Fritzy Tech Inc. - Quarter Report: 2019 December (Form 10-Q)

 

(Mark One)

  

 

(Registrant’s telephone number, including area code) 

 

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

  

 

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

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files).  YES      NO  

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “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     NO  

 

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS

 

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

 

APPLICABLE ONLY TO CORPORATE ISSUERS   

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.   

 

 

  

  

  

 

 

 

  

 

 

  

  

 

 

 

 

   

 

 

 

 

 

First Priority Tax Solutions, Inc. (“First Priority” or the “Company”) was incorporated on March 31, 2014 under the laws of the State of Delaware.

 

On May 8, 2018, First Priority Tax Solutions, Inc. entered into an Asset Purchase Agreement with Silverlight International Limited., the Company owned by the owner of Zshoppers, Inc., whereby First Priority Tax Solutions, Inc. has agreed to acquire the net assets of Zshoppers, Inc.

 

On October 1, 2018, First Priority Tax Solutions, Inc. disposed of Zshoppers, Inc.

 

On December 3,2019, a majority of shareholders and board of directors approved a resolution to change the name of the Company to Fritzy Tech Inc. (“Fritzy Tech” or the “Company”).

 

The Company is currently seeking for a new business plan.

 

 

The Management of the Company is responsible for the selection and use of appropriate accounting policies and the appropriateness of accounting policies and their application. Critical accounting policies and practices are those that are both most important to the portrayal of the Company’s financial condition and results and require management’s most difficult, subjective, or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain. The Company’s significant and critical accounting policies and practices are disclosed below as required by generally accepted accounting principles.

 

 

The accompanying unaudited condensed interim financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and with the rules and regulations of the United States Securities and Exchange Commission (“SEC”) to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited condensed interim financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year. These condensed unaudited consolidated financial statements should be read in conjunction with the financial statements of the Company for the reporting period ended June 30, 2019 and notes thereto contained in the Company’s Annual Report on Form 10-K filed with the SEC on September 30, 2019.

 

 

These consolidated financial statements include the accounts of the Company and the acquired assets of Zshoppers, Inc. All material intercompany balances and transactions have been eliminated.

 

The Company elected June 30th as its fiscal year end date upon its formation.

 

    

 

On December 1, 2017, as a result of a private transaction, the control block of voting stock of the Company, represented by 4,000,000 shares of common stock (representing approximately 70% of issued and outstanding common shares of the Company), has been transferred from its Chief Executive Officer to an unaffiliated corporation, and a change of control of the Company has occurred. Upon the change of control of the Company, the existing directors and officers resigned immediately, and the Company has appointed a new director and officer. The Company entered into an agreement to transfer to its primary shareholder all its assets and liabilities which include real estate properties for generating rental income and liabilities consists of vendor payables and notes payable.

 

 

On December 1, 2017, as a result of the change of control of the Company, the Company transferred all its assets and liabilities to its primary shareholder. Please refer to Note 5 and 6.

 

On October 1, 2018, the Company disposed of Zshoppers, Inc. for which the Company acquired their net assets on May 8, 2018. Please refer to Note 6.

 

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

 

Critical accounting estimates are estimates for which (a) the nature of the estimate is material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change and (b) the impact of the estimate on financial condition or operating performance is material. The Company’s critical accounting estimates and assumptions affecting the financial statements were:

 

 

 

These significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to these estimates or assumptions, and certain estimates or assumptions are difficult to measure or value.

 

  

Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable in relation to the financial statements taken as a whole under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

 

Management regularly evaluates the key factors and assumptions used to develop the estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such evaluations, if deemed appropriate, those estimates are adjusted accordingly.

 

Actual results could differ from those estimates.

 

 

For the purpose of the accompanying financial statements, all highly liquid investments with a maturity of six months or less are considered to be cash equivalents.

 

 

Effective December 1, 2017, Real Estate reflected on the balance sheet was transferred to the principal shareholder of the Company.

 

 

The Company follows subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions.

