UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-K

 

 

 

 

 

 

 

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. Yes [ ] No [X]

 

Indicate by checkmark 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 Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [ ] No [X]

 

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 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 the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [ ] Smaller reporting company [X]

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [X] No [ ]

 

The aggregate market value of Common Stock held by non-affiliates of the Registrant on May 31, 2015, was $Nil based on a $Nil average bid and asked price of such common equity, as of the last business day of the registrant's most recently completed second fiscal quarter. (There was no bid or ask price of our common shares during this year).

 

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date. 24,082,004 common shares issued and outstanding as of June 1, 2016.

---

 

Item 1. Business

 

Our Business

We are a development stage company in the business of acquiring, developing, marketing and selling mobile application software. Our operations, to date, have been devoted primarily to startup and development activities, which include the following:

§

Formation of the company;

§

Development of our business plan;

§

Building an online presence;

§

Design and development of our initial mobile application

Currently, we have no fully-developed revenue generating mobile applications. We intend to build a harmonious portfolio of apps that will service a wide range of industries and consumers. We currently have one application (Hotchek) in our portfolio.  Hotchek is a multi-use customizable application designed to enable users to easily engage their network audience with the use of highly interactive polls and surveys.

We expect that Apple and Android online App stores will be the primary distribution, marketing, promotion and payment platform for our mobile Apps.  Operations will also take place through our company website “devagoinc.com,” which intends to serve as a multipurpose marketplace for the sale of our mobile applications.

Our planned website, devagoinc.com, is in the development stage. In addition, our product offering is also in the development stage. We have only recently begun operations, have no sales or revenues, and therefore rely upon the sale of our securities or debt financing to fund our operations. We have a going concern uncertainty as of the date of our most recent financial statements.

We intend to meet our cash requirements for the next 12 months by generating revenue and through a combination of debt financing and equity financing. We currently do not have any arrangements or commitments in place to complete any private placement financings and there is no assurance that we will be successful in completing any such financings on terms that will be acceptable to us.

Market Trends and Opportunity

It is still too early to predict the trajectory that apps will take; however, it is becoming clear - the mobile browser is taking a back seat to mobile apps. Analytics firm Flurry has published data on mobile usage by US consumers during Q1 2014. While users are spending more time on their devices (an average of 2 hours and 42 minutes per day, up four minutes on the same period last year), how they use that time has changed as well. Only 22 minutes per day are spent in the browser, with the balance of time focused on applications. This is a reality that enterprises around the world are now taking on in the development of their marketing and business strategies.

---

Devago believes the mobile channel is opening up new ways for companies to nurture customer relationships in ways not possible in the past. Via the deployment of strategic apps, mobile presents businesses with a unique opportunity to engage customers with a product or service anytime, anywhere, in a manner that is specifically tuned to their individual needs. The mobile experience also delivers a rich set of analytics that provides hard-to-come-by insights into everything from a customer's buying behavior to his or her actual physical location, allowing companies to custom tailor the conversation while also setting the stage for interaction that is all about intention.

Mobile opens up a world of data that no other channel can provide, with access to a user’s on-the-go lifestyle, consumption habits, social, transactions and is the fabric to connecting to the world around us – it truly tells marketers who their consumer is. We believe that we have the expertise and keen eye for applications that facilitate mobile relationship marketing (MRM) as a critical area for companies to gain competency and competitive advantage. We endeavor to become one of leading mobile applications providers within the space of mobile relationship marketing.

---

The Graph above is a breakdown of the overall mobile advertising revenues spent versus time spent on Mobile.  Google accounts for 18% of time spent on Mobile and has a high market share in terms of ad revenues at 49.3% of advertising spent. The rest of the apps, including gaming apps, are simply not getting their fair share of advertising spent. The “other” apps command 65.3% of time spent but only receive 32% of ad revenues. We believe this represents a massive opportunity for applications to monetize through advertising.  Globally ad spend jumped by 105% in 2013. eMarketer also projects that the mobile ad market will grow 75% in 2014 for a total of $31.5 billion, making the opportunity even bigger. Please note, while the foregoing industry predictions are based on publicly available third party industry reports, there are wide ranging variations in the predictions regarding the size of the future mobile applications market and undue reliance should not be placed on these statistics.

