Attached files
| file | filename |
|---|---|
| EX-32 - CERTIFICATION UAGRANITE - Vortex Blockchain Technologies Inc. | exhibit32.htm |
| EX-31 - CERTIFICATION UAGRANITE - Vortex Blockchain Technologies Inc. | exhibit31.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended March 31, 2017.
oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from
_to
.
Commission file number:
UA GRANITE CORPORATION
(Exact name of registrant as specified in its charter)
Nevada
80-0899451
(State or other jurisdiction of
(I.R.S. Employer
incorporation or organization)
Identification No.)
10 Bogdan Khemlnitsky Street #13A
Kiev, Ukraine 01030
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (380) 636419991
Securities registered under Section 12(b) of the Act: None.
Securities registered under Section 12(g) of the Act: common stock (title of class), $0.001 par value.
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes oNo þ
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 oNo þ
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 þNo o
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 oNo þ
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. o
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. Smaller reporting company þ
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes þ No o
The aggregate market value of the registrant’s common stock, $0.00001 par value held by non-affiliates (650,000) was
approximately $162,500 based on the average closing bid and ask prices ($0.25) for the common stock on June 29, 2017.
At July 12, 2017, the number of shares outstanding of the registrant’s common stock, $0.00001 par value (the only class of voting
stock), was 5,650,000.
1
TABLE OF CONTENTS
PART I
Business ............................................................................................................................... 3
Risk Factors ......................................................................................................................... 6
Unresolved Staff Comments .................................................................................................. 6
Properties ............................................................................................................................. 6
Legal Proceedings................................................................................................................. 6
Mine Safety Disclosures ........................................................................................................ 6
PART II
Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer
Purchases of Equity Securities................................................................................................ 7
Selected Financial Data ......................................................................................................... 9
Management's Discussion and Analysis of Financial Condition and Results of
Operations............................................................................................................................. 9
Quantitative and Qualitative Disclosures about Market Risk ................................................... 13
Financial Statements and Supplementary Data....................................................................... 14
Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure ........................................................................................................................... 15
Controls and Procedures ...................................................................................................... 15
Other Information ................................................................................................................ 17
PART III
Directors, Executive Officers, and Corporate Governance...................................................... 18
Executive Compensation ...................................................................................................... 20
Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters ............................................................................................................. 22
Certain Relationships and Related Transactions, and Director Independence............................ 22
Principal Accountant Fees and Services ................................................................................ 23
PART IV
Exhibits, Financial Statement Schedules ................................................................................. 24
.......................................................................................................................................... 25
2
PART I
ITEM 1
As used herein the terms “Company,” “we,” “our,” and “us” refer to UA Granite Corporation unless
context indicates otherwise.
FORWARD-LOOKING STATEMENTS
The information in this Annual Report on Form 10-K contains forward-looking statements. These
forward-looking statements involve risks and uncertainties, including statements regarding our capital
needs, business plans and expectations. Such forward-looking statements involve risks and uncertainties
regarding our planned business, availability of funds, government regulations, common share prices,
operating costs, capital costs, our ability to deploy our planned business and generate revenues and other
factors. Any statements contained herein that are not statements of historical facts may be deemed to be
forward-looking statements. In some cases, you can identify forward-looking statements by terminology
such as "may", "will", "should", "expect", "plan", "intend", "anticipate", "believe", "estimate", "predict",
"potential" or "continue", the negative of such terms or other comparable terminology. These statements
are based on certain assumptions and analyses made by our management in light of its experience and its
perception of historical trends, current conditions and expected future developments as well as other
factors they believe are appropriate in the circumstances. Actual events or results may differ materially. In
evaluating these statements, you should consider various factors, including the risks outlined below, and,
from time to time, in other reports we file with the Securities and Exchange Commission (the
“Commission”). These factors may cause our actual results to differ materially from any forward-looking
statement. We disclaim any obligation to publicly update these statements, or disclose any difference
between its actual results and those reflected in these statements. Given these uncertainties, readers are
cautioned not to place undue reliance on such forward-looking statements.
Overview
The Company was incorporated in the State of Nevada on February 14, 2013, to engage in the business of
marketing and distributing finished granite products. We have since discontinued efforts related to our
granite products business due to difficulties that have arisen from the continuation of hostilities between
separatist elements supported by foreign interests and Ukrainian government forces in certain eastern
districts of Ukraine. The Company is now in the process of seeking out other business opportunities.
Our office is located at 10 Bogdan Khemlnitsky Street #13A, Kiev, Ukraine 0130, and our telephone
number is (380) 636419991. Our registered agent is Business Filings Incorporated 311 South Division
Street, Carson City Nevada.
The Company currently maintains a quotation on the OTC Markets Group, Inc. over the counter market
platform under the symbol “UAGZ.”
Company
Our present intent is to identify and evaluate business opportunities that might prove to be a good match
for the Company. We will not be able to develop any identified business opportunities without additional
financing. Our board of directors and management are actively pursuing financing in order to maintain
operations while we evaluate potential businesses.
3
Selection of a Business
We will not restrict our consideration to any particular business or industry segment, and might consider,
among others, finance, brokerage, insurance, transportation, communications, research and development,
biotechnology, service, natural resources, manufacturing or high-technology. Management recognizes
that the Company’s inadequate financial resources limit the scope and number of suitable business
venture candidates that might otherwise be available.
The decision to participate in a specific business opportunity will be made upon management’s analysis
of the quality of the other firm’s management and personnel, the anticipated acceptability of new products
or marketing concepts, the merit of technological changes and numerous other factors which are difficult,
if not impossible, to analyze through the application of any objective criteria. In many instances, it is
anticipated that the historical operations of a specific venture may not necessarily be indicative of the
potential for the future because of the necessity to substantially shift a marketing approach, expand
operations, change product emphasis, change or substantially augment management, or make other
changes. We will to some extent be dependent upon the management of a business opportunity to identify
such problems and to implement, or be primarily responsible for the implementation of, required changes.
We will not acquire or merge with any company for which audited financial statements could not be
obtained. Nonetheless, it may be anticipated that any opportunity in which we determine to participate
would present certain risks to our shareholders. Risks might include the track record of management’s
effectiveness, failures to establish a consistent market for products or services, development stage, or to
realize profits. Many more of these risks may not be adequately identified prior to the selection of a
specific opportunity, and our shareholders must, therefore, depend on the ability of management to
identify and evaluate such risks as such become evident.
Acquisition of Business
We may become a party to a merger, consolidation, reorganization, joint venture, franchise or licensing
agreement with another entity or may purchase the stock or assets of an existing business. On the
consummation of any given transaction it is possible that present management and shareholders would no
longer control of the Company. In addition, management may, as part of the terms of any transaction,
resign and be replaced by new officers and directors without a vote of the Company’s shareholders.
The Company anticipates that any securities issued in any reorganization would be issued in reliance on
exemptions from registration under applicable federal and state securities laws. In some circumstances,
however, as a negotiated element of any transaction, the Company may agree to register securities either
at the time the transaction is consummated, under certain conditions, or at a specified time thereafter. The
issuance of a substantial additional securities and their potential sale into any trading market may have a
depressive effect on our stock price.
While the actual terms of a transaction to which the Company may be a party cannot be predicted, it may
be expected that the parties to the business transaction would find it desirable to avoid the creation of a
taxable event and thereby structure the acquisition in a so called “tax-free” reorganization under Section
368(a)(1) of the Internal Revenue Code of 1986, as amended (the “Code”). However, in order to obtain
tax-free treatment under the Code, it may be necessary for the owners of the acquired business to own
80% or more of the voting stock of the surviving entity. In such event, the shareholders of the Company
would retain less than 20% of the issued and outstanding shares of the surviving entity, which result is a
significant dilution in the equity of existing shareholders.
4
In the event a merger or acquisition were to occur, our shareholders would in all likelihood hold a lesser
percentage ownership interest in the Company following such merger or acquisition. The percentage
ownership of existing shareholders may be subject to a significant reduction in the event we acquire a
target company with substantial assets. Any merger or acquisition effected by the Company can be
expected to have a significant substantial dilutive effect on the percentage of shares held by the
Company’s present shareholders.
