Newpoint Financial Corp - Annual Report: 2016 (Form 10-K)

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 fiscal year ended December 31, 2016

Commission file number 000-54953 

Registrant's telephone number including area code (718) 447-1900

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

None

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

Common Stock, $0.001 par value

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act

[ ] Yes     [X] No

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     [X] No

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).     [X ] Yes     [] No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of 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 10-K.

[] Yes     [ ] No

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

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

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter.

APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes [ ] No [ ]

(APPLICABLE ONLY TO CORPORATE REGISTRANTS)

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: 69,322,426 shares of common stock as of March 29, 2017. 

DOCUMENTS INCORPORATED BY REFERENCE

None

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JUDO CAPITAL CORP.

FORM 10-K

TABLE OF CONTENTS

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PART I

ITEM 1.     BUSINESS

FORWARD-LOOKING STATEMENTS; This annual report contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that involve risks and uncertainties. In addition, Classic Rules Judo Championships, Inc., (formerly Blue Ribbon Pyrocool, Inc.) (the “Company” or “Classic Rules”), may from time to time make oral forward-looking statements. Actual results are uncertain and may be impacted by many factors. In particular, certain risks and uncertainties that may impact the accuracy of the forward-looking statements with respect to revenues, expenses and operating results include without limitation; cycles of customer orders, general economic and competitive conditions and changing customer trends, technological advances and the number and timing of new product introductions, shipments of products and components from foreign suppliers, and changes in the mix of products ordered by customers. As a result, the actual results may differ materially from those projected in the forward-looking statements.

Because of these and other factors that may affect the Company’s operating results, past financial performance should not be considered an indicator of future performance, and investors should not use historical trends to anticipate results or trends in future periods.

History

Blue Ribbon Pyrocool, Inc. was incorporated on the 16th day of November 2005 as a wholly owned subsidiary of Puritan Financial Group, Inc. (which was formerly Blue Ribbon International, Inc.) On March 24, 2008 a special meeting of the Shareholders of Puritan Financial Group, Inc. was held.  A quorum representing 90.2% of the issued common shares were present and the Broad of Directors stated that a special meeting of the Board of Directors held earlier that day approved the spinout of Blue Ribbon Pyrocool, Inc.

March 26, 2008 was also set as the record date to establish those Blue Ribbon shareholders who are eligible to participate in the distribution.  Classic Rules did not issue shares to anyone other than our stockholders as of March 26, 2008. The special meeting of shareholders was held as scheduled and the distribution was approved by unanimous vote of Blue Ribbon shares represented at the meeting which consisted of approximately 90.2% of the then outstanding stock of Blue Ribbon.

A stock dividend payable in shares of Blue Ribbon Pyrocool (now, Classic Rules) common stock to the shareholders of Puritan Financial has been authorized by Classic Rules and approved by its shareholders.  In March 2008, upon approval of its shareholders, Puritan Financial notified its stock transfer agent, Corporate Stock Transfer, that a spin-out company (Blue Ribbon Pyrocool) would be created and that there would be a distribution of 10,449,250 shares of Blue Ribbon common stock, representing all of the issued and outstanding stock of Blue Ribbon, for the benefit of the Puritan Financial shareholders with no action on the part of the shareholders and will be a book entry.

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On July 15, 2008 the Board of Directors of Blue Ribbon executed a Corporate Resolution changing the name of Blue Ribbon to Classic Rules Judo Championships, Inc.

On July 15, 2008 the Board of Directors of Classic Rules declared a 10 to 1 reverse split reducing the total number of outstanding shares from 10,449,250 to 1,044,925; but with the effect of rounding up by the transfer agent another 127 shares were added and the total became 1,045,052.

Also on July 15, 2008, the ad hoc committee comprising a quorum of approximately 90.2% of the voting shares executed a Waiver of Notice for a Special Stockholders Meeting to be held on July 15, 2008 for the purpose of approving the distribution of Classic Rules stock to the Eligible Shareholders and to resolve the issuance of 8,705,084 shares to be distributed to the founding investors of Classic Rules.

Classic Rules World Judo Championships, Inc., a wholly owned subsidiary of the Company was incorporated pursuant to the laws of the State of Connecticut on August 13, 2008. The subsidiary was incorporated to act as the accounting and administrative arm of the tournament, named “ Classic Rules World Judo Championships” which held its first tournament on March 21, 2010 in New Rochelle, New York. The second tournament was held on May 7, 2011. The Company has not hosted a tournament since and has shifted its business focus and plans to engage in real estate investing and development.

