VIRTUAL INTERACTIVE TECHNOLOGIES CORP. - Annual Report: 2016 (Form 10-K)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
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ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended November 30, 2016
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TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
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For the transition period from ______________ to ______________
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Commission file number: 333-190265
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MASCOTA RESOURCES CORP.
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(Exact name of registrant as specified in its charter)
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Nevada
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36-4752858
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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29409 232nd Ave. SE
Black Diamond, WA 98010
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(Address of principal executive offices)
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Registrant's telephone number: (206) 818-4799
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Securities registered under Section 12(b) of the Exchange Act:
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Title of each class
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Name of each exchange on which registered
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None
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None
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Securities registered under Section 12(g) of the Exchange Act:
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Title of class
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None
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Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes ☐ 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 ☒ No ☐
Indicate by checkmark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes ☐ No ☒
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes ☐ No ☒
1
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.
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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.
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Large accelerated filer
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Accelerated filer
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Non-accelerated filer
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Smaller reporting company
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(Do note check if a smaller reporting company)
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☒ No ☐
State the aggregate market value of the voting and non-voting common equity held by non-affiliates as of May 31, 2016 was $0.00.
As of May 12, 2017, the Company had 3,890,750 outstanding shares of common stock.
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Page
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We are an exploration stage mineral company. During the year ended November 30, 2015 we were an Inactive Registrant as that term is defined in Rule 3-11 of Regulation S-X of the Securities and Exchange Commission. As such, we were not required to present within our Form 10-K audited financial statements as of and for the year ended November 30, 2015. We did not qualify for the Inactive Registrant exemption for the year ended November 30, 2016 due to our issuance of a controlling block of common stock to our Secretary, Mark Rodenbeck, in June 2016. Accordingly, we have included unaudited financial statements as of and for the year ended November 30, 2015 comparatively with our audited financial statements as of and for the year ended November 30, 2016.
On May 3, 2013, our consulting geologist acquired a 100% legal and beneficial ownership interest in the MC00000266 mining claim (hereafter the "Claim") which was held in trust for us. The Claim was located in the Northeast Athabasca Basin, in the Province of Saskatchewan, Canada. It was located on provincial lands administered by the Province of Saskatchewan. The legal and ownership rights on the claim were limited to the exploration and extraction of mineral deposits subject to applicable regulations. The Claim totaled roughly 2,014 acres or 3.15 square miles in size and was located approximately 25 miles north of the community of Points North, Saskatchewan.
We were unable to raise the necessary funding to keep the mineral Claim in good standing and in May 2015, we forfeited our legal and beneficial ownership interest in the Claim for non-payment. As of November 30, 2015, we no longer held a beneficial interest in the Claim or any other mineral properties.
We plan to proceed with the acquisition and exploration of mineral claims to determine whether there are commercially exploitable reserves of gold, silver, or uranium.
Competition
The mineral exploration industry, in general, is intensely competitive and even if commercial quantities of reserves are discovered, a ready market may not exist for the sale of the reserves.
Most companies operating in this industry are more established and have greater resources to engage in the production of mineral claims. Our operations are not yet well-established and our resources at the present time are limited. We may exhaust all of our resources and be unable to complete full exploration of any Mineral Claim. There is also significant competition to retain qualified personnel to assist in conducting mineral exploration activities. If a commercially viable deposit is found to exist and we are unable to retain additional qualified personnel, we may be unable to enter into production and achieve profitable operations. These factors set forth above could inhibit our ability to compete with other companies in the industry and enter into production of the mineral claim if a commercial viable deposit is found to exist.
Numerous factors beyond our control may affect the marketability of any substances discovered. These factors include market fluctuations, the proximity and capacity of natural resource markets and processing equipment, government regulations, including regulations relating to prices, taxes, royalties, land tenure, land use, importing and exporting of minerals, and environmental protection. The exact effect of these factors cannot be accurately predicted, but the combination of these factors may result in our not receiving an adequate return on invested capital.
Employees
We have no employees as of the date of this filing, other than Dale Rasmussen who serves as our President, CEO, and CFO, and Mark Rodenbeck who serves as our Secretary. Our Officers receive no compensation for their services to us.
Not applicable.
None.
None.
Not applicable.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Our common stock is quoted under the symbol "MACR" on the OTC Pink tier operated by OTC Markets Group, Inc.
To date, an active trading market for our securities has not developed.
Holders of Our Common Stock
As of May 12, 2017 we had 3,890,750 outstanding shares of common stock, held by thirty-two (32) shareholders of record.
We have not declared any dividends and we do not plan to declare any dividends in the foreseeable future.