Current Product

Our primary products will be mobile applications. We plan to develop internal mobile applications and also to acquire existing mobile applications (“apps”) that are complementary to our existing business and the breadth of our offerings. We intend to build a harmonious portfolio of apps that will service a wide range of industries and consumers.

Currently, we have no fully-developed revenue generating mobile applications. We currently have one application (Hotchek) in our portfolio.  Hotchek is a multi-use customizable application designed to enable users to easily engage their network audience with the use of highly interactive polls and surveys.

---

 

We have completed release one and continue to work on release two of the Hotchek app and hope to have it ready for commercial sale during the 4^th quarter of 2016.

We expect to complete releases one and two of the Hotchek app and have it ready for commercial sale by in 2016.

During the period from September to November, 2015, the Company performed design and implementation of the Chrome extension, iOS, and Android Apps for Hotchek.  A framework was completed to solidify short and long term goals of the product.  Unit testing was also completed, and functionality of the extension was tested.  Scalability of the projects have been considered during design of the applications.

During the period from December, 2015, to February, 2016, the UAT of the chrome extension was completed, and the product was tested across different versions, screen resolutions, and operating systems.  Customer feedback was sought on the usability of the extension, and changes were made to incorporate customer suggestions.  The application was made ready for live deployment.  Work was completed on the coding of the mobile apps for Andriod and iOS.  Unit testing of the mobile apps was completed during this period, involving testing on various versions of the operating systems and hardware.

Aside from our internal applications, we plan to acquire Apps that are currently in development, as well as apps that are ready to be presented to the public. We plan to specialize in apps that are used to increase the customer connection, often with a social aspect; enable self-service; and obtain better information on customer preferences.

Revenue Generation

We plan to derive revenue by way of the sale of our developed and acquired mobile applications as well as through advertisement integration. We plan to use advertising integration in the free versions of our mobile applications that are downloaded by consumers/end users. We will also look to generate revenue from clients by sale of premium subscription packages that offer greater levels of usage or access to advanced features within the application.

We are engaged in the monetization of mobile application software or “Apps” through four revenue generating platforms: (i) development of customized Apps for third parties to monetize their particular intellectual property, persona or brand, (ii) incubation of Apps in partnership with third parties, (iii) sale of advertising and sponsorship opportunities directly to brands via mobile advertising networks and (iv) acquisition of Apps from other developers and use of a proprietary application programming interface, or API, to make Apps recommendations for our user base.

Marketing

Awareness of the services, competitive advantages and revenue potential that we are able to provide through our mobile applications, is expected to be delivered through the implementation of a number of marketing initiatives including search engine optimization, website completion, hosted video demonstrations, third party service contacts, product reviews, tradeshow attendance, as well as blogging and other forms of social media which are driven by technology and mobile flexibility. These efforts and the resulting awareness will be key drivers behind the success of our revenue producing operations.

Company Website – We believe that using the internet is a great marketing tool not only for providing information on our company, but also for providing current information on our upcoming apps as well as industry related information regarding new technology and device updates. We have developed our preliminary website, and are in the process of developing a more advanced site where we can provide more detailed information regarding our apps designs and features. We have not yet recognized revenues from the website nor is there any indication that we ever will recognize direct revenues from our website.

App Landing Page- Apart from the app page within the app store, a dedicated website for our application is necessary to harness the potential of search engines. Apart from the major ASO factors, search engines and SEO can also be used as a potential route to app discovery. If our app gathers enough traction and momentum, it will attract positive ratings and would rank better for a relevant search query in the app stores as well.

---

Integration into our clients’ existing advertising and marketing strategies-We will focus a significant portion of our marketing and public relations efforts towards soliciting corporations or organizations to use our Hotchek mobile application within their online advertising and marketing campaigns.