 

Pursuant to Section 850-10-20 the related parties include a. affiliates (“Affiliate” means, with respect to any specified Person, any other Person that, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such Person, as such terms are used in and construed under Rule 405 under the Securities Act) of the Company; b. entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825–10–15, to be accounted for by the equity method by the investing entity; c. trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; d. principal owners of the Company; e. management of the Company; f. other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g. other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.

 

The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. The disclosures shall include: (a) the nature of the relationship(s) involved; (b) a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; (c) the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and (d) amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.

 

 

The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or un-asserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or un-asserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

 

 

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.

 

Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed.

 

 

The Company recognizes revenue from the sale of products and services in accordance with ASC 606,”” following the five steps procedure:

 

Step 1: Identify the contract(s) with customers

Step 2: Identify the performance obligations in the contract

Step 3: Determine the transaction price

Step 4: Allocate the transaction price to performance obligations

Step 5: Recognize revenue when the entity satisfies a performance obligation

 

The Company recognizes revenue when it satisfies its obligation by transferring control of the good or service to the customer. A performance obligation is satisfied over time if one of the following criteria are met:

 

 

The Company’s sales are completed through an online marketplace providing coupons and on-line discounts for products and services provided by third parties.

 

Cost of services include all expenses directly incurred to generate revenue, which include costs such as products purchases, processing fees, chargebacks and disputes, and shipping costs.

 

 

Earnings per share (“EPS”) are the amount of earnings attributable to each share of common stock. For convenience, the term is used to refer to either earnings or loss per share. EPS is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Pursuant to ASC Paragraphs 260-10-45-10 through 260-10-45-16 Basic EPS shall be computed by dividing income available to common stockholders (the numerator) by the weighted-average number of common shares outstanding (the denominator) during the period. Income available to common stockholders shall be computed by deducting both the dividends declared in the period on preferred stock (whether or not paid) and the dividends accumulated for the period on cumulative preferred stock (whether or not earned) from income from continuing operations (if that amount appears in the income statement) and also from net income. The computation of diluted EPS is similar to the computation of basic EPS except that the denominator is increased to include the number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued during the period to reflect the potential dilution that could occur from common shares issuable through contingent shares issuance arrangement, stock options or warrants.

 

 

Pursuant to ASC Paragraphs 260-10-45-45-21 through 260-10-45-45-23 Diluted EPS shall be based on the most advantageous conversion rate or exercise price from the standpoint of the security holder. The dilutive effect of outstanding call options and warrants (and their equivalents) issued by the reporting entity shall be reflected in diluted EPS by application of the treasury stock method unless the provisions of paragraphs 260-10-45-35 through 45-36 and 260-10-55-8 through 55-11 require that another method be applied. Equivalents of options and warrants include non-vested stock granted to employees, stock purchase contracts, and partially paid stock subscriptions (see paragraph 260–10–55–23). Anti-dilutive contracts, such as purchased put options and purchased call options, shall be excluded from diluted EPS. Under the treasury stock method: a. Exercise of options and warrants shall be assumed at the beginning of the period (or at time of issuance, if later) and common shares shall be assumed to be issued. b. The proceeds from exercise shall be assumed to be used to purchase common stock at the average market price during the period. (See paragraphs 260-10-45-29 and 260-10-55-4 through 55-5.) c. The incremental shares (the difference between the number of shares assumed issued and the number of shares assumed purchased) shall be included in the denominator of the diluted EPS computation.

 

There were no potentially dilutive common shares outstanding for the reporting periods ending December 31, 2019 and December 31, 2018.

 

 

The Company adopted paragraph 230-10-45-24 of the FASB Accounting Standards Codification for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (“Indirect method”) as defined by paragraph 230-10-45-25 of the FASB Accounting Standards Codification to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments. The Company reports the reporting currency equivalent of foreign currency cash flows, using the current exchange rate at the time of the cash flows and the effect of exchange rate changes on cash held in foreign currencies is reported as a separate item in the reconciliation of beginning and ending balances of cash and cash equivalents and separately provides information about investing and financing activities not resulting in cash receipts or payments in the period pursuant to paragraph 830-230-45-1 of the FASB Accounting Standards Codification.