A smaller reporting company is not required to provide the information required by this Item.
Forward-Looking Statements
Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are "forward-looking statements." These forward-looking statements generally are identified by the words "believes," "project," "expects," "anticipates," "estimates," "intends," "strategy," "plan," "may," "will," "would," "will be," "will continue," "will likely result," and similar expressions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on our operations and future prospects on a consolidated basis include, but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements.
General and administrative expenses consist primarily of professional fees incurred to maintain our status as an SEC Registrant. The increase in general and administrative expenses from $21,338 for the year ended November 30, 2015 to $26,201 for the year ended November 30, 2016 is due to significant audit and accounting fees incurred during the year ended November 30, 2016 to bring our SEC filings current.
In support of the Company's efforts and cash requirements, it has relied on advances from related parties until such time that the Company can support its operations or attains adequate financing through sales of its equity or traditional debt financing. There is no formal written commitment for continued support by shareholders or officer and directors. The advances are considered temporary in nature and have not been formalized by a promissory note.
The Company's officers and directors, Dale Rasmussen and Mark Rodenbeck, loaned the Company the following amounts:
| Date | Amount | |||
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March 19, 2014
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$
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12,935
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June 24, 2014
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2,375
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August 29, 2014
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1,102
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November 30, 2014
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24
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Total, November 30, 2014
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$
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16,436
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April 2015
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15,000
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September 2015
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19,668
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Total, November 30, 2015
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51,104
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January 2016
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20,150
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Total
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$
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71,254
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The amounts were unsecured and bear 6% interest per year. Interest expense totaled $2,298 and $1,806, respectively, for the years ended November 30, 2015 and 2016.
On June 21, 2016, 2,000,000 shares of common stock owned by Ms. Ponce, the Company's former president, were cancelled and returned to treasury.
On June 28, 2016, the Company issued 50,000 shares of its common stock and 50,000 shares of its preferred stock to Dale Rasmussen in satisfaction of Mr. Rasmussen's loans to the Company totaling $16,436. Also on June 28, 2016, the Company issued 2,740,750 shares of its common stock to Mark Rodenbeck in satisfaction of Mr. Rodenbeck's loans to the Company totaling $54,818. Mr. Rasmussen and Mr. Rodenbeck also agreed to forgive the accrued interest totaling $4,708 due on those loans, which was recorded as an addition to paid-in capital.
Off Balance Sheet Arrangements
As of November 30, 2016 and May 12, 2017, there were no off balance sheet arrangements.
Not applicable.
MASCOTA RESOURCES CORP.
CONSOLIDATED FINANCIAL STATEMENTS
November 30, 2016 and 2015
(Stated in US Dollars)
CERTIFIED PUBLIC ACCOUNTANTS
A PROFESSIONAL CORPORATION
1438 N. HIGHWAY 89 STE. 130
FARMINGTON, UTAH 84025
_______________
(801) 447-9572 FAX (801) 447-9578
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors
Mascota Resources Corp.
Ogden Utah
We have audited the accompanying consolidated balance sheet of Mascota Resources Corp. (the Company) as of November 30, 2016 and the related consolidated statements of operations, stockholders' equity (deficit) and cash flows for the year then ended. The Company's management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the 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 audit 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 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 audit provides 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 November 30, 2016 and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming Mascota Resources Corp. will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has incurred losses since its inception, has a working capital deficit, and has not yet established profitable operations. These factors raise substantial doubt about the ability of the Company to continue as a going concern. Management's plans in regards to these matters are also described in Note 2. These financial statements do not include any adjustments that might result from the outcome of these uncertainties.
/s/ Pritchett, Siler & Hardy, P.C.
PRITCHETT, SILER & HARDY, P.C.
Farmington, Utah
May 4, 2017
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CONSOLIDATED BALANCE SHEETS
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November 30,
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2016
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2015
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(Unaudited)
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ASSETS
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Current Assets
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Cash
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$
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1,172
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$
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3,600
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Total Current Assets
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1,172
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3,600
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Total Assets
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$
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1,172
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$
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3,600
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| LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||||
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LIABILITIES
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Current Liabilities
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Accounts Payable
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$
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9,016
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$
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5,393
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Accrued Interest, Related Parties
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-
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2,410
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Notes Payable, Related Parties
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-
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51,104
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Total Current Liabilities
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9,016
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58,907
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Total Liabilities
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9,016
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58,907
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| STOCKHOLDERS' DEFICIT | ||||||||
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Preferred Stock, $0.01 par value, 10,000,000 shares authorized,
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500
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-
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50,000 shares issued and outstanding as of November 30, 2016
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Common Stock, $0.001 par value, 90,000,000 shares authorized,
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3,891
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3,100
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3,890,750 and 3,100,000 shares issued and outstanding, as of
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November 30, 2016 and November 30, 2015, respectively
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Additional paid-in capital
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156,003
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81,332
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Accumulated deficit
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(168,238
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(139,739
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Total Stockholders' Deficit
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(7,844
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(55,307
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Total Liabilities and Stockholders' Deficit
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$
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1,172
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$
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3,600
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The accompanying notes are an integral part of these financial statements.
