ITEM 1. FINANCIAL STATEMENTS
Free Flow, Inc.
Balance Sheet
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As of
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As of
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June 30, 2019
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December 31, 2018
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(Un-audited)
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(Audited)
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ASSETS
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Current Assets
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Cash
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$
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46,908
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|
|
$
|
19,115
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|
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Trade Receivables - current
|
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8,629
|
|
|
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7,723
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Trade Receivables - old
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-
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573
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|
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Receivable from Subsidiaries
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2,123
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Product Development Advance
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14,370
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Advances for Inventory Purchases
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28,879
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18,963
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Inventory at cost,
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682,361
|
|
|
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571,260
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TOTAL CURRENT ASSETS
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783,269
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|
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617,634
|
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|
|
|
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Fixed Assets
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|
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|
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Land and Building, at cost
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775,515
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|
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772,513
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Less: Accumulated depreciaton
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(30,901
|
)
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|
(30,901
|
)
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|
Writtendown value
|
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|
744,614
|
|
|
|
741,612
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TOTAL FIXED ASSETS
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744,614
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|
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741,612
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|
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|
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Other Assets
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|
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Delivery Turcks at cost
|
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3,500
|
|
|
|
3,500
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|
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Less: Accumulated depreciaton
|
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(2,492
|
)
|
|
|
(2,492
|
)
|
|
Writtendown value
|
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|
1,008
|
|
|
|
1,008
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|
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Equipment and Delivery Trucks, after depreciation allowance
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35,000
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35,000
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Less: Accumulated depreciaton
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(7,000
|
)
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(7,000
|
)
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Writtendown value
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28,000
|
|
|
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28,000
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TOTAL OTHER ASSETS
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29,008
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29,008
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|
|
|
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|
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TOTAL ASSETS
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$
|
1,556,891
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$
|
1,388,254
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LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)
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Current Liabilities
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Accounts Payable
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$
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8,723
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$
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7,468
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Notes Payable - Related Parties
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10,018
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|
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|
380
|
|
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TOTAL CURRENT LIABILITIES
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18,741
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|
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|
7,848
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|
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Long Term Liabilities
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Line of Credit
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251,000
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-
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Loan - secured
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895,877
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900,100
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TOTAL LONG TERM LIABILITIES
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1,146,877
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900,100
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Total Liabilities
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1,165,618
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907,948
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Redeemable Preferred Stock
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Series B; 500,000 shares authorized; 330,000 and 0 issued
and outstanding
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as of December 31, 2018 and 2017
respectively ( Classified as Mezzanine Equity)
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330,000
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330,000
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Series C; 500,000 shares authorized; 470,935 and 0 issued
and outstanding
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as of December 31, 2018 and 2017
respectively ( Classified as Mezzanine Equity) -
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as equity in Accurate
Auto Parts, Inc.
|
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|
470,935
|
|
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470,935
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Stockholders' Equity (Deficit)
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Preferred Stock ($0.0001) par value, 20,000,000 shares authorized
|
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10,000 shares par value $0.0001 Class A issued on December 31, 2015
|
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1
|
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1
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Common stock, ($0.0001) par value, 100,000,000 shares authorized
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26,200,000 shares issued and outstanding as of December 31, 2018
and December 31, 2017
|
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2,622
|
|
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|
2,620
|
|
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Additional Paid in capital
|
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|
129,033
|
|
|
|
114,546
|
|
|
Stockholder's equity in Accurate Auto Parts, Inc.
|
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|
200
|
|
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Subscription not yet accepted
|
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|
2,000
|
|
|
|
|
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Profit (Loss) Current Period
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(105,522
|
)
|
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Retained Earnings (Deficit)
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|
(437,996
|
)
|
|
|
(437,796
|
)
|
|
TOTAL STOCKHOLDERS' DEFICIT
|
|
|
(409,662
|
)
|
|
|
(320,629
|
)
|
|
|
|
|
|
|
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|
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TOTAL LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)
|
|
$
|
1,556,891
|
|
|
$
|
1,388,254
|
|
The accompanying notes are an integral part of these financial statements
Free Flow, Inc.
