Telco Cuba, Inc. - Quarter Report: 2015 August (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

Telco Cuba Inc.

(Exact name of small business issuer as specified in its charter)

N.A 

(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 [X] 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.

 

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o  Nox

The number of shares of Common Stock held by non-affiliates, as of January 28, 2016 was 123,106,039 shares, all of one class of common stock, $0.001 par value, having an aggregate market value of $246,212 based on the closing price of the Registrant's common stock of $0.002 on January 28, 2016 as quoted on the Electronic Over-the-Counter Bulletin Board ("OTCPK").

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

 

DOCUMENTS INCORPORATED BY REFERENCE

 

Part I – FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS

 

TELCO CUBA, INC.

 

(Unaudited)

 

 

F-1

F-3

TELCO CUBA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Nine Months Ended August 31, 2015 and 2014

(Unaudited)

Note 1 - Nature of Operations and Going Concern

Nature of Operations

Telco Cuba Inc., (fka CaerVision Global, Inc. fka American Mineral Group Inc.) (the "Company") was incorporated in the State of Nevada on August 10, 2007 under the name American Mineral Group, Inc. On January 9, 2015, the outstanding shareholders of the Company voted to change the name of the Company from American Mineral Group, Inc. to CaerVision Global, Inc. in order to better reflect the planned change in the Company’s future operations.

On January 26, 2015, the Company entered into a stock purchase definitive agreement with Vitall, Inc., a Delaware corporation, whereby the Company agreed to issue 15,000,000 shares of common stock for 100% of the issued and outstanding capital of Vitall, Inc. On March 17, 2015, Vitall, Inc. terminated the merger agreement due to non-performance on the part of the Company.  As a result, the name CaerVision Global, Inc. was surrendered back to its original owner.

Until June 12, 2015, the Company was engaged exclusively in the exploration, development, and acquisition of mineral properties.

Merger

On June 12, 2015 the Company consummated a Share Exchange with Amgentech, Inc., a Florida corporation.  Under the terms of the Share Exchange, the holders of Amgentech received 50,088 shares of CaerVision Series B Preferred Stock that had been previously issued to third parties in exchange for 100% of the issued and outstanding capital of Amgentech. Each shares of Series B preferred stock is convertible into 5,000 shares of common stock (254,440,000 shares total) and has voting rights of 5,000 per share (254,440,000 votes). As a result of this transaction, Amgentech became a wholly-owned subsidiary of the Company with control transferring to the previous owners of Amgentech.  Amgentech elected to be treated as the successor issuer for SEC reporting and accounting purposes.  The Share Exchange was accounted for as a reverse acquisition and re-capitalization. The Amgentech Shareholders obtained approximately 60% of voting control on the date of Share Exchange. On June 15, 2015, the Company appointed William Sanchez to the position of CEO, CFO, President, Treasurer and Secretary. At the same time, Erwin Vahlsing Jr., Thomas J Craft Jr. and Frederick J Puccillo Jr., resigned their positions as officers and directors of the Company.

In accordance with Accounting Standards Codification (“ASC”) 805-10-40, Business Combinations – Reverse Acquisitions, Amgentech was the acquirer for financial reporting purposes and the Company was the acquired company. The Company filed an amendment to its articles of incorporation and changed its name to Telco Cuba, Inc.  

The following table summarizes the assets acquired and liabilities assumed from the reverse acquisition transaction:

TELCO CUBA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Nine Months Ended August 31, 2015 and 2014

(Unaudited)

In accordance with “reverse merger” accounting treatment, our historical financial statements as of period ends, and for periods ended, prior to the Merger will be replaced with the historical financial statements of Amgentech prior to the Merger in all future filings with the SEC, beginning with this Quarterly Report. Prior to the Merger, we were a “shell company” (as such term is defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended). As a result of the Merger, we ceased to be a shell company. All reference to common stock shares and per share amounts have been retroactively restated to effect the reverse acquisition as if the transaction had taken place as of the beginning of the earliest period presented.

Amgentech, Inc. is a Florida based Corporation engaged in the business of providing technology solutions, integrating and building technology infrastructure and software and website development. Amgentech, Inc. also offers managed collocated and leased servers.  Originally founded in 2001, Amgentech, Inc. has been providing Internet based solutions, VoIP infrastructure and consulting services for over 14 years to diverse clients in The United States of America, the counties of El Salvador, Nicaragua, Costa Rica, Panama, Colombia and Venezuela.  Amgentech, Inc. continues to provide these same services, in addition to providing the technical and Internet know how to implement the technological vision that is envisioned for Telco Cuba, Inc., Amgentech will be the sole technical services provider.

General

The accompanying condensed consolidated financial statements as of August 31, 2015 and for the three and nine months ended August 31, 2015 and 2014 are unaudited. These unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") for interim financial information and are presented in accordance with the requirements of Rule S-X of the Securities and Exchange Commission (the "SEC") and with the instructions to Form 10-Q. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Our operating results for the three and nine months ended August 30, 2015 are not necessarily indicative of the results that may be expected for the fiscal year ending November 30, 2015.

The condensed financial statements as of November 30, 2014 were unaudited. These unaudited condensed consolidated financial statements represent the financial position of Amgentech, Inc. as of November 30, 2014 and the results of operations for the three and nine months ended August 31, 2015 and 2014, as the reporting entity.  For pro-forma consolidated information, refer to Note 9.

Going Concern

The accompanying unaudited condensed financial statements have been prepared on the basis of accounting principles applicable to a going concern; accordingly, they do not give effect to adjustment that would be necessary should the Company be unable to continue as a going concern and therefore be required to realize its assets and retire its liabilities in other than the normal course of business and at amounts different from those in the accompanying financial statements. As shown in the accompanying unaudited condensed financial statements, the Company incurred a net loss of $178,849 for the nine months ended August 31, 2015, has an accumulated deficit of $5,722,947 and also has working capital deficit of $5,668,055 at August 31, 2015.