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CONSOLIDATED STATEMENTS OF OPERATIONS
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Years Ended
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November 30,
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2016
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2015
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(Unaudited)
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Revenue
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$
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-
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$
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-
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Operating expenses
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General and administrative
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26,201
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21,338
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Total operating expenses
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26,201
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21,338
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Operating loss
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(26,201
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(21,338
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Interest expense
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2,298
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1,806
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Net loss
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(28,499
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(23,144
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Basic and diluted loss per share
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(0.01
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(0.01
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Weighted average number of shares
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3,331,055
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3,100,000
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outstanding - basic
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||||||||
The accompanying notes are an integral part of these financial statements.
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CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT
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Additional
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Stockholders'
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|||||||||||||||||||||||||||
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Common Stock
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Preferred Stock
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Paid-in
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Accumulated
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Deficit
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Shares
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Amount
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Shares
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Amount
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Capital
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Deficit
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Total
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Balances at November 30, 2014
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3,100,000
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$
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3,100
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-
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$
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-
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$
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81,332
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$
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(116,595
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$
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(32,163
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)
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Net loss for the year (unaudited)
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-
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-
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-
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-
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-
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(23,144
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(23,144
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)
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Balances at November 30, 2015 (unaudited)
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3,100,000
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3,100
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-
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-
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81,332
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(139,739
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(55,307
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Shares canceled and returned to treasury
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(2,000,000
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(2,000
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-
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-
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2,000
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-
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-
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Conversion of shareholder notes into common and preferred stock
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2,790,750
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2,791
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50,000
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500
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67,963
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-
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71,254
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Forgiveness of accrued interest on
shareholders notes
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- | - | - | - |
4,708
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- |
4,708
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Net loss for the year
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-
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-
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-
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-
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-
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(28,499
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(28,499
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Balances at November 30, 2016
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3,890,750
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$
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3,891
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50,000
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$
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500
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$
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156,003
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$
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(168,238
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$
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(7,844
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The accompanying notes are an integral part of these financial statements.
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CONSOLIDATED STATEMENTS OF CASH FLOWS
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Year Ended
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||||||||
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November 30,
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2016
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2015
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(Unaudited)
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Cash flows from operating activities
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|||||||
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Net loss
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$
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(28,499
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)
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$
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(23,144
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)
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Change in operating assets and liabilities:
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Increase (decrease) in accounts payable
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3,623
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(9,730
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)
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Increase in accrued interest, related parties
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2,298
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1,806
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Net cash (used by) operating activities
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(22,578
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(31,068
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)
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Cash flows from investing activities
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Net cash provided by (used by) investing activities
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-
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-
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Cash flows from financing activities
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||||||||
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Proceeds from notes payable, related parties
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20,150
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34,668
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Net cash provided by financing activities
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20,150
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34,668
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Net increase (decrease) in cash
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(2,428
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)
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3,600
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Cash at beginning of period
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3,600
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-
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||||||
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Cash at end of period
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$
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1,172
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$
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3,600
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SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
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Cash paid for:
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||||||||
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Interest
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$
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-
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$
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-
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||||
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Income taxes
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$
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-
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$
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-
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||||
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Conversion of shareholders notes into common and preferred stock
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$
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71,254
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$
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-
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||||
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Forgiveness of accrued interest on shareholder notes
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$
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4,708
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$
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-
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||||
The accompanying notes are an integral part of these financial statements.
Notes to Consolidated Financial Statements
For the Years Ended November 30, 2016 and 2015
Note 1 Nature of Operations
Mascota Resources Corp. ("the Company," "we," "us," or "our") was incorporated in the state of Nevada on November 3, 2011. The Company is an exploration stage company and was formed for the purpose of acquiring exploration and development stage mineral properties.
On November 9, 2011, the Company incorporated a wholly-owned subsidiary, MRC Exploration LLC ("MRC"), in the State of Nevada for the purpose of mineral exploration.
During May 2013, MRC acquired a Uranium mineral claim located in the Athabasca Basin, within the Province of Saskatchewan, Canada (the "Claim"). Subsequently, the required exploration and development expenditures were not made and the ownership interest in the Claim lapsed on May 3, 2015 and as of that date, the Company no longer held a beneficial interest in the Claim.
