Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 2014
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: 000-54868
FREE FLOW, INC.
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(Exact name of registrant as specified in its charter)
Delaware 45-3838831
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State or other jurisdiction I.R.S. Employer
of incorporation or Identification No.
organization
2301 WOODLAND CROSSING DRIVE, SUITE #155
HERNDON, VA 20171
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(703) 789-3344
Securities registered pursuant to Section 12(b) of the Act:
Title of each class registered Name of each
exchange on which
registered
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Not Applicable Not Applicable
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK
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(Title of class)
Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act. Yes |_| No |X|
Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act. |_|
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 |X| No |_|
Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate Website, if any, every Interactive Data file required to
be submitted and posted pursuant to Rule 405 of Regulation S-T (section 232.405
of this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files)
Yes |_| No |X|
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (ss. 229.405 of this chapter) is not contained herein, and
will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. |X|
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
definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act. (Check One).
------------------------------ ------- ------------------------------ ----------
Large accelerated filer [___] Accelerated filer [___]
------------------------------ ------- ------------------------------ ----------
Non-accelerated filer [___] Smaller reporting company [_X_]
(Do not check if a smaller
reporting company)
------------------------------ ------- ------------------------------ ----------
Indicate by check mark whether the Registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes |_| No |X|
There were 26,200,000 shares issued and outstanding of the registrant's Common
Stock as of April 15, 2015. No market value has been computed based upon the
fact that no active trading market has been established.
TABLE OF CONTENTS
PART I
ITEM 1 Business 4
ITEM 1 A. Risk Factors 6
ITEM 1 B. Unresolved Staff Comments 10
ITEM 2 Properties 10
ITEM 3 Legal Proceedings 10
ITEM 4 Mine Safety Disclosures 10
PART II
ITEM 5 Market for Registrant's Common Equity, Related Stockholder 10
Matters and Issuer Purchases of Equity Securities
ITEM 6 Selected Financial Data 11
ITEM 7 Management's Discussion and Analysis of Financial Condition 11
and Results of Operations
ITEM 7A Quantitative and Qualitative Disclosures About Market Risk 13
ITEM 8 Financial Statements and Supplementary Data 13
ITEM 9 Changes in and Disagreements with Accountants on Accounting 29
and Financial Disclosure
ITEM 9A Controls and Procedures 29
ITEM 9B Other Information 30
PART III
ITEM 10 Directors, Executive Officers, and Corporate Governance 30
ITEM 11 Executive Compensation 32
ITEM 12 Security Ownership of Certain Beneficial Owners and Management 34
and Related Stockholder Matters
ITEM 13 Certain Relationships and Related Transactions, and Director
Independence 35
ITEM 14 Principal Accounting Fees and Services 36
PART IV
ITEM 15 Exhibits, Financial Statement Schedules 37
SIGNATURES 38
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FORWARD LOOKING STATEMENTS
THIS DOCUMENT INCLUDES FORWARD-LOOKING STATEMENTS, INCLUDING, WITHOUT
LIMITATION, STATEMENTS RELATING TO FREE FLOW, INC. ("FREE FLOW") PLANS,
STRATEGIES, OBJECTIVES, EXPECTATIONS, INTENTIONS AND ADEQUACY OF RESOURCES.
THESE FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES,
AND OTHER FACTORS THAT MAY CAUSE FREE FLOW'S ACTUAL RESULTS, PERFORMANCE OR
ACHIEVEMENTS TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR
ACHIEVEMENTS EXPRESSED OR IMPLIED BY THE FORWARD-LOOKING STATEMENTS. THESE
FACTORS INCLUDE, AMONG OTHERS, THE FOLLOWING: FREE FLOW'S ABILITY TO IMPLEMENT
ITS BUSINESS STRATEGY; ABILITY TO OBTAIN ADDITIONAL FINANCING; FREE FLOW'S
LIMITED OPERATING HISTORY; UNKNOWN LIABILITIES ASSOCIATED WITH FUTURE
ACQUISITIONS; ABILITY TO MANAGE GROWTH; SIGNIFICANT COMPETITION; ABILITY TO
ATTRACT AND RETAIN TALENTED EMPLOYEES; AND FUTURE GOVERNMENT REGULATIONS; AND
OTHER FACTORS DESCRIBED IN THIS DOCUMENT OR IN OTHER OF FREE FLOW'S FILINGS WITH
THE SECURITIES AND EXCHANGE COMMISSION. FREE FLOW IS UNDER NO OBLIGATION, TO
PUBLICLY UPDATE OR REVISE ANY FORWARD-LOOKING STATEMENTS, WHETHER AS A RESULT OF
NEW INFORMATION, FUTURE EVENTS OR OTHERWISE.
For further information about these and other risks, uncertainties and factors,
please review the disclosure included in this report under Item 1A "Risk
Factors."
PART I
ITEM 1. BUSINESS
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HISTORY
Free Flow, Inc. (the "Company" or "Free Flow") was incorporated on October 28,
2011 under the laws of State of Delaware to enter into the green energy
industry. The Company began with the idea of developing swimming pool solar pump
system to create a blend of green energy harvesting while maintaining the
present system. Having received firm enquiries from overseas farmers, Free Flow
is now focused on the sale of solar panels to the agriculture sector, providing
alternate means of electricity to operate pumps for water wells in India and
Pakistan. The Company remains in the development stage since its inception and
has just began realizing revenues from its operations. The Company's fiscal year
end is December 31.
The Company's capitalization is 100,000,000 common shares with a par value of
$0.0001 per share and 20,000,000 preferred shares with a par value of $ 0.0001
per share.
Of the 20,000,000 authorized preferred shares, the Company has designated 10,000
shares as "Preferred Shares - Series A". Each share of "Preferred Shares -
Series A" carries voting rights equal to ten thousand (10,000) votes. In other
words, the 10,000 "Preferred Shares - Series A" collectively have a voting right
equal to one hundred million (100,000,000) common shares of the Corporation.
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.
On August 1, 2014, the Company issued 300 Preferred Shares--Series A stock
issued to Redfield Holdings, Ltd. for $1 each for a total of $300.
As of December 31, 2014, the Company had 26,200,000 shares of common stock
issued and outstanding and 300 Preferred Shares - Series A shares issued and
outstanding.
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COMPANY OVERVIEW
On March 13, 2014, S. Douglas Henderson, former CEO, (the "Seller"), entered
into a Common Stock Purchase Agreement (the "Stock Purchase Agreement") pursuant
to which the Seller agreed to sell to Redfield Holdings, Ltd., a Virginia
corporation (the "Purchaser"), twenty five million (25,000,000) shares of common
stock of the Registrant (the "Shares") owned by Mr. Henderson, then constituting
approximately 95.4% of the Registrant's outstanding common stock, for $255,000.
Mr. Henderson paid off all liabilities of the company at that time.
The sale of the shares was completed on April 18, 2014. As a result of the sale
there was a change of control of the Registrant. Pursuant to the terms of the
Common Stock Purchase Agreement dated S. Douglas Henderson, the Registrant's
sole officer and director resigned his positions on April 18, 2014. Mr.
Henderson's resignation was not the result of any dispute or disagreement with
the Registrant. The Company appointed Ferdinando (Fred) Ferrara as a Director
and Sabir Saleem as CEO at that time. There was no family relationship or other
relationship between the Seller and the Purchaser.
HYGINEIQ PRODUCT
On July 31, 2014, the Company purchased "HYGIENiQ", the trade mark, along with
all intellectual properties, and inventories of GS Pharmaceutical, Inc., a
related party for $339,000. Sabir Saleem, CEO of Free Flow, Inc. is also CEO of
GS Pharmaceutical, Inc. However, Mr. Saleem does not own any shares of stock in
GS Pharmaceuticals, Inc. The payment of this purchase is a three year promissory
note bearing 2% interest per annum for $330,000 and a sum of $9,000 in good
funds/cash within 90 days. On December 2, 2014 the Company paid $9,000 towards
the short term loan and interest of $234, leaving a balance of $0. On December
31, 2014, the balance due to GS Pharmaceutical, Inc. is $330,000 and interest
expense incurred of $2,638. The Company paid interest expense $2,266 and accrued
interest expense as of December 31, 2014 is $372.
PURCHASE OF SHARES OF SKY ENERGY (PVT) LTD., INDIA.
On August 7, 2014, the Company entered into a stock purchase contract with
Riyazuddin Kazi and Ahteshamuddin Kagzi to purchase 225,000 shares for a sum of
$4,005,000 of Sky Energy (Pvt) Ltd. being 90% of the issued and outstanding
shares. As consideration thereof, Bills of Exchange are lodged with the Escrow
Agent. The effectuation of the contract (the effective date of the closing of
the transaction) is subject to the Sellers delivering the audited financial
statements to the Company. As of this date the agreed upon Audited Statement has
not been received by the Company.
INCORPORATION OF SUBSIDIARY
On January 24, 2015, Free Flow, Inc. incorporated Promedaff, Inc. in the state
of Virginia as a wholly-owned subsidiary.
At this time, Free Flow, Inc. has not developed a business plan with regards to
the items stated above.
OFF BALANCE SHEET ARRANGEMENTS
We do not have any off-balance sheet arrangements.
BACKLOG OF ORDERS
We currently have no orders for sales at this time.
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GOVERNMENT CONTRACTS
We have no government contracts.
NUMBER OF PERSONS EMPLOYED
As of April 15, 2015, we had no full-time employees. Officers and Directors work
on an as needed part-time basis up to 5 hours per week.
DESCRIPTION OF PROPERTIES/ASSETS
Real Estate. None.
Title to properties. None.
Patents and Patent Applications. None.
