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As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 7/09/21 Triccar Inc. 10-Q 9/30/20 32:1.4M Secs Transfer Corp./FA |
Document/Exhibit Description Pages Size
1: 10-Q Quarterly Report HTML 285K
8: R1 Cover HTML 66K
9: R2 Consolidated Balance Sheets HTML 57K
10: R3 Consolidated Balance Sheets (Parenthetical) HTML 29K
11: R4 Consolidated Statements of Operations HTML 46K
12: R5 Consolidated Statements of Cash Flows HTML 47K
13: R6 Consolidated Statement of Changes in Stockholders' HTML 55K
Equity
14: R7 Basis of Presentation HTML 15K
15: R8 Business Activities HTML 20K
16: R9 Going Concern HTML 16K
17: R10 Summary of Selected Accounting Policies HTML 23K
18: R11 Commitments and Contingencies HTML 14K
19: R12 Other Income HTML 13K
20: R13 Equity HTML 17K
21: R14 Related Party Transactions HTML 15K
22: R15 Subsequent Events HTML 15K
23: R16 Summary of Selected Accounting Policies (Policies) HTML 40K
24: R17 Business Activities (Details Narrative) HTML 25K
25: R18 Summary of Selected Accounting Policies (Details HTML 13K
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26: R19 Other Income (Details Narrative) HTML 12K
27: R20 Equity (Details Narrative) HTML 27K
28: R21 Subsequent Events (Details Narrative) HTML 12K
30: XML IDEA XML File -- Filing Summary XML 51K
7: XML XBRL Instance -- triccar10q_htm XML 272K
29: EXCEL IDEA Workbook of Financial Reports XLSX 32K
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
| i ☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended i September 30, 2020
OR
| i ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission File No. i 000-55825
(Exact name of registrant as specified in its charter)
| i Nevada | i 84-4250492 | |
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
|
|
i 71101 | |
| (Address of Principal Executive Offices) | (Zip Code) |
(Registrant’s telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) |
Name of each exchange on which registered |
| i Common Stock, $0.0001 par value per share | i TCCR | i NONE |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ i No ☒
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ☐ i No ☒
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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated Filer ☐ | Smaller reporting company i ☒ |
| Accelerated Filer ☐ | Emerging growth company i ☐ |
| i Non-accelerated Filer ☒ |
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 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ i No ☒
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
As of July 9, 2021 there were shares of Class A common stock outstanding.
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TRICCAR, INC.
Index
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PART 1 — FINANCIAL INFORMATION
TRICCAR, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
| September 30, 2020 | December 31, 2019 | |||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash | $ | i 3,831 | $ | i 29,467 | ||||
| Total current assets | i 3,831 | i 29,467 | ||||||
| Total assets | $ | i 3,831 | $ | i 29,467 | ||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ | i 168,411 | $ | i — | ||||
| Accrued liabilities | i 48,830 | i 32,491 | ||||||
| Total current liabilities | i 217,241 | i 32,491 | ||||||
| Total Liabilities | i 217,241 | i 32,491 | ||||||
| Commitments and Contingencies | ||||||||
| Stockholders’ Deficit: | ||||||||
| Preferred stock $ par value; authorized shares with outstanding as September 30, 2020 and December 31, 2019 | i — | i — | ||||||
| Common stock- Class A $ par value; authorized shares with shares issued and outstanding at December 31, 2019 | — | i 525 | ||||||
| Common stock- Class B $ par value; authorized shares with shares issued and outstanding at December 31, 2019 | — | i 275 | ||||||
| Common stock- Class A $ par value; authorized shares with shares issued and outstanding at September 30, 2020 | i 7,250 | — | ||||||
| Common stock- Class B $ par value; authorized shares with shares issued and outstanding at September 30, 2020 | i 2,750 | — | ||||||
| Additional paid-in capital | i — | i 101,401 | ||||||
| Accumulated deficit | ( i 223,410 | ) | ( i 105,225 | ) | ||||
| Total stockholders’ deficit | ( i 213,410 | ) | ( i 3,024 | ) | ||||
| Total Liabilities and Stockholders’ Deficit | $ | i 3,831 | $ | i 29,467 | ||||
The accompanying notes are an integral part of these consolidated financial statements.