The Company's business plan is to proceed with the acquisition and exploration of feasible mineral claims to determine whether there are commercially exploitable reserves of gold, silver and uranium. Our geological consulting firm is well-experienced in the mineral exploration business and will provide us with the expected costs of exploration to determine the commercial viability of the prospect.
Note 2 Going Concern
These financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which assumes that the Company will be able to meet its obligations and continue its operations in the ordinary course of business. Realization values may be substantially different from carrying values as shown and these financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern. The Company has not yet achieved profitable operations, has accumulated losses of $(168,238), since its inception through November 30, 2016 and expects to incur further losses in the development of its business, all of which casts substantial doubt about the Company's ability to continue as a going concern.
The Company's ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing from shareholders or other sources to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management has no formal plan in place to address this concern but considers that the Company may be able to obtain additional funds by equity financing and/or related party advances, however there is no assurance of additional funding being available or on acceptable terms, if at all.
The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the company cannot continue in existence.
Note 3 Summary of Significant Accounting Policies
Basis of Presentation
The consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") and are stated in US dollars. The Company has adopted a November 30 year end.
Consolidated Statements
These consolidated financial statements include the accounts of the Company and MRC Exploration LLC., a wholly owned subsidiary incorporated in Nevada, USA on November 9, 2011. All significant inter-company transactions and balances have been eliminated.
Foreign Currency Translation
The Company's functional currency is the United States dollar as substantially all of the Company's operations are in the USA. The Company uses the United States dollar as its reporting currency for consistency with registrants of the Securities and Exchange Commission ("SEC").
Assets and Liabilities
Assets and liabilities denominated in a foreign currency are translated at the exchange rate in effect at the balance sheet date and capital accounts are translated at historical rates. Income statement accounts are translated at the average rates of exchange prevailing during the period, if applicable.
Translation adjustments from the use of different exchange rates from period to period are included in the Accumulated Other Comprehensive Income account in Stockholders' Equity, if applicable.
Transactions undertaken in currencies other than the functional currency of the entity are translated using the exchange rate in effect as of the transaction date. Any exchange gains and losses are included in the Statement of Operations and Comprehensive Loss.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimated.
Exploration Stage Accounting
The Company is an exploration stage company, as defined in pronouncements of the Financial Accounting Standards Board (FASB) and Industry Guide #7 of the Securities and Exchange Commission. Generally accepted accounting principles govern the recognition of revenue by an exploration stage enterprise and the accounting for costs and expenses. An exploration stage company is also required to make additional disclosures as defined under the then current Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 915, "Development-Stage Entities." Additional disclosures required are that our financial statements be identified as those of an exploration stage company, and that the statements of operations, changes in changes in stockholders' deficit and cash flows disclosed activity since the date of its Inception (November 3, 2011). Effective June 10, 2014, the FASB changed its regulations with respect to development stage entities and these additional disclosures are no longer required for annual reporting periods beginning after December 15, 2015, with the option for entities to early adopt these new provisions. Consequently these additional disclosures are not included in the Company's financial statements.
Cash Equivalents
The Company considers all short term investments purchased with an original maturity of three months or less to be cash equivalents.
Income Taxes
We account for income taxes under the liability method, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statements and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Current tax benefits are offset by a valuation reserve as they are considered not likely to be realized in the foreseeable future.
Net Income (Loss) Per Share
In accordance with FASB ASC Topic 260, "Earnings per Share," basic earnings per share ("EPS") is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted EPS gives effect to all dilutive potential of shares of common stock outstanding during the period including stock options or warrants, using the treasury stock method (by using the average stock price for the period to determine the number of shares assumed to be purchased from the exercise of stock options or warrants), and convertible debt or convertible preferred stock, using the if-converted method. Diluted EPS excludes all dilutive potential of shares of common stock if their effect is anti-dilutive. No potentially dilutive debt or equity instruments were issued or outstanding during the years ended November 30, 2016 or 2015.
New Accounting Pronouncements
The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations.
Note 4 Investment in Mining Rights
On May 3, 2013, the Company's consulting geologist acquired a 100% legal and beneficial ownership interest in a Uranium mineral claim for $10,000, paid by the Company and expensed immediately upon acquisition, which he held in trust for the Company pursuant to a Mineral Claim Trust Agreement, dated May 3, 2013. The Mineral Claim was located in the Northeast Athabasca Basin, in the Province of Saskatchewan, Canada. The required exploration and development expenditures to keep the Claim active were not made as required by the Agreement. The ownership interest lapsed on May 3, 2015 and as of that date the Company no longer held a beneficial interest in the Claim.