We anticipate expansive growth of our subscriber base as enlisted enterprises reach out to their customers or end users to download and use our mobile application as a means to completing their interactive survey or questionnaire. We will focus its sales and promotional efforts towards organizations that have a high business to consumer component and want to deliver their brand via the mobile application space but do so in a more cost effective and time efficient manner. Focused efforts will be placed on entities with large established contact lists that are seeking innovative ways to engage their customers or end users.

Our eventual aim is to have a large enough subscriber base to attract integrated advertising revenue from big brand companies.

Customers

We currently have no customers. We are focused on several commercial enterprise markets.

For commercial use of our applications, a typical prospective customer would include;

§

Travel Agencies

§

Model/Talent Agencies

§

Product retailer

§

Service providers

§

Bars & Restaurants

§

Film Industry

§

Auto Dealers

§

Music Industry

We plan to identify and address additional target categories and industries for our products based on market research and feedback from our customers.

Competition

The app development market is very competitive, with many companies developing apps worldwide.

There are many companies who compete directly with our products and services.  These companies may already have an established market in our industry.  Most of these companies have significantly greater financial and other resources than us and have been developing their products and services longer than we have been developing ours.  Additionally, there are not significant barriers to entry in our industry and new companies may be created that will compete with us and other, more established companies who do not now directly compete with us, may choose to enter our markets and compete with us in the future.

The business in which we operate is highly competitive.  Continued evolution in the industry, as well as technological advancements, is opening up the market to increased competition.  Other key competitive factors include: industry consolidation; price; availability of financing; product and system performance; product quality, availability and warranty; the quality and availability of service; company reputation; and time-to-market.

 

Item 5. Market for Registrant’s Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities

 

Market Information

 

Our common stock is quoted under the symbol “DVGG” on the OTCPink operated by OTC Markets Group, Inc. 

There is currently no active trading market for our securities. There is no assurance that a regular trading market will develop, or if developed, that it will be sustained. Therefore, a shareholder may be unable to resell his securities in our company.

 

The following table sets forth the range of high and low bid quotations for our common stock for each of the periods indicated as reported by the OTCPink. These quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.

Penny Stock

Holders of Our Common Stock

 

As of June 1, 2016, we had 33 holders of record of our common stock.

The holders of common stock are entitled to one vote for each share held of record on all matters submitted to a vote of stockholders. Holders of the common stock have no preemptive rights and no right to convert their common stock into any other securities. There are no redemption or sinking fund provisions applicable to the common stock.

 

Dividends

 

There are no restrictions in our articles of incorporation or bylaws that prevent us from declaring dividends. The Nevada Revised Statutes, however, do prohibit us from declaring dividends where after giving effect to the distribution of the dividend:

 

 

We have not declared any dividends and we do not plan to declare any dividends in the foreseeable future.

Recent Sales of Unregistered Securities and Use of Proceeds

 

On September 8, 2014, we issued 20,000,000 shares of our common stock to our officer and director at $0.001 for $20,000.

On March 30, 2015, our registration statement on Form S-1 (File No. 333-201319) was declared effective by the Securities and Exchange Commission for our initial public offering pursuant to which we sold an aggregate of 4,082,004 shares of our common stock at $0.007 per share for a total of $28,574. There has been no material change in the planned use of proceeds from our initial public offering as described in our final prospectus filed with the Securities and Exchange Commission on March 17, 2015 pursuant to Rule 424(b).

These securities were issued pursuant to Section 4(2) of the Securities Act and/or Regulation S promulgated thereunder. The holders represented their intention to acquire the securities for investment only and not with a view towards distribution. The investors were given adequate information about us to make an informed investment decision. We did not engage in any general solicitation or advertising. We directed our transfer agent to issue the stock certificates with the appropriate restrictive legend affixed to the restricted

 

Securities Authorized for Issuance under Equity Compensation Plans

 

We have no equity compensation plans.

 

Item 6. Selected Financial Data

 

A smaller reporting company is not required to provide the information required by this Item.

