operating and the leases are currently in default, this agreement remains in place for the three SWD wells continue to be maintained pursuant to the terms of the operating and management agreement. Elysian Fields is an affiliate of Newton Dorsett, our largest stockholder and was paid $60,000 in fees during 2020 by the Company. See Related Party footnote 7.

In connection with the sale of TRICCAR Holdings, TRICCAR’s management team and two members of its Board of Directors resigned, and Matthew Flemming was appointed to serve as the Company’s Chief Executive Officer, President and as a member of the board of directors.

   

Outlook

 

The Company has several years of history in the operations and development of saltwater disposal wells. Management currently believes the oil and gas industry outlook is positive and increasing activity levels which in turn drives more demand for our saltwater disposal services.

 

IHS Markit estimates the US oilfield water management to be valued at around $37 billion in 2019, representing a 12% year-on-year (y/y) market growth from 2018; this is mainly driven by water disposal and water logistics. The Permian Basin continues to produce and demand the largest volume of oilfield water among all US onshore regions, with water spending in the region estimated at $13.3 billion in 2019.

 

Figure 1: Market size, by play ($ billion)

Within the value chain of the water management market, water logistics continues to be the largest segment. Indeed, logistics are expected to make up 60% of spending in 2019 with water hauling services the main driver in that category.

 

Right behind water logistics is water disposal. As hydrocarbon production continues to increase, mainly due to Permian Basin activities, produced water is projected to follow the same trend. As a result, the water disposal market should continue growing at a 6% compound average growth rate (CAGR) through 2024. However, this growth could be limited if the disposal challenges in the Permian Basin are not addressed by both operators and third-party companies.

 

Permian water disposal volumes contribute to more than 30% of the total disposed volumes in the onshore US, and in fact they have increased more than 40% between 2010 and 2019. In addition, disposal volumes in West Texas are expected to reach the highest level recorded in the last five years during 2019.

 

Development and Operating Activities

 

Economic conditions in the oil and gas industry are subject to volatility. The uncertain nature of these economic conditions combined with federal and state regulatory uncertainty in the energy industry requires operators to be flexible and adept at adjusting operations and strategy to achieve profitability. We intend to evaluate all conditions and risks affecting our operating activities and to respond to those conditions by employing resources in areas we believe to have the most potential for success. The oil field service industry has been and will continue to be affected by the volatility in oil and natural gas prices and may experience lower revenues as oil producers’ pressure oil field service providers for lower cost service.

 

The Company’s business requires capital to fund operations and growth. In order to adequately fund operating activities, we may need to secure additional capital from third parties or other debt or equity financing sources. There

 

can be no assurance that we will be able to enter into additional financing arrangements on terms that are acceptable. There are also no assurances that we will be able to achieve profitability from our operations in the current market environment.

 

General Regulations

 

Both state and federal authorities regulate the transportation and disposal of salt water, produced fluids and drilling fluids. The executive and legislative branches of government at both the state and federal levels have periodically proposed the establishment of controls on saltwater disposal, environmental protection, as well as various other related programs affecting the saltwater disposal business. If any further legislation is promulgated related to the disposal of salt water, produced fluids or drilling fluids, such legislation could have a material effect on our operations.

 

Federal Regulatory Actions

 

Federal legislation has also been introduced which may have an effect on the use of hydraulic fracturing to increase oil and gas production, primarily in shale formations, due to concerns related to potential contamination of drinking water supplies.

 

The U.S. Environmental Protection Agency (“EPA”) has asserted federal regulatory authority pursuant to the federal Safe Drinking Water Act (“SDWA”) over certain hydraulic fracturing activities involving the use of diesel. In addition, Congress has considered legislation to provide for federal regulation generally of hydraulic fracturing in the United States under the SDWA and to require disclosure of the chemicals used in the hydraulic fracturing process.

 

The Company’s operations are located in areas where hydraulic fracturing is used as the primary method of establishing and developing oil and gas producing wells. These areas are also where the majority of the Company’s revenues are generated as these producing wells also generate salt water and other fluids as by-products of the oil and gas producing process. Any regulation inhibiting or prohibiting the use of hydraulic fracturing may have a material adverse effect on our operations.

 

State Regulatory Controls

 

The State of Texas (where we operate) regulates the operation and permitting associated with the transport and disposal of salt water and other produced fluids. Because we are primarily engaged in saltwater, produced fluids and drilling fluid disposal activities, our operations are subject to inspection and permitting by authorities of the State of Texas. There have been recent regulatory and legislative proposals related to concerns with potential water supply contamination potentially be caused by hydraulic fracturing operations.

 

Environmental Regulations

 

Our salt water and other fluids disposal operations are subject to environmental protection regulations established by federal, state, and local agencies. We believe we are in compliance with the applicable environmental regulations established by these agencies with jurisdiction over our operations. Certain environmental regulations currently in effect could have a material adverse effect on our earnings or prospects for profitability if we received a determination from one of these agencies that our operations are not in compliance. The Texas Legislature has mandated a regulatory program for the management of hazardous wastes generated during crude oil and natural gas exploration and production, gas processing, oil and gas waste reclamation, saltwater disposal and transportation operations. The disposal of these wastes, as governed by the Railroad Commission of Texas, is subject to the supervision of state of Texas authorities. Our disposal operations are also subject to inspection and regulation by state and federal environmental authorities.

 

 

Item 1A. Risk Factors

 

Business Risks

 

Our business volume has declined, and our operations have lost a significant amount of money during the last two fiscal years.

Due to reductions in the volume of business and the decision to no longer provide transportation services to our customers combined with the SWD leases currently in default with no current revenues from salt water disposal, the Company’s operations have not been profitable. We have made substantial changes in our operations including significant reductions in operating expenses and employees of our salt water disposal operations in Texas, and sales of transportation assets to raise cash to reduce debt. There can be no assurance we will be successful in returning to profitability. If we are unable to return to profitability, we may be required to seek the protection of the United States Bankruptcy Court and liquidate or reorganize.

 

Our independent auditors have issued a report which raises the question about our ability to continue as a going concern. This report may impair our ability to raise additional financing and adversely affect the price of our common stock.

The report of our independent auditors contained in our financial statements for the year ended December 31, 2020 includes a paragraph that explains that we have been experiencing financial and liquidity concerns. Per the report, these conditions raise substantial doubt about our ability to continue as a going concern. Reports of independent auditors questioning a company’s ability to continue as a going concern are generally viewed unfavorably by analysts and investors. This report, along with our recent financial results, may make it difficult for us to raise additional debt or equity financing necessary to conduct our operations.