Note 5 Related Party Transactions
In support of the Company's efforts and cash requirements, it may rely on advances from related parties until such time that the Company can support its operations or attains adequate financing through sales of its equity or traditional debt financing. There is no formal written commitment for continued support by shareholders or officer and directors. The following advances are considered temporary in nature and have not been formalized by a promissory note.
The Company's President, Dale Rasmussen, loaned the Company the following amounts:
|
Date
|
Amount
|
|||
|
March 19, 2014
|
$
|
12,935
|
||
|
June 24, 2014
|
2,375
|
|||
|
August 29, 2014
|
1,102
|
|||
|
November 30, 2014
|
24
|
|||
|
Total, November 30, 2015
|
16,436
|
|||
|
June 28, 2016, converted to stock
|
(16,436 | ) | ||
|
Total, November 30, 2016
|
$
|
--
|
||
The Company's Secretary, Mark Rodenbeck, loaned the Company the following amounts:
|
Date
|
Amount
|
|||
|
May 1, 2015
|
$
|
15,000
|
||
|
September 5, 2015
|
19,668
|
|||
|
Total, November 30, 2015
|
$
|
34,668
|
||
|
January 15, 2016
|
20,150
|
|||
|
Total, June 27, 2016
|
54,818
|
|||
|
June 28, 2016, converted to stock
|
(54,818
|
)
|
||
|
Total, November 30, 2016
|
$
|
--
|
||
The loans totaled $0 and $51,104 at November 30, 2016 and 2015 respectively, were unsecured, bore 6% interest per annum, and were due on demand. Interest expense on the loans totaled $2,298 and $1,806 for the years ended November 30, 2016 and 2015, respectively, and accrued interest was $4,708 and $2,410 at June 27, 2016 and November 30, 2015, respectively. On June 28, 2016, these loans and accrued interest were either forgiven or repaid with the Company's common and preferred stock, as detailed in Note 6.
Note 6 Stockholders' Deficit
Authorized Share Capital
The authorized share capital of the Company consists of 90,000,000 shares of common stock with par value of $0.001 and 10,000,000 shares of preferred stock with a par value of $0.001.
Preferred Stock
No preferred stock had been issued or outstanding since November 3, 2011 (Inception) through November 30, 2015. On June 28, 2016, the Company issued 50,000 shares of its preferred stock to Dale Rasmussen in satisfaction of his $15,436 loan made to the Company.
As of November 30, 2016 and 2015 the Company had 50,000 and no shares, respectively, of preferred stock issued and outstanding.
Common Stock
On June 21, 2016, 2,000,000 shares of common stock owned by Maria Ponce, the Company's former President, were canceled and returned to treasury.
On June 28, 2016, the Company issued 50,000 common shares to Dale Rasmussen in satisfaction of Rasmussen's remaining loans of $1,000 made to the Company. Also on June 28, 2016, the Company issued 2,740,750 common shares to Mark Rodenbeck in satisfaction of loans totaling $54,818 made to the Company. Mr. Rasmussen and Mr. Rodenbeck also agreed to forgive the accrued interest totaling $4,708 due on those loans, which is reflected as an addition to paid-in capital.
As of November 30, 2016 and 2015, the Company had 3,890,750 and 3,100,000 shares of common stock issued and outstanding.
Note 7 Income Taxes
Deferred income taxes are determined based on the estimated future tax effects of differences between financial statement carrying amounts and the tax bases of existing assets and liabilities. Deferred tax assets are recognized to the extent that realization of those assets is considered to be more likely than not. A valuation allowance is established for deferred taxes when it is more likely than not that all or a portion of the deferred tax assets will not be realized. Provisions are made for the U.S. income tax liability and additional non-U.S. taxes on the undistributed earnings of non-U.S. subsidiaries, except for amounts Mascota Resources Corp. has designated to be indefinitely reinvested.
The Company records benefits for uncertain tax positions based on an assessment of whether the position is more likely than not to be sustained by the taxing authorities. If this threshold is not met, no tax benefit of the uncertain tax position is recognized. If the threshold is met, the tax benefit that is recognized is the largest amount that is greater than 50% likely of being realized upon ultimate settlement. This analysis presumes the taxing authorities' full knowledge of the positions taken and all relevant facts, but does not consider the time value of money. The Company also accrues for interest and penalties on its uncertain tax positions and includes such charges in its income tax provision in the Consolidated Statements of Operations.