Operation of Business after Acquisition
The Company's operation following a merger with or acquisition of a business would be dependent on the
nature of the business and the interest acquired. We are unable to determine at this time whether the
Company would be in control of the business or whether present management would be in control of the
Company following any acquisition. We could expect that any future business would present various
challenges that cannot be predicted at the present time.
Competition
Whatever the business opportunity is that we do ultimately acquire or develop, we are almost certain to be
involved in intense competition with other business entities, many of which will have a competitive edge
over us by virtue of their stronger financial resources and prior business experience.
Employees
The Company currently has one employee Myroslav Tsapaliuk, our chief executive officer, chief
financial officer and one of our directors who devotes approximately 20 hours a week to our business.
The Company looks to Mr. Tsapaliuk for his entrepreneurial skills and talents. Management uses
consultants, attorneys and accountants as necessary and does not plan to engage any full-time employees
in the near future.
Patents, Trademarks, Licenses, Franchises, Concessions, Royalty Agreements and Labor Contracts
The Company owns no patents, trademarks, licenses, franchises, concessions, or royalty agreements.
The Company is not subject to any labor contracts.
Governmental and Environmental Regulation
General
The Company cannot at this time anticipate the government regulations, if any, to which the Company
may be subject following a merger or acquisition. However, we can be certain that the conduct of any
business subjects us to environmental, public health and safety, land use, trade, or other governmental
regulations and state or local taxation. In selecting a business in which to acquire an interest, management
would endeavor to ascertain the effects of such government regulation on a prospective business
opportunity. In certain circumstances, however, such as the acquisition of an interest in a new or start-up
business activity, it may not be possible to predict with any degree of accuracy the impact of government
regulation.
The Company believes that it is currently in compliance in all material respects with all laws, rules,
regulations and requirements that affect its business. Further, we believe that compliance with such
applicable laws, rules, regulations and requirements does not impose a material impediment on our ability
to conduct business.
5
Research and Development
During the years ended March 31, 2017 and 2016, the Company spent no amounts on research and
development activities.
Bankruptcy or Similar Proceedings
Since inception there has been no bankruptcy, receivership or similar proceeding.
Reorganizations, Purchase or Sale of Assets
Since inception there have been no material reclassifications, mergers, consolidations, or purchase or sale
of a significant amount of assets not in the ordinary course of business
Reports to Security Holders
The Company’s annual report contains audited financial statements. We are not required to deliver an
annual report to security holders and will not automatically deliver a copy of the annual report to our
security holders unless a request is made for such delivery. We file all of our required reports and other
information with the Commission. The public may read and copy any materials that are filed by the
Company with the Commission at the Commission’s Public Reference Room at 100 F Street, N.E.,
Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference
Room by calling the Commission at 1-800-SEC-0330. The statements and forms filed by us with the
Commission have also been filed electronically and are available for viewing or copy on the Commission
maintained Internet site that contains reports, proxy and information statements, and other information
regarding issuers that file electronically with the Commission. The Internet address for this site can be
found at http://www.sec.gov.
ITEM 1A.
RISK FACTORS
Not required for smaller reporting companies.
ITEM 1B.
UNRESOLVED STAFF COMMENTS
Not required for smaller reporting companies.
ITEM 2.
The Company maintains an office at 10 Bogdan Khmelnitsky Street, # 13A, Kyiv 01030, Ukraine. The
office is provided by our chief executive officer, Myroslav Tsapaliuk, at no cost to the Company, as our
primary location for the planning and implementation of our business plan. Management believes the
current premises are sufficient for its needs for at least the next 12 months.
ITEM 3.
LEGAL PROCEEDINGS
We are not party to any legal proceedings and to our knowledge no such proceedings are threatened or
contemplated.
ITEM 4.
MINE SAFETY DISCLOSURES
Not applicable.
6
PART II
ITEM 5.
MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS,
AND ISSUER PURCHASES OF EQUITY SECURITIES
Market Information
Since April 19, 2014, our common shares have been quoted on the OTCPink tier of the OTC Markets
Group, Inc. electronic trading platform, under the symbol “UAGZ”. The following table shows the
reported high and low closing bid prices per share for our common stock based on the information
provided by OTC Markets Group. The over-the-counter market quotations set forth for our common stock
reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily
represent actual transactions.
The following table indicates the high and low bid prices of our common shares during the periods
indicated:
QUARTER
HIGH BID
LOW BID
ENDED
March 31, 2017
$
0.25
$
0.25
December 31, 2016
$
0.25
$
0.25
September 30, 2016
$
0.25
$
0.25
June 30, 2015
$
0.25
$
0.25
March 31, 2015
$
0.25
$
0.25
December 31, 2014
$
0.25
$
0.25
September 30, 2014
$
0.25
$
0.25
June 30, 2014
$
0.25
$
0.25
The market quotations provided reflect inter-dealer prices, without retail mark-up, markdown or
commission and may not represent actual transactions.
Capital Stock
The following is a summary of the material terms of the Company’s capital stock. This summary is
subject to and qualified by our articles of incorporation and bylaws.
Common Stock
As of March 31, 2017, there were 29 shareholders of record holding a total of 5,650,000 shares of fully
paid and non-assessable common stock of the 75,000,000 shares of common stock, par value $0.00001,
authorized. The board of directors believes that the number of beneficial owners is greater than the
number of record holders because a portion of our outstanding common stock is held in broker “street
names” for the benefit of individual investors. The holders of the 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 is no redemption or sinking fund provisions applicable to the common stock.
Warrants
As of March 31, 2017, the Company had no outstanding warrants to purchase shares of its common stock.
7
Stock Options
As of March 31, 2017, the Company had no outstanding stock options to purchase shares of its common
stock.
Convertible Securities
As of March 31, 2017, the Company had no outstanding convertible securities to purchase shares of its
common stock.
Securities Authorized for Issuance Under Equity Compensation Plans
The Company had no securities authorized for issuance under any equity compensation plan as of March
31, 2017.
Purchases of Equity Securities made by the Issuer and Affiliated Purchasers
The Company had not repurchased any shares of its common stock during the year ended March 31,
2017.
Dividends
The Company has not declared any cash dividends since inception and does not anticipate paying any
dividends in the near future. The payment of dividends is within the discretion of the board of directors
and will depend on our earnings, capital requirements, financial condition, and other relevant factors.
There are no restrictions that currently limit the Company's ability to pay dividends on its common stock
other than those generally imposed by applicable state law.
Recent Sales of Unregistered Securities
During the quarter ended March 31, 2017, there were no sales of the Company’s securities.
Trading Information
The Company’s transfer agent is:
West Coast Stock Transfer, Inc.
721 North Vulcan Avenue, Suite 205
Encinitas
California 92024
(619) 664-4780
8
Section 15(g) of the Securities Exchange Act of 1934
Our shares are covered by Section 15(g) of the Securities Exchange Act of 1934, as amended that imposes
additional sales practice requirements on broker/dealers who sell such securities to persons other than
established customers and accredited investors (generally institutions with assets in excess of $5,000,000
or individuals with net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000
jointly with their spouses). For transactions covered by Section 15(g), the broker/dealer must make a
special suitability determination for the purchase and have received the purchaser’s written agreement to
the transaction prior to the sale. Consequently, Section 15(g) may affect the ability of broker/dealers to
sell our securities and also may affect your ability to sell shares in the secondary market.
Section 15(g) also imposes additional sales practice requirements on broker/dealers who sell penny
securities. These rules require a one page summary of certain essential items. The items include the risk
of investing in penny stocks in both public offerings and secondary marketing; terms important to in
understanding of the function of the penny stock market, such as “bid” and “offer” quotes, a dealers
“spread” and broker/dealer compensation; the broker/dealer compensation, the broker/dealers duties to its
customers, including the disclosures required by any other penny stock disclosure rules; the customers
rights and remedies in causes of fraud in penny stock transactions; and, the NASD’s toll free telephone
number and the central number of the North American Administrators Association, for information on the
disciplinary history of broker/dealers and their associated persons.
The application of the penny stock rules may affect the trading of our shares.
ITEM 6.
SELECTED FINANCIAL DATA
Not required for smaller reporting companies.
ITEM 7.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
This Management’s Discussion and Analysis of Financial Condition and Results of Operations and other
parts of this annual report contain forward-looking statements that involve risks and uncertainties.