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TRICCAR, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
| September 30, 2020 | September 30, 2019 | September 30, 2020 | September 30, 2019 | |||||||||||||
| Revenue, net of discounts | $ | i — | $ | i — | $ | i — | $ | i — | ||||||||
| Costs and expenses: | ||||||||||||||||
| General and administrative | i 7,384 | i 15,385 | i 54,050 | i 58,395 | ||||||||||||
| Total costs and expenses | i 7,384 | i 15,385 | i 54,050 | i 58,395 | ||||||||||||
| Operating loss | ( i 7,384 | ) | ( i 15,385 | ) | ( i 54,050 | ) | ( i 58,395 | ) | ||||||||
| Other (income) expense: | ||||||||||||||||
| Other income (Note 6) | i — | i — | ( i 10,000 | ) | i — | |||||||||||
| Interest expense | i — | i — | i — | i — | ||||||||||||
| Loss before provision for income taxes | ( i 7,384 | ) | ( i 15,385 | ) | ( i 44,050 | ) | ( i 58,395 | ) | ||||||||
| Provision for income taxes | i — | i — | i — | i — | ||||||||||||
| Net loss | $ | ( i 7,384 | ) | $ | ( i 15,385 | ) | $ | ( i 44,050 | ) | ( i 58,395 | ) | |||||
| Net loss per common share – basic: | $ | ( i 0.00 | ) | $ | ( i 0.00 | ) | $ | ( i 0.00 | ) | $ | ( i 0.00 | ) | ||||
| Weighted Average Common Shares Outstanding: | ||||||||||||||||
| Basic | i 100,000,000 | i 79,899,027 | i 93,333,333 | i 79,899,027 | ||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
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TRICCAR, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
The accompanying notes are an integral part of these consolidated financial statements.
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| 5 |
TRICCAR, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2020
(UNAUDITED)
| Additional | Total | |||||||||||||||||||||||||||
| Common Stock Class A | Common Stock Class B | Paid-In | Accumulated | Stockholders’ | ||||||||||||||||||||||||
| Shares | Par Value | Shares | Par Value | Capital | Deficit | Equity (Deficit) | ||||||||||||||||||||||
| Balance December 31, 2018 of TRICCAR Holdings, Inc. | i 52,376,527 | $ | i 524 | i 27,500,000 | $ | i 275 | $ | i 23,402 | $ | ( i 16,047 | ) | $ | i 8,154 | |||||||||||||||
| Net Loss | — | i — | — | i — | i — | ( i 16,871 | ) | $ | ( i 16,871 | ) | ||||||||||||||||||
| Balance March 31, 2019 of TRICCAR Holdings, Inc. | i 52,376,527 | $ | i 524 | i 27,500,000 | $ | i 275 | $ | i 23,402 | $ | ( i 32,918 | ) | $ | ( i 8,717 | ) | ||||||||||||||
| Issuance of company's common stock | i 45,000 | i — | i — | i — | i 30,500 | i — | $ | i 30,500 | ||||||||||||||||||||
| Net Loss | — | i — | — | i — | i — | ( i 26,140 | ) | $ | ( i 26,140 | ) | ||||||||||||||||||
| Balance June 30, 2019 of TRICCAR Holdings, Inc. | i 52,421,527 | $ | i 524 | i 27,500,000 | $ | i 275 | $ | i 53,902 | $ | ( i 59,058 | ) | $ | ( i 4,357 | ) | ||||||||||||||
| Net Loss | — | i — | — | i — | i — | ( i 15,385 | ) | ( i 15,385 | ) | |||||||||||||||||||
| Balance September 30, 2019 of TRICCAR Holdings, Inc. | i 52,421,527 | $ | i 524 | i 27,500,000 | $ | i 275 | $ | i 53,902 | $ | ( i 74,443 | ) | $ | ( i 19,742 | ) | ||||||||||||||