ITEM 1A. RISK FACTORS
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OUR BUSINESS IS A DEVELOPMENT STAGE COMPANY AND UNPROVEN AND THEREFORE RISKY.
We have only very recently adopted the business plan described herein-above.
Potential investors should be made aware of the risk and difficulties
encountered by a new enterprise4, especially in view of the intense competition
from existing businesses.
WE HAVE HISTORICALLY INCURRED LOSSES AND CANNOT ASSURE INVESTORS AS TO FUTURE
PROFITABILITY.
We have historically incurred losses from operations. During the year ended
December 31, 2014, we recognized a net loss of $44,018. Our ability to be
profitable in the future will depend on successfully implementing our marketing
and sales activities, all of which are subject to many risks beyond our control.
Even if we become profitable on an annual basis, we cannot assure you that our
profitability will be sustainable or increase on a periodic basis.
In addition, the independent registered public accounting firm's report on the
Company's financial statements as of December 31, 2014, includes a "going
concern" explanatory paragraph, that describes substantial doubt about the
Company's ability to continue as a going concern. If we are unable to continue
as a going concern, realization of assets and settlement of liabilities in other
than the normal course of business may be at amounts significantly different
from those in the financial statements included in this registration statement.
WE HAVE A LACK OF REVENUE HISTORY AND INVESTORS CANNOT VIEW OUR PAST PERFORMANCE
SINCE WE ARE A START-UP COMPANY.
We were formed on October 28, 2011, for the purpose of engaging in any lawful
business and any new enterprise. We have had limited revenues in the last five
years. We have only had operational activities during the last year. We are not
profitable and the business effort is considered to be in an early development
stage. We must be regarded as a new or developmental venture, and may be subject
to unforeseen costs, expenses and problems. As a development venture, we may not
be able to adequately forecast and budget our costs. It should be assumed that
any or all of these events could occur, with the result that anyone, if
significant enough could prevent the proposed business from being successful and
potential investors could lose all of their investment.
-6-
BASED ON OUR CURRENT CASH RESERVES, WE WILL HAVE RELATIVELY SMALL OPERATIONAL
BUDGET FOR THE OPERATIONS WHICH WE CANNOT EXPAND WITHOUT ADDITIONAL RAISING
CAPITAL.
If we are unable to begin to generate enough revenue to cover our operational
costs, we will need to seek additional sources of funds. Currently, we have no
committed source for any funds as of date hereof. No representation is made that
any funds will be available when needed. In the event funds cannot be raised if
and when needed, we may not be able to carry out our business plan and could
fail in business as a result of these uncertainties.
WE CANNOT GIVE ANY ASSURANCES THAT WE WILL BE ABLE TO RAISE ENOUGH CAPITAL TO
FUND ACQUISITIONS AND PRODUCT DEVELOPMENT.
We will need to raise additional funds to support not only our budget, but our
expansion operations. We cannot make any assurances that we will be able to
raise such funds or whether we would be able to raise such funds with terms that
are favorable to us. We may seek to borrow monies from lenders at commercial
rates, but such lenders will probably be at higher than bank rates, which higher
rates could, depending on the amount borrowed, make the net operating income
insufficient to cover the interest.
WE MAY IN THE FUTURE ISSUE MORE SHARES WHICH COULD CAUSE A LOSS OF CONTROL BY
OUR PRESENT MANAGEMENT AND CURRENT STOCKHOLDERS.
We may issue further shares as consideration for the cash or assets or services
out of our authorized but unissued common stock that would, upon issuance,
represent a majority of the voting power and equity of our Company. The result
of such an issuance would be those new stockholders and management would control
our Company, and persons unknown could replace our management at this time. Such
an occurrence would result in a greatly reduced percentage of ownership of our
Company by our current shareholders, which could present a risk to investors, in
that the business focus of the Company could be completely changed with no say
by current management and current shareholders.
ONE OF OUR OFFICERS AND DIRECTORS IS A MAJORITY SHAREHOLDER OF THE COMPANY. AS
SUCH THERE IS A POSSIBILITY OF HIM CONTROLLING THE COMPANY TO THE DETRIMENT OF
OUTSIDERS.
Mr. Saleem, President, CEO and Director, through direct and indirect ownership,
is sole owner and shareholder of Redfield Holdings, Ltd. ("Redfield"), the
majority shareholder of our Company. As such, he will be able to control the
operations and the direction of the Company with very little outside influence.
Mr. Saleem does not hold direct shares of common stock of the Company. However,
as an officer, director and beneficial shareholder of Redfield Holdings, Ltd. he
has the ability to vote the shares of Redfield, our majority shareholder.
As such, he is the beneficial holder of the 20,630,000 common shares and 300
Preferred Shares - Series A held by Redfield. Through his ownership in Redfield,
Mr. Saleem controls majority of the voting stock of the Company.
WE WILL DEPEND UPON MANAGEMENT BUT WE WILL HAVE LIMITED PARTICIPATION OF
MANAGEMENT.
We currently have two individuals who are serving as our officers and directors
for up to 5 hours per week each, on a part-time basis. All two directors are
also acting as our officers. None of the officers have an employment agreement
with the Company. We will be heavily dependent upon their skills, talents, and
abilities, as well as several consultants to us, to implement our business plan,
and may, from time to time, find that the inability of the officers and
directors to devote their full-time attention to our business results in a delay
in progress toward implementing our business plan. Because investors will not be
able to manage our business, they should critically assess all of the
information concerning our officers and directors.
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OUR OFFICERS AND DIRECTORS ARE NOT EMPLOYED FULL-TIME BY US AND MAY CAUSE
CONFLICTS OF INTERESTS AS TO CORPORATE OPPORTUNITIES WHICH WE MAY NOT BE ABLE OR
ALLOWED TO PARTICIPATE IN.
In the future they may become, in their individual capacities, officers,
directors, controlling shareholder and/or partners of other entities engaged in
a variety of businesses. Thus, our officers and directors may have potential
conflicts including their time and efforts involved in participation with other
business entities. In some circumstances this conflict may arise between their
fiduciary duties to us and their fiduciary duties to Redfield'a business
divisions. It is possible that in this situation their judgment maybe more
consistent with their fiduciary duties to these ventures and may be detrimental
to our interests.
Presently there is no requirement contained in our Articles of Incorporation,
Bylaws, or minutes which requires officers and directors of our business to
disclose to us business opportunities which come to their attention. Excluded
from this duty would be opportunities which the person learns about through his
involvement as an officer and director of another company. We have no intention
of merging with or acquiring business opportunity from any affiliate or officer
or director.
We do not know of any reason other than outside business interests that would
prevent them from devoting full-time to our Company, when the business may
demand such full-time participation.
WE MAY DEPEND UPON OUTSIDE ADVISORS, WHO MAY NOT BE AVAILABLE ON REASONABLE
TERMS AND AS NEEDED.
To supplement the business experience of our officers and directors, we may be
required to employ accountants, technical experts, appraisers, attorneys, or
other consultants or advisors. Our Board, without any input from stockholders,
will make the selection of any such advisors. Furthermore, we anticipate that
such persons will be engaged on an "as needed" basis without a continuing
fiduciary or other obligation to us. In the event we consider it necessary to
hire outside advisors, we may elect to hire persons who are affiliates, if they
are able to provide the required services.
WE HAVE AGREED TO INDEMNIFICATION OF OFFICERS AND DIRECTORS AS IS PROVIDED BY
DELAWARE STATUTE.
Delaware Statutes provide for the indemnification of our directors, officers,
employees, and agents, under certain circumstances, against attorney's fees and
other expenses incurred by them in any litigation to which they become a party
arising from their association with or activities on our behalf. We will also
bear the expenses of such litigation for any of our directors, officers,
employees, or agents, upon such person's promise to repay us therefore if it is
ultimately determined that any such person shall not have been entitled to
indemnification. This indemnification policy could result in substantial
expenditures by us that we will be unable to recoup.
RISK FACTORS RELATED TO OUR STOCK
OUR STOCK IS THINLY TRADED AND, AS A RESULT, YOU MAY BE UNABLE TO SELL AT OR
NEAR ASK PRICES OR AT ALL IF YOU NEED TO LIQUIDATE YOUR SHARES.
The shares of Free Flow common stock were approved for trading on the OTC
Bulletin Board on April 3, 2013, and, as result, they are thinly-traded, meaning
that the number of persons interested in purchasing the Company's common shares
at or near ask prices at any given time may be relatively small or non-existent.
This situation is attributable to a number of factors, including the fact that
the Company is a small company which is relatively unknown to stock analysts,
stock brokers, institutional investors and others in the investment community
that generate or influence sales volume, and that even if it came to the
attention of such persons, they tend to be risk-averse and would be reluctant to
follow an unproven, early stage company such as Free Flow or purchase or
recommend the purchase of any of the Company's Securities until such time as the
Company became more seasoned and viable. As a consequence, there may be periods
of several days or more when trading activity in the Company's Securities is
minimal or non-existent, as compared to a seasoned issuer which has a large and
steady volume of trading activity that will generally support continuous sales
without an adverse effect on Securities price. We cannot give you any assurance
that a broader or more active public trading market for the Company's common
-8-
Securities will develop or be sustained, or that any trading levels will be
sustained. Due to these conditions, the Company can give investors no assurance
that they will be able to sell their shares at or near ask prices or at all if
they need money or otherwise desire to liquidate their securities of the
Company.
THE REGULATION OF PENNY STOCKS BY SEC AND FINRA MAY DISCOURAGE THE TRADABILITY
OF OUR SECURITIES.
We are a "penny stock" company. Our securities currently trade in the OTCBB
market and, and are subject to a Securities and Exchange Commission rule that
imposes special sales practice requirements upon broker-dealers who sell such
securities to persons other than established customers or accredited investors.