 

Competition may adversely affect us.

The market is highly competitive. Our competitors include many large companies that have substantially greater market presence and financial, technical, marketing and other resources than we do. There can be no assurance that we will have the financial resources, technical expertise or marketing and support capabilities to compete successfully. Increased competition could result in significant price competition, which in turn could result in lower revenues, which could materially adversely affect our potential profitability.

 

Overreliance on management.

We depend on our senior management to work effectively as a team, to execute our business strategy and business plan, and to manage employees and consultants. Our success will be dependent on the personal efforts of key personnel. Any of our officers or employees can terminate his or her employment relationship at any time, and the loss of the services of such individuals could have a material adverse effect on our business and prospects.

 

We will incur losses and there is no guarantee that we will ever become profitable.

We are currently generating minimal revenues from operations, and if we do not increase our revenues significantly it is likely that we will not achieve profitability in the near future, if at all. If we do not become profitable the value of your investment could be harmed or lost completely.

 

We may need additional capital in the future in order to continue our operations.

If we do not turn profitable or generate cash from operations and additional capital is needed to support operations, economic and market conditions may make it difficult or impossible to raise additional funds through debt or equity financings. If funds are not sufficient to support operations, we may need to pursue a financing or reduce expenditures to meet our cash requirements. If we do obtain such financing, we cannot assure that the amount or the terms of such financing will be as attractive as we may desire, and your equity interest in the company may be diluted considerably. If we are unable to obtain such financing when needed, or if the amount of such financing is not sufficient, it may be necessary for us to take significant cost saving measures or generate funding in ways that may negatively affect our business in the future. To reduce expenses, we may be forced to make personnel reductions or curtail or discontinue development programs. There is no assurance that, if required, we will be able to generate sufficient funds or reduce spending to provide the required liquidity. Long term capital requirements will depend on numerous factors, including, but not limited to, the status of collaborative arrangements, the progress of research and development programs and the receipt of revenues from sales of products. Our ability to achieve and/or sustain profitable operations depends on a number of factors, many of which are beyond our control, including:

our ability to successfully market our services;

 

Government legislation changes;

 

our ability to successfully maintain federal and/or state regulatory approval(s) for our services;

 

 
the level of service competition and of price competition;

 

our ability to attract the right personnel to execute our plans; and

 

general economic conditions in the oil and gas industry in the U.S.

 

We might attempt to acquire products or businesses that we believe are a strategic complement to our business model.

We might encounter operating difficulties and expenditures relating to integrating an acquired product or business. These acquisitions might require significant management attention that would otherwise be available for ongoing development of our business. In addition, we might never realize the anticipated benefits of any acquisition. We might also make dilutive issuances of equity securities, incur debt or experience a decrease in cash available for our operations, or incur contingent liabilities and/or amortization expenses relating to goodwill and other intangible assets, in connection with future acquisitions.

 

Risks Related to our Common Stock

 

Future conversions or exercises by holders of options could dilute our common stock.

Purchasers of our common stock will experience dilution of their investment upon creation and exercise of the employee stock option program, employee stock grants, and other stock options or issued common shares used to conduct the normal course of business, including but not limited to, acquisitions, partnerships, property leases or purchases, and investments.

 

We intend to retain any earnings in the foreseeable future for our continued growth and, thus, do not expect to declare or pay any cash dividends in the foreseeable future.

The Company currently intends to retain its earnings for future growth and, therefore, does not anticipate declaring any dividends in the foreseeable future. The Company would expect that any determination to pay dividends on its shares would be based primarily upon the financial condition, results of operations, regulatory and business capital requirements, any restrictions contained in financing or other agreements binding upon the Company, and other factors that the board of directors deems relevant.

 

Antitakeover effects of certain certificate of incorporation and bylaw provisions could discourage, delay or prevent a change in control.

Our certificate of incorporation and by-laws could discourage, delay or prevent persons from acquiring or attempting to acquire us. Our certificate of incorporation authorizes our board of directors, without action of our stockholders, to designate and issue preferred stock in one or more series, with such rights, preferences and privileges as the board of directors shall determine. In addition, our by-laws grant our board of directors the authority to adopt, amend or repeal all or any of our bylaws, subject to the power of the stockholders to change or repeal the bylaws. In addition, our by-laws limit who may call meetings of our stockholders.

 

Dependence upon Management and Key Personnel

The Company is, and will be, heavily dependent on the skill, acumen and services of the management of the Company. The loss of the services of any or all of these individuals or any other key individuals for any substantial length of time would materially and adversely affect the Company’s results of operation and financial position. (See “Management”).

 

Item 1B. Unresolved Staff Comments.

 

There are no unresolved comments from the staff of the Securities and Exchange Commission.

 

Item 2. Description of Properties.

 

Our principal executive offices are located at 220 Travis Street, Suite 501, Shreveport, Louisiana 71101.

 

Disposal Wells. We currently have three disposal wells in Wise County, Texas licensed by the State of Texas for the disposal of salt water and certain drilling fluids. We receive fees from the use of our wells from customers who pay

 

to dispose of their produced water through the use of our disposal wells.

 

Currently, these leases are in default and the Company is in the process of entering negotiations to renew or restart these leases. However, there can be no assurances of our ability to execute or ratify SWD leases. The Company currently believes the restart of these leases could require substantial additional capital which is under management review.

 

Our disposal wells and their locations are as follows: 

 

Company Well Name Permit # Location State
         
Trull Disposal Well, LLC Trull 1 11954 Trull Lease, Well No. 1, Seventy Day (Congl) Field, Wise County, RRC District 09 TX
         
Trull Well #2, LLC Trull 2 12180 Trull Lease, (19617), Well No. 2, Seventy Day (Congl) Field, Wise County, RRC District 09 TX
         
Chico Coffman Tank Trucks, Inc CSWU 1202 11779 Caughlin Strawn West Unit Lease (30288), Well No.1202, Caughlin (Strawn) Field, Wise County, RRC District 09 TX

 

The COVID-19 pandemic and declining oil prices in early 2020, forced us to terminate the surface leases for our three Wise County wells in 2020. The three SWD leases are currently in default and the Company anticipates entering into negotiations with the lessors to ratify or otherwise reinstate these leases. The Company currently receives no revenues from salt water disposal from these SWD wells and there can be no assurances that we will be able to restart these SWD leases. We currently maintain the ongoing regulatory filings with the Texas Railroad Commission and field maintenance of our onsite well bores, pumps, storage facilities and related equipment.  We are reviewing economic activity in the region to determine the appropriate time to renegotiate surface leases with land owners and engage in disposal activities.