Management plans to raise cash from public or private debt or equity financing, on an as needed basis and in the longer term, to generate revenues from the acquisition, exploration and development of mineral interests, if found. The Company's ability to continue as a going concern is dependent upon achieving profitable operations and/or upon obtaining additional financing. The outcome of these matters cannot be predicted at this time.

The accompanying unaudited condensed financial statements do not include any adjustments related to the recoverability or classification of asset-carrying amounts or the amounts and classification of liabilities that may result should the Company be unable to continue as a going concern.

F-5

TELCO CUBA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Nine Months Ended August 31, 2015 and 2014

(Unaudited)

         Note 2 - Significant Accounting Policies

         a)   Accounting Principles

The accounting and reporting policies of the Company conform to United States generally accepted accounting principles.

Principles of Consolidation

Telco Cuba, Inc. and its subsidiaries, are encompassed in the following entities, which have been consolidated in the accompanying financial statements:

 

100% owned by Telco Cuba, Inc.  

All intercompany balances have been eliminated in consolidation.

         b)    Basic and Diluted Loss Per Share

Basic and diluted loss per share is based on the weighted average number of shares outstanding. Potential common shares includable in the computation of fully diluted per share results are not presented in the financial statements as their effect would be anti-dilutive.

At August 31, 2015, the Company has convertible notes outstanding totaling $488,775 which, if converted at current market prices, would result in 78,635,000 new dilutive common shares. The Company also has 3,000 shares of Series A Preferred stock and 78,600 shares of Series B Preferred stock which if converted would result in 396,000,000 new dilutive common shares.

         c)   Fair Value Measurements

Valuation Hierarchy

ASC 825-10 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of  nonperformance. ASC 825-10 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 825-10 establishes three levels of inputs that may be used to measure fair value:

Level 1 - Quoted prices in active markets for identical assets or liabilities.

Level 2 - Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 - Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities.

To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is disclosed is determined based on the lowest level input that is significant to the fair value measurement.

F-6

TELCO CUBA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Nine Months Ended August 31, 2015 and 2014

(Unaudited)

Items recorded or measured at fair value on a recurring basis in the accompanying unaudited condensed consolidated financial statements consisted of the following items as of August 31, 2015:

The derivative liabilities are measured at fair value using quoted market prices and estimated volatility factors based on historical quoted market prices for the Company’s common stock, and are classified within Level 3 of the valuation hierarchy.

The following is a reconciliation of the beginning and ending balances for assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3):

         d)   Income Taxes

 

The Company accounts for income taxes under ASC Topic 740, formerly SFAS No. 109, Accounting for Income Taxes, as clarified by ASC Topic 740, formerly FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, (“FIN No. 48”). Deferred tax assets and liabilities are determined based upon differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized.

 

The Company adopted the provisions of ASC Topic 740, formerly FIN No. 48 on January 1, 2007. Previously, the Company had accounted for tax contingencies in accordance with Statement of Financial Accounting Standards No. 5, Accounting for Contingencies. As required by ASC Topic 450, formerly FIN No. 48, the Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. At the adoption date, the Company applied ASC Topic 740, formerly FIN No. 48 to all tax positions for which the statute of limitations remained open. As a result of the implementation of ASC Topic 740, formerly FIN No. 48, the Company did not recognize any change in the liability for unrecognized tax benefits.

 

The Company is subject to income taxes in the U.S. federal jurisdiction. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. With few exceptions, the Company is no longer subject to U.S. federal, state and local income tax examinations by tax authorities for the years before April 1, 2007.

The Company is not currently under examination by any federal or state jurisdiction.

 

The Company’s policy is to record tax-related interest and penalties as a component of operating expenses.

 

F-7

TELCO CUBA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Nine Months Ended August 31, 2015 and 2014

(Unaudited)

e)    Cash and Cash Equivalents

For purposes of the statement of cash flows, cash includes demand deposits, saving accounts and money market accounts. The Company considers all highly liquid instruments with maturities of three months or less when purchased to be cash equivalents.

         f)    Revenue Recognition

The Companies follow the guidance of the FASB ASC 605-10-S99 “Revenue Recognition Overall – SEC Materials”. The Companies record revenue when persuasive evidence of an arrangement exists, product delivery has occurred, the sales price to the customer is fixed or determinable, and collectability is reasonably assured. Revenues consist primarily of product sales.

         g)   Estimates

The preparation of financial statements in conformity with US generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of revenues and expenditures during the reporting period. Actual results could differ from those reported.

         h)   Foreign Currency Transaction Gains and Losses

The Company’s principle operations are located in the United States through it has some prior liabilities in Canadian dollars.  Accordingly, the Company has used the balance sheet conversion rate to adjust the foreign currency liability and therefor has recorded a foreign currency transaction gain or loss. Cumulative differences resulting from the fluctuation in the exchange rate are recorded as an offset to equity in the balance sheet and recorded as a component of comprehensive loss on the income statement.

         i)   Accounts receivable and concentration of credit risk

The Company currently has accounts receivable of $3,689 which is spread out over multiple customers, and therefore, does not currently foresee a concentrated credit risk associated with trade receivables.  If and when the Company experiences a marked increase in trade receivables, we will evaluate the receivable in light of the collectability in the normal course of business.  

         j)   Reclassifications

Certain prior year financial statement balances have been reclassified to conform to the current year presentation. These reclassifications had no effect on the recorded net loss.

         k)   Recently Adopted Accounting Pronouncements

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

         l)   Material Equity Instruments

The Company evaluates preferred stock series A, B & C and other contracts (convertible promissory note payable) to determine if those contracts or embedded components of those contracts qualify as derivative financial instruments to be separately accounted for under the relevant sections of ASC 815-40, Derivative Instruments and Hedging: Contracts in Entity’s Own Equity (“ASC 815”).  The result of this accounting treatment could be that the fair value of a financial instrument is classified as a derivative financial instrument and is marked-to-market at each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the statement of operations as other income or other expense. Upon conversion or exercise of a derivative financial instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. Financial instruments that are initially classified as equity that become subject to reclassification under ASC 815 are reclassified to a liability account at the fair value of the instrument on the reclassification date.

