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Folkup Development Inc. – ‘10-Q’ for 8/31/19

On:  Tuesday, 10/15/19, at 2:24pm ET   ·   For:  8/31/19   ·   Accession #:  1684506-19-15   ·   File #:  333-216921

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  As Of               Filer                 Filing    For·On·As Docs:Size

10/15/19  Folkup Development Inc.           10-Q        8/31/19   38:1M

Quarterly Report   —   Form 10-Q   —   Sect. 13 / 15(d) – SEA’34
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-Q        Quarterly Report                                    HTML    135K 
 2: EX-31.1     Certification -- §302 - SOA'02                      HTML     22K 
 3: EX-32.1     Certification -- §906 - SOA'02                      HTML     15K 
35: R1          Document and Entity Information                     HTML     43K 
22: R2          Balance sheets (Unaudited)                          HTML     71K 
12: R3          Balance sheets (Unaudited) (Parenthetical)          HTML     20K 
28: R4          Statements of operations                            HTML     36K 
36: R5          Statement of changes in stockholders' equity        HTML     38K 
23: R6          Statements of cash flows                            HTML     53K 
13: R7          Organization and Nature of Business                 HTML     18K 
29: R8          Going Concern                                       HTML     17K 
34: R9          Summary of Signifcant Accounting Policies           HTML     44K 
15: R10         Fixed Assets                                        HTML     15K 
18: R11         Loan From Director                                  HTML     16K 
37: R12         Common Stock                                        HTML     25K 
24: R13         Commitments and Contingencies                       HTML     16K 
16: R14         Income Taxes                                        HTML     36K 
19: R15         Subsequent Events                                   HTML     17K 
38: R16         Significant Accounting Policies (Policies)          HTML     44K 
25: R17         Summary of Signifcant Accounting Policies (Tables)  HTML     17K 
14: R18         Income Taxes (Tables)                               HTML     34K 
20: R19         Going Concern (Details Text)                        HTML     14K 
31: R20         Summary of Signifcant Accounting Policies (Details  HTML     15K 
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26: R21         Fixed Assets (Details Text)                         HTML     14K 
10: R22         Loan From Director (Details Text)                   HTML     17K 
21: R23         Common Stock (Details Text)                         HTML     14K 
32: R24         Income Taxes (Details 1)                            HTML     19K 
27: R25         Income Taxes (Details 2)                            HTML     20K 
11: R26         Income Taxes (Details Text)                         HTML     21K 
33: XML         IDEA XML File -- Filing Summary                      XML     61K 
30: EXCEL       IDEA Workbook of Financial Reports                  XLSX     27K 
 4: EX-101.INS  XBRL Instance -- none-20190831                       XML    255K 
 6: EX-101.CAL  XBRL Calculations -- none-20190831_cal               XML     19K 
 7: EX-101.DEF  XBRL Definitions -- none-20190831_def                XML     47K 
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 9: EX-101.PRE  XBRL Representation File -- none-20190831_pre        XML    178K 
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17: ZIP         XBRL Zipped Folder -- 0001684506-19-000015-xbrl      Zip     32K 


‘10-Q’   —   Quarterly Report


This is an HTML Document rendered as filed.  [ Alternative Formats ]



UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarter ended: August 31, 2019

OR

[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from ___________ to____________

 

Commission File Number: 333-216921

FOLKUP DEVELOPMENT INC.

 

(Exact name of registrant as specified in its charter)

 

Nevada

(State or Other Jurisdiction of Incorporation or Organization)

 

32-0499929

IRS Employer Identification Number

3799

Primary Standard Industrial Classification Code Number

 

Mileve Maric Ajnstajn 72,

Novi Beograd, Republic of Serbia 11070

Tel.  (315) 359-5955

Email: folkupdevelopment@gmail.com

(Address and telephone number of principal executive offices)

 

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

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

Large accelerated filer o

Accelerated filer o

Non-accelerated filer x

Emerging growth company x

Smaller reporting company x

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. [ ]

 

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

Yes [  ] No [X]

 

As of October 15, 2019, there were 3,800,000 shares outstanding of the registrant’s common stock.