 

 

The Company follows the guidance in Section 855-10-50 of the FASB Accounting Standards Codification for the disclosure of subsequent events. The Company will evaluate subsequent events through the date when the financial statements were issued. Pursuant to ASU 2010-09 of the FASB Accounting Standards Codification, the Company as an SEC filer considers its financial statements issued when they are widely distributed to users, such as through filing them on EDGAR.

 

 

In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (Topic 606),” which supersedes the revenue recognition requirements in “Revenue Recognition (Topic 605).” This ASU requires an entity to recognize revenue when goods are transferred, or services are provided to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. This ASU also requires disclosures enabling users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. In August 2015, the FASB issued ASU 2015-14, “Revenue from Contracts with Customers (Topic 606), deferral of the Effective Date.” With the issuance of ASU 2015-14, the new revenue guidance ASU 2014-09 will be effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2018, using one of two prescribed retrospective methods. In April 2016, the FASB issued ASU 2016-10, “Revenue from Contracts with Customer (Topic 606), Identifying Performance Obligations and Licensing.” The guidance is applicable from the date of applicability of ASU 2014-09. This ASU finalizes the amendments to the guidance on the new revenue standard on the identification of performance obligations and accounting for licenses of intellectual property. In December 2016, the FASB issued ASU 2016-20, “Technical Corrections and Improvements (Topic 606)” which is applicable from the date of applicability of ASU 2014-09. This guidance provides optional exemptions from the disclosure requirement for remaining performance obligations for specific situations in which an entity need not estimate variable consideration to recognize revenue. In May 2016, FASB issued ASU No. 2016-12, “Narrow-Scope Improvements and Practical Expedients”. This amendment clarified certain aspects of Topic 606 and will be applicable from the date of applicability of ASU 2014-09. The Company is in process of evaluating the impact of the foregoing updates.

 

 

In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)”. This new standard replaces the existing guidance on leases and requires the lessee to recognize a right-of-use asset and a lease liability for all leases with lease terms equal to or greater than twelve months. For finance leases, the lessee would recognize interest expense and amortization of the right-of-use asset, and for operating leases, the lessee would recognize total lease expense on a straight-line basis. This standard is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2018. Upon adoption, entities will be required to use a modified retrospective transition which provides for certain practical expedients. Entities are required to apply the new standard at the beginning of the earliest comparative period presented. Early adoption of this new standard is permitted. The Company is currently evaluating the effect this new standard will have on its consolidated financial statements and related disclosures. The Company does not expect the requirement to recognize a right-of-use asset and a lease liability for operating leases to have a material impact on the presentation of its consolidated statements of financial position.

 

 

The Company has elected to adopt early application of Accounting Standards Update No. 2014-15,.

 

The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the accompanying financials at December 31, 2019 and June 30, 2019, the Company had an accumulated deficit of $270,997 and $248,451 of continuing operations, respectively, and retained earnings of $109,905 and $109,905 from discontinued operations, as of December 31, 2019 and June 30, 2019, respectively. The Company has a working capital deficit (total current liabilities exceeded total current assets) of $86,569 and $64,023, at December 31, 2019 and June 30, 2019, respectively. The Company’s cash balance and revenues generated are not currently sufficient and cannot be projected to cover its operating expenses for the next twelve months from the filing date of this report. These factors among others raise substantial doubt about the Company’s ability to continue as a going concern for a reasonable period of time.

  

The Company’s existence is dependent upon management’s ability to develop profitable operations. Management is devoting substantially all of its efforts to developing its business and raising capital and there can be no assurance that the Company’s efforts will be successful. No assurance can be given that management’s actions will result in profitable operations or the resolution of its liquidity problems. The accompanying consolidated financial statements do not include any adjustments that might result should the Company be unable to continue as a going concern.