 

Item 3. Legal Proceedings

 

There are no material legal proceedings currently pending or, to our knowledge, threatened against us.

 

PART II

 

Item 4. Market For Registrant’s Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities.

 

Market Price and Dividend Information

 

Our common stock is quoted on the pink sheet market operated by OTC Markets Group, Inc. under the symbol “TCCR”. The following table sets forth the high and low closing prices for our common stock as reported.

 

Quarterly Price Ranges

 

     Common Stock 
 Quarter Ended   High   Low 
 March 31, 2020  $2.30  $0.27 
 June 30, 2020  $2.00  $0.71 
 September 30, 2020  $2.00  $0.71 
 December 31, 2020  $1.00  $0.27 
           
 March 31, 2019  $0.93  $0.45 
 June 30, 2019  $0.45  $0.15 
 September 30, 2019  $0.30  $0.15 
 December 31, 2019  $0.27  $0.20 

 

 

 

As of July 19, 2021, the closing sales price of our common stock on the OTC Pink Market was $0.75. As of July 20, 2021, there were approximately 971 stockholders of record of our common stock. 

 

Dividend Policy

 

Any determination to pay dividends will be at the discretion of our Board and will depend on our financial condition, results of operations, capital requirements and other factors that our Board deems relevant. In addition, the terms of any future debt or credit facility may preclude us from paying dividends. At this time, we do not anticipate paying any future dividends.

 

Issuer Purchases of Equity Securities

 

None.

 

Item 5. Selected Financial Data

 

Not applicable as we are a smaller reporting company.

 

Item 6. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations for the Twelve Months Ended December 31, 2020 and 2019.

 

Cautionary Statement

Statements in this report, which are not purely historical facts, including statements regarding the Company’s anticipations, beliefs, expectations, hopes, intentions or strategies for the future, may be forward-looking statements within the meaning of Section 21E of the Securities Act of 1934, as amended. All forward-looking statements in this report are based upon information available to us on the date of the report. Any forward-looking statements involve risks and uncertainties that could cause actual results or events to differ materially from events or results described in the forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements.

 

Results of Operations

For the year ended December 31, 2020, we reported a net loss of $106,182 as compared to a net loss of $89,178 for the year ended December 31, 2019.

 

Revenue. No revenue was generated for the years ended December 31, 2020 and 2019.

 

Expenses. The components of our costs and expenses for the years ended December 31, 2020 and 2019 are as follows:

 

      % Increase
Costs and expenses 2020 2019 (Decrease)
Operating costs $60,000  $—     100%
General and administrative  56,182   89,178   (37)%
             
Total costs and expenses $116,182  $89,178   30%

  

Other Income. Other income for the year ended December 31, 2020 included an Economic Injury Disaster Loan advance of $10,000. No other income or expense was recorded for the year ended December 31, 2019.

 

 

We have not recorded federal income tax expense for the years ended December 31, 2020 and 2019 because of our net operating loss carry forwards. In addition, since there is continued uncertainty as to the realization of a deferred tax asset, we have not recorded any deferred tax benefits.

 

Liquidity and Capital Resources

 

Cash Flows and Liquidity

 

As of December 31, 2020, we had total current assets of $1,699. Our total current liabilities as of December 31, 2020 were approximately $277,241. We had a working capital deficit of $275,542 as of December 31, 2020 compared to a working capital deficit of $3,024 as of December 31, 2019.

 

Our ability to obtain access to additional capital through third parties or other debt or equity financing arrangements is contingent upon our ability to locate adequate financing or equity investments on commercially reasonable terms. There can be no assurance that we will be able to obtain such financing on acceptable terms.

 

The following table summarizes our sources and uses of cash for the years ended December 31, 2020 and 2019:

 

  2020 2019
     
Net cash used in operating activities $(29,843) $(60,137)
         
Net cash provided by financing activities  2,078   78,000 
Net increase (decrease) in cash $(27,768) $17,863 

 

As of December 31, 2020, we had a cash balance of $1,699, a decrease of $27,768 from December 31, 2019 due to minimal operating and general administrative expenses.

 

Item 7. Quantitative and Qualitative Disclosures About Market Risk

 

As a smaller reporting company, we are not required to complete this item.

 

Item 8. CONSOLIDATED FINANCIAL STATEMENTS.

 

TRICCAR, INC.

 

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES

 

 PAGE
  
Report of Independent Registered Public Accounting FirmF-1
  
Consolidated Balance Sheets - December 31, 2020 and 2019F-2
  
Consolidated Statements of Operations-For the Years Ended December 31, 2020 and 2019F-3
  
Consolidated Statements of Cash Flows-For the Years Ended December 31, 2020 and 2019F-4
  
Consolidated Statements of Changes in Stockholders’ Deficit For the Years Ended December 31, 2020 and 2019F-5
  
Notes to Consolidated Financial StatementsF-6

 

 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Board of Directors and Stockholders of TRICCAR Inc.

 

Opinion on the Financial Statements

 

We have audited the accompanying consolidated balance sheets of TRICCAR Inc. and its subsidiaries (the “Company”) as of December 31, 2020 and 2019 and the related consolidated statements of operations, changes in stockholders’ deficit and cash flows for each of the two years in the period ended December 31, 2020, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2020 and 2019, and the results of its consolidated operations and its consolidated cash flows for each of the two years in the period ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America.

 

Explanatory Paragraph – 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 has suffered recurring losses from operations since inception and has a working capital deficiency both of which raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Basis for Opinion

 

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material 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. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

 

Our audits included 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 include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

 

Critical Audit Matters

 

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.

 

/s/ Turner, Stone & Company, L.L.P.

 

Dallas, Texas

July 20, 2021

 

We have served as the Company’s auditor since 2006.