F-8

TELCO CUBA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Nine Months Ended August 31, 2015 and 2014

(Unaudited)

 

Certain of the Company’s embedded conversion features on debt are treated as derivative liabilities for accounting purposes under ASC 815-40 due to insufficient authorized shares to settle these outstanding contracts.  SEC staff guidance permits a sequencing approach based on the use of ASC 840-15-25 which provides guidance for contracts that permit partial net share settlement. The sequencing approach may be applied in one of several ways: contracts may be evaluated based on (1) earliest issuance date (2) earliest maturity date, (3) latest issuance date, (4) latest maturity date or (2) equally to all instruments on a pro-rata basis. In the case of insufficient authorized share capital available to fully settle outstanding contracts, the Company utilizes the earliest issuance date sequencing method to reclassify outstanding contracts as derivative instruments. These contracts are recognized currently in earnings until such time as the convertible notes or preferred stock are exercised, expire, the related rights have been waived and/or the authorized share capital has been amended to accommodate settlement of these contracts. These instruments do not trade in an active securities market.

As of August 31, 2015 and November 30, 2014, the Company has recorded a charge for the derivative liability of $1,057,554 and $0, respectively, associated with the $488,775 and $0 in convertible debentures outstanding. The liability was recorded at the fair market value, which estimated value, was based upon the remaining contractual life of the convertible notes payable (the host instrument), using the Black-Sholes pricing model, and since these earlier notes had reached maturity and were now due on demand, the intrinsic value was also considered. The conversion exceeded the market price accordingly the intrinsic value was also zero.

In addition, the Company has issued and outstanding a total of 3,000 shares of Series A Preferred stock, which are convertible into Common Stock at 1,000:1 and 78,600 shares of Series B Preferred stock, which are convertible into Common Stock at 5,000:1. Combined, these Preferred Shares could be converted into 396,000,000 shares of Common Stock.  However, 50,088 shares of Series B preferred (convertible into 254,440,000 shares of common stock) are held by the Company’s chief executive and are subject to a lock up agreement that precludes their conversion. Upon analysis, there was no additional adjustment of the derivative liability required regarding these potential conversions.

         Note 3 -   Mineral Property

In August 2009, the Company entered into an agreement to acquire the mineral rights to 331 unpatented lode mining claims known as the Conglomerate Mesa, located in Inyo County, California.  In March 2011, the Company added an additional 217 unpatented lode mining claims.  In fiscal year 2012, the Company determined that the effort and cost of developing these claims required more resources that could be more effectively used on other opportunities, and abandoned the Conglomerate Mesa project.

In February 2013, the Company acquired a 28% Working Interest in the Grand Chenier oil and gas prospect in Louisiana.  The property contains an estimate 9.0 million barrels of oil and was in production until approximately 2009 when the then operator failed to manage the interests and certain repairs were not made leading to the cessation of production.  The Company believes that with approximately $2.0 million in capital, the field can be returned to production and additional wells within the prospect can then be brought online increasing production to a profitable level.

As a result of the share exchange agreement with Telco Cuba in June 2015, the Company has determined that the oil and gas assets no longer fit with the long-term business strategy and the Company is, accordingly, seeking a suitable buyer for these assets.  In prior years, the Company recorded a 100% reserve against the value of the mineral assets given the probability of being able to bring these assets into production.

F-9

TELCO CUBA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Nine Months Ended August 31, 2015 and 2014

(Unaudited)

         Note 4 -   Capital Stock

 a)   Authorized

Authorized capital stock consists of:

500,000,000 common shares with a par value of $0.001 per share; and

1,000,000 preferred shares with a par value of $0.001 per share. On January 25, 2013, the Company filed an amendment to its articles of incorporation to designation 100,000 preferred shares as Series A preferred stock which have a conversion rate to common shares of 1 for 1,000. The amendment also designated 100,000 shares of preferred stock as Series B preferred stock which have a conversion rate to common shares of 1 for 5,000.

In the nine months ended August 31, 2015 and 2014, the company made distributions to shareholders of $61,183 and $81,276, which resulted from payments to the president and sole shareholder of Amgentech made prior to the share exchange.

As part of the Merger, all of the outstanding 1,000 shares of commons stock of Amgentech were exchanged  into 50,088 Series B preferred stock.

 b)   Share Issuances

There were no share issuances in the fiscal year ended November 30, 2014.

In the nine months ended August 31, 2015, the Company issued a total of 25,735,379 shares of common stock, as follows:

In accordance with Accounting Standards Codification (“ASC”) 805-10-40, Business Combinations – Reverse Acquisitions, Amgentech was the acquiring entity for accounting purposes. While the transaction is accounted for using the purchase method of accounting, in substance the transaction was are capitalization of 3,000 Series A preferred stock, 33,392 Series B preferred stock and 46,288,164 common stock of our capital structure.

1,335,379 common shares in connection with the conversion of $5,000 of convertible debentures and accrued interest.  

24,400,000 common shares in connection with the conversion of 4,880 shares of Series B preferred stock.  

 

         Note 5 - Convertible Debentures

There were no new convertible debentures issued in the fiscal year ended November 30, 2014; however, certain debentures previously issued were assigned to third parties and the terms thereof were then renegotiated to modify the conversion rate from 50% to 45%, during the period ended August 31, 2015 and pursuant to the said reassignment, accrued interest worth of $16,965 was re-classed into convertible debentures and interest worth $14,963 were waived which were recorded as gain on extinguishment of debt.  

During the nine months ended August 31, 2015, the Company issued two notes total of $140,000 in new convertible debentures. Due to the variable conversion price associated with the above convertible debentures, the Company has determined that the conversion feature is considered a derivative liability. The accounting treatment of derivative financial instruments requires that the Company record the fair value of the derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair value as of each subsequent balance sheet date. The initial fair value of the embedded debt derivative at the date of issuance was $1,033,168 allocated as a debt discount and derivatives liability. The debt discount is being amortized over the term of the convertible promissory notes. The Company recognized a charge of $23,333 for the three and nine months ended August 31, 2015 for amortization of this debt discount and as of August 31, 2015, the unamortized debt discount amounted to $116,667.