Condensed Statements of Operations
(Unaudited)
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Six months ended June 30,
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Three months ended June 30,
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2019
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2018
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2019
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2018
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REVENUES
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Revenues
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$
|
147,569
|
|
|
$
|
79,600
|
|
|
$
|
58,784
|
|
|
$
|
39,795
|
|
|
TOTAL REVENUES
|
|
|
147,569
|
|
|
|
79,600
|
|
|
|
58,784
|
|
|
|
39,795
|
|
|
COST OF GOODS SOLD
|
|
|
69,283
|
|
|
|
27,277
|
|
|
|
24,772
|
|
|
|
14,521
|
|
|
GROSS PROFIT
|
|
|
78,286
|
|
|
|
52,323
|
|
|
|
34,012
|
|
|
|
25,274
|
|
|
|
|
|
|
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GENERAL & ADMINISTRATIVE EXPENSES
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Administrative expenses
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|
103,750
|
|
|
|
13,631
|
|
|
|
41,186
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|
|
|
8,440
|
|
|
Professional fees
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|
25,363
|
|
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|
6,658
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|
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|
2,865
|
|
|
|
3,145
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Selling expenses
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15,263
|
|
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|
9,055
|
|
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|
6,812
|
|
|
|
4,887
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|
|
Financial Expenses
|
|
|
39,432
|
|
|
|
1,279
|
|
|
|
17,554
|
|
|
|
987
|
|
|
TOTAL GENERAL & ADMISINSTRATEVIE EXPENSES
|
|
|
183,808
|
|
|
|
30,623
|
|
|
|
68,418
|
|
|
|
17,459
|
|
|
|
|
|
|
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PROFIT (LOSS) FROM OPERATION
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|
(105,522
|
)
|
|
|
21,701
|
|
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|
(34,405
|
)
|
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|
7,815
|
|
|
|
|
|
|
|
|
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NET INCOME (LOSS)
|
|
$
|
(105,522
|
)
|
|
$
|
21,701
|
|
|
$
|
(34,405
|
)
|
|
$
|
7,815
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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BASIC EARNING PER SHARE
|
|
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(0.0040
|
)
|
|
|
0.0008
|
|
|
|
0.0100
|
|
|
|
0.0003
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
WEIGHTED
AVERAGE NUMBERO OF
COMMON SHARESS OUTSTANDING
|
|
|
26,221,000
|
|
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|
26,200,000
|
|
|
|
26,200,000
|
|
|
|
26,200,000
|
|
The accompanying notes are an integral part of these financial statements
Free Flow, Inc.
Statement of Changes in Shareholders' (Deficit)
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Additional
|
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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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Shares
|
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Amount
|
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|
Shares
|
|
|
Amount
|
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Capital
|
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Deficit
|
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Total
|
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|
|
|
|
|
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|
Series-A
|
|
|
|
|
|
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|
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|
Balance, January 1, 2019
|
|
|
26,200,000
|
|
|
$
|
2,620
|
|
|
|
10,000
|
|
|
$
|
1
|
|
|
$
|
114,545
|
|
|
$
|
(437,796
|
)
|
|
$
|
(437,796
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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Loss for the six months ended
|
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|
|
|
|
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|
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2019
|
|
|
21,000
|
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
14,448
|
|
|
|
(105,522
|
)
|
|
|
(105,522
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE, JUNE 30, 2019
|
|
|
26,221,000
|
|
|
$
|
2,622
|
|
|
|
10,000
|
|
|
$
|
1
|
|
|
$
|
128,993
|
|
|
$
|
(543,318
|
)
|
|
$
|
(543,318
|
)
|
The accompanying notes are an integral part of these financial statements
Free Flow, Inc.