| Balance December 31, 2019 of TRICCAR Holdings, Inc. | i 52,500,000 | $ | i 525 | i 27,500,000 | $ | i 275 | $ | i 101,401 | $ | ( i 105,225 | ) | $ | ( i 3,024 | ) | ||||||||||||||
| Contribution by shareholders | i — | i — | i — | i — | i 2,075 | i — | $ | i 2,075 | ||||||||||||||||||||
| Recapitalization on reverse merger - purging previous share | ( i 52,500,000 | ) | ( i 525 | ) | ( i 27,500,000 | ) | ( i 275 | ) | ( i 103,476 | ) | i — | $ | ( i 104,276 | ) | ||||||||||||||
| Recapitalization on reverse merger - issuance of new share | i 72,500,000 | i 7,250 | i 27,500,000 | i 2,750 | i — | ( i 74,135 | ) | $ | ( i 64,135 | ) | ||||||||||||||||||
| Net Loss | — | i — | — | i — | i — | ( i 27,620 | ) | $ | ( i 27,620 | ) | ||||||||||||||||||
| Balance March 31, 2020 | i 72,500,000 | $ | i 7,250 | i 27,500,000 | $ | i 2,750 | $ | — | $ | ( i 206,980 | ) | $ | ( i 196,980 | ) | ||||||||||||||
| Net Loss | — | i — | — | i — | i — | ( i 9,046 | ) | $ | ( i 9,046 | ) | ||||||||||||||||||
| Balance June 30, 2020 | i 72,500,000 | $ | i 7,250 | i 27,500,000 | $ | i 2,750 | $ | — | $ | ( i 216,026 | ) | $ | ( i 206,026 | ) | ||||||||||||||
| Net Loss | — | i — | — | i — | i — | ( i 7,384 | ) | $ | ( i 7,384 | ) | ||||||||||||||||||
| Balance September 30, 2020 | i 72,500,000 | $ | i 7,250 | i 27,500,000 | $ | i 2,750 | $ | — | $ | ( i 223,410 | ) | $ | ( i 213,410 | ) | ||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
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TRICCAR, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
i
The consolidated financial statements included herein have been prepared by TRICCAR, Inc. (“the Company”), 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 U.S. generally accepted accounting principles have been omitted. However, in the opinion of management, all adjustments (which include only normal recurring adjustments, unless otherwise indicated) necessary to present fairly the financial position and results of operations for the periods presented have been made. The results for interim periods are not necessarily indicative of trends or of results to be expected for the full year.
i
On December 12, 2019, Frontier Oilfield Services, Inc., a Texas Corporation (“FOSI”) entered into a Reorganization and Stock Purchase Agreement (the “Agreement”) to change its corporate domicile from Texas to Nevada, assume the name TRICCAR, Inc. (“TRICCAR”), and to acquire i 100% of the issued and outstanding equity of TRICCAR Holdings, Inc., a Nevada Corporation (“TRICCAR Holdings”).
Pursuant to the Agreement, effective on February 28, 2020, the parties closed the Agreement.
TRICCAR acquired 100% of the issued and outstanding equity of TRICCAR Holdings. TRICCAR issued shares of stock to acquire all the issued and outstanding equity stock of TRICCAR Holdings while TRICCAR shareholders retained shares of stock. As a consequence, immediately subsequent to the acquisition TRICCAR will have approximately shares of common stock outstanding. The issuance of the new shares has already been reflected on TRICCAR’s book and is pending the name and symbol change with transfer agent.
The accompanying consolidated financial statements include the accounts of the Company., and its subsidiary TRICCAR Holdings.