Forward-looking statements can also be identified by words such as “anticipates,” “expects,” “believes,”
“plans,” “predicts,” and similar terms. Forward-looking statements are not guarantees of future
performance and our actual results may differ significantly from the results discussed in the forward-
looking statements. Factors that might cause such differences include but are not limited to those
discussed in the subsection entitled Forward-Looking Statements and Factors That May Affect Future
Results and Financial Condition below. The following discussion should be read in conjunction with our
financial statements and notes thereto included in this report. Our fiscal year end is March 31.
Discussion and Analysis
The Company’s plan of operation over the next twelve months is to identify and acquire or develop a
business opportunity. We will require a minimum of $50,000 in funding over the next 12 months to
maintain current operations and seek out a suitable business opportunity. Should we identify a new
opportunity within this time frame, for acquisition or development, the Company will most likely need
additional funding to close or develop any given transaction. The amount of funding required will depend
on the opportunity and is not determinable at this time.
9
We anticipate that the required prospective funding will be in the form of equity financing from the sale
of our common stock or unsecured debt financing arranged with third parties or our own shareholders.
However, since the Company does not have any financing arranged it cannot provide any assurance that it
will be able to realize sufficient funding from financing efforts to maintain operations. Management is
currently considering all avenues available to obtain the financing required to maintain operations while
seeking out a business opportunity. Accordingly, we will require continued financial support from our
shareholders until we are able to procure third party financing and generate sufficient cash flow from a
new business opportunity to maintain operations. Despite our efforts there is substantial doubt as to
whether we will be successful in achieving these objectives.
Results of Operations
During the year ended March 31, 2017, the Company sought out prospective business opportunities; and
satisfied continuous public disclosure requirements.
Our operations for the years ended March 31, 2017 and 2016 are summarized below.
2017
2016
Operating Expenses:
General and Administration
$
(5,621) $
(1,846)
Professional fees
$
(7,206) $
(5,280)
Consulting
$
(4,090) $
(15,728)
Imputed interest expense
$
(3,493) $
(1,543)
Net Loss for the Year
$
(20,410) $
(24,397)
Net Loss
Net loss for year ended March 31, 2017 was $20,410 as compared to a net loss of $24,397 for the year
ended March 31, 2016. The decrease in net loss over the comparative annual periods can be attributed to
the decrease in consulting fees offset by the increase in general and administrative fees, professional fees
and imputed interest expense in the current annual period.
We did not generate revenue during this period and expect to continue to incur losses over the next twelve
months at a rate comparable to the current annual period presented here or until such time as we are able
to conclude the acquisition or development of a new business opportunity that produces net income.
Capital Expenditures
The Company expended no amounts on capital expenditures for the years ended March 31, 2017 and
March 31, 2016.
Income Tax Expense (Benefit)
The Company has a prospective income tax benefit resulting from a net operating loss carry-forward and
start up costs that will offset any future operating profit.
10
Impact of Inflation
The Company believes that inflation has had a negligible effect on operations over the past two years.
Liquidity and Capital Resources
Since inception, the Company has experienced significant changes in liquidity, capital resources, and
stockholders’ deficit.
The Company had current and total assets of $0 as of March 31, 2017, consisting solely of cash, as
compared to current and total assets of $95, consisting solely of cash as of March 31, 2016. Net
stockholders' deficit was $53,485 at March 31, 2017, as compared to a net stockholders’ deficit of
$36,568 at March 31, 2016. The Company had a net working capital deficit of $53,485 as of March 31,
2017.
Cash Used in Operating Activities
Net cash used in operating activities for the year ended March 31, 2017 was $17,785 as compared to
$26,343 for the year ended March 31, 2016, which differences reflect the related party loan along with the
comparative increase in general and administrative expenses, the decrease in consulting expenses and
changes in working capital in the current year. Net cash flow used in operating activities in the prior year
can also be primarily attributed to general and administrative expenses, and changes in working capital.
General and administrative expenses include but are not limited to, personnel costs, accounting fees,
consulting expenses, and professional fees, accounts payable and accrued liabilities while changes in
working capital include changes in accounts payable.
We expect to continue to use net cash flow in operating activities over the next twelve months or until
such time as the Company can generate sufficient revenue to transition to providing net cash flow from
operations.
Cash Used in Investing Activities
We do expect to use net cash flow in investing activities in connection with the development or
acquisition of a business opportunity. Until such time as such unidentified opportunity is concluded, we
do not expect to use net cash flows in investing activities.
Cash Flows from Financing Activities
Net cash flow provided by financing activities for the year ended March 31, 2017, decreased to
$17,690 as compared to $23,320 for the year ended March 31, 2016. The decrease in net cash flow
provided from financing activities over the comparative annual periods can be attributed to an decrease in
amounts provided by a director as compared to those amounts provided by a director in the former period.
We expect to continue to use cash flow provided by financing activities to procure sufficient funds to
maintain operations in order to seek out business opportunities.
11
The Company’s current assets are insufficient to conduct its plan of operation over the next twelve (12)
months. We will have to seek at least $50,000 in debt or equity financing over the next twelve months to
maintain operations. The Company has no current commitments or arrangements with respect to, or
immediate sources of this funding. Further, no assurances can be given that funding is available. The
Company’s shareholders are the most likely source of new funding in the form of loans or equity
placements though none have made any commitment for future investment and the Company has no
agreement formal or otherwise. The Company’s inability to obtain sufficient funding to maintain
operations will have a material adverse affect on its ability to fulfill its plan of operation.
The Company does not intend to pay cash dividends in the foreseeable future.
The Company had no lines of credit or other bank financing arrangements as of March 31, 2017 or March
31, 2016.
The Company had no commitments for future capital expenditures that were material at March 31, 2017.
The Company has no defined benefit plan or contractual commitment with any of its officers or directors.
The Company has no current plans for the purchase or sale of any plant or equipment.
The Company has no current plans to make any changes in the number of employees.
Off-Balance Sheet Arrangements
As of March 31, 2017, we have no significant off-balance sheet arrangements that have or are reasonably
likely to have a current or future effect on our financial condition, changes in financial condition, revenues
or expenses, results of operations, liquidity, capital expenditures, or capital resources that are material to
stockholders.
Future Financings
We anticipate continuing to rely on debt or equity sales of our shares of common stock in order to
continue to fund our business operations. There is no assurance that we will achieve any additional sales
of our equity securities or arrange for debt or other financing to fund our plan of operation.
Critical Accounting Policies
In Note 2 to the audited financial statements for the years ended March 31, 2017 and 2016, included in
our Form 10-K, the Company discusses those accounting policies that are considered to be significant in
determining the results of operations and its financial position. The Company believes that the
accounting principles utilized by it conform to accounting principles generally accepted in the US.
The preparation of financial statements requires Company management to make significant estimates and
judgments that affect the reported amounts of assets, liabilities, revenues and expenses. By their nature,
these judgments are subject to an inherent degree of uncertainty. On an on-going basis, the Company
evaluates estimates. The Company bases its estimates on historical experience and other facts and
circumstances that are believed to be reasonable, and the results form the basis for making judgments
about the carrying value of assets and liabilities. The actual results may differ from these estimates under
different assumptions or conditions.
12
Going Concern
The Company’s auditors have expressed an opinion as to the Company’s ability to continue as a going
concern as a result of an accumulated deficit of $885,505 since inception and negative cash flows from
operating activities as of March 31, 2017. The Company’s ability to continue as a going concern is
subject to the ability of the Company to obtain funding from outside sources. Management’s plan to
address the Company’s ability to continue as a going concern includes obtaining funding from the private
placement of equity or through debt financing. Management believes that it will be able to obtain funding
to allow the Company to remain a going concern through the methods discussed above, though there can
be no assurances that such methods will prove successful.
Forward-Looking Statements and Factors That May Affect Future Results and Financial Condition
The statements contained in the section titled Management’s Discussion and Analysis of Financial
Condition and Results of Operations and elsewhere in this current report, with the exception of historical
facts, are forward-looking statements. Forward-looking statements reflect our current expectations and
beliefs regarding our future results of operations, performance, and achievements. These statements are
subject to risks and uncertainties and are based upon assumptions and beliefs that may or may not
materialize. These statements include, but are not limited to, statements concerning:
§ the sufficiency of existing capital resources;
§ our ability to raise capital to fund cash requirements for future operations;
§ uncertainties related to the Company’s future business prospects;
§ the volatility of the stock market and;
§ general economic conditions.