Statements of Cash Flow
|
|
|
Six months
|
|
|
Six months
|
|
|
|
|
Ended
|
|
|
Ended
|
|
|
|
|
June 30, 2019
|
|
|
June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOW FROM OPERATING ACTIVITIES
|
|
$
|
(105,522
|
)
|
|
$
|
21,700
|
|
|
(Increase) in Other Assets -
|
|
|
|
|
|
|
|
|
|
(Increase) Decrease in Prepaid Expenses
|
|
|
-
|
|
|
|
(8,264
|
)
|
|
Increase (Decrease) in Customer Deposits
|
|
|
-
|
|
|
|
17,692
|
|
|
(Increase) Advance for Inventory Purchases
|
|
|
(24,286
|
)
|
|
|
|
|
|
Increase (Decrease) in Accounts Payable
|
|
|
|
|
|
|
(21,140
|
)
|
|
(Increase) Trade Receivables
|
|
|
(333
|
)
|
|
|
(4,710
|
)
|
|
(Increase) Decrease in Inventory
|
|
|
(111,101
|
)
|
|
|
(64,963
|
)
|
|
NET CASH USED IN OPERATING ACTIVITIES
|
|
|
(241,242
|
)
|
|
|
(59,685
|
)
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOW FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
Proceeds from notes payable - related parties
|
|
|
7,515
|
|
|
|
(83,931
|
)
|
|
Increse (decrease) in Prepaid for Asset Purchse
|
|
|
|
|
|
|
25,000
|
|
|
Proceeds from Subscription not yet accepted
|
|
|
2,000
|
|
|
|
-
|
|
|
Proceeds form Loan from River Valley Bank
|
|
|
246,777
|
|
|
|
-
|
|
|
(Increase) in Fixed Assets - Land, Building
|
|
|
(3,002
|
)
|
|
|
-
|
|
|
Proceeds from sale of shares
|
|
|
14,490
|
|
|
|
-
|
|
|
Proceeds from Accounts Payable - trade (Decrease in Accounts Payable)
|
|
|
1,255
|
|
|
|
-
|
|
|
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
|
|
|
269,035
|
|
|
|
(58,931
|
)
|
|
|
|
|
|
|
|
|
|
|
|
NET INCREASE (DECREASE) IN CASH
|
|
|
27,793
|
|
|
|
(754
|
)
|
|
|
|
|
|
|
|
|
|
|
|
CASH AT BEGINNING PERIOD
|
|
|
19,115
|
|
|
|
5,354
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH AT END PERIOD
|
|
$
|
46,908
|
|
|
$
|
4,600
|
|
The accompanying notes are an integral part of these financial statements
Free Flow, Inc.
Notes to Condensed Consolidated Financial Statements
June 30, 2019
(Unaudited)
NOTE 1 – BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting
principles generally accepted in the United States of America for interim financial statements and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the United States Securities and Exchange Commission (“SEC”).
Accordingly, they do not contain all information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements. In the opinion of the Company’s management, the accompanying
unaudited consolidated financial statements contain all the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of June 30, 2019 and the results of operations and cash flows
for the periods presented. The results of operations for the six months ended June 30, 2019 are not necessarily indicative of the operating results for the full fiscal year or any future period. These unaudited consolidated financial
statements should be read in conjunction with the financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 filed with the SEC on April 29, 2019.
NOTE 2 GOING CONCERN
The Company’s financial statements are prepared using generally accepted accounting principles in the United States
of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has established itself as a stable ongoing business entity with established
revenues and / or sufficient reserves to cover its operating costs and allow it to continue as a going concern. However, the ability of the Company to continue as a going concern is also dependent on the Company obtaining adequate Sales so
that the Company can liquidate its inventories and continue as a going business.
In order to continue as a going concern, the Company will need, among other things, Sales of its product lines.
Management has obtained such sales through Internet sales and marketing companies who specialize in promotion of such businesses. Management has obtained working capital line of credit from its commercial bank to meet its minimal operating
expense and is expecting that cash flow from sales will soon be available to augment the operating capital needs. However, management cannot provide an assurance that the Company will be successful in accomplishing any of its plans.
The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish
the plans described in the preceding paragraph and eventually fulfill the secured purchase orders to attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is
unable to continue as a going concern.
NOTE 3 – INCORPORATION OF SUBSIDIARY
In February 2015, the company incorporated a subsidiary, Promedaff, Inc. and purchased a skin care product line and
formulations for $2,000,000 against a promissory note. An e commerce platform was set up for sales and marketing. The efforts did not bear any success and the entire inventory was sold through the Seller and the Promissory Note was cancelled
and marked “VOID”. The name of this entity was changed to Motors & Metals, Inc. and had remained inactive but was in good standing, until it received a letter of intent from an overseas buyer willing to enter a long term contract to
purchase shredded steal derived from automobile scrap. Thus Motors & Metals, Inc. has embarked upon substituting its automobile crushing business to shredding of automobiles and recovering ferrous metals.
Proposals form renowned manufacturers of auto shredding equipment have been received and are being evaluated to
determine the most suitable and competitive supplier. The initial plan is laid out to have an output of 3,000 tons of shredded steel per month.