Through May 14, 2021, TRICCAR was a biomedical research, development, and marketing firm whose focus was to develop, acquire, and partner to bring bioceutical solutions (not requiring FDA approval) and pharmaceutical drugs (requiring FDA approval) to the market. The Company was in the development stage of bioceutical and pharmaceutical products designed to support the well-being of humans and animals that have common diseases.
On May 14, 2021, TRICCAR and TRICCAR Holdings entered into a Mutual Rescission Agreement and General Release (“Rescission Agreement”), pursuant to which the Reorganization and Stock Purchase Agreement (“Agreement”) entered into by and between the TRICCAR and TRICCAR Holdings on December 12, 2019 was rescinded. Pursuant to the terms of the Rescission Agreement, the shares that were to be issued to the shareholders of TRICCAR Holdings will be returned by the shareholders of TRICCAR Holdings and in exchange therefor, TRICCAR will return the shares of TRICCAR Holdings it received to the shareholders of TRICCAR Holdings and the Company will disclaim any right, title and/or interest in or to any shares of capital stock of TRICCAR Holdings.
Effective December 31, 2019, the Company entered into an asset exchange and purchase agreement with Kenneth Owens, a note holder and stockholder of the Company at the time of the transaction, for the transfer of all our assets located in Wise County, Texas in exchange for the cancellation of $ i 4.6 million in debt owed to Mr. Owens by the Company and the return of shares of our common stock owned by Mr. Owens.
At the closing of the transaction, Mr. Owens did not accept the transfer of three of the SWD wells located in Wise County. The SWD’s are as follows: Trull 1, Trull 2 and CSWU. As a result, the Company never transferred these
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three SWD wells to Mr. Owens and continued to own these three SWD wells. On December 31, 2019, the Company had an existing operating and management agreement with Elysian Fields Disposal LLC to serve as operator, management and consultant of various field operational assets. Under the contract agreement Elysian Fields has the authority to operate the wells and provide accounting and operating services through itself or other qualified sub-contractors. This agreement remains in place and the three SWD wells continue to be operated pursuant to the terms of the operating and management agreement. Elysian Fields Disposal LLC is controlled by Newton Dorsett, an affiliate and related party of the Company.
Development Stage Company – The Company is considered a development stage company and has had no commercial revenue and its losses have been associated with design, refurbishment and operations of its salt water disposal wells.
/ i
The Company’s financial statements are prepared using U.S. generally accepted accounting principles (“U.S. GAAP”) applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. As of the date of the financial statements, the Company has generated losses from operations, has an accumulated deficit and working capital deficiency. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern.
To continue as a going concern and achieve a profitable level of operations, the Company will need, among other things, to increase its business volume and grow revenues, reduce its operating expenses, raise additional capital resources and develop new and stable sources of revenue to meet its operating expenses.
The Company’s ability to continue as a going concern will be dependent upon management’s ability to successfully implement management’s plans to pursue additional business volumes from new and existing customers, reduce indebtedness through sales of non-performing assets and conversions of debt to equity, and rationalize the Company’s cost structure to achieve 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. The Company’s continued existence will ultimately be dependent on its ability to generate cash flows to support its operations as well as provide sufficient resources to retire existing liabilities on a timely basis. The Company faces significant risk in implementing its business plan and there can be no assurance that financing for its operations and business plan will be available or, if available, such financing will be on satisfactory terms.
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4. SUMMARY OF SELECTED ACCOUNTING POLICIES
i
Reverse Merger
On December 12, 2019, Frontier Oilfield Services, Inc., a Texas Corporation (“FOSI”) entered into a Reorganization and Stock Purchase Agreement (the “Agreement”) to change its corporate domicile from Texas to Nevada, assume the name TRICCAR, Inc. (“TRICCAR”), and to acquire i 100% of the issued and outstanding equity of TRICCAR Holdings, Inc., a Nevada corporation (“TRICCAR Holdings”).
Pursuant to the Agreement, effective on February 28, 2020, the parties closed the Agreement.