 

 

 

 

 

 

 

Page

 

 

PART I

 FINANCIAL INFORMATION:

 

 

 

 

Item 1.

Financial Statements

3

 

 

 

 

Balance Sheets as of August 31, 2019 (unaudited) and November 30, 2018

4

 

 

 

 

Statements of Operations for the three and nine months ended August 31, 2019 and 2018 (unaudited)

5

 

 

 

 

Statement of Changes in Stockholders’ Equity for the three and nine months ended August 31, 2019 and 2018 (unaudited)  

6

 

 

 

 

Statements of Cash Flows for the nine months ended August 31, 2019 and 2018 (unaudited)

7

 

 

 

 

Notes to the Financial Statements (unaudited)

8

 

 

 

Item 2.

 

Management’s Discussion and Analysis of Financial Condition and

Results of Operations

11

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

14

 

 

 

Item 4.

Controls and Procedures

14

 

 

 

PART II

OTHER INFORMATION:

 

 

 

 

Item 1.

Legal Proceedings

15

 

 

 

Item 1A

Risk Factors

15

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

15

 

 

 

Item 3.

Defaults Upon Senior Securities

15

 

 

 

Item 4.

Mine Safety Disclosure.

15

 

 

 

Item 5.

Other Information

15

 

 

 

Item 6.

Exhibits

15

 

 

 

 

 Signatures

16

 

 


2

 

 

 

 

PART I – FINANCIAL INFORMATION

 

Item 1. Financial statements

 

The accompanying interim financial statements of FOLKUP DEVELOPMENT INC. (the “Company”), have been prepared without audit pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with United States generally accepted principles have been condensed or omitted pursuant to such rules and regulations.

 

The interim financial statements are condensed and should be read in conjunction with the company’s latest annual financial statements.

 

In the opinion of management, the financial statements contain all material adjustments, consisting only of normal adjustments considered necessary to present fairly the financial condition, results of operations, and cash flows of the Company for the interim periods presented.


 

 

 

 

 

 

 

 

 

3

 

 

 


FOLKUP DEVELOPMENT INC.

Balance sheets

AS OF AUGUST 31, 2019

 

 

 

 

ASSETS

 

(Unaudited)

August 31, 2019

(Audited)

November 30, 2018

Current Assets

 

 

 

Cash and cash equivalents

$

14,142

$                       33,388

Accounts Receivable

 

-

2,415

Total Current Assets

 

14,142

35,803

Fixed Assets

 

 

 

Equipment, net

 

-

780

Total Fixed Assets

 

-

780

 

 

 

 

Total Assets

$

14,142

$                       36,583

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Liabilities

 

 

 

Current Liabilities

 

 

 

Accounts Payable

$

-

$                         4,395

   Related Party Loans

 

29,955

17,960

Total Current Liabilities

 

29,955

22,355

 

 

 

 

Total Liabilities

 

29,955

22,355

 

 

 

 

Commitments and Contingencies

 

-

-

 

 

 

 

Stockholders’ Equity

 

 

 

Common stock, par value $0.001; 75,000,000 shares authorized, 3,800,000 and 3,800,000 shares issued and outstanding accordingly

 

3,800

3,800

Additional paid in capital

 

23,200

23,200

Accumulated deficit

 

(42,813)

(12,772)

Total Stockholders’ Equity

 

(15,813)

14,228

 

 

 

 

Total Liabilities and Stockholders’ Equity

$

14,142

$                       36,583

 

 

 

 

 

 

 

See accompanying notes, which are an integral part of these financial statements


4

 

 

 

 

 


FOLKUP DEVELOPMENT INC.