As was reported in 10-Qs for the earlier quarters as well as in 10-Ks for the Annual reports, on February 4, 2016 the
company incorporated another subsidiary in the State of Virginia under the name JK Sales, Corp. (on December 7, 2017 the name was changed to Accurate Auto Parts, Inc.) and has since remained in the business of buying end of life and salvage
vehicles and selling auto parts.
On April 17, 2018 the company incorporated in Virginia, another subsidiary named Accurate Investments, Inc. with the
objectives of acquiring real estate property, and has remained dormant until any business is transacted.
NOTE 4 – RELATED PARTY
As of December 31, 2018, the Company had a note payable in the amount of $380 to Redfield Holdings, Ltd. a related
party. During the six months ended the Company borrowed an additional $9,638 thus owing a total sum of $10,018 as of June 30, 2019. The note is unsecured and does not bear any interest and has a maturity date of December 30, 2020.
NOTE 5 – CAPITAL
STOCK
The Company has authorized 100,000,000 shares of common shares with a par value of $0.0001 per shares and 20,000,000
shares of preferred stock, with a par value of $0.0001 per shares.
Pursuant to the resolution of the shareholders meeting held on March 30, 2015 the Company designated 500,000 shares
of the preferred authorized shares as preferred shares – Series “B” shares. The preferred shares – Series “B” were assigned the following preferences:
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a)
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Each share to carry one vote.
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b)
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Each share will be redeemable with a 365 days written notice to the company.
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c)
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Each share will be junior to any debt incurred by the Company.
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d)
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The redemption value will be the par value at which such “preferred shares – series B” are bought by the
subscriber.
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e)
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Each share will carry a dividend right at par with the common shares.
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On December 31, 2014 the Company had a Note outstanding in the principal amount of $330,000 plus interest payable to
GS Pharmaceuticals, Inc. By mutual consent this note and accrued interest was converted to 330,000 preferred shares – Series “B”.
On March 31, 2015 an amount of $58,000
was subscribed by Redfield Holdings, Ltd. by cancellation of a Note against
the issuance of 9,700 shares of preferred shares – Series “A”. These shares were issued to Redfield Holding, Ltd. thus making a total of entire designated
preferred shares – Series “A” shares to Redfield Holdings, Ltd. Each share of preferred shares – Series “A” carries voting right equal to 10,000 common shares.
On June 30, 2017 total preferred shares
issued and outstanding are 10,000 Series “A” and 330,000 Series “B”.
On April 2, 2019, in a private transaction the Company accepted a sum of $14,490.00 against issuance of 21,000
restricted Common shares of the Company. Thus the total common shares issued and outstanding as on June 30, 2019 stood at 26,221,000.
NOTE 6 – SUBSEQUENT
EVENT
S
None.
ITEM 2.
MANAGEMENT’S DISCUSSION AND ALALYIS OR PLAN OF OPERATION
THE FOLLOWING DISCUSSION SHOULD BE READ IN CONJUNCTION WITH OUR UNAUDITED FINANCIAL STATEMENT SAND NOTES THERETO
INCLUDED HEREIN. IN CONNECTION WITH, AND BECAUSE WE DESIRE TO TAKE ADVANTAGE OF, THE “SAFE HARBOR” PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995, WE CAUTION READERS REGARDING CERTAIN FORWARD LOOKING STATEMENTS IN THE
FLOWING DISCUSSION AND ELSEWHERE IN THE THIS REPORT AND IN ANY OTHER STATEMENT MADE BY, OR AN BEHALF, WHETHER OR NOT IN FUTURE FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION, FORWARD-LOOKING STATEMENTS ARE STATEMENT NOT BASED ON
HISTORICAL INFORMATION AND WHICH RELATE TO FUTURE OPERATIONS, STRATEGIES, FINANCIAL RESULTS OR OTHER DEVELOPMENTS. FORWARD-LOOKING STATEMENTS ARE NECESSARILY BASED UPON ESTIMATES AND ASSUMPTIONS THAT ARE INHERENTLY SUBJECT TO SIGNIFICANT
BUSINESS, ECONOMIC AND COMPETITIVE UNCERTAINTIES, MANY OF WHICH ARE BEYOND OUR CONTROL AND MANY OF WHICH, WITH RESPECT TO FUTURE BUSINESS DECISIONS, ARE SUBJECT TO CHANGE, THESE UNCERTAINTIES AND CONTINGENCIES CAN AFFECT ACTUAL RESULTS AND
COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FORM THOSE EXPRESSED IN ANY FORWARD-LOOKING STATEMENTS AND COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED IN ANY FORWARD LOOKING STATEMENTS MADE BY, OR ON OUR BEHALF, WE
DIS TO UPDATE FORWARD-LOOKING STATEMENTS.