Our Business

On June 2, 2014, the Company ceased its principal activities of hosting and sponsoring judo tournaments. The Company plans to operate in real estate investment activities focused in the New York City metropolitan area.

Background Information of the Business Plan

The evolution of the extent to establish The Classic Rules Judo Championship series is the following:

Preliminary Background Information

The Company changed its name to Classic Rules Judo Championships and entered into a new business venture of hosting judo competitions on July 15, 2008. On June 2, 2014, the Company ceased its principal activities of hosting and sponsoring judo tournaments. The Company plans to operate in real estate investment activities focused in the New York City metropolitan area.

Government Regulation

The Company is, and will continue to be, subject to several and varying governmental regulations. In general, the Company is subject to environmental, public health and safety, land use, trade and other governmental regulations, and national, state, or local taxation or tariffs. The Company’s management will endeavor to ascertain and comply with all applicable to the business of the Company. However, it may not be possible to predict with any degree of accuracy all applicable regulations or the impact of government regulation, and, compliance with such regulation will require certain efforts and resources of the Company.

a) Penny Stock Regulations: Our shares are "penny stocks" covered by Section 15(g) of the Exchange Act, and Rules 15g-1 through 15g-6 and Rule 15g-9 promulgated thereunder. They impose additional sales practice requirements on broker/dealers who sell our securities to persons other than established customers and accredited investors (generally institutions with assets in excess of $5,000,000 or individuals with net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouses). While Section 15(g) and Rules 15g-1 through 15g-6 apply to brokers-dealers, they do not apply to us.

Rule 15g-1 exempts a number of specific transactions from the scope of the penny stock rules.

Rule 15g-2 declares unlawful broker/dealer transactions in penny stocks unless the broker/dealer has first provided to the customer a standardized disclosure document.

Rule 15g-3 provides that it is unlawful for a broker/dealer to engage in a penny stock transaction unless the broker/dealer first discloses and subsequently confirms to the customer current quotation prices or similar market information concerning the penny stock in question.

Rule 15g-4 prohibits broker/dealers from completing penny stock transactions for a customer unless the broker/dealer first discloses to the customer the amount of compensation or other remuneration received as a result of the penny stock transaction.

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Rule 15g-5 requires that a broker/dealer executing a penny stock transaction, other than one exempt under Rule 15g-1, disclose to its customer, at the time of or prior to the transaction, information about the sales persons compensation.

Rule 15g-6 requires broker/dealers selling penny stocks to provide their customers with monthly account statements.

Rule 15g-9 requires broker/dealers to approve the transaction for the customer's account; obtain a written agreement from the customer setting forth the identity and quantity of the stock being purchased; obtain from the customer information regarding his investment experience; make a determination that the investment is suitable for the investor; deliver to the customer a written statement for the basis for the suitability determination; notify the customer of his rights and remedies in cases of fraud in penny stock transactions; and, the FINRA's toll free telephone number and the central number of the North American Administrators Association, for information on the disciplinary history of broker/dealers and their associated persons. The application of the penny stock rules may affect your ability to resell your shares.

The FINRA has adopted rules that require that in recommending an investment to a customer, a broker/dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer's financial status, tax status, investment objectives and other information.  Under interpretations of these rules, the FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. The FINRA requirements make it more difficult for broker/dealers to recommend that their customers buy our common stock, which may have the effect of reducing the level of trading activity and liquidity of our common stock.  Further, many brokers charge higher transactional fees for penny stock transactions. As a result, fewer broker/dealers may be willing to make a market in our common stock, reducing a stockholder's ability to resell shares of our common stock.

Again, the foregoing rules apply to broker/dealers. They do not apply to us in any manner whatsoever. Since our shares are covered by Section 15(g) of the Exchange Act, which imposes additional sales practice requirements on broker/dealers, many broker/dealers may not want to make a market in our shares or conduct any transactions in our shares. As such, your ability to dispose of your shares may be adversely affected.

b) Blue Sky Restrictions on Resale: If a selling security holder wants to sell shares of our common stock under this registration statement in the United States, the selling security holders will also need to comply with state securities laws, also known as "Blue Sky laws," with regard to secondary sales. All states offer a variety of exemption from registration for secondary sales. Many states, for example, have an exemption for secondary trading of securities registered under Section 12(g) of the Securities Exchange Act of 1934 or for securities of issuers that publish continuous disclosure of financial and non-financial information in a recognized securities manual, such as Standard & Poor's. The broker for a selling security holder will be able to advise a selling security holder which states our common stock is exempt from registration with that state for secondary sales.