 

In order to improve the Company’s liquidity, the Company’s management is actively pursuing additional equity financing through discussions with investment bankers and private investors. There can be no assurance that the Company will be successful in its effort to secure additional equity financing.

 

 

On May 8, 2018, the Company entered into a Capital Contribution Agreement with our principal shareholder, Silverlight International Limited. Under the terms of the Capital Contribution Agreement, Silverlight contributed the assets of Zshoppers.com, an electronics and general products ecommerce website, valued at $100,000 to the Company, in exchange for the issuance of an additional 333 shares of common stock (pre-reverse stock split of 20,000 shares, see Note 7) to Silverlight at $5 per share. The assets contributed to our Company consist of all assets used in the operation of the Zshoppers.com business, including, but not limited to Zshoppers domain names, social media accounts and email lists. In connection with the capital contribution, our Company pay the former owner of Zshoppers.com 25% profit share for one year from the date of acquisition, plus $1,000 per month for the Payment Period.

 

 

The acquisition of Zshoppers, Inc. met the definition of a business in accordance with FASB ASC Topic 805,” As such, the Company accounted for the acquisition as a business combination.

 

The net assets (liabilities) acquired by First Priority Tax Solutions, Inc. from Zshoppers, Inc. on May 8, 2018 is summarized as follows:

 

 

Revenues of $5,917 and net loss of $2,968 since the acquisition date are included in the consolidated statements of operations for the year ended June 30, 2018.

 

 

On December 1, 2017, as a result of the change of control of the Company, the Company transferred all its assets and liabilities to its primary shareholder summarized as follows:

 

 

 

On December 1, 2017, as a result of the change of control of the Company, the Company transferred to its primary shareholder all its assets and liabilities which include real estate properties for generating rental income.

 

On October 1, 2018, the Company disposed of Zshoppers, Inc. for which the Company acquired their net assets on May 8, 2018.

 

The sales of net liabilities qualified as a discontinued operation of the Company and accordingly, the Company has excluded results of the operations from its Condensed Statements of Operations to present the revenue and cost of revenue from the real estate activity in discontinued operations.

 

For six months ended December 31, 2019 and 2018, the Company had net loss from discontinued operations results of $0 and $2,304, respectively.

 

    

 

 

The Company has authorized 8,000,000 preferred shares with a par value of $0.000001 per share. No shares of preferred stock have been issued.

 

 

The Company has authorized 92,000,000 common shares with a par value of $0.000001 per share, and 5,760,000 shares of common stock issued and outstanding

 

On May 8, 2018, the Company issued 333 shares of common stock (pre-reverse stock split of 20,000 shares) to acquire the net assets from Zshoppers.

 

On December 3, 2019, a majority of the Company’s shareholders and board of directors approved a reverse stock split of the Company’s issued and outstanding shares of common stock on a one (1) new for 60 old basis. The reverse stock split was approved by Financial Industry Regulatory Authority ( FINRA ) with an effective date of December 23, 2019. As a result of the reverse split, the Company’s issued and outstanding common stock decreased from 5,760,000 shares to 96,000 shares, all with a par value of $0.000001. The Company’s authorized shares remain unchanged.

 

As of December 31, 2019 and June 30, 2019, the issued and outstanding common stock was 96,000 shares and 96,000 shares, respectively.

 

 

On May 8, 2018, the Company entered into a Capital Contribution Agreement with our principal shareholder, Silverlight International Limited. Under the terms of the Capital Contribution Agreement, Silverlight contributed the assets of Zshoppers.com, an electronics and general products ecommerce website, valued at $100,000 to the Company, in exchange for the issuance of an additional 333 shares of common stock (pre-reverse stock split of 20,000 shares) to Silverlight at $5 per share. The assets contributed to our Company consist of all assets used in the operation of the Zshoppers.com business, including, but not limited to Zshoppers domain names, social media accounts and email lists. In connection with the capital contribution, our Company pay the former owner of Zshoppers.com 25% profit share for one year from the date of acquisition, plus $1,000 per month for the payment period.