For purposes of the rule, the phrase "accredited investors" means, in general
terms, institutions with assets in excess of $5,000,000, or individuals having a
net worth in excess of $1,000,000 or having an annual income that exceeds
$200,000 (or that, when combined with a spouse's income, exceeds $300,000). For
transactions covered by the rule, the broker-dealer must make a special
suitability determination for the purchaser and receive the purchaser's written
agreement to the transaction prior to the sale. Effectively, this discourages
broker-dealers from executing trades in penny stocks. Consequently, the rule
will affect the ability of purchasers in this offering to sell their securities
in any market that might develop therefore because it imposes additional
regulatory burdens on penny stock transactions.
In addition, the Securities and Exchange Commission has adopted a number of
rules to regulate "penny stocks". Such rules include Rules 3a51-1, 15g-1, 15g-2,
15g-3, 15g-4, 15g-5, 15g-6, 15g-7, and 15g-9 under the Securities and Exchange
Act of 1934, as amended. Because our securities constitute "penny stocks" within
the meaning of the rules, the rules would apply to us and to our securities. The
rules will further affect the ability of owners of shares to sell our securities
in any market that might develop for them because it imposes additional
regulatory burdens on penny stock transactions.
Shareholders should be aware that, according to Securities and Exchange
Commission, the market for penny stocks has suffered in recent years from
patterns of fraud and abuse. Such patterns include (i) control of the market for
the security by one or a few broker-dealers that are often related to the
promoter or issuer; (ii) manipulation of prices through prearranged matching of
purchases and sales and false and misleading press releases; (iii) "boiler room"
practices involving high-pressure sales tactics and unrealistic price
projections by inexperienced sales persons; (iv) excessive and undisclosed
bid-ask differentials and markups by selling broker-dealers; and (v) the
wholesale dumping of the same securities by promoters and broker-dealers after
prices have been manipulated to a desired consequent investor losses. Our
management is aware of the abuses that have occurred historically in the penny
stock market. Although we do not expect to be in a position to dictate the
behavior of the market or of broker-dealers who participate in the market,
management will strive within the confines of practical limitations to prevent
the described patterns from being established with respect to our securities.
Inventory in penny stocks have limited remedies in the event of violations of
penny stock rules. While the courts are always available to seek remedies for
fraud against the Company, most, if not all, brokerages require their customers
to sign mandatory arbitration agreements in conjunctions with opening trading
accounts. Such arbitration may be through an independent arbiter. Investors may
file a complaint with FINRA against the broker allegedly at fault, and FINRA may
be the arbiter, under FIRNA rules. Arbitration rules generally limit discovery
and provide more expedient adjudication, but also provide limited remedies in
damages usually only the actual economic loss in the account. Investors should
understand that if a fraud case is filed against a company in the courts it may
be vigorously defended and may take years and great legal expenses and costs to
pursue, which may not be economically feasible for small investors.
The fact that we are a penny stock company will cause many brokers to refuse to
handle transactions in the stocks, and may discourage trading activity and
volume, or result in wide disparities between bid and ask prices. These may
cause investors significant illiquidity of the stock at a price at which they
may wish to sell or in the opportunity to complete a sale. Investors will have
no effective legal remedies for these illiquidity issues.
-9-
WE WILL PAY NO FORESEEABLE DIVIDENDS IN THE FUTURE.
We have not paid dividends on our common stock and do not ever anticipate paying
such dividends in the foreseeable future. Investors whose investment criteria is
dependent on dividends should not invest in our common stock.
ITEM 1B. UNRESOLVED STAFF COMMENTS
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Not Applicable.
ITEM 2. PROPERTIES
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FACILITIES
The Company operates out of facilities leased by Free Flow, Inc. at 2301
Woodland Crossing Drive, Suite #155, Herndon, VA 20171. At this time we do not
pay a monthly rental fee as the space is provided by the Company's President.
ITEM 3. LEGAL PROCEEDINGS
--------------------------
We are not currently involved in any legal proceedings nor do we have any
knowledge of any threatened litigation.
ITEM 4. MINE SAFETY DISCLOSURES
--------------------------------
Not applicable.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES
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MARKET INFORMATION
On April 3, 2013, the Company's common stock was accepted for trading by FINRA
on the OTCBB and the Over-the-Counter Markets OTCQB and was assigned the symbol
is "FFLO".
The following table sets forth the range of high and low closing prices for the
common stock of each full quarterly period during the years ended December 31,
2014 and 2013. The quotations were obtained from information published by the
FINRA and reflect inter-dealer prices, without retail mark-up, mark-down or
commission and may not necessarily represent actual transactions.
HIGH LOW
QUARTER ENDED: ---------- -------
December 31, 2014 $0 $0
September 30, 2014 $0 $0
June 30, 2014 $0 $0
March 31, 2014 $0 $0
QUARTER ENDED:
December 31, 2013 $0 $0
September 30, 2013 $0 $0
June 30, 2013 $0 $0
March 31, 2013 $0 $0
-10-
HOLDERS
There are approximately 59 shareholders of record of our common stock as of
December 31, 2014.
DIVIDEND POLICY
Holders of our common stock are entitled to receive such dividends as may be
declared by our board of directors. We have not declared or paid any dividends
on our common shares and it does not plan on declaring any dividends in the near
future. The Company currently intends to use all available funds to finance the
operation and expansion of its business.
RECENT SALES OF UNREGISTERED SECURITIES
On August 1, 2014, the Company issued 300 shares of Preferred Shares - Series A
stock to Redfield Holdings, Ltd. for $1 each for a total of $300.
ISSUER PURCHASES OF EQUITY SECURITIES
The Company did not repurchase any shares of its common stock during the years
ended December 31, 2014 and 2013.
ITEM 6. SELECTED FINANCIAL DATA
--------------------------------
Not applicable.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
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MANAGEMENTS' DISCUSSION AND ANALYSIS
THE FOLLOWING DISCUSSION SHOULD BE READ IN CONJUNCTION WITH OUR AUDITED
CONSOLIDATED FINANCIAL STATEMENTS AND NOTES THERETO INCLUDED HEREIN.
THIS DISCUSSION CONTAINS FORWARD-LOOKING STATEMENTS, SUCH AS STATEMENTS RELATING
TO OUR FINANCIAL CONDITION, RESULTS OF OPERATIONS, PLANS, OBJECTIVES, FUTURE
PERFORMANCE AND BUSINESS OPERATIONS. THESE STATEMENTS RELATE TO EXPECTATIONS
CONCERNING MATTERS THAT ARE NOT HISTORICAL FACTS. THESE FORWARD-LOOKING
STATEMENTS REFLECT OUR CURRENT VIEWS AND EXPECTATIONS BASED LARGELY UPON THE
INFORMATION CURRENTLY AVAILABLE TO US AND ARE SUBJECT TO INHERENT RISKS AND
UNCERTAINTIES. ALTHOUGH WE BELIEVE OUR EXPECTATIONS ARE BASED ON REASONABLE
ASSUMPTIONS, THEY ARE NOT GUARANTEES OF FUTURE PERFORMANCE AND THERE ARE A
NUMBER OF IMPORTANT FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY
FROM THOSE EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. BY MAKING
THESE FORWARD-LOOKING STATEMENTS, WE DO NOT UNDERTAKE TO UPDATE THEM IN ANY
MANNER EXCEPT AS MAY BE REQUIRED BY OUR DISCLOSURE OBLIGATIONS IN FILINGS WE
MAKE WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE FEDERAL SECURITIES
LAWS. OUR ACTUAL RESULTS MAY DIFFER MATERIALLY FROM OUR FORWARD-LOOKING
STATEMENTS.
THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM'S REPORT ON THE COMPANY'S
FINANCIAL STATEMENTS AS OF DECEMBER 31, 2014 INCLUDES A "GOING CONCERN"
EXPLANATORY PARAGRAPH THAT DESCRIBES SUBSTANTIAL DOUBT ABOUT THE COMPANY'S
ABILITY TO CONTINUE AS A GOING CONCERN.
PLAN OF OPERATIONS
We are a development stage company and have only recently generated limited
revenues. Because of the change in control, as disclosed in the Form 8-K filed
with the SEC on May 5, 2014, the Registrant is going in a new business
direction.
-11-
We will need substantial additional capital to support our proposed future
operations. We have LIMITED revenues. We have NO committed source for any funds
as of date hereof. No representation is made that any funds will be available
when needed. In the event funds cannot be raised when needed, we may not be able
to carry out our business plan, may never achieve sales, and could fail in
business as a result of these uncertainties.
RESULTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2014 COMPARED TO THE YEAR ENDED DECEMBER 31,
2013
During the year ended December 31, 2014, the Company recognized revenues of
$6,120 from sales. During the year ended December 31, 2013, the Company did not
recognize any revenues from its operational activities.
During the year ended December 31, 2014, the Company incurred operational
expenses of $42,616. During the year ended December 31, 2013, the Company
incurred operational expenses of $22,806. The increase of $19,810 was primarily
a result of a $4,658 increase in general and administrative expenses combined
with a $15,323 increase in professional fees and $171 decrease in depreciation
expenses.
During the year ended December 31, 2014, the Company recognized a net loss of
$44,018 compared to a net loss of $23,323 during the year ended December 31,
2013.
LIQUIDITY
THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM'S REPORT ON THE COMPANY'S
FINANCIAL STATEMENTS AS OF DECEMBER 31, 2014, AND FOR EACH OF THE YEARS IN THE
TWO-YEAR PERIOD THEN ENDED, INCLUDES A "GOING CONCERN" EXPLANATORY PARAGRAPH,
THAT DESCRIBES SUBSTANTIAL DOUBT ABOUT THE COMPANY'S ABILITY TO CONTINUE AS A
GOING CONCERN.