We wish to caution readers that our operating results are subject to various risks and uncertainties that
could cause our actual results to differ materially from those discussed or anticipated. We also wish to
advise readers not to place any undue reliance on the forward-looking statements contained in this report,
which reflect our beliefs and expectations only as of the date of this report. We assume no obligation to
update or revise these forward-looking statements to reflect new events or circumstances or any changes
in our beliefs or expectations, other than as required by law.
Recent Accounting Pronouncements
Please see Note 2 to our financial statements for a discussion of recent accounting pronouncements.
ITEM 7A.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not required for smaller reporting companies.
13
ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Our audited financial statements for the year ended March 31, 2017, as set forth below, are included with
this Annual Report on Form 10-K. Our audited financial statements are prepared on the basis of
accounting principles generally accepted in the United States and are expressed in U.S. dollars.
March 31, 2017
Index
Auditor’s
Report…….………………………………………………………………………………………….........……F-1
Balance Sheets as of March 31, 2017 and March 31, 2016 .............................................................................F-2
Statements of Operations for the years ended March 31, 2017 and 2016.........................................................F-3
Statements of Cash Flows for the years ended March 31, 2017 and 2016 .......................................................F-4
Statement of Changes in Stockholders’ Deficit from March 31, 2015 through
March 31, 2017 ...........................................................................................................................................F-5
Notes to the Financial Statements .................................................................................................................F-6
14
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors
UA Granite Corporation
We have audited the accompanying balance sheets of UA Granite Corporation as of March 31, 2017 and
2016 and the related statements of operations, changes in stockholders’ deficit, and cash flows for the
years then ended. 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 audits in accordance with 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. The Company is not
required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.
Our audit included consideration of internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on
the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no
such opinion. 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 statement
presentation. We believe that our audits provide 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 UA Granite Corporation as of March 31, 2017 and 2016 and the results of its
operations and cash flows for each of the years in the two-year period ended March 31, 2017, in
conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the Company will continue as a
going concern. As discussed in Note 1 to the financial statements, the Company suffered a net loss from
operations and has a net capital deficiency, which raises substantial doubt about its ability to continue as a
going concern. Management’s plans regarding those matters are also described in Note 1. The financial
statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ M&K CPAS, PLLC
www.mkacpas.com
Houston, Texas
July 12, 2017
F-1
UA Granite Corporation
Balance Sheets
March 31, 2017 and March 31, 2016
March 31,
March 31,
2017
2016
ASSETS
Current Assets
Cash
$
0
$
95
Total Assets
$
0
$
95
LIABILITIES AND STOCKHOLDERS’ EQUITY
(DEFICIT)
Current Liabilities
Accounts Payable and Accrued Liabilities
592
1,460
Accounts Payable - Related Party
37,970
21,500
Due to Directors
14,923
13,703
Total Liabilities
53,485
36,663
Stockholders’ Equity (Deficit)
Common Stock (75,000,000 shares authorized, par value
0.00001) 5,650,000 and 5,650,000 shares issued and
outstanding) at September 30, 2015 and March 31, 2015,
respectively
57
57
Additional Paid in Capital
31,963
28,470
Accumulated deficit
(85,505)
(65,095)
Total Stockholders’ Equity (Deficit)
(53,485)
(36,568)
Total Liabilities and Stockholders’Equity (Deficit)
$
0
$
95
(The Accompanying Notes are an Integral Part of These Financial Statements)
F-2
UA Granite Corporation
Statements of Operations
For the Years Ended March 31, 2017 and 2016
Year Ended
Year Ended
March 31,
March 31,
2017
2016
Operating Expenses
Legal and accounting
$
7,206
$
5,280
Consulting
4,090
15,728
General and administrative
5,621
1,846
Total Operating Expenses
16,917
22,854
Other Expense
Imputed interest expense
3,493
1,543
Net Loss
$ (20,410)
$ (24,397)
Net Loss Per Common Share –
$
(0.00)
$
(0.00)
Basic and Diluted
Weighted Average Number of
Common Shares Outstanding
5,650,000
5,650,000
(The Accompanying Notes are an Integral Part of These Financial Statements)
F-3
UA Granite Corporation
Statements of Cash Flows
For the Years Ended March 31, 2017 and 2016
Year Ended
Year Ended
March 31, 2017
March 31, 2016
Operating Activities
Net loss
$
(20,410)
$
(24,397)
Adjustment to reconcile net loss to net cash
used by operating activities:
Imputed interest
3,493
1,543
Changes in operating assets and liabilities:
Accounts payable and accrued liabilities
(868)
(3,489)
Net Cash Used in Operating Activities
(17,785)
(26,343)
Financing Activities
Proceeds from related parties
16,470
21,500
Proceeds from director
1,220
1,820
Net Cash Provided by Financing Activities
17,690
23,320
Increase (Decrease) in Cash
(95)
(3,023)
Cash - Beginning of Period
95
3,118
Cash - End of Period
$
0
$
95
Supplemental Disclosure of Cash Flow information
Interest
$
-
$ -
Income taxes
$
-
$ -
(The Accompanying Notes are an Integral Part of These Financial Statements)
F-4
UA Granite Corporation
Statement of Changes in Stockholders’ Deficit
From March 31, 2015 to March 31, 2017
Additional
Common Stock
Paid
Accumulated
Shares
Amount
in Capital
Deficit
Total
Balances at March 31, 2015
5,650,000 $
57
$
26,927 $ (40,698) $ (13,714)
Imputed interest
-
-
1,543
-
1,543
Net loss
-
-
-
(24,397)
(24,397)
Balances at March 31, 2016
5,650,000 $
57
$
28,470 $ (65,095) $ (36,568)
Imputed interest
3,493
3,493
Net loss
-
-
-
(20,410)
(20,410)
Balances at March 31, 2017
5,650,000 $
57
$
31,963 $ (85,505) $ (53,485)
(The Accompanying Notes are an Integral Part of These Financial Statements)
F-5
UA Granite Corporation
Notes to the Financial Statements
NOTE 1 – NATURE OF OPERATIONS
DESCRIPTION OF BUSINESS AND HISTORY
UA Granite Corporation (the “Company”) was incorporated on February 14, 2013 in the State of Nevada.
The Company does not have any revenues and has incurred losses since inception. Currently, the
Company has no operations, has been issued a going concern opinion, and relies upon the sale of our
securities and loans from its sole officer and director to fund operations.
GOING CONCERN
These financial statements have been prepared on a going concern basis, which implies the Company will
continue to meet its obligations and continue its operations for the next fiscal year. Realization value may
be substantially different from carrying values as shown and these financial statements do not include any
adjustments to the recoverability and classification of recorded asset amounts and classification of
liabilities that might be necessary should the Company be unable to continue as a going concern. As of
March 31, 2017 the Company has a working capital deficiency, has not generated revenues and has
accumulated losses since inception. The continuation of the Company as a going concern is dependent
upon the continued financial support from its shareholders, the ability of the Company to obtain necessary
equity financing to continue operations, and the attainment of profitable operations. These factors raise
substantial doubt regarding the Company’s ability to continue as a going concern.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
These financial statements and related notes are presented in accordance with accounting principles
generally accepted in the United States, and are expressed in U.S. dollars. The Company’s fiscal year-end
is March 31.
USE OF ESTIMATES
The preparation of financial statements in accordance with U.S. generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of net revenue and expenses in
the reporting period. We regularly evaluate our estimates and assumptions related to the useful life and
recoverability of long-lived assets, stock-based compensation and 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 differ
materially and adversely from our estimates. To the extent there are material differences between our
estimates and the actual results, our future results of operations will be affected.
F-6
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued
CASH AND CASH EQUIVALENTS
The Company considers all highly liquid instruments with original maturities of three months or less
when acquired, to be cash equivalents. We had no cash equivalents at March 31, 2017 or March 31,
2016.