 

In addition, the Company recorded $336,810 in convertible debentures previously issued by Telco Cuba prior to the merger with Amgentech. As of August 31, 2015, these debts bear interest at the rates between 8% and 12% per annum, and are convertible at a discount to the stocks market price of between 15% and 55%, based on a look back period of between 10 and 30 days prior to conversion.  Combined, these convertible instruments can be converted into 78,635,000 and 166,457,353 shares of common stock as of August 31, 2015 and November 30, 2014, respectively. In the nine months ended August 31, 2015, Ash Union Capital, a holder of convertible debentures, converted $5,000 of convertible debentures and accrued interest into 1,335,379 in common shares.

As of August 31, 2015 and November 30, 2014, the Company has convertible debenture balances of $488,775 and $0, respectively.

F-10

TELCO CUBA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Nine Months Ended August 31, 2015 and 2014

(Unaudited)

 

 

         Note 6 - Derivative Liabilities

In June 2008, the FASB finalized ASC 815, “Determining Whether an Instrument (or Embedded Feature) is indexed to an Entity’s Own Stock.” Under ASC 815, instruments which do not have fixed settlement provisions are deemed to be derivative instruments. The Company has determined that it needs to account for convertible debentures issued for its shares of common stock, as derivative liabilities, and apply the provisions of ASC 815. The instruments have a ratchet provision that adjust either the exercise price and/or quantity of the shares as the conversion price equals to variable % of the "market price" at the time of conversion, as a result, the instruments need to be accounted for as derivative liabilities. In accordance with ASC 815, these convertible debentures have been re-characterized as derivative liabilities. ASC 815, “Accounting for Derivative Instruments and Hedging Activities” (“ASC 815”) requires that the fair value of these liabilities be re-measured at the end of every reporting period with the change in fair value reported in the statement of operations.

At August 31, 2015 and November 30, 2014, the fair value of the embedded derivatives was determined using Binomial Option Pricing Model based on the following assumptions:

The fair value of the derivative liabilities was measured using the Black-Scholes option pricing model.

At August 31, 2015, the Company reevaluated the derivative liability based on the fair value assumptions for the convertible debt.  As of August 31, 2015, the derivative liability was $1,057,554.  

The following table represents the Company’s debt derivative liability activity for the periods presented:

The derivative liability results from the embedded conversion features of the debt to convert into 78,635,000 shares at fixed prices ranging from $0.00166 to $0.00220 per share. The liability was recorded at the fair market value, which estimated value, was based upon the remaining contractual life of the convertible notes payable (the host instrument), using the Black-Sholes pricing model, and since these earlier notes had reached maturity and were now due on demand the intrinsic value was also considered. The conversion exceeded the market price accordingly the intrinsic value was also zero. Accordingly, the reclassification of the value of these derivatives had no impact on the Company’s financial statements.

Note 7 - Notes Payable

During prior years, the Company borrowed $233,332 from a non-affiliated accredited investor.  The Notes carry interest at a rate of 15% per annum and are due on demand.  

The Company also issued a note on April 27, 2013 in the amount of $1,500,000 associated with the purchase of the Grand Chenier lease. The note was issued to the seller of the asset, bears interest at 8% per annum and is due five years from the date of issuance. As of August 31, 2015 the outstanding balance was $1,500,000.  The Notes carry interest at a rate of 8% per annum and is due five years from the date of issuance.  Further, the Company also had accrued payable of $500,000 associated with the purchase of the Grand Chenier lease.

As of August 31, 2015 and November 30, 2014, the Company had total notes payable of $2,233,332 and $0 outstanding which were owed to unrelated third parties.  

 

 

 

F-11

 

TELCO CUBA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Nine Months Ended August 31, 2015 and 2014

(Unaudited)

 

       

         Note 8 - Related party transactions

Our officers have from time to time lent money to the Company. At August 31, 2015 and November 30, 2014, they had a collective balance owed to them of $72,188 and $15,100, respectively.  The balances do not bear interest and are due on demand.

         Note 9 – Pro-forma Consolidated Information

On June 12, 2015, the Company consummated a share exchange with Amgentech, Inc., the result of which was Amgentech became the successor issuer for reporting and accounting purposes.  These financial statements reflect the results of operations of Amgentech from the date of the share exchange through August 31, 2015 for all periods presented exclusive of the predecessor company operations.  The tables below represent the results of operations and financial position of the Company on a pro-forma consolidated basis as if the share exchange had occurred at November 30, 2014.

 

			November 30, 2014
		Telco Cuba	Amgentech
			Inc	Eliminations	Total
Cash		2	16,091		16,093
Accounts receivable		-	5,690		5,690
Security Deposit		-	1,632		1,632
		2	23,413		23,415
Fixed Assets		-	6,416		6,416
		-	6,416		6,416
Less accumulated depreciation		-	(4,772)		(4,772)
		-	1,645		1,645
					-
		-	-		-
		2	25,058	-	25,060
Current Liabilities
Accounts payable		101,390			101,390
Accrued payroll		1,297,949			1,297,949
Convertible debentures		375,925			375,925
Accrued Interest		383,401			383,401
Accrued Expenses		64,000	-		64,000
Due to Officers		18,861	15,100		33,961
Notes payable		2,233,331			2,233,331
Derivative Liability		498,942			498,942
		4,973,800	15,100		4,988,900
Total Liabilities		4,973,800	15,100		4,988,900
Stockholders' Equity (Deficit)
Preferred A Stock		3			3
Preferred B Stock		88	50	(50)	88
Preferred C Stock		-			-
Common Stock		15,885			15,885
Recapitalization		-		(4,764,563)	(4,764,563)
Additional paid-in-capital		12,384,985	950	(12,385,935)	-
Retained Earning		(17,149,549)	(77,476)	17,150,549	(76,476)
Net Income(Loss)		(225,210)	86,434	-	(138,776)
Stockholders' Equity (Deficit)		(4,973,798)	9,958	0	(4,963,840)
Liabilities and Stockholder's Equity		2	25,058	1	25,060