Net deferred tax assets (liabilities) consist of the following components as of November 30, 2016 and 2015:
Deferred tax assets:
|
|
2016
|
2015
|
||||||
|
NOL Carryover
|
$
|
25,235
|
$
|
20,960
|
||||
|
Valuation allowance
|
(25,235
|
)
|
(20,960
|
)
|
||||
|
Net deferred tax asset
|
$
|
--
|
$
|
--
|
||||
The income tax provision differs from the amount of estimated income tax determined by applying the U.S. federal income tax rate to pretax income from continuing operations for the periods ended November 30, 2016 and 2015 due to the following:
|
|
2016
|
2015
|
||||||
|
Book Loss (15% statutory rate)
|
$
|
(4,275
|
)
|
$
|
(3,471
|
)
|
||
|
Change in valuation allowance
|
4,275
|
3,471
|
||||||
|
Tax at effective rate
|
$
|
--
|
$
|
--
|
||||
The Company had net operating loss carryforwards of approximately $168,238, (2015: $139,739), that may be offset against future taxable income from the year 2016 through 2034. No tax benefit has been reported in the November 30, 2016 or 2015 financial statements since the potential tax benefit is offset by a valuation allowance of the same amount. There is no provision for state taxes, since the Company's operations have been limited to administrative expenses and fund-raising in the state of its incorporation (Nevada) which has no income tax.
Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carryforwards for Federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur, net operating loss carryforwards may be limited as to use in future years. The tax years that remain subject to examination by major taxing jurisdictions are those for the years ended November 30, 2016, 2015, 2014, and 2013.
Note 8 Management Changes
On February 17, 2015, Dale Rasmussen resigned as the Company's Secretary and Mr. Rodenbeck was appointed as the Company's Secretary and as a director. Mr. Rasmussen remains as the Company's Chief Executive and Financial Officer.
Note 9 Subsequent Events
The Company evaluated subsequent events through the date these financial statements were issued. There have been no subsequent events after November 30, 2016 for which disclosure is required.
During the year ended November 30, 2016, there were no changes in or disagreements with accountants.
Disclosure Controls and Procedures
We have carried out an evaluation of the effectiveness of our disclosure controls and procedures as of November 30, 2016. This evaluation was carried out under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer.
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted 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 controls and procedures designed to ensure that information required to be disclosed in our company's reports filed under the Securities Exchange Act of 1934 is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.
Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were ineffective as of the end of the period covered by this annual report.
Management's Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934). Management has assessed the effectiveness of our internal control over financial reporting as of November 30, 2016 based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. As a result of this assessment, management concluded that, as of November 30, 2016, our internal control over financial reporting was not effective. Our management identified the following material weaknesses in our internal control over financial reporting, which are indicative of many small companies with small staff: (i) inadequate segregation of duties and effective risk assessment; and (ii) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both US GAAP and SEC guidelines.
We plan to take steps to enhance and improve the design of our internal control over financial reporting. During the period covered by this annual report on Form 10-K, we have not been able to remediate the material weaknesses identified above. To remediate such weaknesses, we hope to implement the following changes during our fiscal year ending for the year ended November 30, 2017: (i) appoint additional qualified personnel to address inadequate segregation of duties and ineffective risk management; and (ii) adopt sufficient written policies and procedures for accounting and financial reporting. The remediation efforts set out in (i) and (ii) are largely dependent upon our securing additional financing to cover the costs of implementing the changes required. If we are unsuccessful in securing such funds, remediation efforts may be adversely affected in a material manner.
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 an exemption for non-accelerated filers set forth in Section 989G of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting that occurred during the year ended November 30, 2016, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
None.
Directors and Executive Officers
|
Name
|
|
Age
|
|
Position(s) and Office(s) Held
|
|
Dale Rasmussen
|
|
66
|
|
President, Chief Executive, Financial and Accounting Officer, and a Director
|
|
|
|
|
|
|
|
Mark Rodenbeck
|
|
68
|
|
Secretary and a Director
|
Dale Rasmussen. Mr. Rasmussen has been an officer and director of the Company since March 2014. Mr. Rasmussen has been the Chairman of Digi Holdings, a private company, since 2012. Mr. Rasmussen is also a board member of West Mountain Gold, a publicly traded company, and Greenwood Energy, a private company. Since 2012 Mr. Rasmussen has been a consultant to several other development stage companies either considering, or on the path to becoming, publicly traded. Mr. Rasmussen served as a director of Quantum Fuel System Technologies Worldwide between 2000 and 2012. While with Quantum, Mr. Rasmussen's responsibilities included acquisitions, joint ventures, strategic alliances and investor and shareholder relations. Mr. Rasmussen was a founding member of Fisker Automotive and served as a director of Fisker since its formation in November 2007 until February 2010. Fisker Automotive, the "Green American" car company that was co-founded by Quantum and Henrik Fisker, was awarded a $528.7 million loan by the U.S. Department of Energy to develop and manufacture plug-in hybrid vehicles, including the Fisker Karma. Mr. Rasmussen was the Senior Vice President and Secretary of IMPCO Technologies (now Fuel Systems Solutions) from 1989 through 2005, joining IMPCO in 1984 as Vice President of Finance and Administration and corporate Secretary. While at IMPCO, Mr. Rasmussen's area of expertise was mergers and acquisitions, strategic planning and investor relations. Prior to joining IMPCO, Mr. Rasmussen was a commercial banker for twelve years, responsible for managing the bank's investment portfolio and branch and corporate development. Mr. Rasmussen is a graduate of Western Washington University and Pacific Coast Banking School, University of Washington.