/ i
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant inter-company transactions and balances have been eliminated in consolidation.
i
Fair Value of Financial Instruments
In accordance with the reporting requirements of ASC Topic 825, Financial Instruments, the Company calculates the fair value of its assets and liabilities which qualify as financial instruments under this standard and includes this
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additional information in the notes to the financial statements when the fair value is different than the carrying value of those financial instruments. The Company does not have assets or liabilities measured at fair value on a recurring basis. Consequently, the Company did not have any fair value adjustments for assets and liabilities measured at fair value at the balance sheet dates, nor gains or losses reported in the statements of operations that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held during the three months ended September 30, 2020 and 2019, except as disclosed.
i
Basic earnings per common share are calculated by dividing net income or loss by the weighted average number of shares outstanding during the period. Diluted earnings per common share are calculated by adjusting outstanding shares, assuming conversion of all potentially dilutive stock options and warrants. The computation of diluted EPS does not assume conversion, exercise, or contingent issuance of shares that would have an anti-dilutive effect on earnings per common share. Anti-dilution results from an increase in earnings per share or reduction in loss per share from the inclusion of potentially dilutive shares in EPS calculations. Currently there are no common stock dilutive instruments in 2020 or 2019 which have been excluded from EPS that could potentially have a dilutive effect on EPS in the future.
i
Use of Estimates
The preparation of the unaudited consolidated financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and the related disclosures at the date of the financial statements and during the reporting period. Actual results could materially differ from these estimates. Significant estimates in the periods ended June 30, 2020 and 2019 include the allowance for doubtful accounts on accounts and other receivables, the useful life of property and equipment and intangible assets, and assumptions used in assessing impairment of long-term assets.
i
Revenue Recognition
In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). This update provides a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. The guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. We have adopted this update but have generated no revenues since inception.
The revenue for the Company will be through the disposal wells operated in Wise County Texas for oil and gas companies who require a disposal of their produced water received in connection with their production of customer’s oil and gas.
iLitigation
From time to time, the Company may be subject to routine litigation, claims, or disputes in the ordinary course of business. In the opinion of management, no pending or known threatened claims, actions or proceedings against TRICCAR that are expected to have a material adverse effect on it’s financial position, results of operations or cash flows. TRICCAR cannot predict with certainty, however, the outcome or effect of any of the litigation or investigatory matters specifically described above or any other pending litigation or claims. There can be no assurance as to the ultimate outcome of any lawsuits and investigations.
i
Effect of Recent Accounting Pronouncements
The Company reviews new accounting standards and updates as issued. No new standards or updates had any material effect on these financial statements. The accounting pronouncements and updates issued subsequent to the date of these financial statements that were considered significant by management were evaluated for the potential effect on these financial statements.
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The outbreak of the coronavirus (COVID-19) resulted in increased travel restrictions, and shutdown of businesses, which may cause slower recovery of the economy. We may experience impact from quarantines, market downturns and changes in customer behavior related to pandemic fears and impact on our workforce if the virus continues to spread. In addition, one or more of our customers, partners, service providers or suppliers may experience financial distress, delayed or defaults on payment, file for bankruptcy protection, sharp diminishing of business, or suffer disruptions in their business due to the outbreak. The extent to which the coronavirus impacts our results will depend on future developments and reactions throughout the world, which are highly uncertain and will include emerging information concerning the severity of the coronavirus and the actions taken by governments and private businesses to attempt to contain the coronavirus. It is likely to result in a potential material adverse impact on our business, results of operations and financial condition. Wider-spread COVID-19 globally could prolong the deterioration in economic conditions and could cause decreases in or delays in advertising spending and reduce and/or negatively impact our short-term ability to grow our revenues. Any decreased collectability of accounts receivable, bankruptcy of small and medium businesses, or early termination of agreements due to deterioration in economic conditions could negatively impact our results of operations.