INCOME TAXES
The Company accounts for income taxes under the provisions issued by the FASB which requires
recognition of deferred tax liabilities and assets for the expected future tax consequences of events that
have been included in the financial statements or tax returns. Under this method, deferred tax liabilities
and assets are determined based on the difference between the financial statement and tax bases of assets
and liabilities using enacted tax rates in effect for the year in which the differences are expected to
reverse. The Company computes tax asset benefits for net operating losses carried forward. The potential
benefit of net operating losses has not been recognized in these financial statements because the Company
cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future
years.
LOSS PER COMMON SHARE
The Company reports net loss per share in accordance with provisions of the FASB. The provisions
require dual presentation of basic and diluted loss per share. Basic net loss per share excludes the impact
of common stock equivalents. Diluted net loss per share utilizes the average market price per share when
applying the treasury stock method in determining common stock equivalents. As of March 31, 2017 and
March 31, 2016, there were no common stock equivalents outstanding.
FAIR VALUE OF FINANCIAL INSTRUMENTS
Pursuant to ASC No. 820, “Fair Value Measurements and Disclosures”, the Company is required to
estimate the fair value of all financial instruments included on its balance sheet as of March 31, 2017. The
Company’s financial instruments consist of cash. The Company considers the carrying value of such
amounts in the financial statements to approximate their fair value due to the short-term nature of these
financial instruments.
RECENTLY ISSUED ACCOUNTING STANDARDS
a) Recently Adopted Accounting Standards
In June 2014, ASU guidance was issued to resolve the diversity of practice relating to the accounting for
stock based performance awards that the performance target could be achieved after the employee
completes the required service period. The update is effective prospectively or retrospectively for annual
reporting periods beginning after December 15, 2015.
The adoption of the pronouncement did not have a material effect on the Company’s consolidated
financial statements.
In June 2014, the FASB issued ASU No. 2014-10, Development Stage Entities (Topic 915): Elimination
of Certain Financial Reporting Requirements. The amendments in this Update remove the definition of a
F-7
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued
RECENTLY ISSUED ACCOUNTING STANDARDS – Continued
development stage entity from the Master Glossary of the Accounting Standards Codification, thereby
removing the financial reporting
distinction between development stage entities and other reporting entities. In addition, the amendments
eliminate the requirements for development stage entities to (1) present inception-to-date information in
the statements of income, cash flows, and shareholder equity, (2) label the financial statements as those of
a development stage entity, (3) disclose a description of the development stage activities in which the
entity is engaged, and (4) disclose in the first year in which the entity is no longer a development stage
entity that in prior years it had been in the development stage. This ASU was effective for annual periods
beginning after December 15, 2014. Early adoption is permitted. Accordingly, we have elected to adopt
ASU No. 2014-10 on April 1, 2015.
b) Recent Accounting Pronouncements
In January 2015, an ASU was issued to simplify the income statement presentation requirements in
Subtopic 225-20 by eliminating the concept of extraordinary items. Extraordinary items are events and
transactions that are distinguished by their unusual nature and by the infrequency of their occurrence.
Eliminating the extraordinary classification simplifies income statement presentation by altogether
removing the concept of extraordinary items from consideration. This ASU is effective for annual periods
beginning after December 15, 2015, including interim periods within those annual periods. An entity
may apply this ASU prospectively or retrospectively to all prior periods presented in the financial
statements. Early adoption is permitted. The Company does not expect the amendments in this ASU to
have any impact on its financial statements.
In November 2015, an ASU was issued to simplify the presentation of deferred income taxes. The
amendments in this ASU require that deferred tax liabilities and assets be classified as non-current in a
classified balance sheet as compared to the current requirements to separate deferred tax liabilities and
assets into current and non-current amounts. This ASU is effective for annual periods beginning after
December 15, 2016, including interim periods within those annual periods. Earlier application is
permitted. This ASU may be applied either prospectively to all deferred tax liabilities and assets or
retrospectively to all periods presented. The Company is currently evaluating this guidance and the
impact it will have on its financial statements.
In February 2016, Topic 842, Leases was issued to replace the leases requirements in Topic 840, Leases.
The main difference between previous GAAP and Topic 842 is the recognition of lease assets and lease
liabilities by lessees for those leases classified as operating leases under previous GAAP. A lessee should
recognize in the balance sheet a liability to make lease payments (the lease liability) and a right-of-use
asset representing its right to use the underlying asset for the lease term. For leases with a term of 12
months or less, a lessee is permitted to make an accounting policy election by class of underlying asset
not to recognize lease assets and lease liabilities. If a lessee makes this election, it should recognize lease
expense for such leases generally on a straight-line basis over the lease term. The accounting applied by a
lessor is largely unchanged from that applied under previous GAAP. Topic 842 will be effective for
annual reporting periods beginning after December 15, 2018, including interim periods within those
annual periods and is to be retrospectively applied. Earlier application is permitted. The Company is
currently evaluating this guidance and the impact it will have on its financial statements.
F-8
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued
RECENTLY ISSUED ACCOUNTING STANDARDS - continued
In March 2016, an ASU was issued to reduce complexity in the accounting for employee share-based
payment transactions. One of the simplifications relates to forfeitures of awards. Under current GAAP,
an entity estimates the number of awards for which the requisite service period is expected to be rendered
and base the accruals of compensation cost on the estimated number of awards that will vest. This ASU
permits an entity to make an entity-wide accounting policy election either to estimate the number of
forfeitures expected to occur or to account for forfeitures in compensation cost when they occur.
This ASU is effective for annual periods beginning after December 15, 2016, including interim periods
within those annual periods. Earlier application is permitted. The Company is currently evaluating this
guidance and the impact it will have on its financial statements.
NOTE 3 -INCOME TAXES
Deferred income taxes arise from temporary differences resulting from income and expense items
reported for financial accounting and tax purposes in different periods. Deferred taxes are classified as
current or non-current, depending on the classification of assets and liabilities to which they relate.
Deferred taxes arising from temporary differences that are not related to an asset or liability are classified
as current or non-current depending on the periods in which the temporary differences are expected to
reverse. The company does not have any uncertain tax positions.
The Company currently has net operating loss carry forwards aggregating $82,012 (2016: $63,551),
which expire through 2030. The deferred tax asset related to the carry forwards has been fully reserved.
The Company has deferred income tax assets, which have been fully reserved, as follows as of March 31,
2017:
Mar 31, 2017
Mar 31, 2016
Deferred tax assets
$
27,884
$ 21,607
Valuation allowance for deferred tax assets
(27,884)
$ (21,607)
Net deferred tax assets
$
-
-
NOTE 4 – FAIR VALUE MEASUREMENTS
The Company adopted ASC No. 820-10 (ASC 820-10), Fair Value Measurements. ASC 820-10 relates
to financial assets and financial liabilities.
ASC 820-10 defines fair value, establishes a framework for measuring fair value in accounting principles
generally accepted in the United States of America (GAAP), and expands disclosures about fair value
measurements. The provisions of this standard apply to other accounting pronouncements that require or
permit fair value measurements and are to be applied prospectively with limited exceptions.
ASC 820-10 defines fair value as the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the measurement date. This standard is
now the single source in GAAP for the definition of fair value, except for the fair value of leased property
as defined in SFAS 13. ASC 820-10 establishes a fair value hierarchy that distinguishes between
F-9
NOTE 4 – FAIR VALUE MEASUREMENTS – Continued
(1) market participant assumptions developed based on market data obtained from independent sources
(observable inputs) and (2) an entity’s own assumptions, about market participant assumptions, that are
developed based on the best information available in the circumstances (unobservable inputs). The fair
value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices
in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs
(Level 3). The three levels of the fair value hierarchy under ASC 820-10 are described below:
•
Level 1 Unadjusted quoted prices in active markets that are accessible at the measurement date
for identical, unrestricted assets or liabilities.
•
Level 2 Inputs other than quoted prices included within Level 1 that are observable for the asset
or liability, either directly or indirectly, including quoted prices for similar assets or
liabilities in active markets; quoted prices for identical or similar assets or liabilities in
markets that are not active; inputs other than quoted prices that are observable for the
asset or liability (e.g., interest rates); and inputs that are derived principally from or
corroborated by observable market data by correlation or other means.