F-12

TELCO CUBA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Nine Months Ended August 31, 2015 and 2014

(Unaudited)

        Pro-forma consolidated revenues for the year ended November 30, 2014 were:

 

 

		November 30, 2014	November 30, 2014
		Telco Cuba	Amgentech Inc	Eliminations	Total
Revenues
				-	-
Sales			246,878	-	246,878
Sales discounts				-	-
			246,878	-	246,878
Expenses		-
Automobile Expenses		-	15,869	-	15,869
Bank Charges		-	778	-	778
Bad Debt Expenses			13,333		13,333
Depreciation Expense		-	1,086	-	1,086
Insurance		-	1,917	-	1,917
Interest Expenses		165,766	-	-	165,766
Change in Fair Value		(303,211)	-	-	(303,211)
Foreign Exchange		(2,597)	-	-	(2,597)
General and Administrative		-	5,096	-	5,096
Marketing		-	4,238	-	4,238
Payroll Expenses		-	-	-	-
Professional fees		-	57,273	-	57,273
Production Expenses		-	28,990	-	28,990
Other		365,251	31,862	-	397,114
		225,210	160,444	-	385,653
		(225,210)	86,434	-	(138,776)
Other Income
Extinguishment of Debt		-			-
		-	-	-	-
		225,210	160,444	-	385,653
Net (loss) Income		(225,210)	86,434	-	(138,776)

F-13

TELCO CUBA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Nine Months Ended August 31, 2015 and 2014

(Unaudited)

        Note 10 - Subsequent Events

Management has evaluated subsequent events pursuant to the requirements of ASC Topic 855 and has determined that no material subsequent events exist other than listed below.

Subsequent to August 31, 2015, the Company converted a total of $12,472 in convertible debt and notes payable owed to unaffiliated third party accredited investors into 10,795,350 shares of restricted common stock.

Subsequent to August 31, 2015, the Company issued 36,280,000 common shares to unaffiliated third party accredited investors in connection with the conversion of 5,656 shares of Series B Preferred stock.

In September 2015, the Company issued 4,007,146 shares of restricted common stock to third parties for services rendered valued at $5,000.

On September 4, 2015, the Company issued 100,000 shares of Series C Preferred Stock to the Company’s CEO in exchange for services rendered to the Company.  The Series C Preferred are non-convertible and have voting rights equal to 10,000 votes of common stock per share.

F-14

ITEM 2. Management’s Discussion and Analysis and Results of Operations

 

The following discussion and analysis provides information which management of the Company believes to be relevant to an assessment and understanding of the Company’s results of operations and financial condition. This discussion should be read together with the Company’s financial statements and the notes to the financial statements, which are included in this report.

 

Forward-Looking Statements

 

This Report contains forward-looking statements that relate to future events or our future financial performance. Some discussions in this report may contain forward-looking statements that involve risk and uncertainty. A number of important factors could cause our actual results to differ materially from those expressed in any forward-looking statements made by us in this Report. Forward-looking statements are often identified by words like “believe,” “expect,” “estimate,” “anticipate,” “intend,” “project” and similar words or expressions that, by their nature, refer to future events.

 

In some cases, you can also identify forward-looking statements by terminology such as “may,” “will,” “should,” “plans,” “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 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, or achievements. You should not place undue certainty on these forward-looking statements, which apply only as of the date of this Report. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or our predictions. 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 in an effort to conform these statements to actual results.

Business History

Telco Cuba, Inc. (fka CaerVision Global, Inc. fka American Mineral Group Inc.) (the "Company") was incorporated under the laws of the State of Nevada on August 10, 2007. On June 15, 2015, the Company effectuated an amendment to its articles of incorporation to change its name from CaerVision Global, Inc. to Telco Cuba, Inc.

The Company was an early stage Mining and Exploration Company throughout the fiscal year ended November 30, 2014 and early 2015, seeking to acquire, develop, and manage various oil, gas, and mineral properties and resources.  In August 2009, the Company entered into an agreement to acquire the mineral rights to 331 unpatented lode mining claims known as the Conglomerate Mesa, located in Inyo County, California.  In March 2011, the Company added an additional 217 unpatented lode mining claims.  In fiscal year 2012, the Company determined that the effort and cost of developing these claims required more resources that could be more effectively used on other opportunities, and abandoned the Conglomerate Mesa project.  In February 2013, the Company acquired a 28% Working Interest in the Grand Chenier oil and gas prospect in Louisiana.  The property contains an estimate 9.0 million barrels of oil and was in production until approximately 2009 when the then operator failed to manage the interests and certain repairs were not made leading to the cessation of production.  

On June 12, 2015, the Company consummated a Share Exchange with Amgentech, Inc., a Florida corporation.  Under the terms of the Share Exchange, the holders of Amgentech received 50,088 shares of Series B Preferred Stock that had been previously issued to third parties in exchange for 100% of the issued and outstanding capital of Amgentech. Each shares of Series B preferred is convertible into 5,000 shares of common stock (254,440,000 shares total) and has voting rights of 5,000 per share (254,440,000 votes). As a result of this transaction, Amgentech became a wholly-owned subsidiary of the Company with control transferring to the previous owners of Amgentech.  Amgentech elected to be treated as the successor issuer for SEC reporting and accounting purposes.  The Share Exchange was accounted for as a reverse acquisition and re-capitalization. The Amgentech Shareholders obtained approximately 60% of voting control on the date of Share Exchange. Amgentech was the acquirer for financial reporting purposes and the Company was the acquired company.  The Company filed an amendment to its articles of incorporation and changed its name to Telco Cuba, Inc.