/ i
5. COMMITMENTS AND CONTINGENCIES
None
i
The other income of $ i 10,000 was Economic Injury Disaster Loan (“EIDL”) program advance provided by Small Business Administration which is designed to provide emergency economic relief to business that were impacted by COVID-10 pandemic. The advance will not have to be repaid. TRICCAR Holdings, Inc. received the advance but were not approved for a EIDL loan.
/ i
The total number shares of common stock authorized that may be issued by the Company is four hundred million () shares of common stock with a par value of one hundredth of one cent ($) per share consisting of three hundred seventy-two million five hundred thousand () shares Class A shares with i 1:1 voting rights and twenty-seven million five hundred thousand () Class B shares with i 20:1 voting rights, and fifty million () shares of preferred stock with a par value of one hundredth of a cent ($) per share. To the fullest extent permitted by the laws of the state of Nevada (currently set forth in NRS 78.195), as the same now exists or may hereafter be amended or supplemented, the board of directors may fix and determine the designations, rights, preferences or other variations of each class or series within each class of capital stock of the corporation.
/ i
None
i
The previously reported agreement for an investment of $18,594,692 via private placement in the public entity from Antonomastic Investment Holdings, Ltd., has not been completed and the Company does not intend to complete any such transaction with Antonomastic.
On May 14, 2021, Triccar, Inc. (the “Company”) and Triccar Holdings Inc. (“Holdings”) entered into a Mutual Rescission Agreement and General Release (“Rescission Agreement”), pursuant to which the Reorganization and Stock Purchase Agreement entered into by and between the Company and Holdings on December 12, 2019 was rescinded. Pursuant to the terms of the Rescission Agreement, the shares that were to be issued to the shareholders of Holdings will not be issued to the prior shareholders of Holdings and in exchange therefor, the prior shareholders of Holdings will own all of the capital stock of Holdings and the Company will disclaim any right, title and/or interest in or to any shares of capital stock of Holdings.
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
CAUTIONARY STATEMENT
Statements in this report which are not purely historical facts, including statements regarding the Company’s anticipations, beliefs, expectations, hopes, intentions or strategies for the future, may be forward-looking statements within the meaning of Section 21E of the Securities Act of 1934, as amended. All forward-looking statements in this report are based upon information available to us on the date of the report. Any forward-looking statements involve risks and uncertainties that could cause actual results or events to differ materially from events or results described in the forward-looking statements. Important factors with respect to any such forward-looking statements, including certain risks and uncertainties that could cause actual results to differ materially from the Company’s expectations (“Cautionary Statements”), are disclosed in the Company’s annual report on Form 10-K, including, without limitation, in conjunction with the forward-looking statements under the caption “Risk Factors.” In addition, important factors that could cause actual results to differ materially from those in the forward-looking statements included herein include, but are not limited to, limited working capital, limited access to capital, changes from anticipated levels of sales and revenues future national or regional economic and competitive conditions, changes in relationships with customers, difficulties in developing new business, difficulties integrating any new businesses or products acquired, regulatory change, the ability of the Company to meet its stated business goals, the Company’s restructuring initiatives, the Company’s ability to sustain profitability, and general economic and business conditions. Although the Company believes the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. All subsequent written and oral forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the Cautionary Statements. We do not undertake to update any forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements.
The following discussion highlights the Company’s results of operations and the principal factors that have affected its consolidated financial condition as well as its liquidity and capital resources for the periods described, and provides information that management believes is relevant for an assessment and understanding of the Company’s consolidated financial condition and results of operations presented herein. The following discussion and analysis are based on the Company’s unaudited financial statements contained in this Current Report, which have been prepared in accordance with generally accepted accounting principles in the United States. You should read the discussion and analysis together with such financial statements and the related notes thereto.
OVERVIEW
TRICCAR Inc. (or “TRICCAR” or “the Company”) currently owns and operates saltwater disposal wells located in Wise County, Texas.
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From January 2020, through May 14, 2021, the Company was engaged in the development of bioceutical and pharmaceutical products designed to support the well-being of humans and animals that have ailments and diseases, as well as the ownership and operation of its saltwater disposal wells.