 

F-1 
 

 

 TRICCAR, INC. AND SUBSIDIARIES

   CONSOLIDATED BALANCE SHEETS  

 

  December 31,
2020
 December 31,
2019
ASSETS        
Current Assets:        
Cash $1,699  $29,467 
Total current assets  1,699   29,467 
Total Assets $1,699  $29,467 
         
LIABILITIES AND STOCKHOLDERS’ DEFICIT        
Current Liabilities:        
Accounts payable $228,411  $   
Accrued liabilities, Related Party  48,830   32,491 
Total current liabilities  277,241   32,491 
Commitments and Contingencies (Note 5)        
Stockholders’ Deficit:        
Preferred stock $.0001 par value; authorized 50,000,000 shares with 0 outstanding as December 31, 2020 and December 31, 2019  0     0   
Common stock- Class A $.00001 par value; authorized 100,000,000 shares with 52,500,000 shares issued and outstanding at December 31, 2019  —     525 
Common stock- Class B $.00001 par value; authorized 30,000,000 shares with 27,500,000 shares issued and outstanding at December 31, 2019  —     275 
Common stock- Class A $.0001 par value; authorized 372,500,000 shares with 72,500,000 shares issued and outstanding at December 31, 2020  7,250   —   
Common stock- Class B $.0001 par value; authorized 27,500,000 shares with 27,500,000 shares issued and outstanding at December 31, 2020  2,750   —   
Additional paid-in capital       101,401 
Accumulated deficit  (285,542)  (105,225)
Total stockholders’ deficit  (275,542)  (3,024)
Total Liabilities and Stockholders’ Deficit $1,699  $29,467 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

F-2 
 

 

 TRICCAR, INC. AND SUBSIDIARIES

   CONSOLIDATED STATEMENTS OF OPERATIONS

 

         
  For the Year Ended
  December 31,
2020
 December 31,
2019
Revenue, net of discounts $  $ 
Costs and expenses:        
Operating expenses, Related Party  60,000      
General and administrative  56,182   89,178 
Total costs and expenses  116,182   89,178 
Operating loss  (116,182)  (89,178)
Other (income) expense:        
 Other income  (10,000)     
Total Other (income) expense  (10,000)     
         
Loss before provision for income taxes  (106,182)  (89,178)
Provision for income taxes          
Net loss $(106,182) $(89,178)
         
Net loss per common share - Basic $(0.00) $(0.01)
         
Weighted Average Common Shares Outstanding:        
Basic  87,103,825   14,302,491 
         

 

The accompanying notes are an integral part of these consolidated financial statements.

 

F-3 
 

 

TRICCAR, INC. AND SUBSIDIARIES  

CONSOLIDATED STATEMENTS OF CASH FLOWS

     
  For the Year Ended
  December 31,
2020
 December 31,
2019
Cash Flows from Operating Activities:        
Net loss $(106,182) $(89,178)
Adjustments to reconcile net loss to net cash used in operating activities:        
         
Changes in operating assets and liabilities:        
Increase (decrease) in operating liabilities:        
Accounts payable  60,000      
Accrued expenses  16,339   29,041 
Net cash used in operating activities  (29,843)  (60,137)
         
Cash Flows from Investing Activities  0     0   
         
Cash Flows from Financing Activities:        
Proceed from equity investment  2,075   78,000 
Net cash provided by financing activities  2,075   78,000 
         
Net increase (decrease) in cash  (27,768)  17,863 
Cash at beginning of the year  29,467   11,604 
Cash at end of the year $1,699  $29,467 
         
Supplemental Cash Flow Disclosures        
Cash paid for:        
Interest  0     0   
Taxes  0     0   
Supplemental Disclosure Of Non-Cash Investing And Financing        
Accounts payable acquired in reverse merger $168,411  $   

 

The accompanying notes are an integral part of these consolidated financial statements.

 

F-4 
 

 

TRICCAR, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIT

 

              Total
                  Additional   Stockholders’
  Common Stock Class A Common Stock Class B Paid-In Accumulated Equity
  Shares Par Value Shares Par Value Capital Deficit (Deficit)
Balance December 31, 2018 of TRICCAR Holdings, Inc.  52,376,527  $525   27,500,000  $275  $23,401  $(16,047) $8,154 
                             
Contributions by shareholders  0     0     0     0     78,000   0     78,000 
                             
Net Loss  —     0     —     0     0     (89,178) $(89,178)
                             
Balance December 31, 2019 of TRICCAR Holdings, Inc.  52,500,000  $525   27,500,000  $275  $101,401  $(105,225) $(3,024)
                             
Contributions by shareholders  0     0     0     0     2,075   0    $2,075 
                             
Recapitalization on reverse merger - purging previous share  (52,500,000)  (525)  (27,500,000)  (275)  (103,476)  0    $(104,276)
                             
Recapitalization on reverse merger - issuance of new share  72,500,000   7,250   27,500,000   2,750   0     (74,135) $(64,135)
                             
Net Loss  —     0     —     0     0     (106,182) $(106,182)
                             
Balance December 31, 2020  72,500,000  $7,250   27,500,000  $2,750  $    $(285,542) $(275,542)

 

The accompanying notes are an integral part of these consolidated financial statements.

 

F-5 
 

TRICCAR, INC.

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

1. BUSINESS ACTIVITIES

 

 On December 12, 2019, Frontier Oilfield Services, Inc., a Texas Corporation (“FOSI”) entered into a Reorganization and Stock Purchase Agreement (the “Agreement”) to change its corporate domicile from Texas to Nevada, assume the name TRICCAR, Inc. (“TRICCAR”), and to acquire 100% of the issued and outstanding equity of TRICCAR Holdings, Inc., a Nevada Corporation (“TRICCAR Holdings”).

 

Pursuant to the Agreement, effective on February 28, 2020, the parties closed the Agreement.

 

TRICCAR acquired 100% of the issued and outstanding equity of TRICCAR Holdings. TRICCAR issued 80,000,000 shares of stock to acquire all the issued and outstanding equity stock of TRICCAR Holdings while TRICCAR shareholders retained 20,000,000 shares of stock. As a consequence, immediately subsequent to the acquisition TRICCAR will have approximately 100,000,000 shares of common stock outstanding. The issuance of the new shares has already been reflected on TRICCAR’s book and is pending the name and symbol change with transfer agent.

 

The accompanying consolidated financial statements include the accounts of the Company, and its subsidiaries.  

 

Through May 14, 2021, TRICCAR was a biomedical research, development, and marketing firm whose focus was to develop, acquire, and partner to bring bioceutical solutions (not requiring FDA approval) and pharmaceutical drugs (requiring FDA approval) to the market. The Company was in the development stage of bioceutical and pharmaceutical products designed to support the well-being of humans and animals that have common diseases.

 

On May 14, 2021, TRICCAR and TRICCAR Holdings entered into a Mutual Rescission Agreement and General Release (“Rescission Agreement”), pursuant to which the Reorganization and Stock Purchase Agreement (“Agreement”) entered into by and between the TRICCAR and TRICCAR Holdings on December 12, 2019 was rescinded. Pursuant to the terms of the Rescission Agreement, the 80,000,000 shares that were to be issued to the shareholders of TRICCAR Holdings were returned by the shareholders of TRICCAR Holdings and in exchange therefor, TRICCAR returned the shares of TRICCAR Holdings it received to the shareholders of TRICCAR Holdings and the Company will disclaim any right, title and/or interest in or to any shares of capital stock of TRICCAR Holdings.