1

Overview

 

Amgentech, Inc. is a Florida based Corporation engaged in the business of providing technology solutions, integrating and building technology infrastructure and software and website development. Amgentech, Inc. also offers managed collocated and leased servers.  Originally founded in 2001, Amgentech, Inc. has been providing Internet based solutions, VoIP infrastructure and consulting services for over 14 years to diverse clients in The United States of America, the counties of El Salvador, Nicaragua, Costa Rica, Panama, Colombia and Venezuela.  Amgentech, Inc. continues to provide these same services, in addition to providing the technical and Internet know how to implement the technological vision that is envisioned for Telco Cuba, Inc., Amgentech will be the sole technical services provider.

Principal Products

 

Telco Cuba, Inc. offers telecommunication services and equipment, including mobile phones, mobile voice service, VoIP service, and calling cards.  The services and devices initially offered will be for consumption solely in The United States of America.  Telco Cuba, Inc. has positioned itself to offer low cost mobile cell phone service/plans in The United States. Telco Cuba, Inc. will offer prepaid service/plans that include predefined minute/unlimited minute plans. Telco Cuba, Inc. is positioning itself to enter the telecommunications market in Cuba once able to.

  

Our Market

 

The Company targets the US and Cuban markets.

Results of operations for the three and nine months ended August 31, 2015 and 2014

The financial data presented below should be read in conjunction with the more detailed financial statements and related notes, which are included elsewhere in this report. Information discussed herein, as well as elsewhere in this Quarterly Report on Form 10Q, includes forward-looking statements or opinions regarding future events or the future financial performance of the Company, and are subject to a number of risks and other factors which could cause the actual results to differ materially from those contained in forward-looking statements. Among such factors are general business and economic conditions, and risk factors as listed in this Form 10-Q or listed from time to time in documents filed by the Company with the Securities and Exchange Commission.  

Revenues

 

Revenues for either the three and nine months ended August 31, 2015 were $38,747 and $125,812, compared to $56,510 and $186,108 for the three and nine months ended August 31, 2014.  The decrease in revenues resulted from a shift in focus to Cuban-based telecommunications which management believes has greater revenue potential in the long term.

  

Operating Expenses

 

Operating expenses for the three months ended August 31, 2015 consisted of $172,055 in general and administrative expense compared to $45,098 for the three months ended August 31, 2014.  The increase resulted from the addition of Amgentech operations to those of Telco Cuba in the current quarter where, in the prior year, Amgentech had minimal expenses.

Operating expenses for the nine months ended August 31, 2015 consisted of $226,387 in general and administrative expenses compared to $120,517 in costs for the nine months ended August 31, 2014.  The increase resulted from the addition of Amgentech operations to those of Telco Cuba in the current period where, in the prior year, Amgentech had minimal expenses.

2

Other Income (Expenses)::

 

Other expense for the three months ended August 31, 2015, was $78,274, and is derived from the convertible debentures and notes payable carried by the Company. For the three months ended August 31, 2014, the interest expense was $0 as Amgentech carried no debt in the prior year.

Other expense for the nine months ended August 31, 2015, was $78,274, and is derived from the convertible debentures and notes payable carried by the Company. For the nine months ended August 31, 2014, the interest expense was $0 as Amgentech carried no debt in the prior year. Interest expense was only recorded from the date of merger forward.

Net Loss:

 

Net Loss for the three months ended August 31, 2015, was $211,582 compared to net income of $11,412 for the three months ended August 31, 2014.  The biggest component of the 2015 net loss was $172,055 in general and administrative expenses, $990,665 in interest expense and offset by gain of $897,428 in change in fair value of derivative liability. For the three month ended August 31, 2014, Amgentech had no convertible debt, thus there was no charge for derivative liability and no interest expense.

Net Loss for the nine months ended August 31, 2015, was $178,849 compared to income of $65,591 for the nine months ended August 31, 2014.  The biggest component of the 2015 net loss was an operating loss of $100,575, interest expense of $990,665 and offset by gain of $897,428 resulting from the change in the fair value of the derivative liability.  For the nine months ended August 31, 2014, Amgentech had no convertible debt, thus there was no charge for derivative liability and no interest expense.

Liquidity and Capital Resources

As of August 31, 2015, the company had total current assets of $60,494 and total current liabilities of $5,728,549 for a net working capital deficit of $5,668,055. The Company will need to raise additional money to meet general and administrative expenses, and will need to raise money to achieve the Company’s business objective to pursue telecom opportunities in the newly emerging Cuban market. The additional funding will come from equity financing from the sale of our common stock. If we are successful in completing an equity financing, existing shareholders will experience dilution of their interest. The Company does not have any financing arranged and we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of its common stock.  

Based on the nature of our business, management anticipates incurring operating losses in the foreseeable future. Management bases this expectation, in part, on the fact that to pursue telecom opportunities in the newly emerging Cuban market may take several years before we are capable of generating profitable revenues. Our future financial results are also uncertain due to a number of factors, some of which are outside its control. These factors include, but are not limited to:

·

Our ability to raise additional funding;

·

Our ability to identify and successfully negotiate the acquisition of potential properties or assets; and

·

If such opportunities or businesses acquired will be profitable.

Due to the Company’s lack of operating history and present inability to generate revenues there is substantial doubt whether the Company can continue as an ongoing business for the next 12 months unless we obtain additional capital to pay our bills.

The Company’s internal sources of liquidity will be loans that may be available from management. Although the Company has no written arrangements with its management, The Company expects that the officers may provide the Company with nominal liquidity, when and if it is required.

There are no assurances that the Company will be able to achieve further sales of its common stock or any other form of additional financing. If the Company is unable to achieve the financing necessary, it will fail to execute its future plan of operations which are to pursue telecom opportunities in the newly emerging Cuban market.

 

3

 

Operational Activities

 

The Company had cash used in operating activities for the nine months ended August 31, 2015 of $106,703 and generated cash from operations of $88,365 for 2014.

 

Investing Activities

 

The Company used cash of $12,107 in investing activities for the nine months ended August 31, 2015 resulting from the purchase of fixed assets, compared to $3,564 in 2014, also from purchasing fixed assets.