PLAN OF OPERATION
Accurate Auto Parts, Inc. the Company’s used auto parts subsidiary has made a sale of $79,600 of Automobile Parts and
Services. The Company continues seeking additional sales both in the domestic and international markets.
RESULTS OF OPERATIONS
The Company did recognize revenue for a sum of $147,569 during the six months ended June 30, 2019 and $79,600 of
revenues during the six month ended June 30, 201. While the net revenues for the period ended June 30, 2019 were higher by $ $67,969 than for the same period during 2018 and the Cost of Goods Sold was higher by $42,007 during the period ended
June 30, 2019 as compared to the same period during 2018. This 12.68% increase in cost of goods sold was due to additional labor having been deployed and the training expenses associated thereagainst. The general and administrative expenses
for the period ended June 30 2019 were $103,750 as compared to $13,631 for the same period during 2018. During the period of 2018 the Company was at a pause mode (not making any purchases) because of being uncertain if the bank which
repossessed the premises (due to landlord having filed a bankruptcy) will sell the property to the Company and enable the Company to continue its business. There were only two employees during the period in 2018 who kept the business open.
The level the company has attained at present in its administrative costs could be classified stable and can handle a sales of up to $1,500,000 per annum without any additional administrative expenses. Likewise the professional and financial
expense can be classified as fixed expenses and will not require any significant increase to sustain a $1,000,000 sales.
During the six months ended June 30, 2019 the company recognized a gross profit of $78,286 as compared to $52,323 for
the corresponding period in the year 2018, this decrease of $25,963 in Gross profit equates to approximately 13 % as compared to the six months ended June 2018.
During the six month ended June 30, 2019 the company recognized a net operating loss of $105,522 as compared to a
profit of $21,701 for the corresponding period in the year 2018, this decrease in net operating profit by $127,223 is due to the fact that the fixed administrative, professional and financial expenses were either being incurred at a minimum
level or did not exist. As explained in the foregoing paragraph, the Company in a pause mode.
While the books show an operating net loss of $105,522 the Company has increased its inventory at by $111,101 thus
showing a total inventory at cost of $682,361 as on June 30, 2019 as compared to an inventory at cost for a sum of $571,260 as on December 31, 2018. While the Company cannot predict if this inventory will be sold at the list price which
approximately is three (3) times its book value cost price (it has been calculated at less than 30% of the selling price) but the management is confident that the marked list price of the inventory is realistic with the current market
conditions. The cost of sales is approximately 53% of the sales, thereby leaving an approximately 23% of the list selling price as a hidden value which equates to a minimum of approximately over $500,000.*
The Company began selling on eBay and has now attained a rating of five star (5/5). This excellent rating is based on
review by the customers. Uploading the inventory is a lengthy and slow process (to log on inventory with photographs and price) on the eBay platform. This is being conducted and thus far approximately 9,300 parts are active on eBay and
another 4,000 items are backlogged. The total number of parts targeted to be uploaded are approximately 15,000.
Management has opted to provide for the depreciation of equipment, trucks and building at the end of the year instead
of providing for it on quarterly basis.
*Market conditions may change, which my adversely affect the future results.
LIQUIDITY
THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM’S REPORT ON THE COMPANY’S FINANCIAL STATEMENTS AS OF DECEMBER 31,
2018, AND FOR EACH OF THE PRECEDING YEARS THEN ENDED, INCLUDES A “GOING CONCERN” EXPLANATORY PARAGRAPH THAT DESCRIBES SUBSTANTIALLY DOUBT ABOUT THE COMPANY’S ABILITY TO CONTINUE AS A GOING CONCERN.
BALANCE SHEET
On June 30, 2018 the Company had total current assets of $1,388,254 consisting of $19,115 in cash and $7,723 in trade
receivables, and $573 in Advances for Purchases and $571,260 in inventory and $18,963 in Advance for purchases. As on June 30, 2019 the Company has a total current assets of $1,556,891 consisting of $46,908 in cash and $8,629 in trade
receivables, and $28,879 in Advance for purchases, $14,370 in Advance for product development, $2,123 receivable from subsidiaries and $682,361 in inventory at cost.