Any person who purchases shares of our common stock from a selling security holder under this registration statement who then wants to sell such shares will also have to comply with Blue Sky laws regarding secondary sales. When the registration statement becomes effective, and a selling security holder indicates in which state(s) he desires to sell his shares, we will be able to identify whether it will need to register or it will rely on an exemption there from.

Employees

The Company presently has no employees other than its officer. Management of the Company expects to use consultants, attorneys, and accountants as necessary, and does not anticipate a need to hire any full-time employees until absolutely necessary for the operations of the Company. The need for employees and their availability will be addressed in connection with the scope and requirements of the operations of the Company.

As of December 31, 2016, we had no employees other than our officer and director. We anticipate that we will not hire any employees in the next twelve months, unless we generate significant revenues.

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Facilities

Our executive, administrative and operating offices are located at 269 Forest Ave, Staten Island, NY 10301 free of rent. There is no written agreement documenting this arrangement.

We have no policies with respect to investments in real estate or interests in real estate, real estate mortgages, or securities of or interests in persons primarily engaged in real estate activities. The mailing address of Classic Rules Judo is 269 Forest Ave, Staten Island, NY 10301.

Risk Factors

Financial position of the Company, working capital deficit; report of independent auditors. The Company has yet to generate revenue from its real estate investment activities. The Company, which is to be considered as a startup Company is currently developing its business and hopes to generate sustainable revenues through investment into specific real estate developments in New York. The Company makes no assurances that the Company will generate sufficient revenues through its operations and be able to continue as a going concern.

The independent accountant’s report on the Company’s financial statements for the years ended December 31, 2016 and 2015, contains an explanatory paragraph regarding the Company’s ability to continue as a going concern.

Risks of Leverage. The Company has, and likely will continue to, incur substantial borrowings, notes, and/or other Company debt for the purpose of developing Company operations and for financing the expansion and growth of the Company, including the possible acquisition of other companies. Any amounts borrowed will depend among other things, on the condition of financial markets. Acquisitions of equipment, vehicles, or other companies purchased on a leveraged basis generally can be expected to be profitable only if they generate, at a minimum, sufficient cash revenues to pay interest on, and to amortize, the related debt, to cover operating expenses and to recover the equity investment. The use of leverage, under certain circumstances, may provide a higher return to the shareholders but will cause the risk of loss to the shareholders to be greater than if the Company did not borrow, because fixed payment obligations must be met on certain specified dates regardless of the amount of revenues derived by the Company. If debt service payments are not made when due, the Company may sustain the loss of its equity investment in the assets securing the debt as a result of foreclosure by the secured lender.  Interest payable on Company borrowings, if any, may vary with the movement of the interest rates charged by banks to their prime commercial customers. An increase in borrowing costs due to a rise in the “prime” or “base” rates may reduce the amount of Company income and cash availability for dividends.

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

None.

Currently, our office space is located at 269 Forest Ave, Staten Island, NY 10301; our telephone number is (315) 451-4889.

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

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Not applicable.

PART II

Market Information

Our common stock is not currently quoted on any exchange. We intend to apply to have our common stock be quoted on the OTC Bulletin Board. If our securities are not quoted on the OTC Bulletin Board, a security holder may find it more difficult to dispose of, or to obtain accurate quotations as to the market value of our securities. The OTC Bulletin Board differs from national and regional stock exchanges in that it (1) is not situated in a single location but operates through communication of bids, offers and confirmations between broker-dealers, and (2) securities admitted to quotation are offered by one or more Broker-dealers rather than the "specialist" common to stock exchanges.

To qualify for quotation on the OTC Bulletin Board, an equity security must have one registered broker-dealer, known as the market maker, willing to list bid or sale quotations and to sponsor the company listing. If it meets the qualifications for trading securities on the OTC Bulletin Board our securities will trade on the OTC Bulletin Board. We may not now or ever qualify for quotation on the OTC Bulletin Board. We currently have no market maker who is willing to list quotations for our securities.

As of March 29, 2017, there were 69,322,426 shares of common stock of the Company issued and outstanding.