At December 31, 2014, the Company had total current assets of $92,777,
consisting of $7,187 in cash, $1,000 in accounts receivable and $84,590 in
inventories and work in progress. At December 31, 2014, total current
liabilities were $43,444, consisting of $9,444 in accounts payable, notes
payable to related party of $34,000 and accrued interest of $0.
During the year ended December 31, 2014, the Company used $40,906 in funds in
its operational activities. During the year ended December 31, 2014, the Company
recognized a net loss of $44,018. During the year ended December 31, 2013, the
Company used $22,806 in its operations, a net loss of $23,323.
SHORT TERM
On a short-term basis, the Company has generated limited revenues sufficient to
cover operations. For short term needs the Company will be dependent on receipt,
if any, of offering proceeds.
CAPITAL RESOURCES
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.
The Company has no material commitments for capital expenditures within the next
year, however if operations are commenced, substantial capital will be needed to
pay for participation, investigation, acquisition and working capital.
-12-
NEED FOR ADDITIONAL FINANCING
The Company does not have capital sufficient to meet its cash needs. The Company
will have to seek loans or equity placements to cover such cash needs.
No commitments to provide additional funds have been made by the Company's
management or other stockholders. Accordingly, there can be no assurance that
any additional funds will be available to the Company to allow it to cover the
Company's expenses as they may be incurred.
SIGNIFICANT ACCOUNTING POLICIES
REVENUE RECOGNITION
The Company recognizes revenue on arrangements in accordance with Securities and
Exchange Commission Staff Accounting Bulletin Topic 13, REVENUE RECOGNITION and
FASB ASC 605-15-25, REVENUE RECOGNITION. In all cases, revenue is recognized
only when the price is fixed or determinable, persuasive evidence of an
arrangement exists, the service is performed and collectability is reasonably
assured. The Company reported $6,120 in revenues from inception to December 31,
2014.
EARNINGS PER SHARE
The Company has adopted ASC 260-10-50, EARNINGS PER SHARE, which provides for
calculation of "basic" and "diluted" earnings per share. Basic earnings per
share includes no dilution and is computed by dividing net income or loss
available to common shareholders by the weighted average common shares
outstanding for the period. Diluted earnings per share reflect the potential
dilution of securities that could share in the earnings of an entity. Basic and
diluted losses per share were the same at the reporting dates as there were no
common stock equivalents outstanding at December 31, 2014 or December 31, 2013.
ITEM 7A. 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 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
----------------------------------------------------
The audited financial statements of Free Flow Inc. for the two-years ended
December 31, 2014 and 2013 and for the period from Inception through December
31, 2014 starting on page 14.
-13-
FREE FLOW, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED FINANCIAL STATEMENTS
AND INDEPENDENT AUDITORS' REPORT
DECEMBER 31, 2014 AND 2013
-14-
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders
Free Flow, Inc.
We have audited the accompanying balance sheet of Free Flow, Inc. (the Company)
as of December 31, 2014 and 2013, the related statements of operations, changes
in shareholders' equity (deficit) and cash flows for the year ended December 31,
2014 and 2013. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statements presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Free Flow, Inc. as of December
31, 2014 and 2013, and the result of its operations and its cash flows for the
year ended December 31, 2014 and 2013 in conformity with U.S. generally accepted
accounting principles.
The financial statements have been prepared assuming that the Company will
continue as a going concern. As discussed in Note 8 to the financial statements,
the Company's losses from operations raise substantial doubt about its ability
to continue as a going concern. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/PLS CPA
--------------------
PLS CPA, A Professional Corp.
April 15, 2015
San Diego, CA. 92111
Registered with the Public Company Accounting Oversight Board
-15-
FREE FLOW, INC.
Balance Sheets
-----------------------------------------------------------------------------------------------
As of As of
December 31, December 31,
2014 2013
---------------- ----------------
Current Assets
Cash $ 7,187 $ 237
Accounts Receivable
Advances for inventory purchase 1,000 -
Inventory & Work in Progress 84,590 -
---------------- ----------------
92,777 237
TOTAL CURRENT ASSETS
OTHER ASSETS
Trademark 250,000
---------------- ----------------
TOTAL OTHER ASSETS 250,000
PROPERTY AND EQUIPMENT, NET - 718
---------------- ----------------
TOTAL ASSETS $ 342,777 $ 955
================ ================
LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Accounts payable $ 9,444 $ 2,940
Notes payable -related parties 34,000 10,000
Accrued interest - 617
---------------- ----------------
TOTAL CURRENT LIABILITIES 43,444 13,557
LONG-TERM LIABILITIES
Accrued interest 372 117
Notes payable -related party 330,000 12,468
---------------- ----------------
TOTAL LONG-TERM LIABILITIES 330,372 12,585
---------------- ----------------
Total Liabilities 373,816 26,142
---------------- ----------------
Stockholders' Equity (Deficit)
Preferred Stock ($0.0001 par value, 20,000,000 shares
authorized; 300 shares issued and outstanding
as of December 31, 2014 and December 31, 2013 - -
Common stock, ($0.0001 par value, 100,000,000 shares
authorized; 26,200,000 shares issued and outstanding
as of December 31, 2014 and December 31, 2013 2,620 2,620
Additional paid-in capital 56,546 18,380
Deficit accumulated during development stage (90,205) (46,187)
---------------- ----------------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) (31,039) (25,187)
TOTAL LIABILITIES &
---------------- ----------------
STOCKHOLDERS' EQUITY (DEFICIT) $ 342,777 $ 955
================ ================
The accompanying notes are an integral part of these financial statements
-16-
FREE FLOW, INC.
Statements of Operations
-----------------------------------------------------------------------------------------------------------
YEAR YEAR
ENDED ENDED
DECEMBER 31, DECEMBER 31,
2014 2013
-------------------- --------------------
REVENUES
Sales $ 6,120 $ -
-------------------- --------------------
TOTAL REVENUES 6,120 -
COST OF GOODS SOLD 4,410 -
-------------------- --------------------
GROSS PROFIT 1,710 -
General & Administrative Expenses
Administrative expenses 12,786 8,128
Professional fees 29,773 14,450
Depreciation Expense 57 228
Amortization Expense - -
-------------------- --------------------
TOTAL GENERAL & ADMINISTRATIVE EXPENSES 42,616 22,806
-------------------- --------------------
LOSS FROM OPERATION (40,906) (22,806)
-------------------- --------------------
OTHER EXPENSE
Interest expense-related party (3,112) (517)
-------------------- --------------------
TOTAL OTHER EXPENSES (3,112) (517)
NET INCOME (LOSS) $ (44,018) $ (23,323)
==================== ====================
BASIC EARNINGS PER SHARE $ (0.00) $ (0.00)
==================== ====================
WEIGHTED AVERAGE NUMBER OF
COMMON AND PREFERRED SHARES OUTSTANDING $ 26,200,000 $ 26,200,000
==================== ====================
The accompanying notes are an integral part of these financial statements
-17-
FREE FLOW, INC.
Statement of changes in Shareholders' Equity (Deficit)
From December 31, 2012 through December 31, 2014
---------------------------------------------------------------------------------------------------------------------------------
DEFICIT
ADDITIONAL ACCUMULATED
COMMON STOCK PREFERRED STOCK PAID-IN DURING TOTAL
SHARES AMOUNT SHARES AMOUNT CAPITAL DEVELOPMENT
STAGE
---------------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 2012 26,200,000 $ 2,620 - $ - $ 18,380 $ (22,864) $ (1,864)
=================================================================================================================================
Loss for the year ended December 31, 2013 (23,323) (23,323)
---------------------------------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 2013 26,200,000 $ 2,620 - $ - $ 18,380 $ (46,187) $ (25,187)
=================================================================================================================================
Debt forgiveness from shareholders 37,866 37,866
Preferred stock issued, August 1, 2014
at $1.00 per share 300 0 300 300
Loss for the period ended December 31, 2014 (44,018) (44,018)
---------------------------------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 2014 26,200,000 $ 2,620 300 $ 0 $ 56,546 $ (90,205) $ (31,039)
=================================================================================================================================
The accompanying notes are an integral part of these financial statements
-18-
FREE FLOW, INC.
Statements of Cash Flows
---------------------------------------------------------------------------------------------------------------
YEAR YEAR
ENDED ENDED
DECEMBER 31, DECEMBER 31,
2014 2013
-------------------- -------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (44,018) $ (23,323)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Amortization expense
Depreciation expense 57 228
Changes in operating assets and liabilities:
( Increase) Decrease in inventory (84,590)
Increase (Decrease) in accounts payable 21,829 2,940
(Increase) Decrease in prepaid expenses (1,000)
Increase in accrued interest 372 517
-------------------- -------------------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (107,350) (19,638)
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of Equipment 0 0
Acquisition of Intangible Assets (250,000) 0
-------------------- -------------------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES (250,000) -
CASH FLOWS FROM FINANCING ACTIVITIES
Proceed from notes payable - related party 374,000 12,468
Payment to note payable--related party (10,000)
Issuance of preferred stock 300
Issuance of common stock -
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 364,300 12,468
-------------------- -------------------
NET INCREASE (DECREASE) IN CASH 6,950 (7,170)
CASH AT BEGINNING OF PERIOD 237 7,407
-------------------- -------------------
CASH AT END OF PERIOD 7,187 237
==================== ===================
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during period for:
Interest $ 2,500 $ -
==================== ===================
Income Taxes $ - $ -
==================== ===================
SIGNIFICANT NON-CASH INVESTING AND FINANCING ACTIVITIES
Forgiveness from shareholders $ 37,866
====================
The accompanying notes are an integral part of these financial statements
-19-
FREE FLOW, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 2014
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
-------------------------------------------------
Free Flow, Inc. (the "Company") was incorporated on October 28, 2011 under the
laws of State of Delaware to enter into the green energy industry. It began with
the idea of developing swimming pool solar pump system to create a blend of
green energy harvesting while maintaining the present system. Having received
firm enquiries from overseas Farmers, Free Flow has now focused on sale of solar
panels to the agriculture sector, providing alternate means of electricity to
operate pumps for Water Wells in Indian and Pakistan. The Company remained in
the development stage since its inception and has just began realizing revenues
from its operations. The Company's fiscal year end is December 31.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
---------------------------------------------------
ACCOUNTING BASIS
The statements were prepared following generally accepted accounting principles
of the United States of America consistently applied. USE OF ESTIMATES
Management uses estimates and assumptions in preparing these financial
statements in accordance with U.S. generally accepted accounting principles.