Statements of operations

THREE AND NINE MONTHS ENDED AUGUST 31, 2019 AND 2018

(Unaudited)

 

 

 

 

Three months ended August 31, 2019

Three months ended August 31, 2018

Nine months ended August 31, 2019

Nine months ended August 31, 2018

OPERATING EXPENSES

 

 

 

 

 

General and Administrative Expenses

$

3,067

$               3,005

$             12,041

$             9,934

Consulting Expenses

$

18,000

$                      -

             18,000

$                    -

TOTAL OPERATING EXPENSES

 

(21,067)

(3,005)

(30,041)

(9,934)

 

 

 

 

 

 

NET LOSS FROM OPERATIONS

 

(21,067)

(3,005)

(30,041)

(9,934)

 

 

 

 

 

 

PROVISION FOR INCOME TAXES

 

-

-

-

-

 

 

 

 

 

 

NET LOSS

$

(21,067)

$             (3,005)

$           (30,041)

$          (9,934)

 

 

 

 

 

 

NET LOSS PER SHARE: BASIC AND DILUTED

 

$

(0.01)

$               (0.00)

$               (0.01)

$            (0.00)

 

 

 

 

 

 

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: BASIC AND DILUTED

 

3,800,000

3,800,000

3,800,000

3,609,142

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying notes, which are an integral part of these financial statements


5

 

 

 

 


FOLKUP DEVELOPMENT INC.

Statement of changes in stockholders’ equity

THREE AND NINE MONTHS ENDED AUGUST 31, 2019 AND 2018

(Unaudited)

 

 

Common Stock

 

Additional Paid-in

Accumulated

Total Stockholders’

 

Shares

Amount

Capital

Deficit

Equity

 

 

Balance, November 30, 2017

3,085,000

3,085

2,465

(1,566)

3,984

Shares issued

715,000

715

20,735

-

-

Balance, May 31, 2018

3,800,000

$    3,800

$         23,200

$           (8,495)

$             18,505

Shares issued

-

-

-

-

-

Net loss for the nine months ended August 31, 2018

-

-

-

            (9,934)

              (9,934)

Net loss for the three months ended August 31, 2018

-

-

-

        (3,005)

     (3,005)

Balance, August 31, 2018

3,800,000

$    3,800

$         23,200

$          (11,500)

$          15,500

Balance, November 30, 2018

3,800,000

$    3,800

$         23,200

$          (12,772)

$             14,228

Shares issued

-

-

-

-

-

Balance, May 31, 2019

3,800,000

$    3,800

$         23,200

$          (21,746)

$             5,254

Shares issued

-

-

-

-

-

Net loss for the nine months ended August 31, 2019

-

-

-

(30,041)

(30,041)

Net loss for the three months ended August 31, 2019

-

-

-

(21,067)

(21,067)

Balance, August 31, 2019

3,800,000

$    3,800

$         23,200

$          (42,813)

$          (15,813)

 


 

 

See accompanying notes, which are an integral part of these financial statements

 

6

 

 

 

 

 

 


FOLKUP DEVELOPMENT INC.

Statements of cash flows

NINE MONTHS ENDED AUGUST 31, 2019 AND 2018

(Unaudited)

 

Nine months ended

August 31, 2019

Nine months ended

August 31, 2018

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

Net loss for the period

$                      (30,041)

$                      (9,934)

Adjustments to reconcile net loss to net cash (used in) operating activities:

 

 

Decrease in Accounts Receivable

2,415

-

Decrease in Accounts Payable

(4,395)

-

Retirement of Equipment  

720

-

Depreciation Expense

60

180

CASH FLOWS USED IN OPERATING ACTIVITIES

(31,241)

(6,754)

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

Proceeds from Related Party Loans

11,995

7,045

Proceeds from sale of common stock

-

21,450

CASH FLOWS PROVIDED BY FINANCING ACTIVITIES

11,995

28,495

 

 

 

NET DECREASE/INCREASE IN CASH

(19,246)

18,741

 

 

 

Cash, beginning of period

33,388

12,679

 

 

 

Cash, end of period

$                            14,142

$                            31,420

 

 

 

SUPPLEMENTAL CASH FLOW INFORMATION:

 

 

Interest paid

$                                     0

$                                     0

Income taxes paid

$                                     0

$                                     0

 

 

 

 

 

 

 

See accompanying notes, which are an integral part of these financial statements


 

 

 

7

 

 


FOLKUP DEVELOPMENT INC.