Dividends

It has been the policy of the Company to retain earnings, if any, to finance the development and growth of its business.

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

When used in this report on Form 10-K, the words "may," "will," "expect," "anticipate," "continue," "estimate," "project," "intend," and similar expressions are intended to identify forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 regarding events, conditions, and financial trends that may affect the Company's future plans of operations, business strategy, operating results, and financial position. Persons reviewing this report are cautioned that any forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties and that actual results may differ materially from those included within the forward-looking statements as a result of various factors. Such factors are discussed under the headings "Item 1. Business" and "Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations," and also include general economic factors and conditions that may directly or indirectly impact the Company's financial condition or results of operations.

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

The Company cautions readers not to place undue reliance on any forward-looking statements, which speak only as of the date made, are based on certain assumptions and expectations which may or may not be valid or actually occur, and which involve various risks and uncertainties, including but not limited to the risks set forth above. In addition, sales and other revenues may not commence and/or continue as anticipated due to delays or otherwise. As a result, the Company’s actual results for future periods could differ materially from those anticipated or projected.

Overview

Classic Rules Judo Championships, Inc. (“We” or the “Company”) was originally formed as Blue Ribbon Pyrocool, Inc. a Delaware corporation, on November 16, 2005, as a wholly owned subsidiary of Puritan Financial Group, Inc., a company traded on the Pink OTC Markets, Inc. On March 24, 2008 a majority of the shareholders approved the spin-off of the Company to the shareholders of record as of March, 26, 2008.  Subsequent to its formation and prior to being renamed, the Company had no revenues or operations.

Our Company, Classic Rules Judo Championships, Inc. created a subsidiary which was incorporated in the state of Connecticut called Classic Rules World Judo Championships, Inc. There are no other subsidiaries. On July 15, 2008 the Company executed a Memorandum of Understanding entitled “Management's Global Agreement” (the “MOU”) with Classic Rules Judo Championships, Inc. and Mr. Chris Angle.  Under such MOU the Company would change its name and pursue the business of Classic Rules Judo Championships, Inc.

We intended to establish and promote tournaments for the sport of classical judo and hosted two such tournaments: one in 2010 and one in 2011. The Company has not hosted a tournament since 2011 and has since changed its business to real estate investing and development.

Critical Accounting Policies and Estimates

The Company's financial statements are prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP). The preparation of the financial statements requires the Company to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosures. Though the Company evaluates the estimates and assumptions on an ongoing basis, our actual results may differ from these estimates.

Certain of the Company's accounting policies that we believe are the most important to the portrayal of the Company's financial condition and results of operations and that require management's subjective judgments are described below to facilitate a better understanding of our business activities. Management bases its judgments on its experience and assumptions which it believes are reasonable and applicable under the circumstances.

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

Revenue Recognition - The Company has not yet generated revenues from its planned real estate investment activities.

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Results of Operations

Comparison of the Years Ended December 31, 2016 and 2015

General and Administrative Expenses. The Company incurred general and administrative expenses of $29,482 during the year ended December 31, 2016 compared to $6,696 during the year ended December 31, 2015. The increase is related to the timing of incurring professional fees associated with bringing filings with the SEC current.

Operating loss. As a result of the Company's general and administrative expenses, the Company incurred an operating loss of $29,482 for the year ended December 31, 2016 as compared with $6,696 for the year ended December 31, 2015.

Net Loss. The Company incurred a net loss of $29,482during the year ended December 31, 2016 compared to $6,696 during the year ended December 31, 2015.

Liquidity and Capital Resources

At December 31, 2016, we had cash of $4,787, current assets of $10,037 and current liabilities totaling $9,805 creating a working capital balance of $232. Current liabilities consisted of accounts payable and accrued liabilities totaling $9,805.

Share Issuances

During the year ended December 31, 2015, the Company accepted the conversion of 500,000 shares of Series A Preferred Stock for 200,000 shares of common stock; issued 50,000,000 common shares for total cash proceeds of $30,000 and receivable of $30,000issued 165,480 common shares valued at $1,654 for no consideration and issued 34,520 common shares valued at $41 for professional services.

There were no shares issued during the year ended December 31, 2016.

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Cash Flows

Net cash used in operating activities were $34,257 and $20,914 during the years ended December 31, 2016 and 2015. Net cash used in operating activities during the year ended December 31, 2016 consisted of a net loss of $29,482 and net changes in working capital of $4,775. Net cash used in operating activities during the year ended December 31, 2015 consisted of a net loss of $6,696 non-cash expenses totaling $41 and a change in working capital of $14,259.