Mark Rodenbeck. Mr. Rodenbeck has been an officer and director of the Company since February 2015. Mr. Rodenbeck graduated (cum laude with Dean's List honors) from Northwood Institute with a B.S. Degree in Business Administration in 1970. Between 1970 and 1976, Mr. Rodenbeck worked as General Manager, and then District Manager, for Foodplex Inc., a large operator of fast food restaurants. In 1976 he became President and 50% owner of Damark Inc. which owned and operated 6 fast food restaurants in Michigan. In 1981, Mr. Rodenbeck sold his restaurants and moved to Denver, Colorado, and became a stockbroker. In 1984, he was promoted to Branch Manager of Engler & Budd, a Minneapolis-based brokerage firm. In 1995, he co-founded Colorado Ceramic Tile, Inc. as a 50% owner and officer. Mr. Rodenbeck retired from Colorado Ceramic Tile in 2012.
Term of Office
Our Directors are appointed for a one-year term to hold office until the next annual general meeting of our shareholders or until removed from office in accordance with our bylaws. Our officers are appointed by our board of directors and hold office until removed by the board.
Code of Ethics
As of May 12, 2017, we had not adopted a Code of Ethics for Financial Executives, which would include our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions.
Summary Compensation Table
The table below summarizes all compensation awarded to, earned by, or paid to each named executive officer for our last two completed fiscal years for all services rendered to us.
|
SUMMARY EXECUTIVE COMPENSATION TABLE
|
||||||||||||||||||
|
Name and
Principal
Position
|
Year
|
Salary
(1)
|
Bonus
(2)
|
Stock Awards
(3)
|
Option
Awards
(4)
|
Non-Equity
Incentive
Plan
Compensation
|
Non-Qualified
Deferred
Compensation
Earnings
|
All Other Compensation
(5)
|
Total
|
|||||||||
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
|||||||||||
|
Dale Rasmussen,
|
2016
|
|||||||||||||||||
|
President, CEO,
|
2015
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|||||||||
|
CFO,
|
|
|||||||||||||||||
|
|
||||||||||||||||||
|
Mark Rodenbeck
|
2016
|
|||||||||||||||||
|
Secretary
|
2015
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|||||||||
____________
|
(1)
|
Dale Rasmussen was appointed as the Company's President, CEO, CFO, Secretary and Director on March 17, 2014 upon the resignation of Ms. Ponce. On February 17, 2015, Dale Rasmussen resigned as the Company's Secretary.
|
|
(2)
|
Mark Rodenbeck was appointed to serve as the Company's Secretary on February 17, 2015.
|
We do not compensate Mr. Rasmussen or Mr. Rodenbeck for serving as directors.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table sets forth, as of May 12, 2017, the beneficial ownership of our common stock by each executive officer and director, by each person known by us to beneficially own more than 5% of our common stock and by our executive officers and directors as a group:
|
Name and address of beneficial owner
|
Shares
Owned
|
Percent
of class
|
||||||
|
Dale Rasmussen
|
50,000
|
1.29
|
%
|
|||||
|
Mark Rodenbeck
|
2,740,750
|
70.44
|
%
|
|||||
|
All executive officers and
|
||||||||
|
directors (two persons)
|
2,790,750
|
71.73
|
%
|
|||||
As used in this table, "beneficial ownership" means the sole or shared power to vote, or to direct the voting of, a security, or the sole or shared investment power with respect to a security (i.e., the power to dispose of, or to direct the disposition of, a security). In addition, for purposes of this table, a person is deemed, as of any date, to have "beneficial ownership" of any security that such person has the right to acquire within 60 days after such date.