 

During the six months ended December 30, 2019 and 2018, the shareholder of the Company has made $17,176 and $20,193 net advancement for paying off operating expenses on behalf of the Company, respectively. As of December 31, 2019, and June 30, 2019, the amount due to the shareholder was $68,772 and $51,596, respectively.

 

 

Management has evaluated subsequent events through the date these unaudited condensed consolidated financial statements were available to be issued. Based on our evaluation, no material events have occurred that require disclosure.

 

 

 

 

This quarterly report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

 

Our unaudited consolidated financial statements are prepared in accordance with United States Generally Accepted Accounting Principles. The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this quarterly report.

 

In this quarterly report, unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to “common shares” refer to the common shares in our capital stock.

 

As used in this quarterly report, the terms “we”, “us”, “our” and “our company” mean Fritzy Tech Inc., unless otherwise indicated.

 

 

Our company was incorporated in the State of Delaware on March 31, 2014. From inception to December 1, 2017, we were in the business of acquiring, developing, managing and selling residential and commercial income-producing properties in the Cincinnati and Dayton, Ohio metropolitan areas. Our revenue primarily resulted from rental income from the tenants occupying the properties we acquire and from the proceeds of property sales. Since starting our business in March 2014, our company has only acquired one light industrial facility in Dayton, Ohio. All real estate activity has been reclassed to discontinued operations. On December 1, 2017, our building was transferred to our primary shareholder in exchange for assumption of the debt associated with the purchase of the building.

 

On December 1, 2017, we underwent a change of control and discontinued our real estate business.

 

On May 8, 2018, we entered into a Capital Contribution Agreement (the “Capital Contribution Agreement”) with our principal shareholder, Silverlight International Limited (“Silverlight”). Under the terms of the Capital Contribution Agreement, Silverlight contributed the assets of Zshoppers.com, an electronics and general products ecommerce website, to our company, in exchange for the issuance of an additional 20,000 shares to Silverlight. To determine the number of shares received by Silverlight in connection with such contribution, our company valued the Zshoppers.com assets at $100,000 and divided this amount by a price per share equal to $5, which represents the most recent price per share for trades of our company’s stock on the Over-the-Counter Quotation System in which our company’s common stock is quoted. In connection with the capital contribution, our company assumed certain ongoing responsibilities of Silverlight for pay the former owner of Zshoppers.com (the “Seller”) under its asset purchase agreement for Zshoppers.com (the “Ongoing Obligations”). The Ongoing Obligations consist of a 25% profit share for the Seller for one year from the date of acquisition (the “Payment Period”), plus $1,000 per month for the Payment Period.

 

On October 1, 2018, our company disposed of Zhoppers, Inc.

 

  

Our company is currently seeking a new business plan.

 

On December 3, 2019 a majority of our stockholders and our board of directors approved a change of name of our company to Fritzy Tech Inc. and a reverse stock split of our issued and outstanding shares of common stock on a sixty (60) old for one (1) new basis. A Certificate of Amendment of Certificate of Incorporation was filed with the Delaware Secretary of State on December 5, 2019 with an effective date of December 16, 2019. The name change and reverse stock split was approved by Financial Industry Regulatory Authority ( FINRA ) with an effective date of December 23, 2019.

 

The address of our principal executive office is 120 High Road, East Finchley, London, England, United Kingdom N2 9ED. Our telephone number is (315) 274-1520. We do not have a corporate website.

 

We do not have any subsidiaries.

 

We have not been subject to any bankruptcy, receivership or similar proceeding.

 

 

We are currently seeking new business opportunities with established business entities for merger with or acquisition of a target business. In certain instances, a target business may wish to become our subsidiary or may wish to contribute assets to us rather than merge. We have not yet begun negotiations or entered into any definitive agreements for potential new business opportunities, and there can be no assurance that we will be able to enter into any definitive agreements.