Those estimates and assumptions affect the reported amounts of assets and
liabilities, the disclosure of contingent assets and liabilities, and the
reported revenues and expenses.
CASH AND CASH EQUIVALENTS
Cash equivalents include short-term, highly liquid investments with maturities
of three months or less at the time of acquisition.
PROPERTY AND EQUIPMENT
Property and equipment are stated at cost. Equipment and fixtures are being
depreciated using the straight-line method over the estimated asset lives, 5
year.
INTANGIBLE ASSETS
Initial Measurement
Intangible asset acquisitions in which the consideration given is cash are
measured by the amount of cash paid, which generally includes the transaction
costs of the asset acquisition. However, if the consideration given is not in
the form of cash (that is, in the form of noncash assets, liabilities incurred,
or equity interests issued), measurement is based on either the cost which shall
be measured based on the fair value of the consideration given or the fair value
of the assets (or net assets) acquired, whichever is more clearly evident and,
thus, more reliably measurable.
-20-
FREE FLOW, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 2014
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
---------------------------------------------------------------
Subsequent Measurement
The company accounts for its intangible assets under the Financial Accounting
Standards Board ("FASB") Accounting Standards Codification Subtopic ("ASC")
350-30-35 "Intangibles--Goodwill and Other--General Intangibles Other than
Goodwill-Subsequent Measurement". Under this method the company is required to
test an indefinite-lived intangible asset for impairment on at least an annual
basis. This is done by comparing the asset's fair value with its carrying
amount. If the carrying amount exceeds the asset's fair value, the difference in
those amounts is recognized as an impairment loss. INCOME TAXES The Company
accounts for its income taxes in accordance with FASB Accounting Standards
Codification ("ASC") No. 740, "Income Taxes". Under this method, deferred tax
assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax balances. Deferred tax
assets and liabilities are measured using enacted or substantially enacted tax
rates expected to apply to the taxable income in the years in which those
differences are expected to be recovered or settled. Deferred tax assets are
reduced by a valuation allowance when, in the opinion of management, it is more
likely than not that some portion or all of the deferred tax assets will not be
realized. The effect on deferred tax assets and liabilities of a change in tax
rates is recognized in income in the period that includes the date of enactment
or substantive enactment.
FINANCIAL INSTRUMENTS
Fair value measurements are determined based on the assumptions that market
participants would use in pricing an asset or liability. ASC 820-10 establishes
a hierarchy for inputs used in measuring fair value that maximizes the use of
observable inputs and minimizes the use of unobservable inputs by requiring that
the most observable inputs be used when available. FASB ASC 820 establishes a
fair value hierarchy that prioritizes the use of inputs used in valuation
methodologies into the following three levels:
o Level 1: Quoted prices (unadjusted) for identical assets or
liabilities in active markets. A quoted price in an active market
provides the most reliable evidence of fair value and must be used to
measure fair value whenever available.
o Level 2: Significant other observable inputs other than Level 1 prices
such as quoted prices for similar assets or liabilities; quoted prices
in markets that are not active; or other inputs that are observable or
can be corroborated by observable market data.
o Level 3: Significant unobservable inputs that reflect a reporting
entity's own assumptions about the assumptions that market
participants would use in pricing an asset or liability. For example,
level 3 inputs would relate to forecasts of future earnings and cash
flows used in a discounted future cash flows method.
-21-
FREE FLOW, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 2014
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
---------------------------------------------------------------
The carrying amounts reported in the balance sheet for cash, accounts payable
and notes payable approximate their estimated fair market value based on the
short-term maturity of this instrument. In addition, FASB ASC 825-10-25 "Fair
Value Option" was effective for January 1, 2008. ASC 825-10-25 expands
opportunities to use fair value measurements in financial reporting and permits
entities to choose to measure many financial instruments and certain other items
at fair value. NET LOSS PER SHARE Basic loss per share includes no dilution and
is computed by dividing loss available to common stockholders by the weighted
average number of common shares outstanding for the period. Dilutive loss per
share reflects the potential dilution of securities that could share in the
losses of the Company. Because the Company does not have any potentially
dilutive securities, the accompanying presentation is only of basic loss per
share.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
Recent accounting pronouncements that the Company has adopted or that will be
required to adopt in the future are summarized below.
In May 2011, FASB issued Accounting Standards Update ("ASU") No. 2011-04, "Fair
Value Measurement (Topic 820): Amendments to Achieve Common Fair Value
Measurement and Disclosure Requirements in U.S. GAAP and IFRS" ("ASU No.
2011-04"). ASU No. 2011-04 provides guidance which is expected to result in
common fair value measurement and disclosure requirements between U.S. GAAP and
IFRS. It changes the wording used to describe many of the requirements in U.S.
GAAP for measuring fair value and for disclosing information about fair value
measurements. It is not intended for this update to result in a change in the
application of the requirements in Topic 820. The amendments in ASU No. 2011-04
are to be applied prospectively. ASU No. 2011-04 is effective for public
companies for interim and annual periods beginning after December 15, 2011.
Early application is not permitted. This update is not expected to have a
material impact on the Company's financial statements.
In June 2011, the FASB issued ASU No. 2011-05, "Comprehensive Income (Topic
220): Presentation of Comprehensive Income" ("ASU No. 2011-05"). In ASU No.
2011-05, an entity has the option to present the total of comprehensive income,
the components of net income, and the components of other comprehensive income
either in a single continuous statement of comprehensive income or in two
separate but consecutive statements. In both choices, an entity is required to
present each component of net income along with total net income, each component
of other comprehensive income along with a total for other comprehensive income,
and a total amount for comprehensive income. The amendments in ASU No. 2011-05
do not change the items that must be reported in other comprehensive income or
when an item of other comprehensive income must be reclassified to net income.
They also do not change the presentation of related tax effects, before related
tax effects, or the portrayal or calculation of earnings per share. The
amendments in ASU No. 2011-05 should be applied retrospectively. The amendment
is effective for fiscal years, and interim periods within those years, beginning
after December 15, 2011. Early adoption is permitted, because compliance with
the amendments is already permitted. The amendments do not require any
transition disclosures. This update is not expected to have a material impact on
the Company's financial statements.
-22-
FREE FLOW, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 2014
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
---------------------------------------------------------------
In September 2011, the FASB issued ASU No. 2011-08, "Intangibles -- Goodwill and
Other (Topic 350)" ("ASU No. 2011-08"). In ASU No. 2011-08, an entity is
permitted to make a qualitative assessment of whether it is more likely than not
that a reporting unit's fair value is less than its carrying amount before
applying the two-step goodwill impairment test. If an entity concludes that it
is not more likely than not that the fair value of a reporting unit is less than
its carrying amount, it would not be required to perform the two-step impairment
test for that reporting unit. The ASU's objective is to simplify how an entity
tests goodwill for impairment. The amendments in ASU No. 2011-08 are effective
for annual and interim goodwill and impairment tests performed for fiscal years
beginning after December 15, 2011. Early adoption is permitted, including for
annual and interim goodwill impairment tests performed as of a date before
September 15, 2011, if an entity's financial statements for the most recent
annual or interim period have not yet been issued. The Company is evaluating the
requirements of ASU No. 2011-08 and has not yet determined whether a revised
approach to evaluation of goodwill impairment will be used in future
assessments. The Company does not expect the adoption of ASU No. 2011-08 to have
a material impact on its financial statements.
Other accounting standards that have been issued or proposed by the FASB that do
not require adoption until a future date are not expected to have a material
impact on the financial statements upon adoption.
The Company has implemented all new accounting pronouncements that are in effect
and that may impact its financial statements and does not believe that there are
any other new accounting pronouncements that have been issued that might have a
material impact on its financial position or results of operations.
NOTE 3 - PROVISION FOR INCOME TAXES
-----------------------------------
Realization of deferred tax assets is dependent upon sufficient future taxable
income during the period that deductible temporary differences and
carry-forwards are expected to be available to reduce taxable income. As the
achievement of required future taxable income is uncertain, the Company recorded
a valuation allowance. As of December 31, 2014 the Company had a net operating
loss carry-forward of approximately $90,205. Net operating loss carry-forward,
expires twenty years from the date the loss was incurred.