Notes to the unaudited financial statements

AUGUST 31, 2019

 

Note 1 – ORGANIZATION AND NATURE OF BUSINESS

 

FOLKUP DEVELOPMENT INC. (the Company, “we”, “us” or “our”) was incorporated in the State of Nevada on July 5, 2016. We aim to deliver our services as follows, to lease and sell to our customers certain items or means of what we refer to as eco-transport. These items are commonly known under the names: a segway, a gyro-scooter or a self-balanced two-wheeled scooter, a self-balanced mono-wheeled scooter and a two-wheeled hoverboard. We expect our services to be demanded by establishments or enterprises or events, for instance, conferences held in large facilities. The business location is in Beograd, Republic of Serbia.

 

Note 2 – GOING CONCERN

 

The accompanying financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern. The Company generated no revenues for the nine months ended August 31, 2019. The Company currently has losses and has not completed its efforts to establish a stabilized source of revenues sufficient to cover operating costs over an extended period of time. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. Management anticipates that the Company will be dependent, for the near future, on additional investment capital to fund operating expenses. Management evaluates that lack of revenues can affect to the entity’s ability to meet its obligations. The ability of the Company to mitigate the conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern is dependent on management’s plans, which include further implementation of its business plan. The Company intends to position itself so that it will be able to raise additional funds through the capital markets. In light of management’s efforts, there are no assurances that the Company will be successful in this or any of its endeavors or become financially viable and continue as a going concern.

 

Note 3 – SUMMARY OF SIGNIFCANT ACCOUNTING POLICIES

 

Basis of presentation

The accompanying financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America. The Company’s yearend is November 30.

 

Use of Estimates

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

 

Cash and Cash Equivalents

The Company considers all highly liquid investments with the original maturities of three months or less to be cash equivalents. The Company had $14,142 of cash as of August 31, 2019 and $33,388 as of November 30, 2018.

 

Depreciation, Amortization, and Capitalization

The Company records depreciation and amortization when appropriate using straight-line balance method over the estimated useful life of the assets. We estimate that the useful life of sport equipment is five years. Expenditures for maintenance and repairs are charged to expense as incurred. Additions, major renewals and replacements that increase the property's useful life are capitalized. Property sold or retired, together with the related accumulated depreciation is removed from the appropriated accounts and the resultant gain or loss is included in net income.

 

Income Taxes

Income taxes are computed using the asset and liability method.  Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws.  A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.


8

 

 


FOLKUP DEVELOPMENT INC.

Notes to the unaudited financial statements

AUGUST 31, 2019

 

Fair Value of Financial Instruments

AS topic 820 "Fair Value Measurements and Disclosures" establishes a three-tier fair value hierarchy, which prioritizes the inputs in measuring fair value. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market.

 

These tiers include:

Level 1:

defined as observable inputs such as quoted prices in active markets;

Level 2:

defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and

Level 3:

defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

 

The carrying value of cash and the Company’s loan from shareholder approximates its fair value due to their short-term maturity.

 

Basic Income (Loss) Per Share

The Company computes income (loss) per share in accordance with FASB ASC 260 “Earnings per Share”. Basic loss per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted income (loss) per share gives effect to all dilutive potential common shares outstanding during the period.  Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive. As of August 31, 2019 and November 30, 2018 there were no potentially dilutive debt or equity instruments issued or outstanding.  

 

Revenue Recognition

The Company recognizes revenue in accordance with Accounting Standards Codification (ASC) 606, Revenue from Contracts. ASC 606 creates a five-step model that requires entities to exercise judgment when considering the terms of contracts, which includes (1) identifying the contracts or agreements with a customer, (2) identifying our performance obligations in the contract or agreement, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied. For the nine months ended August 31, 2019 the Company has generated no revenue.

 

Stock-Based Compensation

Stock-based compensation is accounted for at fair value in accordance with ASC Topic 718.  To date, the Company has not adopted a stock option plan and has not granted any stock options.

 

Recent Accounting Pronouncements

We have reviewed all the recently issued, but not yet effective, accounting pronouncements and we do not believe any of these pronouncements will have a material impact on the Company.