Net cash provided by financing activities were $30,000 and $29,958 during the years ended December 31, 2016 and 2015. Net cash provided by financing activities during the year ended December 31, 2016 consisted of cash received for a common stock subscription receivable of $30,000. Net cash provided by financing activities during the year ended December 31, 2015 consisted net repayments of related party loans of $74, cash contributions from shareholders of $32 and proceeds from the sale of common stock of $30,000.

Our auditors have raised, in their current audit report, a substantial doubt about our ability to continue as a going concern. We will be unable to continue as a going concern if we are not able to raise capital and are unsuccessful in securing a business acquisition. Until such time as sufficient capital is raised, we intend to limit expenditures for capital assets and other expense categories.

The Company must currently rely on corporate officers, directors and outside investors in order to meet its budget. If the Company is unable to obtain financing from any of one of these aforementioned sources, the Company would not be able to satisfy its financial obligations. Limited commitments to provide additional funds have been made by management and other shareholders. We cannot provide any assurance that any additional funds will be made available on acceptable terms or at all.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on us.

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

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CONTENTS

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders

Judo Capital Corp. (formerly known as Classic Rules Judo Championships, Inc.)

Staten Island, NY

We have audited the accompanying consolidated balance sheets of Judo Capital Corp. (formerly known as Classic Rules Judo Championships, Inc.) (the “Company”) as of December 31, 2016 and 2015, and the related consolidated statements of operations, stockholders’ equity(deficit), and cash flows for the years then ended. These consolidated financial statements are the responsibility of the entity’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform an audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company. as of December 31, 2016, and 2015, and the consolidated results of their operations and their cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note [B] to the consolidated financial statements, the Company has suffered recurring losses from operations which raises substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note [B]. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ MaloneBailey, LLP

www.malonebailey.com

Houston, Texas

March 29, 2017

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F-2

F-3

 F-4

F-5

Judo Capital Corp.

Formerly Classic Rules Judo Championships, Inc.

Notes to Consolidated Financial Statements

December 31, 2016 and 2015

NOTE A – ORGANIZATION AND NATURE OF BUSINESS

Judo Capital Corp. was incorporated in the State of Delaware on November 16, 2005 under the name Blue Ribbon Pyrocool, Inc. (“Blue Ribbon”). Blue Ribbon changed its name to Classic Rules Judo Championships, Inc. ("Classic Rules") on July 15, 2008 then to Judo Capital Corp on February 15, 2017. Classic Rules formed a subsidiary in the State of Connecticut on August 13, 2008 named Classic Rules World Judo Championships, Inc. to develop an annual judo championship tournament. Collectively the entities are referred to as “the Company”. On June 2, 2014, the Company ceased its principal activities of hosting and sponsoring judo tournaments. The Company plans to operate in real estate investment activities focused in the New York City metropolitan area.

NOTE B – GOING CONCERN

The accompanying financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has no revenues, has incurred net losses of $29,482 and $6,696 for the years ended December 31, 2016 and 2015, has an accumulated deficit of $347,915 and $318,433 at December 31, 2016 and 2015, and has experienced negative cash flows from operations. These circumstances raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Management plans to enter to real estate market and has signed an agreement to raise capital to do so. However, the Company needs to raise additional capital in order to fully develop its business plan. Failure to raise adequate capital and generate adequate sales revenues could result in the Company having to curtail or cease operations. Additionally, even if the Company does raise sufficient capital to support its operating expenses and generate adequate revenues, there can be no assurance that the revenue will be sufficient to enable it to develop business to a level where it will generate profits and cash flows from operations.

NOTE C – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

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

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that effect 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 revenue and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.  The Company had no cash equivalents at December 31, 2016 and 2015.

F-6

Judo Capital Corp.

Formerly Classic Rules Judo Championships, Inc.

Notes to Consolidated Financial Statements

December 31, 2016 and 2015

NOTE C – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Fair Value of Financial Instruments:

Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic No. 825, “Financial Instruments” (“Topic No. 825”) requires entities to disclose the fair value of financial instruments, both assets and liabilities recognized and not recognized on the balance sheet, for which it is practicable to estimate fair value. Topic No. 825 defines fair value of a financial instrument as the amount at which the instrument could be exchanged in a current transaction between willing parties. At December 31, 2016 and 2015 the carrying value of the Company’s cash, accounts payable and accrued liabilities and related party payables approximate fair value due to the short-term nature of these financial instruments.