 

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

Forward-Looking Statements

 

Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements generally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. We intend such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and are including this statement for purposes of complying with those safe-harbor provisions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse affect on our operations and future prospects on a consolidated basis include, but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Further information concerning our business, including additional factors that could materially affect our financial results, is included herein and in our other filings with the SEC.

---

Plan of Operation

 

We recently closed our public offering by issuing a total of 4,082,004 shares of our common stock at $0.007 per share for a total of $28,574. We were not able to raise the full $105,000 from our offering. We will scale back our business development in line with the available capital.  Our primary priority will be to retain our reporting status with the SEC, which we have sufficient capital to cover at this time.  We are currently looking to secure additional financing to focus on the development of our website, product development and sales and marketing activities. 

Results of Operations for the Year Ended November 30, 2015

---

We do not expect the adoption of any recently issued accounting pronouncements to have a significant impact on our results of operations, financial position or cash flow.

Critical Accounting Policies

 

Use of Estimates

 

The preparation of financial statements in conformity with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. We regularly evaluate estimates and assumptions related to deferred income tax asset valuation allowances. We base our estimates and assumptions on current facts, historical experience and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by us may differ materially and adversely from our estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

---

Revenue Recognition

 

Revenue from the sale of goods is recognized when the following conditions are satisfied:

 

§

We have transferred to the buyer the significant risks and rewards of ownership of the goods;

§

We retain neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;

§

The amount of revenue can be measured reliably;

§

It is probable that the economic benefits associated with the transaction will flow to the entity; and

§

The costs incurred or to be incurred in respect of the transaction can be measured reliably.

 

Off Balance Sheet Arrangements

 

As of November 30, 2015, there were no off balance sheet arrangements.

 

Emerging Growth Company

We are an emerging growth company as defined in Section 2(a)(19) of the Securities Act. We will continue to be an emerging growth company until: (i) the last day of our fiscal year during which we had total annual gross revenues of $1,000,000,000 or more; (ii) the last day of our fiscal year following the fifth anniversary of the date of the first sale of our common stock pursuant to an effective registration statement under the Securities Act; (iii) the date on which we have, during the previous 3-year period, issued more than $1,000,000,000 in non-convertible debt; or (iv) the date on which we are deemed to be a large accelerated filer, as defined in Section 12b-2 of the Exchange Act.

As an emerging growth company, we are exempt from:

§

Sections 14A(a) and (b) of the Exchange Act, which require companies to hold stockholder advisory votes on executive compensation and golden parachute compensation;

§

The requirement to provide, in any registration statement, periodic report or other report to be filed with the Securities and Exchange Commission (the “Commission” or “SEC”), certain modified executive compensation disclosure under Item 402 of Regulation S-K or selected financial data under Item 301 of Regulation S-K for any period before the earliest audited period presented in our initial registration statement;

§

Compliance with new or revised accounting standards until those standards are applicable to private companies;

§

The requirement under Section 404(b) of the Sarbanes-Oxley Act of 2002 to provide auditor attestation of our internal controls and procedures; and

§

Any Public Company Accounting Oversight Board (“PCAOB”) rules regarding mandatory audit firm rotation or an expanded auditor report, and any other PCAOB rules subsequently adopted unless the Commission determines the new rules are necessary for protecting the public.

 We have elected to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(1) of the Jumpstart Our Business Startups Act.

 We are also a smaller reporting company as defined in Rule 12b-2 of the Exchange Act. As a smaller reporting company, we are not required to provide selected financial data pursuant to Item 301 of Regulation S-K, nor are we required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002. We are also permitted to provide certain modified executive compensation disclosure under Item 402 of Regulation S-K.

 

---

Item 8. Financial Statements and Supplementary Data

 

Index to Financial Statements Required by Article 8 of Regulation S-X:

 

Audited Financial Statements:

 

---

 

 

 

 

 

/s/ KLJ & Associates, LLP   KLJ & Associates, LLP

Edina, MN

June 30, 2016

 

 

 

DEVAGO INC.

Balance Sheets

The accompanying notes are an integral part of these financial statements

DEVAGO INC.