 

Note 4 – FIXED ASSETS

 

As of August 31, 2019 the Company purchased 2 monowheels for $1,200, which were retired and removed.

 

Note 5 – LOAN FROM DIRECTOR

 

For the nine months ended August 31, 2019, our sole director has loaned to the Company $11,995. Loan is unsecured, non-interest bearing and due on demand. The balance due to the director was $29,955 as of August 31, 2019.

 

Note 6 – COMMON STOCK

 

The Company has 75,000,000, $0.001 par value shares of common stock authorized.

 

There were 3,800,000 shares of common stock issued and outstanding as of August 31, 2019.


9

 

 


FOLKUP DEVELOPMENT INC.

Notes to the unaudited financial statements

AUGUST 31, 2019

 

Note 7 – COMMITMENTS AND CONTINGENCIES

 

Milena Topolac Tomovic, our sole officer and director, has agreed to provide the premises under the office needs for free use. Office location is Mileve Maric Ajnstajn 72, 11070 Novi Beograd, Republic of Serbia.

 

Note 8 – INCOME TAXES

 

The Company adopted the provisions of uncertain tax positions as addressed in ASC 740-10-65-1. As a result of the implementation of ASC 740-10-65-1, the Company recognized no increase in the liability for unrecognized tax benefits. As of August 31, 2019 the Company had net operating loss carry forwards of $42,813 that may be available to reduce future years’ taxable income in varying amounts through 2031. Future tax benefits which may arise as a result of these losses have not been recognized in these financial statements, as their realization is determined not likely to occur and accordingly, the Company has recorded a valuation allowance for the deferred tax asset relating to these tax loss carry-forwards. The valuation allowance at August 31, 2019 was approximately $8,991. The net change in valuation allowance during the nine months ended August 31, 2019 was $6,309. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred income tax assets will not be realized. 

 

The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred income tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based on consideration of these items, management has determined that enough uncertainty exists relative to the realization of the deferred income tax asset balances to warrant the application of a full valuation allowance as of August 31, 2019. All tax years since inception remains open for examination by taxing authorities.

 

The provision for Federal income tax consists of the following: 

 

 

 

As of August 31, 2019

As of November  30, 2018

 

Non-current deferred tax assets:

 

 

 

 

Net operating loss carry forward

$

(8,991)

(2,682)

 

Valuation allowance

$

8,991

2,682

 

Net deferred tax assets

$

-

-

 

 

 

The actual tax benefit at the expected rate of 21% differs from the expected tax benefit for the nine months ended August 31, 2019 as follows:

 

 

Nine months ended

August 31, 2019

Nine months ended

August 31, 2018

Computed “expected” tax expense (benefit)

 

$

(6,309)

(2,086)

Change in valuation allowance

$

6,309

2,086

Actual tax expense (benefit)

$

-

-

 

 

Note 9 – SUBSEQUENT EVENTS

 

In accordance with SFAS 165 (ASC 855-10) the Company has analyzed its operations subsequent to August 31, 2019 to the date these financial statements were issued, and has determined that it does not have any material subsequent events to disclose in these financial statements.


10

 


Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

This quarterly report and other reports filed by FOLKUP DEVELOPMENT INC. (“we,” “us,” “our,” or the “Company”), from time to time contain or may contain forward-looking statements and information that are based upon beliefs of, and information currently available to, the Company’s management as well as estimates and assumptions made by Company’s management. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. When used in the filings, the words “anticipate,” “believe,” “estimate,” “expect,” “future,” “intend,” “plan,” or the negative of these terms and similar expressions as they relate to the Company or the Company’s management identify forward-looking statements. Such statements reflect the current view of the Company with respect to future events and are subject to risks, uncertainties, assumptions, and other factors. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned.

 

Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, levels of activity, performance, or achievements. Except as required by applicable law, including the securities laws of the United States, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results.

 

Our financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). These accounting principles require us to make certain estimates, judgments, and assumptions. We believe that the estimates, judgments, and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments, and assumptions are made. These estimates, judgments, and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenues and expenses during the periods presented. Our financial statements would be affected to the extent there are material differences between these estimates.