Equity-Based Compensation

The Company accounts for equity-based compensation transactions with employees under the provisions of FASB ASC Topic No. 718, “Compensation, Stock Compensation” (“Topic No. 718”). Topic No. 718 requires the recognition of the fair value of equity-based compensation in net earnings. The fair value of common stock issued for compensation is measured at the market price on the date of grant. The fair value of the Company’s equity instruments, other than common stock, is estimated using a Black-Scholes option valuation model. This model requires the input of highly subjective assumptions and elections including expected stock price volatility and the estimated life of each award. In addition, the calculation of equity-based compensation costs requires that we estimate the number of awards that will be forfeited during the vesting period.  The fair value of equity-based awards granted to employees is amortized over the vesting period of the award and the Company elects to use the straight-line method for awards granted after adoption of Topic No. 718.

The Company accounts for equity-based transactions with non-employees under provisions of ASC Topic No. 505-50, “Equity-Based Payments to Non-Employees” (“Topic No. 505-50”). Topic No. 505-50 establishes that equity-based payment transactions with non-employees shall be measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The fair value of common stock issued for payments to non-employees is measured at the market price on the date of grant. The fair value of equity instruments, other than common stock, is estimated using the Black-Scholes option valuation model.  In general, the Company recognizes an asset or expense in the same manner as if it was to pay cash for the goods or services instead of paying with or using the equity instrument.

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Judo Capital Corp.

Formerly Classic Rules Judo Championships, Inc.

Notes to Consolidated Financial Statements

December 31, 2016 and 2015

NOTE C – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Income Taxes

The Company accounts for income taxes in accordance with FASB ASC Topic No. 740, Income Taxes (“Topic No. 740”) which requires the use of the liability method of accounting for income taxes. The liability method measures deferred income taxes by applying enacted statutory rates in effect at the balance sheet date to the differences between the tax basis of assets and liabilities and their reported amounts on the financial statements. The resulting deferred tax assets or liabilities are adjusted to reflect changes in tax laws as they occur. A valuation allowance is provided when it is more likely than not that a deferred tax asset will not be realized. At December 31, 2016 and 2015, the entire deferred tax asset, which arises from our net operating losses, has been fully reserved because management has determined that it is not more likely than not that the net operating loss carry forwards will be realized in the future.

The Company recognizes and measures uncertain tax positions and records tax benefits when it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The Company recognizes interest and penalties as a component of income tax expense. At December 31, 2016 and 2015 the Company did not have any unrecognized tax benefits and has not accrued any liability for the payment of tax related interest or penalties. The Company currently has no federal or state tax examinations in progress nor has it had any federal or state tax examinations since inception.

Subsequent Events

In accordance with Topic No. 855 “Subsequent Events” the Company evaluated subsequent events, which are events or transactions that occurred after December 31, 2016 through the date of the issuance of the accompanying consolidated financial statements.

Recently Issued Accounting Pronouncements

Management does not believe that any recently issued but not yet effective accounting pronouncements, if adopted, would have an effect on the accompanying consolidated financial statements.

Advertising Costs

The Company's policy regarding advertising is to expense advertising when incurred.

Net Loss Per Common Share

The Company computes basic loss per common share by dividing net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding for the period. Diluted loss per share is computed using the weighted average number of shares of common stock and dilutive common equivalent shares outstanding during the year. Common equivalent shares from stock options and other common stock equivalents are excluded from the computation when their effect is anti-dilutive. The Company was in a loss position for all periods presented and, accordingly, there is no difference between basic loss per share and diluted loss per share.

Related parties

The Company follows ASC 850, “Related Party Disclosures,” for the identification of related parties and disclosure of related party transactions.

Reclassification

Certain prior year amounts have been reclassified to conform with the current year presentation.

NOTE D – STOCKHOLDERS’ DEFICIT

Preferred Stock

The Company is authorized to issue 50,000,000 shares of preferred stock with a par value of $0.001 per share.

F-8

Judo Capital Corp.

Formerly Classic Rules Judo Championships, Inc.

Notes to Consolidated Financial Statements

December 31, 2016 and 2015

NOTE D – STOCKHOLDERS’ DEFICIT (CONTINUED)

Preferred Stock (continued)

On June 3, 2015, the Company accepted the conversion of all outstanding shares of Series A Preferred Stock and issued 200,000 shares of common stock in exchange for 500,000 shares of Series A Preferred Stock.