•
Level 3
Inputs that are both significant to the fair value measurement and unobservable. These
inputs rely on management's own assumptions about the assumptions that market
participants would use in pricing the asset or liability. (The unobservable inputs are
developed based on the best information available in the circumstances and include the
Company's own data.)
The following presents the Company's fair value hierarchy for those assets and liabilities measured at fair
value on a non-recurring basis as of March 31, 2017 and March 31, 2016:
Level 1: None
Level 2: None
Level 3: None
Total Gain (Losses): None
NOTE 5 - RELATED PARTY TRANSACTIONS
A director has advanced funds to us for our legal, audit, filing fees, general office administration and cash
needs. As of March 31, 2017, the director has advanced a total of $14,923 (2016: $13,203). The advances
are without specific terms of repayment. Imputed interest of $1,107 and $1,543 was charged to additional
paid in capital during the year ended March 31, 2017 and March 31, 2016, respectively.
A related entity has advanced funds to us for our legal, audit, filing fees, general office administration and
cash needs. As of March 31, 2017, the related entity has advanced a total of $37,970 (2016: $21,500). The
advances are without specific terms of repayment. Imputed interest of $2,386 and nil was charged to
additional paid in capital during the three year ended March 31, 2017 and March 31, 2016, respectively.
F-10
NOTE 6 - COMMON STOCK
On February 14, 2013, the Company issued 5,000,000 common shares to Myroslav Tsapaliuk, the
founder of the Company.
On December 12, 2013, the Company issued 650,000 common shares in a registered offering to
subscribers for total proceeds of $26,001.
As of March 31, 2017, the Company has 5,650,000 common shares issued and outstanding.
NOTE 7 – SUBSEQUENT EVENT
The Company has evaluated subsequent events from the balance sheet date through the date the financial
statements were issued and has determined that there are no events to disclose.
F-11
ITEM 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
Not applicable.
ITEM 9A.
CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
In connection with the preparation of this annual report, an evaluation was carried out by the Company’s
management, with the participation of the chief executive officer and the chief financial officer, of the
effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and
15d-15(e) under the Securities Exchange Act of 1934 (“Exchange Act”)) as of March 31, 2017.
Disclosure controls and procedures are designed to ensure that information required to be disclosed in
reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported
within the time periods specified in the Commission’s rules and forms, and that such information is
accumulated and communicated to management, including the chief executive officer and the chief
financial officer, to allow timely decisions regarding required disclosures.
Based on that evaluation, the Company’s management concluded, as of the end of the period covered by
this report, that the Company’s disclosure controls and procedures were not effective in recording,
processing, summarizing, and reporting information required to be disclosed, within the time periods
specified in the Commission’s rules and forms, and such information was not accumulated and
communicated to management, including the chief executive officer and the chief financial officer, to
allow timely decisions regarding required disclosures.
Management's Annual Report on Internal Control over Financial Reporting
The Company’s management is responsible for establishing and maintaining adequate internal control
over financial reporting. The Company’s internal control over financial reporting is a process, under the
supervision of the chief executive officer and the chief financial officer, designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of the Company’s financial
statements for external purposes in accordance with United States generally accepted accounting
principles (GAAP). Internal control over financial reporting includes those policies and procedures that:
§ Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the
transactions and dispositions of the Company’s assets.
§ Provide reasonable assurance that transactions are recorded as necessary to permit preparation of
the financial statements in accordance with generally accepted accounting principles, and that
receipts and expenditures are being made only in accordance with authorizations of management
and the board of directors.
§ 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 the
financial statements.
Due to its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk
that controls may become inadequate because of changes in conditions or that the degree of compliance
with the policies or procedures may deteriorate.
15
The Company’s management conducted an assessment of the effectiveness of our internal control over
financial reporting as of March 31, 2017, based on criteria established in Internal Control – Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013),
to determine whether there existed material weaknesses in internal control over financial reporting.
A material weakness is a control deficiency, or a combination of deficiencies in internal control over
financial reporting that creates a reasonable possibility that a material misstatement in annual or interim
financial statements will not be prevented or detected on a timely basis. The assessment identified a
material weakness in internal control over financial reporting. Since the assessment of the effectiveness of
our internal control over financial reporting did identify a material weakness, management considers its
internal control over financial reporting to be ineffective.
The matters involving internal control over financial reporting that management considers to be material
weaknesses are: The matters involving internal control over financial reporting that our management
considered to be material weaknesses were:
Lack of Appropriate Independent Oversight. The board of directors has not provided an appropriate level
of oversight of the Company’s financial reporting and procedures for internal control over financial
reporting during the annual period, since it has only one independent directors that could have provided
an appropriate level of oversight, including challenging management’s accounting for and reporting of
transactions. While this control deficiency did not result in any audit adjustments to our 2017 interim or
annual financial statements, it could have resulted in material misstatements that might have been
prevented or detected by independent oversight. Accordingly, we determined that this control deficiency
as of March 31, 2017, constituted a material weakness.
Failure to Segregate Duties. The board of directors has not maintained any segregation of duties within
the Company’s management, instead relying on a single individual to fill the role of chief executive
officer, chief financial officer and principal accounting officer, responsible for a broad range of duties that
cannot be properly reconciled with a singular management resource. Accordingly, we determined that
this control deficiency as of March 31, 2017, constituted a material weakness.
Insufficient Accounting Resources. The board of directors has insufficient internal accounting resources,
with an acceptable knowledge of US GAAP processes, to oversee the Company’s financial reporting and
procedures for internal control. Accordingly, we determined that this control deficiency as of March 31,
2017, constituted a material weakness.
US GAAP Knowledge. The board of directors has engaged an external consultant to counter the internal
lack of US GAAP knowledge however the effectiveness of the external consultant is affected by the
Company’s lack of sufficient internal accounting resources. Accordingly, we determined as of March 31,
2017, that the internal lack of US GAAP knowledge is part of the material weaknesses as stated above.
Management’s Remediation Initiatives
Due to the material weaknesses in internal control over financial reporting described above, the
Company’s management has concluded that, as of March 31, 2017, that the Company’s internal control
over financial reporting was not effective based on the criteria in Internal Control – Integrated
Framework issued by the COSO. The Company intends to remedy its material weaknesses by:
16
— forming an audit committee made up of non-managerial directors that will oversee management at
such time as the board of directors is enlarged in response to acquiring or developing a given
business opportunity.
— engaging an individual to serve as chief financial officer and principal accounting officer to
segregate the duties of chief executive officer and chief financial officer in response to acquiring or
developing a given business opportunity.
— bolstering internal accounting resources through contracting an individual with a working
knowledge of GAAP accounting in response to acquiring or developing a given business
opportunity.
The aforementioned material weaknesses were identified by our chief executive officer and chief
financial officer in connection with his review of our financial statements as of March 31, 2017.
Management believes that the material weakness set forth above did not have an effect on our financial
results. However, management believes that the weaknesses identified above could result in ineffective
application of required internal controls over financial reporting, which weakness could result in a
material misstatement in our financial statements in future periods.
Attestation Report
This annual report does not include an attestation report of our independent registered public accounting
firm regarding internal control over financial reporting. We were not required to have, nor have we,
engaged our independent registered public accounting firm to perform an audit of internal control over
financial reporting pursuant to the rules of the Commission that permit us to provide only management’s
report in this annual report.
Changes in internal control over financial reporting
During the quarter ended March 31, 20177, there have been no changes in internal control over financial
reporting that have materially affected, or are reasonably likely to materially affect our internal control
over financial reporting except in connection with the appointment of a new independent member of the
board of directors.
9B.
OTHER INFORMATION
Not applicable.
17
PART III
ITEM 10.
DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
Officers and Directors
The following table sets forth the name, age and position of each director and executive officer of the
Company:
Name
Age
Position
Myroslav Tsapaliuk
57
Director, Chief Executive Officer, Chief Financial
Officer, Principal Accounting Officer
Shawn Teigen
44
Former Director
Set forth below is a brief description of the background and business experience of each of our executive
officers and directors for the past five years:
Myroslav Tsapaliuk has served as chief executive officer, chief financial officer, principal accounting
officer and director since February 19, 2013.