 

DESCRIPTION OF BUSINESS

 

We aim to deliver our products and services as follows, to lease and sell to our customers’ certain items or means of what we refer to as eco-transport. These items are commonly known under the names: a segway, a gyro-scooter or a self-balanced two-wheeled scooter, a self-balanced mono-wheeled scooter and a two-wheeled hoverboard. We expect our products and services to be demanded by establishments or enterprises or events, for instance, conferences held in large facilities, or touristic agencies and other establishments or organizations that face the problem of covering large distances by employees or visitors of theirs.

 

Our business address was provided by our registered agent and located at Mileve Maric Ajnstajn 72, Novi Beograd, Republic of Serbia 11070. Our telephone number is (315) 359-5955. Our plan of operations is forward-looking and there is no assurance that we will ever reach profitable operations. We have generated no revenue for the six months ended May 31, 2019. It is likely that we will not be able to achieve profitability and would be forced to cease operations due to the lack of funding.

 

Business

 

We are a company currently undergoing the stage of development. We plan to sell or lease means of ecological urban transportation to companies arranging events, such as exhibitions of any kind or conferences, where these means mentioned above can be used by the spectators to move around the facilities. We also expect medium sized production companies to lease our equipment for their employees to move around the warehouses or around the territory where it doesn't violate safety rules. Construction companies may lease or obtain our equipment to provide with it monitoring committees or authorities arriving with inspection, as well as superintendant workers. We expect that the use of ecological means of transportation may help employees of business entities or customers of event organizations to become more mobile, or to be able to cover larger distances in shorter terms of time. At an event occasion these items of transportation can also be used in additional advertising purposes to attract wider group of customers by being up-to-date or as advertising means, with promotional stickers being placed on them. At the same time, inspecting authorities may be able to complete their task of inspection in less amount of time, thus becoming more effective. We plan to offer our services to airports, where they will be able to lease those units to passengers who are in a rush to their terminals, the ones who want to avoid the fatigue after covering large distances between terminals, or the ones with troubles to walk. We also hope that hospitals may turn to us, as in some cases there are patients with restricted mobility who do not require a wheelchair but still face difficulties to walk. Those who did not suffer brain disorders and maintain their


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balance might use gyro transportation to move around the hospital territory or facilities. Amusement parks may acquire such means of transportation to lease them to their visitors. We expect our gyro vehicles to be demanded by the touristic companies that arrange city tours, thus creating an alternative to walking tours and bus tours. To make our interaction with customers more effective we plan to grant every customer a free training course on how to drive the gyro vehicles and maintain them, what issues may happen due to misuse and how to prevent them, as well as fix minor issues. As an additional service we might collect the sold items to be repaired and find the licensed repair shop on behalf of our customers, while providing a substitute unit instead.

 

Customers

 

We expect our potential customers to be business entities performing jobs at, or providing services at, or maintaining the services or premises of museums, exhibition centres, trade centres, shopping malls, entertainment centres, amusement parks, local parks, construction sites, hospitals or airports. We also may lease the gyro-transportation units to groups of individuals if they apply for it.

 

Marketing

 

Our steps are likely to be as follows:

- organize free exhibitions and workshops for potential customers;

- take part in the exhibitions and workshops that our potential customers may have interest in;

- to pay for the web banners on the websites where our potential customers might see our advertisement.

- to release printed advertisement in magazines.

- to order shooting of promotional videos from advertising agencies.

- to pay for the SEO (search engine optimization), which helps us to take place in the top of search inquiries.

- branding the gyro-vehicles to the needs of customers, by placing stickers or painting the colors to match the brand identity;

During our marketing campaign we plan to highlight the ability to be more mobile and efficient and to demonstrate this we plan to invite guest stars to take part in our promotional videos.

 

Competition

 

We believe that narrowing to a very certain groups of customers, by which we mean small or medium business entities, can help us to target them more precisely. Understanding the needs of our customers will help us to avoid storing a huge amount of various transportation models, but only a few varieties. The same types of gyro vehicles can be shipped to museums, exhibition centres and airports, whereas a second different type will meet the needs of construction sites, warehouses and small factories. The third sort of vehicles will suit the needs of open space establishments like parks.