There was 0 shares of Series A Preferred Stock issued and outstanding at December 31, 2016 and 2015.

Common Stock

The Company is authorized to issue up to 100,000,000 shares of common stock with a par value of $0.001 per share.

On June 3, 2015, the Company accepted the conversion of all outstanding shares of Series A Preferred Stock and issued 200,000 shares of common stock in exchange for 500,000 shares of Series A Preferred Stock.

On October 15, 2015, the Company issued 50,000,000 shares of common stock Gladstone Ventures, LLC which the Company’s CEO is a Managing Member, for cash proceeds of $30,000 and a subscription receivable of $30,000, which was subsequently collected on October 4, 2016.

In November 2015, certain shareholders of the Company expressed dissatisfaction. While no legal action was taken by the shareholders, the Company deemed it was in its best interest to settle with the shareholders by issuing a total of 165,480 shares of common stock. The common stock issuance was treated as an equity financing activity and adjusted against additional paid in capital.

On November 4, 2015, the Company issued a total of 34,520 shares of common stock fair valued at $41 for professional services performed related to settling with the dissatisfied shareholders.

At December 31, 2016 and 2015 there were 69,322,426 shares of common stock issued and outstanding.

 NOTE E – INCOME TAXES

The income tax provision differs from the amount computed by applying the U.S. Federal and state statutory corporate income tax rates as follows:

Net deferred tax assets and liabilities consist of the following components:

The Company’s net operating loss carry forwards of $347,915 will begin to expire in 2028.

F-9

Judo Capital Corp.

Formerly Classic Rules Judo Championships, Inc.

Notes to Consolidated Financial Statements

December 31, 2016 and 2015

NOTE F – RELATED PARTY TRANSACTIONS

During the year ended December 31, 2015 the Company received cash contributions from a related party totaling $32 and made net repayments to related parties of $74. Additionally, there was $128 which was expenses paid by this related party on behalf of the Company. The Company currently operates out of the office related party free of rent.

There was $0 due to related parties as of December 31, 2016 and 2015.

On October 15, 2015, the Company issued 50,000,000 shares of common stock to Gladstone Ventures, LLC which the Company’s CEO is a Managing Member, for cash proceeds of $30,000 and a subscription receivable of $30,000, which was subsequently collected on October 4, 2016.

NOTE G – COMMITMENTS AND CONTINGENCIES

During the third quarter of 2014, the Company identified fraudulent activities entered into by its former CEO who is also a former member of the Board of Directors. The former officer and director of the Company entered into certain employment agreements and convertible notes payable without the proper authorization of the Company or other members of its Board of Directors. The employment agreements and convertible notes payable were entered into during the three months ended June 30, 2014. The Company assessed its potential responsibility for these liabilities entered into and determined it to be remote due to the former officer not having received approval from the Company board of directors to enter into such transactions and the employment agreements and notes being entered into through a fictitious entity with which the Company has no previous or current affiliation with. As such, the impacts of these agreements are not reflected in these financial statements.

NOTE F – SUBSEQUENT EVENTS

The Company amended its Certificate of Incorporation on February 15, 2017 to change its name from Classic Rules Judo, Inc. to Judo Capital Corp.

On February 21, 2017, the Company received $20,000 under its credit facility to Delshah Ventures to fund general working capital requirements.

F-10

None.

Evaluation of Disclosure Controls and Procedures

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

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on this evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that the Company's disclosure controls and procedures were not effective as of such date.

Management's Annual Report on Internal Control over Financial Reporting

The management of the Company is responsible for the preparation of the financial statements and related financial information appearing in this Annual Report on Form 10-K. The financial statements and notes have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP"). The management of the Company is also responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and l5d-15(f) under the Exchange Act. A company's internal control over financial reporting is defined as a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Our internal control over financial reporting includes those policies and procedures that:

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Management, including the Chief Executive Officer and Chief Financial Officer, does not expect that the Company's disclosure controls and internal controls will prevent all error and all fraud. Because of its inherent limitations, a system of internal control over financial reporting can provide only reasonable, not absolute, assurance that the objectives of the control system are met and may not prevent or detect misstatements. Further, over time, control may become inadequate because of changes in conditions or the degree of compliance with the policies or procedures may deteriorate.