 

Effective December 31, 2019, the Company entered into an asset exchange and purchase agreement with Kenneth Owens, a note holder and stockholder of the Company at the time of the transaction, for the transfer of all our assets located in Wise County, Texas in exchange for the cancellation of $4.6 million in debt owed to Mr. Owens by the Company and the return of 2,701,168 shares of our common stock owned by Mr. Owens.

 

At the closing of the transaction, Mr. Owens did not accept the transfer of three of the SWD wells located in Wise County, Texas.  The SWD’s are as follows: Trull 1, Trull 2 and CSWU 1202. As a result, the Company never transferred these three SWD wells to Mr. Owens. The leases for these three SWD wells are in default and there is no current disposal activity or revenues from these SWDs. We are in the process of entering into negotiations with the lessors to restart these leases. The Company has continued to provide regulatory compliance reporting and maintenance services for these three SWD wells. On December 31, 2019, the Company had an existing operating and management agreement with Elysian Fields Disposal LLC to serve as operator, management and consultant of various field operational assets. Under the contract agreement, Elysian Fields has the authority to operate the wells and provide accounting and regulatory compliance reporting services through itself or other qualified sub-contractors. While the SWD wells are not commercially operating and the leases are currently in default, this agreement remains in place for the three SWD wells continue to be maintained pursuant to the terms of the operating and management agreement. Elysian Fields is an affiliate of Newton Dorsett, our current largest stockholder and was paid $60,000 in fees during 2020 by the Company. See Related Party footnote 7.

 

2. GOING CONCERN

 

The Company’s financial statements are prepared using U.S. generally accepted accounting principles (“U.S. GAAP”) applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. As of the date of the financial statements, the Company has generated losses from operations, has an accumulated deficit and working capital deficiency. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern.

 

In order to continue as a going concern and achieve a profitable level of operations, the Company will need, among other things, to increase its business volume and grow revenues, reduce its operating expenses, raise additional capital resources and develop new and stable sources of revenue sufficient to meet its operating expenses.

 

The Company’s ability to continue as a going concern will be dependent upon management’s ability to successfully implement management’s plans to pursue additional business volumes from new and existing customers, reduce indebtedness through sales of non-performing assets and conversions of debt to equity, and reduce costs to achieve profitable operations. The accompanying consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. The Company’s continued existence will ultimately be dependent on its ability to generate sufficient cash flows to support its operations as well as provide sufficient resources to retire existing liabilities on a timely basis. The Company faces significant risk in implementing its business plan and there can be no assurance that financing for its operations and business plan will be available or, if available, such financing will be on satisfactory terms.

 

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Reverse Merger

On December 12, 2019, Frontier Oilfield Services, Inc., a Texas Corporation (“FOSI”) entered into a Reorganization and Stock Purchase Agreement (the “Agreement”) to change its corporate domicile from Texas to Nevada, assume the name TRICCAR, Inc. (“TRICCAR”), and to acquire 100% of the issued and outstanding equity of TRICCAR Holdings, Inc., a Nevada corporation (“TRICCAR Holdings”).

 

Pursuant to the Agreement, effective on February 28, 2020, the parties closed the Agreement.

F-6 
 

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant inter-company transactions and balances have been eliminated in consolidation.

 

Fair Value of Financial Instruments

In accordance with the reporting requirements of ASC Topic 825, Financial Instruments, the Company calculates the fair value of its assets and liabilities which qualify as financial instruments under this standard and includes this additional information in the notes to the financial statements when the fair value is different than the carrying value of those financial instruments. The Company does not have assets or liabilities measured at fair value on a recurring basis. Consequently, the Company did not have any fair value adjustments for assets and liabilities measured at fair value at the balance sheet dates, nor gains or losses reported in the statements of operations that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held during the year ended December 31, 2020 and 2019, except as disclosed.

 

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ significantly from previously estimated amounts.

 

Revenue Recognition

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). This update provides a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. The guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts.

 

Our salt water disposal services provide oil and gas operators that produce hydrocarbons to dispose of their by-product of salt water (produced water) in an industry approved manner. Revenue is primarily based on a per-barrel price or other throughput metrics as specified in the contract. The Company recognizes revenue as services are performed. We have adopted this update and have generated no revenues during 2020.

 

Cash

 

For purposes of the consolidated statements of cash flows, cash includes demand deposits, time deposits, certificates of deposit and short-term liquid investments with original maturities of three months or less when purchased. The Federal Deposit Insurance Corporation provides coverage for all accounts of up to $250,000. As of December 31, 2020, and 2019, NaN of the Company’s cash was more than federally insured limits. 

 

Fair Value Measurements

U.S. GAAP defines fair value as the price that would be received for an asset or paid to transfer a liability (exit price) in an orderly transaction between market participants in the principal or most advantageous market for the asset or liability. U.S. GAAP also classifies the inputs used to measure fair value into the following hierarchy:

 

F-7 
 

 

 Level 1:Quoted prices in active markets for identical assets or liabilities.
   
 Level 2:Quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability.
   
 Level 3:Unobservable inputs for the asset or liability.

 

Income Taxes

Income taxes are accounted for under the asset and liability method. 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 taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Income tax expense is the tax payable for the year plus or minus the change during the period in deferred tax assets and liabilities.

 

Earnings Per Share (EPS)

Basic earnings per common share was calculated by dividing net income or loss by the weighted average number of shares outstanding during the year. Diluted earnings per common share was calculated by adjusting outstanding shares, assuming conversion of all potentially dilutive stock options and warrants. The computation of diluted EPS does not assume conversion, exercise, or contingent issuance of shares that would have an anti-dilutive effect on earnings per common share. Anti-dilution results from an increase in earnings per share or reduction in loss per share from the inclusion of potentially dilutive shares in EPS calculations. The table below sets forth the reconciliation for net loss and weighted average shares used for calculating basic and diluted earnings per share.

Reconciliation for Net Loss and Weighted Average Shares Used for Calculating Basic and Diluted Earnings per Share

 

  2020 2019
Earnings (numerator)        
Net loss $(106,182) $(89,178)
Net loss available to common shareholders $(106,182) $(89,178)
         
Shares (denominator)        
Weighted average common shares outstanding (basic)  87,103,825   14,302,491 
         
Loss per share (basic) $(0.00) $(0.01)

 

 

4. RECENT ACCOUNTING PRONOUNCEMENTS

 

In February 2016, the FASB issued ASU 2016-02, Leases, which will, among other impacts, change the criteria under which leases are identified and accounted for as on- or off-balance sheet. The guidance will be effective for the fiscal year beginning after December 15, 2018, including interim periods within that year. Once effective, the new guidance

F-8 
 

must be applied on a modified retrospective basis to leases existing at the beginning of the earliest period presented in the financial statements. The Company adopted this ASU on January 1, 2019 and evaluated and presented the impacts of the adoption of this ASU in September 2019, however we no longer need to present the adoption of this ASU due to ceased related operations by the end of 2019.