 

Revenue

 

We expect to have two main income streams: the money that we are likely to receive after:

a) selling or

b) leasing the eco-transportation units.

 

Insurance

 

We do not maintain any insurance and do not intend to maintain insurance in the future. Because we do not have any insurance, if we are made a party of a products liability action, we may not have sufficient funds to defend the litigation. If that occurs a judgment could be rendered against us that could cause us to cease operations.

 

Employees; Identification of Certain Significant Employees.

 

We are a startup company and currently do not have employees other than Milena Topolac Tomovic, our sole officer and director. We intend to hire employees on an as needed basis.

 

Offices

 

Our business address is at Mileve Maric Ajnstajn 72, Novi Beograd, Republic of Serbia 11070. This address was provided by our registered agent service. We do not pay any lease and there is no agreement to pay any lease in the future. Our telephone number is (315) 359-5955.


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Government Regulation

 

We will be required to comply with all regulations, rules, and directives of governmental authorities and agencies applicable to our business in any jurisdiction which we would conduct activities. We do not believe that regulation will have a material impact on the way we conduct our business.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

Results of Operations for the three and nine months ended August 31, 2019 and 2018:

 

Revenue and cost of goods sold

 

For the three month period ended August 31, 2019 the Company generated no revenue from selling or leasing means of ecological urban transportation.

 

For the three month period ended August 31, 2018 the Company generated no revenue from selling or leasing means of ecological urban transportation.

 

For the nine month period ended August 31, 2019 the Company generated no revenue from selling or leasing means of ecological urban transportation.

 

For the nine month period ended August 31, 2018 the Company generated no revenue from selling or leasing means of ecological urban transportation.

 

Operating expenses

 

Total operating expenses for the three month period ended August 31, 2019 were $21,067. The operating expenses included audit fees of $2,000; consulting service fees of $18,000; professional fees of $1,067. Total operating expenses for the three month period ended August 31, 2018 were $3,005.

 

Total operating expenses for the nine month period ended August 31, 2019 were $30,041. The operating expenses included retired property of $720; depreciation of $60; audit fees of $9,600; consulting service fees of $18,000; professional fees of $1,661. Total operating expenses for the nine month period ended August 31, 2018 were $9,934.

 

The increase in operating expenses was caused by the signing a consulting agreement on July 15, 2019.

 

Net Loss

 

The net loss for the three months period ended August 31, 2019 and 2018 was $21,067and loss $3,005 respectively.

 

The net loss for the nine months period ended August 31, 2019 and 2018 was $30,041 and loss $9,934 respectively.

 

Liquidity and Capital Resources and Cash Requirements

 

At August 31, 2019, the Company had cash of $14,142 ($33,388 as of November 30, 2018). Furthermore, the Company had a working deficit of $15,813 (working capital of $13,448 as of November 30, 2018).

 

At August 31, 2018, the Company had cash of $31,420. Furthermore, the Company had a working capital of $14,660.


During the nine month period ended August 31, 2019, the Company used $31,241 of cash in operating activities due to its net loss, decrease in accounts receivable of $2,415; decrease in accounts payable of $4,395; disposal of equipment of $720 and depreciation of $60.  

 

During the nine month period ended August 31, 2018, the Company used $9,754 of cash in operating activities due to its net loss and depreciation of $180.

 


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During the nine month period ended August 31, 2019, the Company used no cash in investing activities.

 

During the nine month period ended August 31, 2018, the Company used no cash in investing activities.

 

During the nine month period ended August 31, 2019, the Company generated $11,995 of cash in financing activities on account of director's loans.

 

During the nine month period ended August 31, 2018, the Company generated $28,495 cash in financing activities.