With the participation of the Chief Executive Officer and Chief Financial Officer, our management evaluated the effectiveness of the Company's internal control over financial reporting as of December 31, 2016 based upon the framework in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on that evaluation, our management has concluded that, as of December 31, 2016, the Company had material weaknesses in its internal control over financial reporting. Specifically management identified the following material weaknesses at December 31, 2016:

As a result of the material weakness described above, management has concluded that, as of December 31, 2016, the Company’s internal control over financial reporting, involving the preparation and reporting of our financial statements presented in conformity with GAAP, were not effective.

We understand that remediation of material weaknesses and deficiencies in internal controls is a continuing work in progress due to the issuance of new standards and promulgations. However, remediation of any known deficiency is among our highest priorities. Our management will periodically assess the progress and sufficiency of our ongoing initiatives and make adjustments as and when practical and necessary.

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

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

None.

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PART III

Our directors hold office until the annual meeting of shareholders next held after their election. Our officers and directors are as follows:

Craig Burton

Craig H. Burton attended University of South Carolina-Coastal and was a duly licensed Real Estate agent in the State of New York. Craig has run a communications business the last 5 years. He is in charge of all company matters at P Laser Company.

Lorenzo DeLuca

Lorenzo DeLuca, age 65, is an attorney who was admitted to practice in the state of New York in 1976. He has been employed by Delshah Capital, LLC for the last five years. Mr. DeLuca has an AB in Economics from Rutgers College 1971 and a JD from New York Law School 1975.   

Ralph Porretti

Ralph Porretti, age 66, is a New York State Licensed Real Estate Agent who has been the Commercial Division Manager for Century 21 Smart for the last 1½ years. He was employed by Cornerstone Realty for the previous six years

Audit Committee

The Board of Directors does not have a Compensation, Audit, or Nominating Committee. The usual functions of such committees are performed by the entire Board of Directors. The Board of Directors has determined that at present we do not have an independent audit committee financial expert. The Board believes that the members of the Board of Directors are collectively capable of analyzing and evaluating our financial statements and understanding internal controls and procedures for financial reporting. In addition, we have been seeking and continue to seek an appropriate individual to serve on the Board of Directors and the Audit Committee who will meet the requirements necessary to be an independent financial expert.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires our executive officers, directors and beneficial owners of more than ten percent (10%) to report their beneficial ownership of equity interests in the company to the SEC. Their initial reports are required to be filed using the SEC's Form 3, and they are required to report subsequent purchases, sales, and other changes using the SEC's Form 4, which must be filed within two business days of most transactions. Officers, directors, and persons owning more than 10% of our capital shares are required by SEC regulations to furnish us with copies of all of reports they file pursuant to Section 16(a).

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Code of Ethics

In 2008, the Company adopted a “Code of Ethics” that applies to the Company’s Chief Executive Officer, Chief Financial Officer, principal accounting officer or controller, and persons performing similar such functions.

The following table provides summary information for the fiscal years ended December 31, 2016 and 2015concerning cash and non-cash compensation paid or accrued by us for our executive officers in excess of $60,000.

Employment Contracts

The Company currently has no employees on the payroll. The Company entered into a Management Agreement with the executive officer of the Company.

Family Relationships

There are no family relationships among the Company’s current directors, executive officers, or other persons nominated or chosen to become officers or executive officers.

The following table sets forth information regarding the beneficial ownership of our common stock as of December 31, 2016. The information in this table provides the ownership information for:

Beneficial ownership has been determined in accordance with the rules and regulations of the SEC and includes voting or investment power with respect to the shares. Unless otherwise indicated, the persons named in the table below have sole voting and investment power with respect to the number of shares indicated as beneficially owned by them.

16

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Since January 1, 2015, we have had no reportable transactions with related parties and none are currently proposed.

The following table sets forth fees billed to us by our auditors during the fiscal years ended December 31, 2016 and 2015 for: (i) services rendered for the audit of our annual financial statements and the review of our quarterly financial statements, (ii) services by our auditor that are reasonably related to the performance of the audit or review of our financial statements and that are not reported as Audit Fees, (iii) services rendered in connection with tax compliance, tax advice and tax planning, and (iv) all other fees for services rendered.

The Company’s board of directors, acting as our audit committee pre-approved each engagement of our independent registered public accounting firm.

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PART IV

(a)     Exhibits:

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SIGNATURES

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, there unto duly authorized.

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