Statement of Operations

The accompanying notes are an integral part of these financial statements

DEVAGO INC.

Statements of Changes in Stockholders’ Equity

The accompanying notes are an integral part of these financial statements

DEVAGO INC.

Statements of Cash Flows

The accompanying notes are an integral part of these financial statements

 

 

Name		Age		Position(s)
Jose Armando Acosta Crespo		35		President, Chief Executive Officer, Principal Executive Officer, Chief Financial Officer, Principal Financial Officer, Principal Accounting Officer, Secretary & Director

SUMMARY COMPENSATION TABLE
Name and principal position	Year	Salary ($)	Bonus ($)	Stock Awards ($)	Option Awards ($)	Non-Equity Incentive Plan Compensation ($)	Nonqualified Deferred Compensation Earnings ($)	All Other Compensation ($)	Total ($)
Jose Armando Acosta Crespo Sole officer and director	2015 2014	- -	- -	- -	- -	- -	- -	5,000 -	- -

 

---

Narrative Disclosure to the Summary Compensation Table

There are no formal agreements to compensate our sole officer for his services. When applicable, our officer is reimbursed for expenses incurred on our behalf.

We have not adopted any retirement, pension, profit sharing, stock option or insurance programs or other similar programs for the benefit of our officer.

Outstanding Equity Awards at Fiscal Year-End

 

Director Compensation

None.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The following table presents certain information regarding beneficial Ownership of our Common Stock as of June 1, 2016, by (i) each person known by us to be the beneficial owner of more than 5% of the outstanding shares of Common Stock, (ii) each director of our company, (iii) each Named Executive Officer and (iv) all directors and executive officers as a group. Unless otherwise indicated, each person in the table has sole voting and investment power as to the shares shown. Unless otherwise indicated, the address of each beneficial owner is Calle Dr. Heriberto Nunez #11A Edificio Apt. 104 Dominican Republic.

 

(1)     As used in this table, "beneficial ownership" means the sole or shared power to vote, or to direct the voting of, a security, or the sole or shared investment power with respect to a security (i.e., the power to dispose of, or to direct the disposition of, a security).In addition, for purposes of this table, a person is deemed, as of any date, to have "beneficial ownership" of any security that such person has the right to acquire within 60 days after such date.

(2)     The above table is based on current outstanding shares of 24,082,004 as of June 1, 2016.

 

Except as provided below and in “Executive Compensation” set forth above, for the past two fiscal years there have not been, and there is not currently proposed, any transaction or series of similar transactions to which we were or will be a participant in which the amount involved exceeded or will exceed the lesser of $120,000 or one percent of the average of our total assets at year-end for the last two completed fiscal years, and in which any director, executive officer, holder of 5% or more of any class of our capital stock or any member of the immediate family of any of the foregoing persons had or will have a direct or indirect material interest.

On February 5, 2015, our sole officer and director, Jose Armando Acosta Crespo, loaned us $15,000 to pay Softaddicts under a demand promissory note.   The note bears interest at 8% per annum.  All principal and accrued interest is due two business days after receipt of the demand for payment.  As of November 30, 2015, no amounts have been paid.

During the year ended November 30, 2015, the Company entered into an agreement for Jose Armando Acosta Crespo to provide five months of consulting services for $5,000.  The services were provided from June to October, 2015.  As at November 30, 2015, $1,000 related to the consulting services is payable.

Item 14. Principal Accounting Fees and Services

 

Below is the table of Audit Fees billed by our auditors in connection with the audits of the Company’s annual financial statements for the years ended:

 

---

 

Item 15. Exhibits, Financial Statements Schedules

 

 

The following financial statements and schedules listed below are included in this Form 10-K.

 

Financial Statements (See Item 8)

 

 

 

1.

Incorporated by reference to the Form S-1/A filed on February 10, 2015.

2.

Incorporated by reference to the Form S-1 filed on December 30, 2014.

---

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Devago Inc.

In accordance with Section 13 or 15(d) of the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated: