Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2013
Commission file number 000-54868
FreeFlow Inc.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation or organization)
9130 Edgewood Drive
La Mesa, CA 91941
(Address of principal executive offices, including zip code)
(619) 741-1006
(Telephone number, including area code)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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 last 90 days. YES [X] NO [ ]
Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss.232.405 of
this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files). YES [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," and "smaller reporting company" in Rule 12b-2 of the
Exchange Act.
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). YES [ ] NO [X]
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 26,200,000 shares as of November 8,
2013
ITEM 1. FINANCIAL STATEMENTS
FreeFlow, Inc.
(A Development Stage Company)
Condensed Balance Sheets
--------------------------------------------------------------------------------
As of As of
September 30, December 31,
2013 2012
-------- --------
(Unaudited)
CURRENT ASSETS
Cash $ 2,323 $ 7,407
-------- --------
TOTAL CURRENT ASSETS 2,323 7,407
FIXED ASSETS
Equipment, net 775 946
-------- --------
TOTAL FIXED ASSETS 775 946
-------- --------
OTHER ASSETS
Intangible Assets, net -- --
-------- --------
TOTAL OTHER ASSETS -- --
-------- --------
TOTAL ASSETS $ 3,098 $ 8,353
======== ========
LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 3,890 $ --
Notes payable 10,000 --
Accrued interest 516 --
-------- --------
TOTAL CURRENT LIABILITIES 14,406 --
LONG-TERM LIABILITIES
Accrued interest 44 217
Notes payable 6,968 10,000
-------- --------
TOTAL LONG-TERM LIABILITIES 7,012 10,217
-------- --------
TOTAL LIABILITIES 21,418 10,217
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred Stock ($0.0001 par value, 20,000,000 shares
authorized; zero shares issued and outstanding
as of September 30, 2013 and December 31, 2012 -- --
Common stock, ($0.0001 par value, 100,000,000 shares
authorized; 26,200,000 shares issued and outstanding
as of September 30, 2013 and December 31, 2012 2,620 2,620
Additional paid-in capital 18,380 18,380
Deficit accumulated during development stage (39,320) (22,864)
-------- --------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) (18,320) (1,864)
-------- --------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT) $ 3,098 $ 8,353
======== ========
The accompanying notes are an integral part of these financial statements
2
Freeflow, Inc.
(A Development Stage Company)
Condensed Statements of Operations
(Unaudited)
--------------------------------------------------------------------------------
October 28, 2011
Three Months Three Months Nine Months Nine Months (inception)
Ended Ended Ended Ended through
September 30, September 30, September 30, September 30, September 30,
2013 2012 2013 2012 2013
------------ ------------ ------------ ------------ ------------
REVENUES
Revenues $ -- $ -- $ -- $ -- $ --
------------ ------------ ------------ ------------ ------------
TOTAL REVENUES -- -- -- -- --
GENERAL & ADMINISTRATIVE EXPENSES
Administrative expenses 1,690 766 3,742 4,596 11,144
Professional fees 2,250 2,250 12,200 9,050 22,250
Depreciation Expense 57 57 171 138 366
Amortization Expense -- 1,250 -- 3,750 5,000
------------ ------------ ------------ ------------ ------------
TOTAL GENERAL & ADMINISTRATIVE EXPENSES 3,997 4,323 16,113 17,534 38,760
------------ ------------ ------------ ------------ ------------
LOSS FROM OPERATION (3,997) (4,323) (16,113) (17,534) (38,760)
------------ ------------ ------------ ------------ ------------
OTHER EXPENSE
Interest expense 133 100 343 117 560
------------ ------------ ------------ ------------ ------------
TOTAL OTHER EXPENSES 133 100 343 117 560
------------ ------------ ------------ ------------ ------------
NET INCOME (LOSS) $ (4,130) $ (4,423) $ (16,456) $ (17,651) $ (39,320)
============ ============ ============ ============ ============
BASIC EARNINGS PER SHARE $ (0.00) $ (0.00) $ (0.00) $ (0.00)
============ ============ ============ ============
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 26,200,000 26,200,000 26,200,000 26,200,000
============ ============ ============ ============
The accompanying notes are an integral part of these financial statements
3
FreeFlow, Inc.
(A Development Stage Company)
Condensed Statements of Cash Flows
(Unaudited)
--------------------------------------------------------------------------------
October 28, 2011
Nine Months Nine Months (inception)
Ended Ended through
September 30, September 30, September 30,
2013 2012 2013
-------- -------- --------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $(16,456) $(17,651) $(39,320)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Amortization expense -- 3,750 5,000
Depreciation expense 171 138 366
Changes in operating assets and liabilities:
Increase (Decrease) in accounts payable and accrued liabilities 3,890 2,250 3,890
(Increase) Decrease in other receivable
Increase in accrued interest 343 117 560
-------- -------- --------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (12,052) (11,396) (29,504)
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of Equipment -- (1,142) (1,141)
Acquisition of Intangible Assets -- -- (5,000)
-------- -------- --------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES -- (1,142) (6,141)
CASH FLOWS FROM FINANCING ACTIVITIES
Decrease in advance from officer --
Proceed from notes payable - related party 6,968 10,000 16,968
Issuance of common stock -- -- 21,000
-------- -------- --------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 6,968 10,000 37,968
-------- -------- --------
NET INCREASE (DECREASE) IN CASH (5,084) (2,538) 2,323
CASH AT BEGINNING OF PERIOD 7,407 13,765 --
-------- -------- --------
CASH AT END OF PERIOD 2,323 11,227 2,323
======== ======== ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during period for:
Interest $ -- $ -- $ --
======== ======== ========
Income Taxes $ -- $ -- $ --
======== ======== ========
The accompanying notes are an integral part of these financial statements
4
FreeFlow, Inc.
(A Development Stage Company)
Notes to Condensed Financial Statements (Unaudited)
September 30, 2013
--------------------------------------------------------------------------------
NOTE 1 - CONDENSED FINANCIAL STATEMENTS
The accompanying condensed financial statements have been prepared by the
Company without audit. In the opinion of management, all adjustments (which
include only normal recurring adjustments) necessary to present fairly the
financial position, results of operations, and cash flows at September 30, 2013,
and for all periods presented herein, have been made.
Certain information and footnote disclosures normally included in the condensed
financial statements prepared in accordance with accounting principles generally
accepted in the United States of America have been condensed or omitted. It is
suggested that these condensed financial statements be read in conjunction with
the financial statements and notes thereto included in the Company's December
31, 2012 audited financial statements. The results of operations for the periods
ended September 30, 2013 and the same period last year are not necessarily
indicative of the operating results for the full years.
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 not yet
established an ongoing source of revenues sufficient to cover its operating
costs and allow it to continue as a going concern. The ability of the Company to
continue as a going concern is dependent on the Company obtaining adequate
capital to fund operating losses until it becomes profitable. If the Company is
unable to obtain adequate capital, it could be forced to cease operations.
In order to continue as a going concern, the Company will need, among other
things, additional capital resources. Management's plan is to obtain such
resources for the Company by obtaining capital from management and significant
shareholders sufficient to meet its minimal operating expenses and seeking
equity and/or debt financing. However management cannot provide any assurances
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 secure other sources of financing and 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.
5
FreeFlow, Inc.
(A Development Stage Company)
Notes to Condensed Financial Statements (Unaudited)
September 30, 2013
--------------------------------------------------------------------------------
NOTE 3 - NOTES PAYABLE - RELATED PARTY
Since inception the Company received cash totaling $16,600 from S Douglas
Henderson in the form of a promissory. As of September 30, 2013 the amount due
to S Douglas Henderson was $16,600
Since inception the Company received cash totaling $368 from Nanette Myers a
non- related party in the form of a promissory. As of September 30, 2013 the
amount due to Nanette Myers was $368
On June 16, 2012, the Company received a $10,000 loan. This loan is at 4%
interest with principle and interest all due on June 16, 2014
On April 30, 2013, the Company received a $3,000 loan. This loan is at 2%
interest with principle and interest all due on May 1, 2015.
On June 21, 2013, the Company received a $600 loan. This loan is at 4% interest
with principle and interest all due on June 21, 2015.
On July 14, 2013, the Company received a $368 loan. This loan is at 4% interest
with principle and interest all due on July 14, 2015.
On September 6, 2013, the Company received a $3,000 loan. This loan is at 4%
interest with principle and interest all due on September 6, 2015.
As of September 30, 2013, accrued interest is $560.
NOTE 4 - CAPITAL STOCK
The Company's capitalization is 100,000,000 common shares with a par value of
$0.0001 per share and 20,000,000 preferred stock, with a par value of $ 0.0001
per share.
On November 22, 2011, the Company issued a total of 25,000,000 shares of common
stock to one director for cash in the amount of $0.0008 per share for a total of
$20,000
On December 6, 2011, the Company issued a total of 1,200,000 shares of common
stock to Garden Bay International for cash in the amount of $0.000833 per share
for a total of $1,000.
As of September 30, 2013 the Company had 26,200,000 shares of common stock
issued and outstanding.
The stockholders' equity section of the Company contains the following classes
of capital stock as of September 30, 2013:
Common stock, $ 0.0001 par value: 100,000,000 shares authorized; 26,200,000
shares issued and outstanding.
Preferred stock, $ 0.0001 par value: 20,000,000 shares authorized; no shares
issued and outstanding.
6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING INFORMATION
Certain statements in this quarterly report on Form 10-Q contain or may contain
forward-looking statements that are subject to known and unknown risks,
uncertainties and other factors which may cause actual results, performance or
achievements to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements. These
forward-looking statements were based on various factors and were derived
utilizing numerous assumptions and other factors that could cause our actual
results to differ materially from those in the forward-looking statements.
Readers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date of this report. Except for our
ongoing obligations to disclose material information under the Federal
securities laws, we undertake no obligation to release publicly any revisions to
any forward-looking statements, to report events or to report the occurrence of
unanticipated events. For any forward-looking statements contained in any
document, we claim the protection of the safe harbor for forward-looking
statements contained in the Private Securities Litigation Reform Act of 1995.
RESULTS OF OPERATIONS
We are a development stage company and have generated no revenues since
inception (October 28, 2011) and have incurred $39,320 in expenses through
September 30, 2013. For the three month periods ended September 30, 2013 and
2012 we incurred $1,690 and $766, respectively, in general and administrative
expenses, $2,250 and $2,250, respectively, in professional fees, $57 and $57 in
depreciation expense, respectively, $0 and $1,250, respectively, in amortization
expense and $133 and $100, respectively, in interest expense.
For the nine month periods ended September 30, 2013 and 2012 we incurred $3,742
and $4,596, respectively, in general and administrative expenses, $12,200 and
$9,050, respectively, in professional fees, $171 and $138 in depreciation
expense, respectively, $0 and $3,750, respectively, in amortization expense and
$343 and $117, respectively, in interest expense.
The following table provides selected financial data about our company at
September 30, 2013.
Balance Sheet Data: 9/30/13
------------------- -------
Cash $ 2,323
Total assets $ 3,098
Total liabilities $ 21,418
Shareholders' equity $(18,320)
Cash provided by financing activities since inception through September 30, 2013
was $20,000 from the sale of 25,000,000 shares of common stock to our officer
and director in November 2011, $1,000 from the issuance of 1,200,000 shares of
common stock to Garden Bay International in December, 2011, and $19,968 from
loan from officer.
7
LIQUIDITY AND CAPITAL RESOURCES
Our cash balance at September 30, 2013 was $2,323, with $21,418 in outstanding
liabilities, consisting of $3,890 in accounts payable, $560 in accrued interest
payable, $10,000 in a note payable to a related party and $6,968 in a long-term
note payable. If we experience a shortfall of cash our director has agreed to
loan us additional funds for operating expenses, however he has no legal
obligation to do so. Total expenditures over the next 12 months are expected to
be approximately $20,000.
PLAN OF OPERATION
The Company has:
* Built and operated a model of its product successfully
* Opened a web site to display its product "Freeflowpools.com"
* Published a sales brochure
* Signed a contract with a large pool construction company to install
its product.
* In addition it has received additional funding in the form of a loan
from its president.
* Recruited a commission sales person within the pool industry.
We have signed an agreement with an independent commission sales person. He is
to receive 10% of the gross sales for which he is responsible. This person works
for a swimming pool maintenance company and visits properties of persons who are
potential customers for our product. When these persons are at home he gives
them a brochure and discusses the advantages of our product. He visits over 40
such properties each week as he does their pool maintenance.
The Company intends to recruit addition pool maintenance firms to market its
product. The Company feels that these firms have the best contact with
prospective buyers.
The Company has direct mailed its brochures to pool contractors in the Southern
California area and will continue to do so during the winter.
Winter is a cool season in Southern California and many persons use there pools
by using heaters or solar devices. The Company will continue to introduce its
system to pool contractors and directly to pool owners.
In the next 12 months, FreeFlow will pursue arrangements for the sale of its
product. Revenues are expected during the Winter of 2013, but no assurance can
be given.
OFF-BALANCE SHEET ARRANGEMENTS
We have no off-balance sheet arrangements.
GOING CONCERN
Our auditor has issued a going concern opinion. This means that there is
substantial doubt that we can continue as an on-going business for the next
twelve months unless we obtain additional capital to pay our bills. This is
because we have not generated revenues and no revenues are anticipated until
sales are generated. There is no assurance we will ever reach that point.
8
ITEM 4. CONTROLS AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
Management maintains "disclosure controls and procedures," as such term is
defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the
"Exchange Act"), that are designed to ensure that information required to be
disclosed in our Exchange Act reports is recorded, processed, summarized and
reported within the time periods specified in the Securities and Exchange
Commission rules and forms, and that such information is accumulated and
communicated to management, including our Chief Executive Officer and Chief
Financial Officer, as appropriate, to allow timely decisions regarding required
disclosure.
In connection with the preparation of this quarterly report on Form 10-Q, an
evaluation was carried out by management, with the participation of the Chief
Executive Officer and the Chief Financial Officer, of the effectiveness of our
disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)
under the Exchange Act) as of September 30, 2013.
Based on that evaluation, management concluded, as of the end of the period
covered by this report, that our disclosure controls and procedures were
effective in recording, processing, summarizing, and reporting information
required to be disclosed, within the time periods specified in the Securities
and Exchange Commission's rules and forms.
CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING
As of the end of the period covered by this report, there have been no changes
in the internal controls over financial reporting during the quarter ended
September 30, 2013, that materially affected, or are reasonably likely to
materially affect, our internal control over financial reporting subsequent to
the date of management's last evaluation.
9
PART II. OTHER INFORMATION
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:
Exhibit No. Description
----------- -----------
3.1 Articles of Incorporation*
3.2 Bylaws*
31.1 Sec. 302 Certification of Principal Executive Officer
31.2 Sec. 302 Certification of Principal Financial Officer
32.1 Sec. 906 Certification of Principal Executive Officer
32.2 Sec. 906 Certification of Principal Financial Officer
101 Interactive data files pursuant to Rule 405 of Regulation S-T
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.
FreeFlow Inc.
Registrant
Date November 8, 2013 By: /s/ S. Douglas Henderson
----------------------------------------------
S. Douglas Henderson, Chief Executive Officer,
Chief Financial and Accounting Officer and
Sole Director
1