 

Financing Activities

 

The Company generated cash of $134,524 from financing activities for the nine months ended August 31, 2015, resulting from loans from officers of $55,707 and the issuance of convertible debentures of $140,000.  In the nine months ended August 31, 2015 and 2014, the company made distributions to shareholders of $61,183 and $81,276, which resulted from payments to the president and sole shareholder of Amgentech made prior to the share exchange.

   

The Company may not have sufficient resources to fully develop or expand its business unless it is able to raise additional financing. The Company can make no assurances these required funds will be available on favorable terms, if at all. If additional capital is raised through the sale of equity or convertible debt securities, the issuance of such securities would result in dilution to our existing stockholders. Additionally, these conditions may increase costs to raise capital and/or result in further dilution. The failure to raise capital when needed, will adversely affect our business, financial condition and results of operations, and could force the Company to reduce or cease operations.

  

The Company believes that it will be able to meet the costs of growth and public reporting with funds generated from operations and additional amounts generated through debt and equity financing, Although management believes that the required financing to fund its business plan can be secured at terms satisfactory to the Company, there is no guarantee these funds will be made available, and if funds are available, that the terms will be satisfactory to the Company.

 

Impact of Inflation

 

The Company does not expect inflation to be a significant factor in operation of the business.

 

Off-Balance Sheet Arrangements

 

There are no off-balance sheet arrangements between the Company and any other entity that have, or are reasonably likely to have, a current or future effect on financial conditions, changes in financial conditions, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.

  

Going Concern

 

The Company has a working capital deficiency of $5,668,055 and accumulated deficit of $5,722,947 as of August 31, 2015. These factors raise substantial doubt about its ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent on the ability to raise additional capital and implement its business plan. The financial statements do not include any adjustments that might be necessary if the company is unable to continue as a going concern.

 

 

 

4

Critical Accounting Policies

The discussion and analysis of our financial condition and results of operations are based upon The Company’s financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates based on historical experience and on various other assumptions that are believed to be reasonable 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. Actual results may differ from these estimates under different assumptions or conditions.

 

Management believes that the application of these policies on a consistent basis enables us to provide useful and reliable financial information about our operating results and financial condition. Some of the critical accounting estimates are detailed below.

 

Critical Accounting Estimates and New Accounting Pronouncements

 

Critical Accounting Estimates

 

The preparation of financial statements in accordance with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect reported amounts and related disclosures in the financial statements. Management considers an accounting estimate to be critical if:

·

it requires assumptions to be made that were uncertain at the time the estimate was made, and

·

Changes in the estimate or different estimates that could have been selected could have a material impact on our results of operations or financial condition.

The Company base estimates and judgments on experience, current knowledge, and beliefs of what could occur in the future, observation of trends in the industry, information provided by customers and information available from other sources. Actual results may differ from these estimates under different assumptions or conditions. The Company has identified the following accounting policies and estimates as those that are believed to be the most critical to the financial condition and results of operations and that require management’s most subjective and complex judgments in estimating the effect of inherent uncertainties: share-based compensation expense, income taxes, and derivative financial instruments.

 

Share-Based Compensation Expense. We calculate share-based compensation expense for option awards and warrant issuances (“Share-based Awards”) based on the estimated grant/issue-date fair value using the Black-Scholes-Merton option pricing model (“Black-Scholes Model”), and recognize the expense on a straight-line basis over the vesting period, net of estimated forfeitures. The Black-Scholes Model requires the use of a number of assumptions including volatility of the stock price, the weighted average risk-free interest rate, and the vesting period of the Share-based Award in determining the fair value of Share-based Awards. Although we believe our assumptions used to calculate share-based compensation expense are reasonable, these assumptions can involve complex judgments about future events, which are open to interpretation and inherent uncertainty. In addition, significant changes to our assumptions could significantly impact the amount of expense recorded in a given period.

 

 Income Taxes. As part of the process of preparing our financial statements, we are required to estimate income taxes in each of the jurisdictions in which we operate. Our provision for income taxes is determined using the asset and liability approach to account for income taxes. A current liability is recorded for the estimated taxes payable for the current year. Deferred tax assets and liabilities are recorded for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using the enacted tax rates in effect for the year in which the timing differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of changes in tax rates or tax laws are recognized in the provision for income taxes in the period that includes the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount more-likely-than-not to be realized. Changes in valuation allowances will flow through the statement of operations unless related to deferred tax assets that expire unutilized or are modified through translation, in which case both the deferred tax asset and related valuation allowance are similarly adjusted. Where a valuation allowance was established through purchase accounting for acquired deferred tax assets, any future change will be credited or charged to income tax expense.

 

The determination of our provision for income taxes requires significant judgment, the use of estimates, and the interpretation and application of complex tax laws. In the ordinary course of our business, there are transactions and calculations for which the ultimate tax determination is uncertain. In spite of our belief that we have appropriate support for all the positions taken on our tax returns, we acknowledge that certain positions may be successfully challenged by the taxing authorities. We determine the tax benefits more likely than not to be recognized with respect to uncertain tax positions. Although we believe our recorded tax assets and liabilities are reasonable, tax laws and regulations are subject to interpretation and inherent uncertainty; therefore, our assessments can involve both a series of complex judgments about future events and rely on estimates and assumptions. Although we believe these estimates and assumptions are reasonable, the final determination could be materially different than that which is reflected in our provision for income taxes and recorded tax assets and liabilities.

5

 

 

New Accounting Pronouncements

 

The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

Not required.

 

ITEM 4. CONTROLS AND PROCEDURES.

 

Evaluation of Disclosure Controls and Procedures. We maintain “disclosure controls and procedures” as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934. In designing and evaluating our disclosure controls and procedures, our management recognized that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of disclosure controls and procedures are met. Additionally, in designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

 

The Company’s Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on such evaluation, and as discussed in greater detail below, the Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this report, disclosure controls and procedures were not effective:

 

·

to give reasonable assurance that the information required to be disclosed in reports that are file 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, and

·

to ensure that information required to be disclosed in the reports that are file or submitted under the Securities Exchange Act of 1934 is accumulated and communicated to management, including our CEO and our Treasurer, to allow timely decisions regarding required disclosure.