The Company is subject to United States federal and state income taxes at an
approximate rate of 34%. The reconciliation of the provision for income taxes at
the United States federal statutory rate compared to the Company's income tax
expense as reported is as follows:
-23-
FREE FLOW, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 2014
NOTE 3 - PROVISION FOR INCOME TAXES (continued)
-----------------------------------------------
December 31, December 31
2014 2013
-------------------------------
Net loss before income taxes per financial
statements $ 90,205 $ 46,187
Income tax rate 34% 34%
Income tax recovery (30,670) (15,704)
Permanent differences - -
Temporary differences - -
Valuation allowance change 30,670 15,704
Provision for income taxes - -
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Deferred income taxes
arise from temporary differences in the recognition of income and expenses for
financials reporting and tax purposes. The significant components of deferred
income tax assets and liabilities at December 31, 2014 and December 31, 2013 are
as follows:
December 31, December 31
2014 2013
------------------- ------------------
Net operating loss
Carry forward $ 30,670 $ 15,704
Valuation allowance (30,670) (15,704)
Net deferred income tax asset - - The Company has recognized a valuation
allowance for the deferred income tax asset since the Company cannot be assured
that it is more likely than not that such benefit will be utilized in future
years. The valuation allowance is reviewed annually. When circumstances change
and which cause a change in management's judgment about the realizability of
deferred income tax assets, the impact of the change on the valuation allowance
is generally reflected in current income.
-24-
FREE FLOW, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 2014
NOTE 4- PROPERTY AND EQUIPEMENT
-------------------------------
Property and equipment consists of the following:
As of
December 31, December 31,
2014 2013
------------ ------------
Equipment $ 0 $ 1,141
------------ ------------
Total Fixed Assets 0 1,141
Less: Accumulated Depreciation (0) (423)
------------ ------------
Net Fixed Assets $ 0 $ 718
============ ============
Depreciation expenses for the periods ended December 31, 2014 and December 31,
2013 were $57 and $423
NOTE 5 - INVENTORY
------------------
December 31, 2014 December 31, 2013
------------------- ------------------
Finished Goods $43,172 0
Working in Process 35,358 0
Packing Materials 6,060 0
------------------- ------------------
$84,590 0
=================== ==================
The inventory comprises of HYGIENiQ, finished products stored at an independent
third party, fulfillment center while the raw material and unfinished inventory
is stored at Aerosol & Packaging, Inc., a contract manufacturing facility in
Maryland.
NOTE 6 - TRADE MARK
-------------------
On July 31, 2014, the Company purchase "HYGIENiQ", the trade mark AMOUNTING
$250,000 from GS Pharmaceutical, Inc., a related party. The ownership rights to
produce, market and sell globally of the HYGIENiQ products and the rights and
privileges in regard to ownership of the trade mark, i.e., HYGIENiQ (registered
or unregistered) were sold, assigned and transferred to the Company. The
consideration for all of the above included all advertisement and sales
promotion material including but not limited to website, videos for infomercials
etc.
-25-
FREE FLOW, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 2014
NOTE 7 - COMMITMENTS AND CONTINGENCIES
--------------------------------------
LITIGATION
The Company is not presently involved in any litigation.
NOTE 8 - GOING CONCERN
----------------------
Future issuances of the Company's equity or debt securities will be required in
order for the Company to continue to finance its operations and continue as a
going concern. The Company's present revenues are insufficient to meet operating
expenses. The financial statement of the Company have been prepared assuming
that the Company will continue as a going concern, which contemplates, among
other things, the realization of assets and the satisfaction of liabilities in
the normal course of business. The Company has incurred cumulative net losses of
$90,205 since its inception and requires capital for its contemplated
operational and marketing activities to take place. The Company's ability to
raise additional capital through the future issuances of common stock is
unknown. The obtainment of additional financing, the successful development of
the Company's contemplated plan of operations, and its transition, ultimately,
to the attainment of profitable operations are necessary for the Company to
continue operations. The ability to successfully resolve these factors raise
substantial doubt about the Company's ability to continue as a going concern.
The financial statements of the Company do not include any adjustments that may
result from the outcome of these aforementioned uncertainties.
NOTE 9 - RELATED PARTY TRANSACTIONS
-----------------------------------
Sabir Saleem, the officer and director of the Company, may in the future, become
involved in other business opportunities as they become available, thus he may
face a conflict in selecting between the Company and his other business
opportunities. The Company has not formulated a policy for the resolution of
such conflicts.
NOTE 10 - NOTES PAYABLE - RELATED PARTY
---------------------------------------
S DOUGLAS HENDERSON, FORMER PRESIDENT
Since inception the Company received cash totaling $$25,100 from S Douglas
Henderson in the form of a promissory. As of December 31, 2014 the amount due to
S Douglas Henderson was $0.
On March 13, 2014, S. Douglas Henderson (the "Seller"), entered into a Common
Stock Purchase Agreement (the "Stock Purchase Agreement") pursuant to which the
Seller agreed to sell to Redfield Holdings. On April 18, 2014 the sale of the
shares was completed at which time the full loan in the amount of $25,100 to
Douglas Henderson was waived per the purchase agreement. Also the Seller paid
all outstanding payable and the Company recorded $37,866 as additional paid-in
capital.
GS PHARMACEUTICAL, INC.
On July 31, 2014, the Company purchase "HYGIENiQ", the trade mark, along with
all intellectual properties, inventories amounting $339,000 from GS
Pharmaceutical, Inc., a related party. The relationship being that the CEO of
Free Flow, Inc., namely Mr. Sabir Saleem is also the CEO of the Seller, namely
GS Pharmaceuticals, Inc. However, Mr. Saleem does not own any shares of stock in
GS
-26-
FREE FLOW, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 2014
NOTE 10 - NOTES PAYABLE - RELATED PARTY (CONTINUED)
---------------------------------------------------
Pharmaceuticals, Inc. The payment of this purchase is three years promissory
note bearing 2% interest per annum for $330,000 and a sum of $9,000 in good
funds/cash within 90 days. On December 2, 2014 the company paid $9,000 towards
the short term loan and interest $234leaving a balance of $0. On December 31,
2014 the balance due to GS Pharmaceutical, Inc. is $330,000 and interest expense
incurred $2,638. The Company paid interest expense $2,266 and accrued interest
expense as of December 31, 2014 is $372.
SABIR SALEEM, PRESIDENT
On December 31, 2014, the Company received cash loans totaling $740 and the
Company paid $740 of the loan balance. These loans are at 0% interest with
principle balance due prior to December 31, 2014.
REDFIELD HOLDINGS, LTD, MAIN SHAREHOLDER
On December 31, 2014, the Company received cash loans totaling $34,000 from
Redfield Holdings, Ltd and the Company paid $0 of the loan balance. These loans
are at 0% interest with principle balance due prior to December 30, 2015.
The Company issued 300 shares to Redfield Holdings, Ltd. against a subscription
for $300 which was accepted by the Company and shares there against issued to
Redfield Holdings, Ltd.
As of December 31, 2014, accrued interest due to GS Pharmaceutical, Inc. is
$372.
NOTE 11 - STOCK PURCHASE AGREEMENT
----------------------------------
On March 13, 2014, S. Douglas Henderson (the "Seller"), entered into a Common
Stock Purchase Agreement (the "Stock Purchase Agreement") pursuant to which the
Seller agreed to sell to Redfield Holdings, Ltd., a Virginia corporation (the
"Purchaser"), with a principal place of business at 2301 Woodland Crossing Dr.,
Suite 155, Herndon, VA 20171, the Twenty Five Million (25,000,000) shares of
common stock of the Registrant(the "Shares") owned by Mr. Henderson,
constituting approximately 95.4% of the Registrant's outstanding common stock,
for $255,000. Mr. Henderson paid off all liabilities of the company at that
time.
The sale of the Shares was completed on April 18, 2014. As a result of the sale
there was a change of control of the Registrant. The new Director of the company
is Ferdinando (Fred) Ferrara and the new CEO is Sabir Saleem. There was no
family relationship or other relationship between the Seller and the Purchaser.
Pursuant to the terms of the Common Stock Purchase Agreement dated March 13,
2014, S. Douglas Henderson, the Registrant's sole officer and director resigned
his positions on April 18, 2014. Mr. Henderson's resignation was not the result
of any dispute or disagreement with the Registrant.
PURCHASE OF SHARES OF SKY ENERGY (PVT) LTD., INDIA.
On August 7, 2014 the company entered into a stock purchase contract with
Riyazuddin Kazi and Ahteshamuddin Kagzi to purchase 225,000 shares for a sum of
$4,005,000 of Sky Energy (Pvt) Ltd. being 90% of the issued and outstanding
shares. As consideration thereof, Bills of Exchange are lodged with the Escrow
Agent. The effectuation of the contract (the effective date of the closing of
the
-27-
FREE FLOW, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 2014
NOTE 11 - STOCK PURCHASE AGREEMENT (CONTINUED)
---------------------------------------------
transaction) is subject to the Sellers delivering the audited financial
statements to the Company. As of this date the agreed upon Audited Statement has
not been received by the Company.
NOTE 12 - 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.
Of the 20,000,000 authorized Preferred Stock, the company has designated 10,000
shares as "Preferred Shares - Series A". Each share of "Preferred Share - Series
A" carries voting rights equal to ten thousand (10,000) votes. In other words
the 10,000 "Preferred Shares - Series A" collectively have a voting right equal
to one hundred million (100,000,000) common shares of the Corporation.
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.
On August 1, 2014 The Company issued 300 Preferred Shares--series A issued to
Redfield Holdings Ltd. for $1 each for a total of $300
As of December 31, 2014, the Company had 26,200,000 shares of common stock
issued and outstanding and 300 shares of preferred Shares issued and
outstanding.
NOTE 13 - SUBSEQUENT EVENT
--------------------------
Subsequently on January 24, 2015 Free Flow, Inc. incorporated a subsidiary
company named Promedaff, Inc.
Promedaff, Inc. bought skin care products from Eliot Obi-Tabot, MD and is
developing a web site to launch an internet commerce along with selling
arrangements for HYGINEiQ. The web site domain name is www.promedaffskincare.com
All of the products are non-prescription, over the counter formulations.