The Company increased its Equity Capital by accepting a subscription for a sum of $14,490 against sale of 21,000
restricted shares of common stock thus the issued and outstanding number of shares stood at 26,221,000 as on June 30, 2018 as against 25,200,000 issued and outstanding shares as on December 30, 2018.
EQUITY LINE OF CREDIT
The Company has obtained an equity line of credit from River Valley Bank, additionally personally guaranteed by the
CEO, Mr. Sabir Saleem against which, a sum of $251,000 was drawn as on June 30, 2018. The line of credit is being used for operating expenses, primarily for purchase of inventory.
REVENUE RECOGNITION
The Company recognizes revenues on arrangements in accordance with Securitas and Exchange Commission Staff Accounting
Bulletin Topic 13, REVENUE RECOGNITION and FASB ASC 605-15-25, REVENUE RECONGNITION. In all cases, revenue is recognized only when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service is performed and
collectability is reasonable assured. The Company reported gross revenues of $249,655 for the year ending December 31, 2018.
ITEM 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABUT MARKET RISKS
Not Applicable.
ITEM 4. CONTROLS
AND PROCEURES
Management's Report on Disclosure Controls and Procedures
Management is responsible for establishing and maintaining adequate internal control so as to
(1) maintain the records in reasonable detail, which will accurately and fairly reflect the transactions and
dispositions of the Company's assets;
(2) to provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles, and that the Company's receipts and expenditures are made within the delegated authority ; and
(3) to provide reasonable assurance for the prevention or timely detection of unauthorized acquisition, use or
disposition of the Company's assets that could have a material effect on company’s financial statements.
However, the management asserts that the company does not have any accounting staff due to limited financial
resources though has plans to recruit gradually. Also, this company does not have a well written document on accounting policies and procedures, though has plans to have them shortly. Consequently, this can result in possible errors in the
presentation and disclosure of financial information in our annual, quarterly, and other filings.
The SIC Code of 1700 as showing in Edgar for this company is no longer valid, since this company is now dealing with
the auto parts, as OEM Recycled Auto Parts. Segregation of duties is an important factor in Internal Control. Though it is achieved to a certain extent, the management is committed to strengthen the internal controls effectively in the
coming months.
Changes in Internal Control over Financial Reporting
There have been no changes in our internal controls over financial reporting that occurred during the period ended
June 30, 2019, that have materially or are reasonably likely to materially affect, our internal controls over financial reporting.
PART II – OTHER INFORMATION
ITEM 1. LEGAL
PROCEEDINGS
None.
ITEM 1A. RISK
FACTOR
Not Applicable to Smaller Reporting Companies.
ITEM 2
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
During the period of January 1, 2015 and March 31, 2015, the Company issued 9,700 shares of Preferred Shares – Series
“A” for a sum of $58,000 and 330,000 shares of Preferred Shares – Series “B” for a sum of $330,000 which were the result of conversion of certain debts of the company.
In April 2019 the Company, as a private transaction, issued 21,000 restricted shares of Common Shares for a sum of
$14,490.
ITEM 3. DEFAULTS
UPON SENIOR SECURITIES
None.
ITEM 4. MINE
SAFETY DISCLOSURE
Not Applicable
ITEM 5. OTHER
INFORMATION
Not Applicable
ITEM 6. EXHIBITS
The following exhibits are included with this quarterly filing. Those marked with an asterisk and required to be filed
hereunder, are incorporated by reference and can be found in their entirety in our original Registration Statement on Form S-1, filed under SEC File Number 000-54868, at the SEC website at
www.sec.gov:
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Exhibit No.
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Description
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3.1
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Articles of Incorporation*
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3.2
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Bylaws*
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31.1
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Sec. 302 Certification of Principal Executive Officer
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31.2
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Sec. 302 Certification of Principal Financial Officer
|
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32.1
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Sec. 906 Certification of Principal Executive Officer
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32.2
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Sec. 906 Certification of Principal Financial Officer
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101
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Interactive data files pursuant to Rule 405 of Regulation S-T
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SIGNATURES
Pursuant to the requirements 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.
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Free Flow Inc.
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Registrant
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Dated August 7, 2019
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By: /s/ Sabir Saleem
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Sabir Saleem, Chief Executive Officer,
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Chief Financial and Accounting Officer
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