 

5. COMMITMENTS AND CONTINGENCIES

 

None. 

 

6. EQUITY TRANSACTIONS

 

The total number of common stock authorized that may be issued by the Company is four hundred million (400,000,000) shares of common stock with a par value of one hundredth of one cent ($0.0001) per share consisting of three hundred seventy-two million five hundred thousand (372,500,000) shares Class A shares with 1:1 voting rights and twenty-seven million five hundred thousand (27,500,000) Class B shares with 20:1 voting rights, and fifty million (50,000,000) shares of preferred stock with a par value of one hundredth of a cent ($0.0001) per share. To the fullest extent permitted by the laws of the state of Nevada (currently set forth in NRS 78.195), as the same now exists or may hereafter be amended or supplemented, the board of directors may fix and determine the designations, rights, preferences or other variations of each class or series within each class of capital stock of the corporation.

  

7. RELATED PARTY TRANSACTION

 

For the periods ending December 31, 2020 and 2019, the Company paid Elysian Fields Disposal LLC., an affiliate of our stockholder Newton Dorsett, $60,000 and $60,000, respectively. These are included as operating costs on the Statement of Operations for contract operating and management services of our SWD wells.

 

Company incurred $60,000 and $60,000 management fees with Elysian Fields Disposal, which is wholly owned by one of the major shareholders, for the years ended December 31, 2020 and 2019, respectively. The account payables outstanding balance with Elysian Fields Disposal was $175,000 and $115,000, as of December 31, 2020 as of December 31, 2019, respectively.

 

Our former CEO, Bill Townsend, had $48,829.24 in accrued expenses, related party at year end 2020. In connection with the May 2021 Rescission Agreement, Mr. Townsend released any amounts owed to him by TRICARR Inc or its affiliates and the amount was extinguished from our liabilities.

  

8. SUBSEQUENT EVENTS

 

None.

 

Item 9. Changes in and Disagreements with Accountants and Financial Disclosure.

 

None.

 

Item 9A. Controls and Procedures.

 

Our management evaluated, with the participation of our Chief Executive Officer (CEO) the effectiveness of the design and operation of our disclosure controls and procedures (as 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 annual report on Form 10-K. In making this assessment, the Company used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework. Based

F-9 
 

on that evaluation, management, including our CEO, concluded our internal controls over financial reporting were not effective in that there was a material weakness as of December 31, 2020.

 

A material weakness is a deficiency or combination of deficiencies in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis by our internal controls.

 

Management has identified a material weakness in the effectiveness of internal control over financial reporting related to a shortage of resources in the accounting department required to assure appropriate segregation of duties with employees having appropriate accounting qualifications related to our unique industry accounting and disclosure rules. Management has outsourced certain financial functions to mitigate the material weakness in internal control over financial reporting. We are also reviewing its finance and accounting staffing requirements.

 

This Annual Report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our independent registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only management’s report in this Annual Report.

 

Limitations on the Effectiveness of Controls. 

Our management, including the CEO, does not expect that its disclosure controls or its internal controls will prevent all errors 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. 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 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 errors or mistakes. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also 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; over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

 

Scope of the Controls Evaluation. 

The CEO evaluation of our disclosure controls and the company’s internal controls included a review of the control objectives and design, the controls implementation by the company and the effect of the controls on the information generated for use in this report. In the course of the Controls Evaluation, the CEO sought to identify data errors, controls problems or acts of fraud and to confirm that appropriate corrective action, including process improvements, was being undertaken. This type of evaluation is to be done on a quarterly basis so that the conclusions concerning controls effectiveness can be reported in our quarterly reports on Form 10-Q and annual report on Form 10-K. Our internal controls are also evaluated on an ongoing basis by other personnel in the company’s organization and by our independent auditors in connection with their audit. The overall goals of these various evaluation activities are to monitor our disclosure controls and our internal controls and to make modifications as necessary; the company’s intent in this regard is that the disclosure controls and the internal controls will be maintained as dynamic systems that change (reflecting improvements and corrections) as conditions warrant.

 

Among other matters, the company sought in its evaluation to determine whether there were any “significant deficiencies” or “material weaknesses” in our internal controls, or whether we had identified any acts of fraud involving personnel who have a significant role in the internal controls. This information was important both for the control evaluation generally and because item 5 in the Section 302 Certifications of the CEO requires that the CEO disclose that information to the Audit Committee of our Board and to our independent auditors and report on related matters in this section of the Report. In the professional auditing literature, “significant deficiencies” represent control issues that could have a significant adverse effect on the ability to record, process, summarize and report financial data in the consolidated financial statements. A “material weakness” is defined in the auditing literature as a particularly serious significant deficiency where the internal control does not reduce to a relatively low level the risk

F-10 
 

that misstatements caused by error or fraud may occur in amounts that would be material in relation to the consolidated financial statements and not be detected within a timely period by employees in the normal course of performing their assigned functions. We also sought to deal with other controls matters in the controls evaluation, and in each case if a problem was identified, the company considered what revision, improvement and/or correction to make in accordance with the on-going procedures.

 

Item 9B. Other Information

 

NONE

 

PART III

 

Item 10. Directors, Executive Officers and Corporate Governance.

 

The table fellow reflects the Company’s executive officers and directors. There is no agreement or understanding between the Company and each current or proposed director or executive officer pursuant to which he was selected as an officer or director. The address for each such officer and director is 220 Travis Street, Shreveport, Louisiana 71101.

 

Name Positions and Offices
Matthew Flemming Chief Executive Officer and Director
Bernard O’Donnell Director, Chair of Audit Committee
Frank Federer Director, Chair of Compensation Committee

 

The Directors and Officers named above will serve until the next annual meeting of the stockholders or until their respective resignation or removal from office. Thereafter, Directors are anticipated to be elected at the annual stockholders’ meeting. Officers will hold their positions at the pleasure of the Board of Directors, absent any employment agreement.

 

Matthew Flemming

Matthew Flemming was appointed to serve as our Chief Executive Office and as a member of our board of directors on May 14, 2021. Mr. Flemming has served as the Chief Business Development Officer of SMG Industries Inc. (OTCQB: SMGI) since December 2020, prior thereto Mr. Flemming served as its Chief Executive Officer from September 2017 and continues to serve as the Chairman of the Board of Directors. Prior thereto, Mr. Flemming was the Chief Executive Officer of MG Cleaners from June 2017 until September 2017 in connection with its pending merger with SMGI. Previous to that, Mr. Flemming was a consultant for a financial restructuring firm and a financial advisor to a private closely held oilfield services company during 2016 and early 2017. From June 2011 to March 2016, Mr. Flemming was the Chief Executive Officer, Treasurer, Secretary, and Chairman of the Board of HII Technologies Inc. HII Technologies was a Houston, Texas based oilfield services company with operations in Texas, Oklahoma, Ohio and West Virginia focused on commercializing technologies and providing services in frac water management, safety services and portable power used by exploration and production companies in the United States. During his tenure at HII, the Company acquired three frac water management companies and started up two other operating subsidiaries driving monthly revenues from nil in August 2012 building to $4.2 million per month by December 2014. In 2015, HII experienced an industry down-turn and ultimately entered into a plan of reorganization under Chapter 11 subsequent to Mr. Flemming’s employment.

 

Prior thereto, from 2009 to 2011, Mr. Flemming was Chief Financial Officer of Hemiwedge Industries Inc. a proprietary valve technology company with oilfield applications that was sold in 2011. From 2005 to 2009, Mr. Flemming was Chief Financial Officer of Shumate Industries, Inc., an oilfield manufacturing company and successor of Excalibur. Previous to that, from 2001 to 2005, Mr. Flemming was Chief Financial Officer of Excalibur Industries, Inc. an industrial and energy related manufacturer and fabrication company. From June 1999 to March 2001, he served as Chief Executive Officer of WorldByNet, Inc. a Houston, Texas based privately held technology company. From

F-11 
 

January 1994 to May 1999, Mr. Flemming served as Chief Executive Officer of FARO Pharmaceuticals, Inc., a privately held national specialty products company that he founded.  Mr. Flemming received a Bachelor of Arts in Finance from the University of Houston.

 

Bernard “Dick” O’Donnell

Bernard O’Donnell has been a member of our board of directors since 2005. Mr. O’Donnell was our EVP & Vice President-Investor Relations from 2005 to 2019. From April 2005 to December 31, 2010, Mr. O’Donnell was also the President and managing principal for Euro American Capital Corporation, a FINRA licensed broker dealer. He has over 40 years of diversified experience in financial sales, investment banking and brokerage operations. He has held series 7, 24, 63, and 66 securities licenses. Mr. O’Donnell has an MBA and a BS degree in Business and Industrial Management from San Jose State University.

 

Frank Federer

Frank Federer has been a member of our board of directors since December, 2019. Mr. Federer is the CEO of Federer Resources. For the past thirty years, he has provided senior management, interim management and guidance for a number of public and private companies. Mr. Federer’s engineering education, combined with extensive business experience, provides a unique set of management, financial and analytical skills, including serving as CEO for public and private companies in medical, aircraft, food and sporting goods manufacturing as well as software and service industry firms and buyer and seller representation, post-merger integration, and operational due-diligence. Federer’s engineering education, combined with his business experience, provides a unique set of management, financial and analytical skills.

 

Mr. Federer has served as Managing Principal of Padgett Performance Group since 2005, leading assessment, training, leadership & management development, organizational development, team optimization, and succession planning. Since 2016, he has served as a board member of Hospice Austin, a nonprofit organization founded over 30 years ago by physicians and concerned citizens to serve families. He holds a BS in Electrical and Mechanical Engineering from Trinity University.

 

Item 11. Executive Compensation.

 

Compensation Discussion and Analysis

Our executive compensation program is designed to create strong financial incentive for our officers to increase revenues, profits, operating efficiency and returns, which we expect to lead to an increase in shareholder value. Our Board of Directors conduct periodic reviews of the compensation and benefits programs to ensure that they are properly designed to meet corporate objectives, overseeing of the administration of the cash incentive and equity-based plans and developing the compensation program for the executive officers. 

 

Compensation Committee

We have a compensation committee of our Board of Directors that is chaired by Frank Federer. The Board of Directors is authorized to create certain committees, including a compensation committee.

 

Role of Management in Determining Compensation Decisions

At the request of our Board of Directors, our management makes recommendations to our Board of Directors relating to executive compensation program design, specific compensation amounts, equity compensation levels and other executive compensation related matters for each of our executive officers, including our Chief Executive Officer. Our Board of Directors maintains decision-making authority with respect to these executive compensation matters.

 

Our Board of Directors reviews the recommendations of our management with respect to total executive compensation and each element of compensation when making pay decisions.

 

Summary Compensation Table 

The following table sets forth the annual and long-term compensation with respect to the year ended December 31, 2020 and 2019 paid or accrued by us on behalf of the executive officers named. 

  

F-12 
 

 

 

                      Long Term Compensation Awards   
                       Restricted  Securities    
                   Stock   Stock  Underlying    
Name and Principal Position  Year   Salary ($)   Bonus ($)   

Awards (1) 

($) 

   

Awards (1)
($)

   Awards
(1)

($)

  

Restricted
Stock
(#)

   Total ($)
Bill Townsend,  2020                           
Chief Executive Officer (1)  2019                           
Donald Ray Lawhorne,  2020  $—    $—    $—    $—    $—    —    $—  
Chief Executive Officer (2)  2019  $—    $—    $—    $—    $—    —    $—  
(1)Mr. Townsend served as our Chief Executive Officer from December 2019 through May 14, 2021.
(2)Mr. Lawhorne served as our Chief Executive Officer from July 2013 through February 2020.

 

Option Grants

There were no stock options granted to the named executive officers for the years ended December 31, 2020 and December 31, 2019.

 

Aggregated Option Exercises in This Year and Year-End Option Values 

There were no option exercises and year-end options for the named executive officers.

 

Employment Agreements

 

The Company is not a party to employment agreements with any of its officers. No salaries have been paid during the years ended December 31, 2020 and 2019.

 

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

 

The following table sets forth, as of June 30, 2021, information regarding the beneficial ownership of our common stock based upon the most recent information available to us for: (i) each person known by us to own beneficially five percent (5%) or more of our outstanding common stock, (ii) each of our officers and directors, and (iii) all of our officers and directors as a group. Unless otherwise indicated, each of the persons listed below has sole voting and investment power with respect to the shares beneficially owned by them. As of June 30, 2021, there were 20,000,000 shares of our common stock issued and outstanding. Except as otherwise listed below, the address of each person is 220 Travis Street, Shreveport, Louisiana 71101.

 

Name Amount of Beneficial
Ownership of Common
Stock (1)
 Percent of Common
Stock
Newton Dorsett (2)  9,788,673   48.9%
         
Directors and Executive Officers:        
Matthew Flemming  -0-   0%
Bernard R. O’Donnell  908,053   4.5%
Frank Federer  -0-     
         
All Directors and Executive Officers as a group (3 persons) (1)-(5)  908,053   4.5%

  *less than one percent

F-13 
 
(1)Pursuant to the rules and regulations of the Securities and Exchange Commission, shares of common stock that an individual or group has a right to acquire within 60 days pursuant to the exercise of options or warrants are deemed to be outstanding for the purposes of computing the percentage ownership of such individual or group, but are not deemed to be outstanding for the purposes of computing the percentage ownership of any other person shown in the table.
(2)The address for Newton Dorsett is 220 Travis Street, Shreveport, Louisiana 71101.

 

Item 13. Certain Relationships and Related Transactions and Director Independence.

 

Company incurred $60,000 and $60,000 management fees with Elysian Fields Disposal, which is wholly owned by one of the major shareholders, for the years ended December 31, 2020 and 2019, respectively. The account payables outstanding balance with Elysian Fields Disposal was $175,000 and $115,000, as of December 31, 2020 as of December 31, 2019, respectively.

 

Item 14. Principal Accounting Fees and Services

 

Audit Fees 

The aggregate fees billed by our independent auditors, for professional services rendered for the audit of our annual consolidated financial statements on Form 10-K and the reviews of the financial reports included in our Quarterly Reports on Form 10-Q for the years ended December 31, 2020 and 2019 amounted to $45,000 and $46,020, respectively.

 

Tax Fees

Fees billed by our auditors for professional services in connection with tax compliance, tax advice or tax planning for the year ended December 31, 2020 and 2019 was $0 and $6,000.

 

All Other Fees 

Our auditors billed no fees for services other than those described above under “Audit Fees” and “Tax Fees” for the year ended December 31, 2020 and 2019.

 

 

 

PART IV

 

Item 15. Exhibits, Financial Statement Schedules.

 

Financial Statement Schedules

 

The following have been made part of this report and appear in Item 8 above.

 

Report of Independent Registered Public Accounting Firm

 

Consolidated Balance Sheets - December 31, 2020 and 2019

 

Consolidated Statements of Operations- 

 For the Years Ended December 31, 2020 and 2019

 

F-14 
 

Consolidated Statements of Cash Flows- 

 For the Years Ended December 31, 2020 and 2019

 

Consolidated Statements of Changes in Stockholders’ Equity (Deficit) 

 For the Years Ended December 31, 2020 and 2019

 

Notes to Consolidated Financial Statements

 

Exhibits

 

Exhibit    

Number

Description
31.1Certification of our Chief Executive Officer under Section 302 of the Sarbanes-Oxley Act of 2002.
31.2Certification of our Chief Financial Officer under Section 302 of the Sarbanes-Oxley Act of 2002.
32.1Certification of our Chief Executive Officer under Section 906 of the Sarbanes-Oxley Act of 2002.
32.2Certification of our Chief Financial Officer under Section 906 of the Sarbanes-Oxley Act of 2002.

 

 

  

SIGNATURES

 

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on July 20, 2021.

 

TRICCAR INC. 
  
SIGNATURE:  
/s/ Matthew Flemming  
Matthew Flemming  
Chief Executive Officer and Director  

 

In accordance with the Exchange Act, this report has been signed by the following persons on behalf of the registrant and in the capacities indicated, on July 20, 2020.

 

Signatures Capacity 
    
/s/ Matthew Flemming Director, Chief Executive Officer & Interim Chief Financial Officer 
 Matthew Flemming   
    
/s/ Bernard R. O’Donnell Director 
 Bernard R. O’Donnell   
    

/s/ Frank Federer

 Director 
Frank Federer   

 

 

 

F-15 
 

Exhibit 31.1

 

CERTIFICATION

 

I, Matthew Flemming, certify that:

 

1.          I have reviewed this annual report on Form 10-K of TRICCAR Inc.;

 

2.          Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

 

3.          Based on my knowledge, the consolidated financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;

 

4.          I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rule 13a-15e and 15d-15e) for the registrant and have:

 

a.          designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

 

b.          designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles;

 

c.          evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

d.          disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

 

5.           I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):

 

a.          all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and

 

b.          any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls.

 

Dated this July 20, 2021 
  
/s/ Matthew Flemming 
Matthew Flemming 
Chief Executive Officer 

 

F-16 
 

Exhibit 31.2

 

CERTIFICATION

 

I, Matthew Flemming, certify that:

 

1.          I have reviewed this annual report on Form 10-K of TRICCAR Inc.;

 

2.          Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

 

3.          Based on my knowledge, the consolidated financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;

 

4.          I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rule 13a-15e and 15d-15e) for the registrant and have:

 

a.          designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

 

b.          designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles;

 

c.          evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

d.          disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

 

5.           I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):

 

a.          all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and

 

b.          any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls.

 

Dated this July 20, 2021 
  
/s/ Matthew Flemming 
Matthew Flemming 
Interim Chief Financial Officer 
F-17 
 

Exhibit 32.1

 

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER AND FINANCIAL OFFICER 

UNDER SECURITIES AND EXCHANGE ACT RULES 13a-14 AND 15d-14

 

In connection with the Annual Report of TRICCAR Inc. (the "Company") on Form 10-K for the period ending December 31, 2020, as filed with the Securities and Exchange commission on the date hereof (the "Report"), I, Matthew Flemming, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that:

 

 (1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Act of 1934 (15 U.S.C.78m or 780(d); and
   
 (2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Dated this July 20, 2020 

 

By:/s/ Matthew Flemming 
 Matthew Flemming 
 Chief Executive Officer 
F-18 
 

Exhibit 32.2

 

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER AND FINANCIAL OFFICER 

UNDER SECURITIES AND EXCHANGE ACT RULES 13a-14 AND 15d-14

 

In connection with the Annual Report of TRICCAR Inc (the “Company”) on Form 10-K for the period ending December 31, 2019, as filed with the Securities and Exchange commission on the date hereof (the “Report”), I, Matthew Flemming, Interim Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that:

 

 (1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Act of 1934 (15 U.S.C.78m or 780(d); and
   
 (2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Dated this July 20, 2021 

 

By:/s/ Matthew Flemming 
 Matthew Flemming 
 Interim Chief Financial Officer