 

Any new acquisition or business opportunities that we may acquire will require additional financing. There can be no assurance, however, that we will be able to acquire the financing necessary to enable us to pursue our plan of operation. If our company requires additional financing and we are unable to acquire such funds, our business may fail.

 

Management of our company believes that there are benefits to being a reporting company with a class of securities quoted on the OTCQB, such as: (i) the ability to use registered securities to acquire assets or businesses; (ii) increased visibility in the financial community; (iii) the facilitation of borrowing from financial institutions; (iv) potentially improved trading efficiency; (v) potential stockholder liquidity; (vi) potentially greater ease in raising capital subsequent to an acquisition; (vii) potential compensation of key employees through stock awards or options; (viii) potentially enhanced corporate image; and (ix) a presence in the United States’ capital market.

 

We may seek a business opportunity with entities that have recently commenced operations, or entities who wish to utilize the public marketplace in order to raise additional capital in order to expand business development activities, to develop a new product or service, or for other corporate purposes. We may acquire assets and establish wholly-owned subsidiaries in various businesses or acquire existing businesses as subsidiaries.

 

In implementing a structure for a particular business acquisition or opportunity, we may become a party to a merger, consolidation, reorganization, joint venture, or licensing agreement with another corporation or entity. We may also acquire stock or assets of an existing business. Upon the consummation of a transaction, it is anticipated that our sole officer and two directors will continue to manage the Company.

 

As of the date hereof, we have not entered into any formal written agreements for a business combination or opportunity. When any such agreement is reached, we intend to disclose such an agreement by filing a current report on Form 8-K.

 

We anticipate that the selection of a business opportunity in which to participate will be complex and without certainty of success. Business opportunities may be available in many different industries and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex. Business opportunities that we believe are in the best interests of our company may be scarce, or we may be unable to obtain the ones that we want. We can provide no assurance that we will be able to locate compatible business opportunities.

 

    

Currently, we do not have a source of revenue. We are not able to fund our cash requirements through our current operations. We have been reliant on loans by affiliated and non-affiliated parties to provide financial contributions and services to keep our company operating. Further, we believe that our company may have difficulties raising capital from other sources until we locate a prospective merger candidate through which we can pursue our plan of operation. If we are unable to secure adequate capital to continue our acquisition efforts, our shareholders may lose some or all of their investment and our business may fail. We currently have no written or oral agreement from our majority shareholder to continue to provide financial contributions.

 

 

The following summary of our operations should be read in conjunction with our unaudited consolidated financial statements for the six months ended December 31, 2019 and 2018, which are included herein.

 

 

Our operating results for three months ended December 31, 2019 and 2018, and the changes between those periods for the respective items are summarized as follows:

   

     

No revenue was generated for three months ended December 31, 2019 and 2018.

 

Net loss was $8,850 for the three months ended December 31, 2019 as compared to net loss of $6,164 for the three months ended December 31, 2018 mainly attributed to the increase in operating expenses.

  

Net loss from continued operations for the three months ended December 31, 2019 and December 31, 2018 was $8,850 and $5,981, respectively. The increase in net loss from continued operations was mainly attributed to the increase operations expenses.

  

Operating expenses for the three months ended December 31, 2019 and December 31, 2018 were $8,850 and $5,981, respectively. The increase in the operating expenses were primarily attributed to the increase in professional fees and general and administrative expenses.

  

Net loss from discontinued operations for the three months ended December 31, 2019 and December 31, 2018 was $0 and $183, respectively

 

 

Our operating results for six months ended December 31, 2019 and 2018, and the changes between those periods for the respective items are summarized as follows:

   

      

  

No revenue was generated for six months ended December 31, 2019 and 2018.

 

Net loss was $22,546 for the six months ended December 31, 2019 as compared to net loss of $18,722 for the six months ended December 31, 2018 mainly attributed to the increase in operating expenses.