Promedaff, Inc. is also strategizing to sell to the beauty spas and pharmacies
that carry such products for sale over the counter.
-28-
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
--------------------------------------------------------------------------------
Not applicable.
ITEM 9A. CONTROLS AND PROCEDURES
--------------------------------
DISCLOSURE CONTROLS AND PROCEDURES
Disclosure controls and procedures (as defined in Rule 13(a) - 15(e)) are
controls and procedures that are designed to ensure that information required to
be disclosed by a public company in the reports that if files or submits under
the Exchange Act is recorded, processed, summarized and reported within the time
periods specified in the SEC's rules and forms. Disclosure controls and
procedures include, without limitation, controls and procedures designed to
ensure that information required to be disclosed by a public company in the
reports that it files or submits under the Exchange Act is accumulated and
communicated to the company's management, including its principal executive and
principal financial officers, or persons performing similar functions, as
appropriate to allow timely decisions regarding required disclosure. As of
December 31, 2014, the Chief Executive Officer/Principal Accounting Officer has
founds such controls and procedures to be ineffective as discussed further
below.
MANAGEMENT'S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING.
Free Flow's management is responsible for establishing and maintaining adequate
internal control over financial reporting for the company in accordance with as
defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. The Company's
internal control over financial reporting is designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with generally
accepted accounting principles. The Company's internal control over financial
reporting includes those policies and procedures that:
(1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the
Company's assets;
(2) provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that the Company's
receipts and expenditures are being made only in accordance with
authorizations of Free Flow's management and directors; and
(3) provide reasonable assurance regarding prevention or timely detection
of unauthorized acquisition, use or disposition of the Company's
assets that could have a material effect on Free Flow's financial
statements.
Our Chief Executive Officer/Principal Accounting Officer, who is the same
individual, has identified certain material weaknesses in internal control over
financial reporting relating to a shortage of accounting and reporting personnel
due to limited financial resources and the size of our Company, as detailed
below:
(1) The Company currently does not have, but is in the process of
developing formally documented accounting policies and procedures,
which includes establishing a well-defined process for financial
reporting.
(2) Due to the limited size of our accounting department, we currently
lack the resources to handle complex accounting transactions. We
believe this deficiency could lead to errors in the presentation and
disclosure of financial information in our annual, quarterly, and
other filings.
(3) As is the case with many companies of similar size, we currently have
a lack of segregation of duties in the accounting department. Until
our operations expand and additional cash flow is generated from
operations, a complete segregation of duties within our accounting
function will not be possible.
-29-
Considering the nature and extent of our current operations and any risks or
errors in financial reporting under current operations and the fact that we have
been a small business with limited employees, such items caused a weakness in
internal controls involving the areas disclosed above.
Our Chief Executive Office/Principal Accounting Officer has concluded that our
internal controls over financial reporting were ineffective as of December 31,
2014, due to the existence of the material weaknesses noted above that we have
yet to fully remediate.
This annual report does not include an attestation report of the Company's
registered public accounting firm regarding internal control over financial
reporting. Management's report was not subject to attestation by the Company's
registered public accounting firm pursuant to permanent rules of the Securities
and Exchange Commission that permit the Company to provide only management's
report in this annual report.
There was no change in our internal control over financial reporting that
occurred during the fiscal year ended December 31, 2014, that has materially
affected, or is reasonably likely to materially affect, our internal control
over financial reporting.
ITEM 9B. OTHER INFORMATION
---------------------------
Not applicable.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
----------------------------------------------------------------
NAME AGE POSITION TERM
-------------------------- ----- ------------------------------------ --------
Sabir Saleem 67 President, CEO, CFO and Director Annual
Fernandino Ferrara 61 Secretary/Treasurer and Director Annual
S. Douglas Henderson (1) 77 Former President, CFO and Director Annual
--------------------------
(1) Mr. Henderson resigned as President, CFO and Director on April 18, 2014.
CURRENT OFFICERS AND DIRECTORS
SABIR SALEEM, PRESIDENT, CEO, CFO AND DIRECTOR, AGE 66
Mr. Saleem was appointed President, CEO, CFO and a Director of Free Flow, Inc.
on April 18, 2014. Mr. Saleem has been the CEO and 100% owner of Redfield
Holdings, Ltd. since its formation in February, 2014. From 2003 until December
2007, he was President of United Medscan Corp; and after that Registrant was
sold, he remained a consultant with United Medscan until October, 2009. Mr.
Saleem was CEO of Total Medical Care, Inc., a not-for-profit corporation, from
July 2006 until 2011. He currently holds the following positions: CEO of GS
Pharmaceuticals, Inc., a pharmaceutical Registrant since February, 2012; and CEO
of Neolife, Inc., a Virginia Registrant since September, 2012. From December
2010 until January 2012, Mr. Saleem was the CEO of Michelex Corporation (TS:
MLXO), a pharmaceutical manufacturer. All of the foregoing, except MLXO, are
privately-owned companies.
-30-
FERNANDINO FERRARA, SECRETARY/TREASURER AND DIRECTOR, AGE 60
Mr. Fernandino Ferrara was appointed Secretary/Treasurer and Director of Free
Flow, Inc. on April 18, 2014. Mr. Ferrara has been President and CEO of
Lease-it-Capital d/b/a AcuLease(TM), located in Farmingdale, NY, for the past 14
years. Mr. Ferrara is also the Secretary-Treasurer of Adopt-A-Battalion, Inc., a
charitable support organization for overseas and returning US servicemen and
servicewomen; and he is the Vice-President of the Suffolk County Police Reserves
Foundation a charitable support organization for Suffolk County, New York,
police.
FORMER OFFICERS AND DIRECTORS
S. DOUGLAS HENDERSON, FORMER PRESIDENT, CFO, SECRETARY AND DIRECTOR
Mr. Henderson was President, CFO, Secretary and sole director of Free Flow from
October 29, 2011 through April 18, 2014. From 1998 until 2008 he was Admissions
Director, Senior Flight Instructor of San Diego Flight Training International,
San Diego CA. Since July 2004, he has worked part time as an income tax preparer
for H & R Block. Mr. Henderson is also part owner of J. Bright Henderson, Inc.,
a dealer in fine art.
Mr. Henderson was a director of Ads in Motion, Inc., a public company, from
August 2007 until June 28, 2010 and was secretary of Ads in Motion from May 2007
until June 28, 2010.
Our officers are spending up to 5 hours per week on our business at this time.
At such time as the Company is financially capable of paying salaries, it is
anticipated that management will assume full- time roles in the Company's
operations and be paid accordingly.
CONFLICTS OF INTEREST - GENERAL.
Our directors and officers are, or may become, in their individual capacities,
officers, directors, controlling shareholders and/or partners of other entities
engaged in a variety of businesses. Thus, there exist potential conflicts of
interest including, among other things, time, efforts and corporation
opportunity, involved in participation with such other business entities. While
each officer and director of our business is engaged in business activities
outside of our business, the amount of time they devote to our business will be
up to approximately 5 hours per week.
CONFLICTS OF INTEREST - CORPORATE OPPORTUNITIES
Presently, no requirement contained in our Articles of Incorporation, Bylaws, or
minutes which requires officers and directors of our business to disclose to us
business opportunities which come to their attention. We have no intention of
merging with or acquiring an affiliate, associate person or business opportunity
from any affiliate or any client of any such person.
COMMITTEES OF THE BOARD OF DIRECTORS
The Company is managed under the direction of its board of directors.
The board of directors has no nominating, auditing committee or a compensation
committee. Therefore, the selection of person or election to the board of
directors was neither independently made nor negotiated at arm's length.
EXECUTIVE COMMITTEE
The members of the Board of Directors serve as its executive committee.
AUDIT COMMITTEE
The members of the Board of Directors serve as its audit committee.
-31-
ITEM 11. EXECUTIVE COMPENSATION
--------------------------------
The following table sets forth the fact that officers received a cash salary
during the last three fiscal years. The following table sets forth this
information by the Company including salary, bonus and certain other
compensation to the Company's Chief Executive Officer and named executive
officers for the years ended December 31, 2014, 2013 and 2012.
SUMMARY EXECUTIVES COMPENSATION TABLE
NON-EQUITY NON-QUALIFIED
INCENTIVE DEFERRED
STOCK OPTION PLAN COMPENSATION ALL OTHER
SALARY BONUS AWARDS AWARDS COMPENSATION EARNINGS COMPENSATION TOTAL
NAME & POSITION YEAR ($) ($) ($) ($) ($) ($) ($) ($)
------------------- -------- ---------- ------- -------- -------- --------------- -------------- -------------- ------------
Sabir Saleem, 2014 0 0 0 0 0 0 0 0
President, CEO 2013 0 0 0 0 0 0 0 0
and CFO 2012 0 0 0 0 0 0 0 0
Fernandino 2014 0 0 0 0 0 0 0 0
Ferrara, 2013 0 0 0 0 0 0 0 0
Secretary/ 2012 0 0 0 0 0 0 0 0
Treasurer
S. Douglas 2014 0 0 0 0 0 0 0 0
Henderson, former 2013 0 0 0 0 0 0 0 0
President, CFO & 2012 0 0 0 0 0 0 0 0
Secretary (1)
-------------------
(1) Mr. Henderson resigned as CEO, President and Secretary on April 18, 2014.
Mr. Saleem and Mr. Ferrara do not have employment agreements with the Company
nor do they receive compensation for their services from the Company.
(REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)
-32-
DIRECTOR COMPENSATION
The following table sets forth certain information concerning compensation paid
to our directors for services as directors, but not including compensation for
services as officers reported in the "Summary Executive Compensation Table"
during the year ended December 31, 2014:
Fees Non-qualified
earned or deferred
Name paid in Non-equity compensation
cash Stock Option incentive plan earnings All other Total
($) awards ($) awards ($) compensation ($) ($) compensation ($) ($)
------------------ ----------- ----------- ----------- ----------------- ----------------- ----------------- ---------
Sabir Saleem 0 0 0 0 0 0 0
Fernandino 0 0 0 0 0 0 0
Ferrara
S. Douglas 0 0 0 0 0 0 0
Henderson (1)
------------------
(1) Mr. Henderson resigned as a Director on April 18, 2014.
All of our officers and/or directors will continue to be active in other
companies. All officers and directors have retained the right to conduct their
own independent business interests.
It is possible that situations may arise in the future where the personal
interests of the officers and directors may conflict with our interests. Such
conflicts could include determining what portion of their working time will be
spent on our business and what portion on other business interest. Any
transactions between us and entities affiliated with our officers and directors
will be on terms which are fair and equitable to us. Our Board of Directors
intends to continually review all corporate opportunities to further attempt to
safeguard against conflicts of interest between their business interests and our
interests.
We have no intention of merging with or acquiring an affiliate, associated
person or business opportunity from any affiliate or any client of any such
person.
Directors receive no compensation for serving.
OPTION/SAR GRANTS IN THE LAST FISCAL YEAR
Free Flow does not have a stock option plan as of the date of this filing. There
was no grant of stock options to the Chief Executive Officer and other named
executive officers during the fiscal years ended December 31, 2014 and 2013.
LIMITATION ON LIABILITY AND INDEMNIFICATION
Free Flow, Inc. officers and directors are indemnified as provided by the
Delaware Revised Statutes and the bylaws.
Under the Delaware Revised Statutes, director immunity from liability to a
company or its shareholders for monetary liabilities applies automatically
-33-
unless it is specifically limited by a company's Articles of Incorporation. Our
Articles of Incorporation do not specifically limit the directors' immunity.
Excepted from that immunity are: (a) a willful failure to deal fairly with us or
our shareholders in connection with a matter in which the director has a
material conflict of interest; (b) a violation of criminal law, unless the
director had reasonable cause to believe that his or her conduct was lawful or
no reasonable cause to believe that his or her conduct was unlawful; (c) a
transaction from which the director derived an improper personal profit; and (d)
willful misconduct.
Our bylaws provide that it will indemnify the directors to the fullest extent
not prohibited by Delaware law; provided, however, that we may modify the extent
of such indemnification by individual contracts with the directors and officers;
and, provided, further, that we shall not be required to indemnify any director
or officer in connection with any proceeding, or part thereof, initiated by such
person unless such indemnification: (a) is expressly required to be made by law,
(b) the proceeding was authorized by the board of directors, (c) is provided by
us, in sole discretion, pursuant to the powers vested under Delaware law or (d)
is required to be made pursuant to the bylaws.
Our bylaws provide that it will advance to any person who was, or is a party, or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he is or was a director or officer of us, or is or was
serving at the request of us as a director or executive officer of another
company, partnership, joint venture, trust or other enterprise, prior to the
final disposition of the proceeding, promptly following request therefore, all
expenses incurred by any director or officer in connection with such proceeding
upon receipt of an undertaking by or on behalf of such person to repay said
amounts if it should be determined ultimately that such person is not entitled
to be indemnified under the bylaws or otherwise.
Our bylaws provide that no advance shall be made by us to an officer except by
reason of the fact that such officer is, or was, our director in which event
this paragraph shall not apply, in any action, suit or proceeding, whether
civil, criminal, administrative or investigative, if a determination is
reasonably and promptly made: (a) by the board of directors by a majority vote
of a quorum consisting of directors who were not parties to the proceeding, or
(b) if such quorum is not obtainable, or, even if obtainable, a quorum of
disinterested directors so directs, by independent legal counsel in a written
opinion, that the facts known to the decision-making party at the time such
determination is made demonstrate clearly and convincingly that such person
acted in bad faith or in a manner that such person did not believe to be in or
not opposed to the best interests of us.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS.
--------------------------------------------------------------------------------
The following table sets forth information with respect to the beneficial
ownership of Free Flow's outstanding common stock by:
o each person who is known by the Company to be the beneficial owner of
five percent (5%) or more of the Company's common stock;
o Free Flow's Chief Executive Officer, its other executive officers, and
each director as identified in the "Management -- Executive
Compensation" section; and
o all of the Company's directors and executive officers as a group.
Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or investment
power with respect to securities. Shares of common stock and options, warrants
and convertible securities that are currently exercisable or convertible within
60 days of the date of this document into shares of Free Flow's common stock are
deemed to be outstanding and to be beneficially owned by the person holding the
options, warrants or convertible securities for the purpose of computing the
percentage ownership of the person, but are not treated as outstanding for the
purpose of computing the percentage ownership of any other person.
-34-
There are currently 100,000,000 common shares authorized of which 26,200,000 are
outstanding at December 31, 2014.
The following sets forth information with respect to our common stock
beneficially owned by each Officer and Director, and by all Directors and
Officers as a group as of December 31, 2014.
TITLE OF CLASS NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT OF CLASS
BENEFICIAL OWNER (1) BENEFICIAL OWNER
------------------------------- ------------------------------ ------------------------ ----------------------------
Common shares Sabir Saleem, President, CEO 20,630,000 78.7%
and Director (2)(3)
Common shares Fernandino Ferrara, 0 0%
Secretary/Treasurer and
Director
Common shares Redfield Holdings, Ltd. 20,630,000 78.7%
Preferred shares - Series "A" Redfield Holdings, Ltd. 300 (3) 100%
------------------------ ----------------------------
All Directors and Executive Common shares 20,630,000 78.7%
Officers as a Group (2
persons)
-------------------------------
(1) Address is c/o Free Flow, Inc., 2301 Woodland Crossing Dr., Suite #155,
Herndon, VA 20171.
(2) Mr. Saleem is an officer, director and/or beneficial shareholder of
Redfield Holdings, Ltd. Redfield Holdings, Ltd. holds 20,630,000 shares of
common stock.
(3) Each share of Preferred Share - Series A stock carries voting rights equal
to ten thousand (10,000) votes. Redfield Holdings, Ltd. holds 300 shares of
Preferred Shares - Series A stock. Mr. Saleem is an officer, director
and/or beneficial shareholder of Redfield Holdings, Ltd. As of December 31,
2014, 300 Preferred Shares - Series A stock was issued and outstanding.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
--------------------------------------------------------------------------------
Other than the transactions discussed below, we have not entered into any
transaction nor are there any proposed transactions in which any of our
founders, directors, executive officers, shareholders or any members of the
immediate family of any of the foregoing had or is to have a direct or indirect
material interest.
-35-
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
-----------------------------------------------
GENERAL. PLS CPA, A Professional Corp. ("PLS CPA") is the Company's principal
auditing accountant firm. The Company's Board of Directors has considered
whether the provisions of audit services are compatible with maintaining PLS
CPA's independence. The engagement of our independent registered public
accounting firm was approved by our of our board directors prior to the start of
the audit of our consolidated financial statements for the years ended December
31, 2014 and 2013.
The following table represents aggregate fees billed to the Company for the
years ended December 31, 2014 and 2013 by PLS CPA.
Year Ended December 31,
2014 2013
-------------------------- ------------------------
Audit Fees $10,050 $10,700
Audit-related Fees $0 $0
Tax Fees $0 $0
All Other Fees $0 $0
-------------------------- ------------------------
Total Fees $10,050 $10,700
All audit work was performed by the auditors' full time employees.
-36-
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
-------------------------------------------------
The following is a complete list of exhibits filed as part of this Form 10K.
Exhibit number corresponds to the numbers in the Exhibit table of Item 601 of
Regulation S-K.
-------- ---------------------------------------------------------------- ---------------------
EXHIBIT
NUMBER DESCRIPTION
-------- ---------------------------------------------------------------- ---------------------
3.1 Articles of Incorporation *
3.2 Bylaws *
31.1 Certification of Principal Executive and Accounting Officer Filed Herewith
pursuant to Section 302 of the Sarbanes-Oxley Act
32.1 Certification of Principal Executive and Accounting Officer Filed Herewith
pursuant to Section 906 of the Sarbanes-Oxley Act
101.INS XBRL Instance Document Filed Herewith (1)
101.SCH XBRL Taxonomy Extension Schema Document Filed Herewith (1)
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document Filed Herewith (1)
101.DEF XBRL Taxonomy Extension Definition Linkbase Document Filed Herewith (1)
101.LAB XBRL Taxonomy Extension Label Linkbase Document Filed Herewith (1)
101.PRE XBRL Taxonomy Extension presentation Linkbase Document Filed Herewith (1)
-------- ---------------------------------------------------------------- ---------------------
*Filed as Exhibits with the Company's S-1 Registration Statement filed with the
Securities and Exchange Commission (www.sec.gov), dated March 6, 2012.
(1) Pursuant to Rule 406T of Regulation S-T, this interactive data file is
deemed not filed or part of a registration statement or prospectus for
purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not
filed for purposes of Section 18 of the Securities Exchange Act of 1934,
and otherwise is not subject to liability under these sections.
-37-
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
FREE FLOW, INC.
/s/ Sabir Saleem April 15, 2015
------------------------------------------------------------
Sabir Saleem
(Chief Executive Officer/Principal Executive Officer
& Principal Accounting Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
/s/ Sabir Saleem April 15, 2015
------------------------------------------------------------
Sabir Saleem, Director
/s/ Fernandino Ferrara April 15, 2015
------------------------------------------------------------
Fernandino Ferrara, Director
-38