This assessment is due in part to the Company’s inability to file its annual and quarterly reports on a timely basis. The Company has, since the share exchange, engaged consultants specializing in financial statement preparation and SEC reporting to assist with preparing and filing the required forms in a timely and accurate manner.  Continued compliance will, in part, depend on the Company having sufficient capital to engage independent auditors to review and audit its financial statement filings.

 

Changes in Internal Control over Financial Reporting. There are no changes in internal control over financial reporting during the last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

6

 

 

PART II - OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

No legal issues

ITEM 1A. RISK FACTORS

 

Not applicable.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

The Company had the following issuances of stock during the nine months ended August 31, 2015:

In the nine months ended August 31, 2015, the Company issued a total of 25,735,379 shares of common stock, as follows:

·

1,335,379 common shares in connection with the conversion of $5,000 of convertible debentures and accrued interest.  

·

24,400,000 common shares in connection with the conversion of 4,880 shares of Series B preferred stock.  

 

Subsequent to August 31, 2015, the Company had the following stock issuances:

·

the Company converted a total of $12,472 in convertible debt and notes payable owed to unaffiliated third party accredited investors into 10,795,350 shares of restricted common stock.

·

the Company issued 36,280,000 common shares to unaffiliated third party accredited investors in connection with the conversion of 5,656 shares of Series B Preferred stock.

·

the Company issued 4,007,146 shares of restricted common stock to third parties for services rendered valued at $5,000.

·

the Company issued 100,000 shares of Series C Preferred Stock to the Company’s CEO in exchange for services rendered to the Company.  The Series C Preferred are non-convertible and have voting rights equal to 10,000 votes of common stock per share.

The Company has not undertaken an offering in which it sold a high number of securities to a high number of investors. In addition, these shareholders had the necessary investment intent as required by Section 4(2) since they agreed to and received share certificates bearing a legend stating that such securities are restricted pursuant to Rule 144 of the Securities Act. This restriction ensures that these securities would not be immediately redistributed into the market and therefore not be part of a “public offering.” Based on an analysis of the above factors, we have met the requirements to qualify for exemption under Section 4(2) of the Securities Act for this transaction.

 

  

ITEM 3. DEFAULTS UPON SENIOR DEBT

 

None

 

ITEM 4. [Removed and Reserved]

 

None

 

 

7

ITEM 5. OTHER INFORMATION

On January 26, 2015, the Company acquired Vitall, Inc. a company which has developed and is marketing a Smartwatch dedicated to the burgeoning health and wellness industry which offers a telephone, a blood pressure monitor, a heart rate monitor, fitness application, and has an emergency help button.  Under the terms of the Agreement, the Company agreed to a share exchange in which:

·

Settlements with various debt holders in which prior officers, directors, preferred shareholders, and current common shareholders would receive twenty-five percent (25%) of the post-merger issued and outstanding shares; and

·

Vitall, Inc. shareholders would receive seventy-five percent (75%) of the post-merger issued and outstanding shares.

·

The Company changed its name to CaerVision Global, Inc.

On March 17, 2015, Vitall, Inc. terminated the merger agreement due to non-performance on the part of the Company.  As a result, the name CaerVision Global, Inc. was surrendered back to its original owner.

On June 12, 2015, the Company consummated a Share Exchange with Amgentech, Inc., a Florida corporation.  Under the terms of the Share Exchange, the holders of Amgentech received 50,088 shares of Series B Preferred Stock that had been previously issued to third parties in exchange for 100% of the issued and outstanding capital of Amgentech. Each shares of Series B preferred stock is convertible into 5,000 shares of common stock (254,440,000 shares total) and has voting rights of 5,000 per share (254,440,000 votes). As a result of this transaction, Amgentech became a wholly-owned subsidiary of the Company with control transferring to the previous owners of Amgentech.  Amgentech elected to be treated as the successor issuer for SEC reporting and accounting purposes.  The Share Exchange was accounted for as a reverse acquisition and re-capitalization. The Amgentech Shareholders obtained approximately 60% of voting control on the date of Share Exchange. Amgentech was the acquirer for financial reporting purposes and the Company was the acquired company.  The Company filed an amendment to its articles of incorporation and changed its name to Telco Cuba, Inc.  

On June 15, 2015, the Company appointed William Sanchez to the position of CEO, CFO, President, Treasurer and Secretary. Concurrent therewith, Erwin Vahlsing Jr., Thomas J Craft Jr. and Frederick J Puccillo Jr., resigned their positions as officers and directors of the Company.

On September 4, 2015, the Company issued 100,000 shares of Series C Preferred Stock to the Company’s CEO in exchange for services rendered to the Company.  The Series C Preferred are non-convertible and have voting rights equal to 10,000 votes of common stock per share.

 

8

ITEM 6. EXHIBITS

 

 

Exhibit Listing

			Incorporated by reference
Exhibit No.	Description of Exhibit	Filed herewith	Form	Exhibit	Filing date (mm/dd/yy)
3.1	Articles of Incorporation		S-1	3.1	02/22/08
3.2	Certificate of Change dated July 20, 2009		8-K	3.1	08/03/09
3.3	Bylaws		S-1	3.2	02/22/08
4.1	Specimen Stock Certificate		S-1	4.1	02/22/08
14	Code of Ethics		S-1	14	02/22/08
31.1	Certifications of Principal Executive Officer and Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	X
32.1	Certifications of Principal Executive Officer and Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	X

 

9

 

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned; thereunto duly authorized.

	Telco Cuba Inc.
Date: February 9, 2016	By:  /s/ William Sanchez
	William Sanchez, Chief Executive Officer and President
Date: February 9, 2016	By:  /s/ William Sanchez
	William Sanchez, Chief Financial Officer, Secretary, and Treasurer

 

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of Registrant and in the capacities indicated on the dates indicated.

Date	Signature	Title
Date: February 9, 2016	/s/ William Sanchez	Director, President, Chief Financial Officer, Secretary, and Treasurer
	William Sanchez

 

10