 

We are attempting to raise funds to proceed with our plan of operations. We will have to utilize funds from Milena Topolac Tomovic, our sole officer and director, who has verbally agreed to loan the Company funds to complete the registration process if offering proceeds are less than registration costs. However, Ms. Topolac Tomovic has no formal commitment, arrangement or legal obligation to advance or loan funds to the Company. Ms. Topolac Tomovic’s verbal agreement to provide us loans for registration costs is non-binding and discretionary. If we are successful, any money raised will be applied to the items set forth in the Use of Proceeds section of this prospectus. We will attempt to raise at least the minimum funds necessary to proceed with our plan of operations. In the long term we may need additional financing. We do not currently have any arrangements for additional financing. Obtaining additional funding will be subject to a number of factors, including general market conditions, investor acceptance of our business plan and initial results from our business operations. These factors may impact the timing, amount, terms or conditions of additional financing available to us. There is no assurance that any additional financing will be available or if available, on terms that will be acceptable to us.

 

No substantial revenues are anticipated until we have completed the financing from this offering and implemented our plan of operations. We must raise cash to implement our strategy and stay in business. The amount of the offering will likely allow us to operate for at least one year and have the capital resources required to cover the material costs with becoming a publicly reporting.

 

The Company will have to meet all the financial disclosure and reporting requirements associated with being a publicly reporting company. The Company’s management will have to spend additional time on policies and procedures to ensure it is compliant with various regulatory requirements, especially that of Section 404 of the Sarbanes-Oxley Act of 2002. This additional corporate governance time required of management could limit the amount of time management has to implement is business plan and impede the speed of its operations.

 

Off-Balance Sheet Arrangements

 

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

 

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

 

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, we are not required to provide information required by this Item.

 

Item 4. Controls and Procedures.

 

Disclosure Controls and Procedures

 

We maintain disclosure controls and procedures, as defined in Rule 13a‐15(e) promulgated under the Securities Exchange Act of 1934 (the "Exchange Act"), that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

 

We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures as of August 31, 2019. Based on the evaluation of these disclosure controls and procedures, and in light of the material


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weaknesses found in our internal controls over financial reporting, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective.

 

Changes in Internal Controls over Financial Reporting

 

There has been no change in our internal control over financial reporting occurred during our first fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

PART II.  OTHER INFORMATION

 

Item 1.

LEGAL PROCEEDINGS

 

During the past ten years, none of the following occurred with respect to the President of the Company: (1) any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; (2) any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); (3) being subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of any competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting her involvement in any type of business, securities or banking activities; and (4) being found by a court of competent jurisdiction (in a civil action), the SEC or the commodities futures trading commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated.

 

We are not currently a party to any legal proceedings, and we are not aware of any pending or potential legal actions.

 

Item 1A.

RISK FACTORS

 

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, we are not required to provide information required by this Item.

 

Item 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

No unregistered sales of equity securities took place during the nine months ended August 31, 2019.

 

Item 3.

DEFAULTS UPON SENIOR SECURITIES

 

There were no senior securities issued and outstanding during the nine months ended August 31, 2019.

 

Item 4.

MINE SAFETY DISCLOSURE

 

Not applicable to our Company.

 

Item 5.

OTHER INFORMATION

 

There is no other information required to be disclosed under this item which was not previously disclosed.

 

Item 6.

EXHIBITS

 

The following exhibits are included as part of this report by reference:

 

Exhibit No.

 

Description

31.1 

 

Certification of Chief Executive Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(a) or 15d-14(a).

 

 

 

32.1 

 

Certification pursuant to Securities Exchange Act of 1934 Rule 13a-14(b) or 15d-14(b) and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002.


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SIGNATURES

 

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Belgrad, Republic of Serbia, on October 15, 2019.

 

 

FOLKUP DEVELOPMENT INC.

 

 

 

 

 

 

 

By:

/s/

Milena Topolac Tomovic

 

 

 

Name:

Milena Topolac Tomovic

 

 

 

Title:

President, Treasurer and Secretary

 

 

 

(Principal Executive, Financial and Accounting Officer)


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 C: 

Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘10-Q’ Filing    Date    Other Filings
Filed on:10/15/19
For Period end:8/31/19
7/15/19
5/31/1910-Q
11/30/1810-K,  8-K
8/31/1810-Q
5/31/1810-Q
11/30/17NT 10-K,  NT 10-Q
7/5/16
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