The persons named above have full voting and investment power with respect to the shares indicated. Under the rules of the Securities and Exchange Commission, a person (or group of persons) is deemed to be a "beneficial owner" of a security if he or she, directly or indirectly, has or shares the power to vote or to direct the voting of such security, or the power to dispose of or to direct the disposition of such security. Accordingly, more than one person may be deemed to be a beneficial owner of the same security. A person is also deemed to be a beneficial owner of any security, which that person has the right to acquire within 60 days, such as options or warrants to purchase our common stock.
Except as stated herein, none of our directors or executive officers, nor any proposed nominee for election as a director, nor any person who beneficially owns, directly or indirectly, shares carrying more than 5% of the voting rights attached to all of our outstanding shares, nor any members of the immediate family (including spouse, parents, children, siblings, and in-laws) of any of the foregoing persons has any material interest, direct or indirect, in any transaction over the last two years or in any presently proposed transaction which, in either case, has or will materially affect us.
On June 21, 2016, 2,000,000 shares of common stock owned by Ms. Ponce, the Company's former president, were canceled and returned to treasury.
In support of the Company's efforts and cash requirements, it may rely on advances from related parties until such time that the Company can support its operations or attains adequate financing through sales of its equity or traditional debt financing. There is no formal written commitment for continued support by shareholders or officer and directors. The following advances are considered temporary in nature and have not been formalized by a promissory note.
The Company's President, Dale Rasmussen, has loaned the Company the following amounts:
|
Date
|
Amount
|
|||
|
March 19, 2014
|
$
|
12,935
|
||
|
June 24, 2014
|
2,375
|
|||
|
August 29, 2014
|
1,102
|
|||
|
November 30, 2014
|
24
|
|||
|
Total
|
$
|
16,436
|
||
The Company's Secretary, Mark Rodenbeck, has loaned the Company the following amounts.
|
Date
|
Amount
|
|||
|
April 2015
|
$
|
15,000
|
||
|
September 2015
|
19,668
|
|||
|
January 2016
|
20,150
|
|||
|
Total
|
$
|
54,818
|
||
The loans totaled $71,254, were unsecured, bore 6% interest per annum, and were due on demand. Interest expense totaled $2,298 and $1,806, respectively as of and for the years ended November 30, 2016 and 2015.
On June 28, 2016, the Company issued 50,000 shares of its common stock and 50,000 shares of its preferred stock to Dale Rasmussen in satisfaction of Mr. Rasmussen's loans to the Company totaling $16,436. Also on June 28, 2016, the Company issued 2,740,750 shares of its common stock to Mark Rodenbeck in satisfaction of Mr. Rodenbeck's loans to the Company totaling $54,818. Mr. Rasmussen and Mr. Rodenbeck also agreed to forgive all accrued interest totaling $4,708 due on those loans, which was recorded as an addition to paid-in capital.
Our only director, Dale Rasmussen, is not independent as that term is defined by the Securities and Exchange Commission.
Below is the table of Audit Fees (amounts in US$) billed by our auditor in connection with the audit of the Company's annual financial statements for the years ended:
|
Financial Statements for the Year Ended November 30,
|
Audit Services
|
Audit Related Fees
|
Tax Fees
|
Other Fees
|
||||||||||||
|
2015
|
$
|
3,000
|
(1)
|
$
|
-
|
$
|
750
|
$
|
-
|
|||||||
|
2016
|
$
|
10,700
|
$
|
-
|
$
|
750
|
$
|
-
|
||||||||
|
(1)
|
Since an audit of our 2015 financial statements is not required due to our status as an Inactive Registrant, these fees are for the review of our November 30, 2015 financial statements and related Form 10K.
|
Financial Statements (See Item 8)
Exhibits
|
Exhibit
Number
|
|
Description
|
|
101**
|
|
The following materials from the Company's Annual Report on Form 10-K for the year ended November 20, 2015 formatted in Extensible Business Reporting Language (XBRL).
|
(1) Incorporated by reference to Form S-1 filed July 31, 2013.
(2) Incorporated by reference to Form S-1/A filed September 11, 2013.
** Provided herewith
In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant has caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized on the 5th day of May 2017.
| MASCOTA RESOURCES CORP. | |||
|
|
By:
|
/s/ Dale Rasmussen | |
| Dale Rasmussen | |||
| Principal Executive Officer | |||
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
|
May 5, 2017
|
By:
|
/s/ Dale Rasmussen | |
| Dale Rasmussen | |||
| Principal Executive, Financial and Accounting Officer | |||
| May 8, 2017 | By: | /s/ Mark Rodenbeck | |
| Mark Rodenbeck | |||
| Director |
25