Business Experience
Mr. Tsapaliuk brings years of experience in sourcing, marketing and installing granite products. Since
August of 1997 to date he has acted as the sole proprietor of FOP “Tsapaliuk Myroslav”, a private entity
that operates in Ukraine. FOP “Tsapaliuk Myroslav” provides services for the installation of granite
counter-tops, tiles and fire places.
Officer and Director Responsibilities and Qualifications
Mr. Tsapaliuk is responsible for the overall management of the Company. His experience in granite
products and his actions as founder qualify him for his responsibilities to the Company.
Other Public Company Directorships in the Last Five Years
Mr. Tsapaliuk has not been a director of any other public companies in the last five years.
Shawn Teigen served as a director from February 24, 2016 to October 27, 2016.
Business Experience
Shawn Teigen is the research director at the Utah Foundation, a pu October 27, 2017 blic policy research
organization that focuses on a wide range of issues including education, taxes, and voting. He has been
employed at the Utah Foundation since 2012. Prior to his present employment, Mr. Teigen worked as an
independent consultant for Orsa & Company, a business consulting firm that advises early-stage
businesses in the public and private sectors. Services ranged from guidance on disclosure issues to
managerial duties that included working with government regulators, business organizations, auditors,
accountants, attorneys and quasi-public governing bodies. He currently serves as a director of several
private entities which operations include energy production, immigration related investments, national
research and civic responsibility for Salt Lake City.
18
Mr. Teigen served two years for the U.S. Peace Corp in Kazakhstan between 2002 -2004.
Officer and Director Responsibilities and Qualifications
Mr. Teigen was responsible for overseeing the management of the Company and for assisting our chief
executive officer in the review of public disclosure materials.
Mr. Teigen holds a Master of Public Policy and a BS in Management from the University of Utah.
Other Public Company Directorships in the Last Five Years
Mr. Teigen served as a director of Infrastructure Developments Corp. a public company that operates as a
distributor of mobile homes and offices between April 2010, and September 2013.
Effective as of October 27, 2016, Mr. Shawn Teigen resigned as a director and treasurer of UA Granite
Corporation.
Family Relationships
None.
Involvement in Certain Legal Proceedings
During the past ten years there are no events that occurred related to an involvement in legal proceedings
that are material to an evaluation of the ability or integrity of the Company’s directors, or persons
nominated to become directors or executive officers.
Term of Office
Our directors were appointed for a one (1) year term to hold office until the next annual meeting of our
shareholders or until removed from office in accordance with our bylaws. Our sole officer was appointed
by our board of directors and will hold office until removed by the board of directors or upon his tender of
resignation.
No other persons are expected to make any significant contributions to the Company’s executive
decisions who are not executive officers or directors of the Company.
Compliance with Section 16(A) of the Exchange Act
Section 16(a) of the Securities Exchange Act of 1934 requires officers and directors and persons who own
more than ten percent of a registered class of our equity securities to file reports of ownership and
changes in their ownership with the Commission, and forward copies of such filings to us. Based solely
upon a review of Forms 3, 4 and 5 furnished to us, we are not aware of any persons who, during the
period ended March 31, 2017, failed to file, on a timely basis, reports required by Section 16(a) of the
Exchange Act except the following:
-
Shawn Teigen failed to file a Form 3 or Form 5 in connection with his appointment and
resignation to the board of directors.
19
Code of Ethics
The Company has not adopted a code of ethics within the meaning of Item 406(b) of Regulation S-K of
the Securities Exchange Act of 1934 that applies to directors and senior officers, such as the principal
executive officer, principal financial officer, controller, and persons performing similar functions.
Board of Directors Committees
The board of directors has not established an audit committee. An audit committee typically reviews, acts
on and reports to the board of directors with respect to various auditing and accounting matters, including
the recommendations and performance of independent auditors, the scope of the annual audits, fees to be
paid to the independent auditors, and internal accounting and financial control policies and procedures.
Since we do not have an audit committee, these functions are performed by our sole director. Certain
stock exchanges currently require companies to adopt a formal written charter that establishes an audit
committee that specifies the scope of an audit committee’s responsibilities and the means by which it
carries out those responsibilities. In order to be listed on any of these exchanges, the Company would be
required to establish an audit committee.
The board of directors has similarly not established a nominating committee, compensation committee or
compliance and ethics committee in the belief that such committees are not necessary since the Company
has only one director, and to date, such director has been performing the functions of such committees.
Director Compensation
Our directors are not reimbursed for out-of-pocket costs incurred in attending meetings or for his services
as a director of the Company.
ITEM 11.
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
The objective of the Company’s compensation program is to provide an incentive to our chief executive
officer and chief financial officer for services rendered. The incentive for his service lies in his being the
Company’s largest shareholder and is adequate to retain him at this stage of our development.
Nonetheless, when we develop or acquire an existing business opportunity our intention in respect to
executive compensation would be to compensate Company executives in accordance with compensatory
packages typical of other early stage companies. We do not expect to rely on any specific formula to
determine future compensation. Future compensation arrangements for Company executives will most
likely include salaries, stock awards and stock options.
Executive compensation paid to our chief executive officer and chief financial officer for the periods
ended March 31, 2017, and March 31, 2016, were $nil and $nil respectively.
Table
The following table provides summary information for 2017 and 2016 concerning cash and non-cash
compensation paid or accrued by the Company to or on behalf of (i) the chief executive officer and the
chief financial officer and (ii) any other employee to receive compensation in excess of $100,000.
20
Summary Compensation Table
Name and
Year Salary Bonus
Stock
Option
Non-Equity
Change in Pension
All Other
Total
Principal
($)
($)
Awards Awards
Incentive Plan
Value and
Compensation
($)
Position
($)
($)
Compensation
Nonqualified
($)
($)
Deferred
Compensation
($)
Myroslav
2017
-
-
-
-
-
-
-
-
Tsapaliuk
2016
-
-
-
-
-
-
-
-
CEO, CFO,
PAO, and
Director
Outstanding Equity Awards as of March 31, 2017
The following table provides summary information for the period March 31, 2017, concerning
unexercised options, stock that has not vested, and equity incentive plan awards by the Company to or on
behalf of (i) the chief executive officer and chief financial officer and (ii) the three most highly
compensated individuals whose total compensation exceeds $100,000:
Outstanding Equity Awards at Fiscal Year-End
Option awards
Stock awards
Equity
incentive
plan
Equity
awards:
incentive
Number
Equity
market or
plan
of
incentive plan payout
awards:
shares
Market
awards:
value of
Number of
number of
or units
value of
number of
unearned
securities
Number of
securities
of stock shares or
unearned
shares,
underlying
securities
underlying
that
units of
shares, units or units or
unexercised underlying
unexercised Option
have
stock that other rights
other rights
options
unexercised
unearned
exercise Option
not
have not
that have not that have
(#)
options
options
price
expiration vested
vested(6)
vested
not vested
Name
exercisable (#) exercisable
(#)
($)
date
(#)
($)
(#)
($)
Myroslav
-
-
-
-
-
-
-
-
-
Tsapaliuk
Compensation of Directors
The following table summarizes the compensation of our Company directors for the year ended March
31, 2017:
Fees
Non-qualified
Earned
Non- Equity
Deferred
or
Stock
Option
Incentive Plan Compensation
All Other
Paid in Awards Awards
Compensation
Earnings
Compensation
Total
Name
Cash
($)
($)
($)
($)
($)
($)
($)
Myroslav Tsapaliuk
-
-
-
-
-
-
-
Shawn Teigen(1)
$500
-
-
-
-
-
$500
(1)Shawn Teigen was appointed on February 24, 2016.
21
ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table sets forth certain information concerning the number of shares of our common stock
owned beneficially (1) as at July 12, 2017 by: (i) our directors, (ii) each of our executive officers, (iii) our
executive officers and directors as a group, and (iv) each beneficial shareholder known to us to own more
than 5% of our outstanding common stock. Unless otherwise indicated, the shareholders listed possess
sole voting and investment power with respect to the shares shown.