Outlook
The Company has several years of history in the operations and development of saltwater disposal wells. Management currently believes the oil and gas industry outlook is positive and increasing activity levels which in turn drives more demand for our saltwater disposal services.
IHS Markit estimates the US oilfield water management to be valued at around $37 billion in 2019, representing a 12% year-on-year (y/y) market growth from 2018; this is mainly driven by water disposal and water logistics. The Permian Basin continues to produce and demand the largest volume of oilfield water among all US onshore regions, with water spending in the region estimated at $13.3 billion in 2019.
Figure 1: Market size, by play ($ billion)
Within the value chain of the water management market, water logistics continues to be the largest segment. Indeed, logistics are expected to make up 60% of spending in 2019 with water hauling services the main driver in that category.
Right behind water logistics is water disposal. As hydrocarbon production continues to increase, mainly due to Permian Basin activities, produced water is projected to follow the same trend. As a result, the water disposal market should continue growing at a 6% compound average growth rate (CAGR) through 2024. However, this growth could be limited if the disposal challenges in the Permian Basin are not addressed by both operators and third-party companies.
Permian water disposal volumes contribute to more than 30% of the total disposed volumes in the onshore US, and in fact they have increased more than 40% between 2010 and 2019. In addition, disposal volumes in West Texas are expected to reach the highest level recorded in the last five years during 2019.
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The industry has responded by increasing the recycle/reuse of produced water in fracking operations. Nevertheless, water recycling is not a “silver bullet” since the industry produces five times more water than needed to meet frack water demand.
Looking ahead, the development of the water midstream sector will be key to the development of the market overall. The signs of consolidation in a highly fragmented market could be the first clear step the industry is taking to face the challenges associated with the water lifecycle. Consolidation continues to be a strong industry trend within the water management service sector to reduce costs generally. The active M&A market at the beginning of 2019 involved third-party companies acquiring pipeline and localized water assets to reduce the use of water haulers and to centralize the disposal process. IHS Markit estimates this trend will continue towards the end of the year.
On May 14, 2021, Triccar, Inc. (the “Company”) and Triccar Holdings Inc. (“Holdings”) entered into a Mutual Rescission Agreement and General Release (“Rescission Agreement”), pursuant to which the Reorganization and Stock Purchase Agreement entered into by and between the Company and Holdings on December 12, 2019 was rescinded. Pursuant to the terms of the Rescission Agreement, the 80,000,000 shares that were to be issued to the shareholders of Holdings will not be issued to the prior shareholders of Holdings and in exchange therefor, the prior shareholders of Holdings will own all of the capital stock of Holdings and the Company will disclaim any right, title and/or interest in or to any shares of capital stock of Holdings.
SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in conformity with US 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 of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates. The Company has adopted ASC 842 requiring the recoding of assets and liabilities related to leases on the balance sheet. The Company records rent on straight-line basis over the terms of the underlying leases.
RESULTS OF OPERATIONS
For the nine months ended September 30, 2020, we reported a net loss of $44,050 as compared to a net loss of $58,395 for the nine months ended September 30, 2019. The components of these results are explained below.
Revenue - No revenue was generated for the nine months ended September 30, 2020.
Expenses - The components of our costs and expenses for the nine months ended September 30, 2020 and 2019 are as follows:
| For the Nine Months Ended | % | |||||||||||
| September 30, | September 30, | Increase | ||||||||||
| 2020 | 2019 | (Decrease) | ||||||||||
| Costs and expenses: | ||||||||||||
| General and administrative | $ | 54,050 | $ | 58,395 | (7 | )% | ||||||
| Total cost and expenses | $ | 54,050 | $ | 58,395 | (7 | )% | ||||||
Operating results for the nine months ended September 30, 2020 and 2019 reflect a net loss of $54,050 and a net loss of $58,395 respectively. We have not recorded any federal income taxes for the nine months ended September 30, 2020 and 2019 because of our accumulated losses and our net operating loss carry forwards.
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LIQUIDITY AND CAPITAL RESOURCES
Cash Flows and Liquidity
As of September 30, 2020, we had total current assets of $3,831. Our total current liabilities as of September 30, 2020 were approximately $217,241. We had a working capital deficit of approximately $213,410 as of September 30, 2020.
As of September 30, 2020, we had $3,831 in cash, a decrease of $25,636 from December 31, 2019 due to minimal general administrative expenses.
Capital Expenditures
The Company suspended capital expenditures during the nine months ended September 30, 2020 due to low working capital available.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not required for smaller reporting companies.
ITEM 4. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
Our management evaluated, with the participation of our Chief Executive Officer (CEO) and Chief Financial Officer (CFO), the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of the end of the quarter covered by this quarterly report on Form 10-Q. In making this assessment, the Company used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework .
A material weakness is a deficiency or combination of deficiencies in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis by the Company’s internal controls.
The Company’s management has identified a material weakness in the effectiveness of internal control over financial reporting related to a shortage of resources in the accounting department required to assure appropriate segregation of duties with employees having appropriate accounting qualifications related to the Company’s unique industry accounting and disclosure rules. Management has outsourced certain financial functions to mitigate the material weakness in internal control over financial reporting. The Company is reviewing its finance and accounting staffing requirements.
Internal Control Over Financial Reporting
There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. As a result, no corrective actions were required or undertaken.
Limitations on the Effectiveness of Controls
Our management, including the CEO, does not expect that its disclosure controls or its internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur
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because of simple errors or mistakes. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
None.
Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
Item 3. DEFAULTS UPON SENIOR SECURITIES
None
As reported on the Company’s Form 8-K filed with the SEC on June 1, 2021, on May 14, 2021, Triccar, Inc. (the “Company”) and Triccar Holdings Inc. (“Holdings”) entered into a Mutual Rescission Agreement and General Release (“Rescission Agreement”), pursuant to which the Reorganization and Stock Purchase Agreement entered into by and between the Company and Holdings on December 12, 2019 was rescinded. Pursuant to the terms of the Rescission Agreement, the 80,000,000 shares that were to be issued to the shareholders of Holdings will not be issued to the prior shareholders of Holdings and in exchange therefor, the prior shareholders of Holdings will own all of the capital stock of Holdings and the Company will disclaim any right, title and/or interest in or to any shares of capital stock of Holdings.
In connection with the terms of the Rescission Agreement, Bill Townsend and Katrina Yao resigned from their positions as officers and directors of the Company and Matthew C. Flemming was appointed to serve as the President and CEO of the Company as well as a member of the Company’s board of directors.
| (a) | EXHIBITS: |
| 31.1 Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||
| 31.2 Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||
| 32.1 Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ||
| 32.2 Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ||
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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 July __, 2021.
TRICCAR, INC.
| SIGNATURE: | /s/ Matthew Flemming | |
|
Mathew Flemming, Chief Executive Officer, Acting Chief Financial Officer and Director |
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| This ‘10-Q’ Filing | Date | Other Filings | ||
|---|---|---|---|---|
 | ||||
| Filed on: | 7/9/21 | |||
| 6/1/21 | 8-K | |||
| 5/14/21 | ||||
| For Period end: | 9/30/20 | |||
| 6/30/20 | 10-Q, NT 10-Q | |||
| 3/31/20 | 10-Q, 10-Q/A, NT 10-Q | |||
| 2/28/20 | 8-K | |||
| 12/31/19 | 10-K, 10-K/A, NT 10-K | |||
| 12/12/19 | ||||
| 9/30/19 | 10-Q, NT 10-Q | |||
| 6/30/19 | 10-Q | |||
| 3/31/19 | 10-Q, NT 10-Q | |||
| 12/31/18 | 10-K, 10-K/A, 8-K | |||
| List all Filings | ||||