  

Net loss from continued operations for the six months ended December 31, 2019 and December 31, 2018 was $22,546 and $16,418, respectively. The increase in net loss from continued operations was mainly attributed to the increase operations expenses.

  

Operating expenses for the six months ended December 31, 2019 and December 31, 2018 were $22,546 and $16,418, respectively. The increase in the operating expenses were primarily attributed to the increase in professional fees and general and administrative expenses.

  

Net loss from discontinued operations for the six months ended December 31, 2019 and December 31, 2018 was $0 and $2,304, respectively

 

 

  

  

The financial statements included in this yearly report have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the financial statements at December 31, 2019 and June 30, 2019, we had an accumulated deficit of $270,997 and $248,451 of continuing operations, respectively, and retained earnings of $109,905 and $109,905 from discontinued operations, as of December 31, 2019, and June 30, 2019, respectively. We had a working capital deficit (total current liabilities exceeded total current assets) of $86,569 and $64,023, at December 31, 2019 and June 30, 2019, respectively. Our cash balance and revenues generated are not currently sufficient and cannot be projected to cover our operating expenses for the next 12 months from the filing date of this report. These factors among others raise substantial doubt about our ability to continue as a going concern for a reasonable period of time.

  

 

 

  

 

Net cash used in our operating activities for the six months ended December 31, 2019 totaled $17,176, compared to net cash used in our operations for the six months ended December 31, 2018 of $23,198. The increase in net cash used in operating activities was primarily due to the increase in net loss from continuing operations.

 

 

For the six months ended December 31, 2019 and December 31, 2018, we had no investing activities.

 

 

For the six months ended December 31, 2019 and December 31, 2018, net cash provided by financing activities was $17,176 and $20,193, respectively, attributed to the advancement from a shareholder for paying off operating expenses on behalf of the Company.

 

 

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.

 

 

The preparation of financial statements in accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. A change in managements’ estimates or assumptions could have a material impact on our financial condition and results of operations during the period in which such changes occurred. Actual results could differ from those estimates. Our financial statements reflect all adjustments that management believes are necessary for the fair presentation of their financial condition and results of operations for the periods presented.

 

 

As a “smaller reporting company”, we are not required to provide the information required by this Item.

 

 

 

Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that is designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the 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 Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

 

An evaluation was conducted under the supervision and with the participation of our management of the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2019. Based on that evaluation, our management concluded that our disclosure controls and procedures were not effective as of such date to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms as a result of the following material weaknesses:

 

The specific material weakness identified by our management was ineffective controls over certain aspects of the financial reporting process because of a lack of a sufficient complement of personnel with a level of accounting expertise and an adequate supervisory review structure that is commensurate with our financial reporting requirements and inadequate segregation of duties. 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 company’s annual or interim financial statements would not be prevented or detected on a timely basis.

 

We expect to be materially dependent upon a third party to provide us with accounting consulting services for the foreseeable future. Until such time as we have a chief financial officer with the requisite expertise in U.S. GAAP, there are no assurances that the material weaknesses in our disclosure controls and procedures and internal control over financial reporting will not result in errors in our financial statements which could lead to a restatement of those financial statements.

 

 

There have been no changes in our internal controls over financial reporting identified in connection with the evaluation required by paragraph (d) of Securities Exchange Act Rule 13a-15 or Rule 15d-15 that occurred in the quarter ended December 31, 2019 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

 

 

 

From time to time, we may become involved in litigation relating to claims arising out of our operations in the normal course of business. We are not involved in any pending legal proceeding or litigation and, to the best of our knowledge, no governmental authority is contemplating any proceeding to which we are a party and which would reasonably be likely to have a material adverse effect on our company. To date, our company has never been involved in litigation, as either a party or a witness, nor has our company been involved in any legal proceedings commenced by any regulatory agency against our company.

 

 

As a “smaller reporting company”, we are not required to provide the information required by this Item.

 

 

None.

 

 

None.

 

 

Not Applicable.

 

 

None.

 

    

 

_________

 

    

 

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