Name and Address
Number of Common
Percentage of
Title of Class
of Beneficial Owner
Shares
Common Shares(1)
Common Stock
Myroslav Tsapaliuk, CEO, CFO, PAO and director
10 Bogdan Khmelnitsky Street, # 13A
5,000,000
88.5
Kiev 01030, Ukraine
(1)
Under Commission Rule 13d-3, a beneficial owner of a security includes any person who, directly or indirectly,
through any contract, arrangement, understanding, relationship, or otherwise has or shares: (i) voting power, which
includes the power to vote, or to direct the voting of shares; and (ii) investment power, which includes the power to
dispose or direct the disposition of shares. Certain shares may be deemed to be beneficially owned by more than one
person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are
deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon
exercise of an option) within 60 days of the date as of which the information is provided. In computing the percentage
ownership of any person, the amount of shares outstanding is deemed to include the amount of shares beneficially
owned by such person (and only such person) by reason of these acquisition rights. As a result, the percentage of
outstanding shares of any person as shown in this table does not necessarily reflect the person’s actual ownership or
voting power with respect to the number of shares of common stock actually outstanding on June 29, 2017. The
percentage calculations are based on the aggregate of 5,650,000 shares issued and outstanding as of June 29, 2017.
ITEM 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND
DIRECTOR INDEPENDENCE
Certain Relationships and Related Transactions
None of our directors or executive officers, nor any proposed nominee for election as a director, nor any
person who beneficially owns, directly or indirectly, shares carrying more than 5% of the voting rights
attached to all of our outstanding shares, nor any members of the immediate family (including spouse,
parents, children, siblings, and in−laws) of any of the foregoing persons has any material interest, direct
or indirect, in any transaction since the beginning of our last fiscal year or in any presently proposed
transaction which, in either case, has or will materially affect us.
Director Independence
Our common stock is quoted on the OTC Pink Sheets. As such, we are not currently subject to corporate
governance standards of listed companies, which require, among other things, that the majority of the
board of directors be independent. Since we are not currently subject to corporate governance standards
relating to the independence of our directors, we choose to define an “independent” director in accordance
with NASDAQ Marketplace Rule 5605(a)(2)). The NASDAQ independence definition includes a series
of objective tests, such as that the director is not an employee of the company and has not engaged in
various types of business dealings with the company. The Company has one independent director under
the above definition.
22
ITEM 14.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
The following table sets forth information regarding the amount billed to us by our independent auditor,
M & K CPAS, PLLC, for our fiscal years ended March 31, 2017 and 2016:
Years ended March 31
2017
2016
Audit Fees:
$
7,460
$
7,100
Audit Related Fees:
-
-
Tax Fees:
-
-
All Other Fees:
-
-
Total:
$
7,460
$
7,100
Audit Fees
Audit Fees are the aggregate fees billed by our independent auditor for the audit of our annual financial
statements and attestation services that are provided in connection with statutory and regulatory filings or
engagements.
Audit-Related Fees
Audit-Related Fees are fees charged by our independent auditor for assurance and related services that are
reasonably related to the performance of the audit or review of our financial statements and are not
reported under "Audit Fees." This category comprises fees billed for independent accountant review of
our interim financial statements and management discussion and analysis, as well as advisory services
associated with our financial reporting.
Policy on Pre-Approval by Audit Committee of Services Performed by Independent Auditors
The Company’s board of directors pre-approves all audit services to be provided to us by our independent
auditors. Our Company’s policy regarding the pre-approval of non-audit services to be provided to us by
our independent auditors is that all such services shall be pre-approved by the board of directors. Non-
audit services that are prohibited to be provided by our independent auditors may not be pre-approved. In
addition, prior to the granting of any pre-approval, our board of directors must be satisfied that the
performance of the services in question will not compromise the independence of the auditors.
23
PART IV
ITEM 15.
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Financial Statements
The following documents are filed under “Item 8. Financial Statements and Supplementary Data,” pages
F-1 through F-12, and are included as part of this Form 10-K:
Financial Statements of the Company for the years ended March 31, 2017 and 2016:
Report of Independent Registered Public Accounting Firm
Balance Sheets
Statements of Operations
Statement of Stockholders’ Equity (Deficit)
Statements of Cash Flows
Notes to Financial Statements
(b) Exhibits
The exhibits required to be attached by Item 601 of Regulation S-K are listed in the Index to Exhibits on
page 26 of this Form 10-K, and are incorporated herein by this reference.
(c) Financial Statement Schedules
We are not filing any financial statement schedules as part of this Form 10-K because such schedules are
either not applicable or the required information is included in the financial statements or notes thereto.
24
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.
UA Granite Corporation
By: /s/ Myroslav Tsapaliuk
Myroslav Tsapaliuk, Chief Executive Officer,
Chief Financial Officer, Principal Accounting
Officer
Date: July 12, 2017
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by
the following person on behalf of the registrant and in the capacities and on the dates indicated.
By: /s/ Myroslav Tsapaliuk
Myroslav Tsapaliuk
Director
Date: July 12, 2017
25
EXHIBIT INDEX
Exhibit
Description
3.1*
Articles of Incorporation (incorporated by reference to the Company’s Form S-1 filed
with the Commission on June 18, 2013).
3.2*
Bylaws (incorporated by reference to the Company’s Form S-1 filed with the
Commission on June 18, 2013).
Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Rule
13a-14 of the Securities and Exchange Act of 1934, as amended, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18
U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
101. INS
XBRL Instance Document†
101. PRE
XBRL Taxonomy Extension Presentation Linkbase†
101. LAB
XBRL Taxonomy Extension Label Linkbase†
101. DEF
XBRL Taxonomy Extension Label Linkbase†
101. CAL
XBRL Taxonomy Extension Label Linkbase†
101. SCH
XBRL Taxonomy Extension Schema†
*
Incorporated by reference to previous filings of the Company.
†
Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed
“furnished” and not “filed” or part of a registration statement or prospectus for purposes
of Section 11 or 12 of the Securities Act of 1933, or deemed “furnished” and not “filed”
for purposes of Section 18 of the Securities and Exchange Act of 1934, and otherwise is
not subject to liability under these sections.
Exhibit 31
26
CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
PURSUANT TO RULE 13a-14 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Myroslav Tsapaliuk certify that:
1. I have reviewed this report on Form 10-K of UA Granite Corporation;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this
report, fairly present in all material respects the financial condition, results of operations and cash flows
of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) and
internal control over financial reporting (as defined in the Exchange Act Rules 13a-15(f) and 15d-15(f)
for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and
procedures to be designed under our supervision, to ensure that material information relating to
the registrant, is made known to us by others within those entities, particularly during the period
in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over
financial reporting to be designed under our supervision, 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;
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in
this report our conclusions about the effectiveness of the disclosure controls and procedures, as of
the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that
occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in
the case of an annual report) that has materially affected, or is reasonably likely to materially
affect, the registrant’s internal control over financial reporting; and
5. I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the
registrant's auditors and the audit committee of the registrant's board of directors (or persons performing
the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal controls
over financial reporting which are reasonably likely to adversely affect the registrant's ability to
record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a
significant role in the registrant's internal controls over financial reporting.
Date: July 12, 2017
/s/ Myroslav Tsapaliuk
Myroslav Tsapaliuk
Chief Executive Officer and Chief Financial Officer
27
Exhibit 32
CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002
In connection with the report on Form 10-K of UA Granite Corporation for the annual period ended
March 31, 2017, as filed with the Securities and Exchange Commission on the date hereof, I, Myroslav
Tsapaliuk, do hereby certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-
Oxley Act of 2002, that, to the best of my knowledge and belief:
(1) This report fully complies with the requirements of section 13(a) or 15(d) of the Securities
Exchange Act of 1934; and
(2) The information contained in this report fairly represents, in all material respects, the financial
condition of the registrant at the end of the period covered by this report and results of operations
of the registrant for the period covered by this report.
Date: July 12, 2017
/s/ Myroslav Tsapaliuk
Myroslav Tsapaliuk
Chief Executive Officer and Chief Financial Officer
This certification accompanies this report pursuant to §906 of the Sarbanes-Oxley Act of 2002 and shall
not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the registrant
for the purposes of §18 of the Securities Exchange Act of 1934, as amended. This certification shall not
be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended (whether made before or after the date of this report),
irrespective of any general incorporation language contained in such filing.
A signed original of this written statement required by §906 has been provided to the registrant and will
be retained by the registrant and furnished to the Securities and Exchange Commission or its staff upon
request.
28