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EX-32.2 - SECTION 906 CERTIFICATION - AMERITEK VENTURESex322sec906.htm
EX-32.1 - SECTION 906 CERTIFICATION - AMERITEK VENTURESex321sec906.htm
EX-31.2 - SECTION 302 CERTIFICATION - AMERITEK VENTURESex312sec302.htm
EX-31.1 - SECTION 302 CERTIFICATION - AMERITEK VENTURESex311sec302.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

 

(Mark one)
   
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended August 31, 2017

OR

 
   
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________________to

   

Commission File Number: 000-54739

 

 
   
     

AMERITEK VENTURES

(Exact name of registrant as specified in its charter)

_________________

Nevada   82-2380777  
(State or Other Jurisdiction   (I.R.S. Employer  
  of Incorporation or Organization)   Identification No.)
             

 

1980 Festival Plaza Drive, Suite 530, Las Vegas, NV       89135  
(Address of principal executive offices)   (Zip Code)
           

877-571-1776
(Registrant’s telephone number, including area code)

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No þ

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.

Yes o No 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 þ No o

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§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 o No þ

 

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K 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. þ

 

 

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer o Accelerated filer o  
  Non-accelerated filer o Smaller Reporting Company o

(Do not check if a smaller reporting company)

Emerging growth company þ

     
               

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  o

 

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

  

There were 27,071,433 shares of Common Stock issued and outstanding as of October 24, 2017.

 

 

 

 

 
 

 

Table of Contents

AMERITEK VENTURES

Index to Form 10-Q

For the Quarterly Period Ended August 31, 2017

PART I Financial Information 3
     
ITEM 1. Financial Statements 3
  Condensed Balance Sheets 3
  Unaudited Interim Condensed Statements of Operations 4
  Unaudited Interim Condensed Statements of Cash Flows 5
  Notes to the Unaudited Condensed Interim Financial Statements 6
     
     
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 13
     
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk 16
     
ITEM 4T. Controls and Procedures 16
     
PART II Other Information 19
     
ITEM 1. Legal Proceedings 19
     
ITEM 1A. Risk Factors 19
     
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds 19
     
ITEM 3 Defaults Upon Senior Securities 19
     
ITEM 4 Submission of Matters to a Vote of Security Holders 19
     
ITEM 5 Other Information 19
     
ITEM 6 Exhibits 20
     
  SIGNATURES 21
     

 

2

 

 
 

 

AMERITEK VENTURES

Unaudited Interim Condensed Balance Sheets

 

 

        August 31, 2017   May 31, 2017
    ASSETS        
Current assets:        
  Cash and cash equivalents   $             107,718   $                       -
  Cash held in escrow   22,500   -
   Deposits   521                           -
    Total current assets   130,739   -
         
TOTAL ASSETS   $             130,739   $                       -
   

 

 

       
    LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)        
Current liabilities:        
  Accounts payable   $                15,000   $             23,270
  Other accrued expenses   5,000   10,000
  Convertible notes payable   129,000   -
  Accrued interest   974   -
  Due to related party   60,700   60,500
    Total current liabilities   210,674   93,770
             
Stockholders' equity (deficit):        
  Preferred stock Series B, $0.001 par value, 5,000,000 shares   -   -
    authorized, none issued and outstanding as of        
    8/31/2017 and 5/31/2017, respectively        
  Convertible preferred stock Series A, $0.001 par   119   119
    value, 5,000,000 shares authorized, 119,200        
    and 119,200 issued and outstanding as of        
    8/31/2017 and 5/31/2017, respectively        
  Preferred stock Series C, $0.001 par value, 5,000,000 shares   -   -
    authorized, none issued and outstanding as of        
    8/31/2017 and 5/31/2017, respectively        
  Common stock, $0.001 par value, 185,000,000 shares   7,230   7,230
    authorized, 7,230,004 and 7,230,004 issued and        
    outstanding as of 8/31/2017 and 5/31/2017,        
    respectively        
  Stock subscription payable     100,000   -
  Additional paid-in capital     370,030   370,030
  Accumulated deficit   (557,314)   (471,149)
    Total stockholders' equity (deficit)   (79,935)   (93,770)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)   $            130,739   $                      -

 

 

The accompanying notes are an integral part of these financial statements.

 

3

 
 

 

AMERITEK VENTURES

Unaudited Interim Condensed Statement of Operations

 

      For the three months ended August 31, 2017   For the three months ended August 31, 2016      
Revenue $                          -   $                -    
Cost of goods sold -   -    
Gross profit -   -    
               
Expenses:          
  General & administrative expenses 85,191   3,000    
    Total expenses 85,191   3,000    
               
Operating loss $             (85,191)   $     (3,000)    
               
Other Income (Expenses):          
    Interest income (expense) (974)   -    
    Total other income (expenses) (974)   -    
               
Net loss applicable to          
  common shareholders $              (86,165)   $      (3,000)    
               
Net loss per share - basic and diluted $                    (0.01)   $       ( 0.00)    
               
Weighted average shares outstanding - basic 7,230,004   6,900,004    
               
Weighted average shares outstanding - diluted 19,746,280   19,150,004    

 

 

 

The accompanying notes are an integral part of these financial statements.

 

4

 
 

 

AMERITEK VENTURES

Unaudited Interim Condensed Statements of Cash Flows

 

 

      For the three months ended August 31, 2017   For the three months ended August 31, 2016
       
CASH FLOWS FROM OPERATING ACTIVITIES      
Net loss $              (86,165)   $           (3,000)
  Changes in operating assets and liabilities:      
    Inventory and deposits (521)   -
    Accounts payable (8,270)   -
    Accrued expenses (4,026)   (3,000)
Net cash used in operating activities (98,982)   -

 

CASH FLOWS FROM INVESTING ACTIVITIES

     
    Advances from shareholder $                         200   -
Net cash provided by investing activities 200   -

 

CASH FLOWS FROM FINANCING ACTIVITIES

     
   Proceeds for issuance of common stock $                 100,000    $                     - 
    Proceeds from convertible debt 129,000   -
Net cash provided by financing activities 229,000   -

 

NET INCREASE (DECREASE) IN CASH

130,218   -
CASH - BEGINNING OF THE PERIOD -   -
CASH - END OF THE PERIOD $                  130,218   $                       -
       
           

The accompanying notes are an integral part of these financial statements.

 

 

5

 
 

 

AMERITEK VENTURES

Notes to the Unaudited Condensed Interim Financial Statements

August 31, 2017

 

 

NOTE 1 - CONDENSED INTERIM FINANCIAL STATEMENTS

 

The accompanying financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows at August 31, 2017 and for all periods presented have been made.

 

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company's May 31, 2017 audited financial statements. The results of operations for the period ended August 31, 2017 are not necessarily indicative of the operating results for the full year.

 

Basis of Presentation

In the opinion of management, the accompanying interim balance sheets and related interim statements of income and cash flows include all adjustments, consisting only of normal recurring items, necessary for their fair presentation in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP"). Preparing financial statements requires management to make estimates and assumptions the affect the reported amounts of assets, liabilities, revenue and expenses. Actual results and outcomes may differ from management's estimates and assumptions.

 

 

NOTE 2 - GOING CONCERN

 

These condensed interim financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. As of August 31, 2017, the Company has accumulated operating losses of $557,314 since inception. The Company's ability to continue as a going concern is contingent upon the successful completion of additional financing arrangements and its ability to achieve and maintain profitable operations.

 

Management plans to raise equity capital to finance the operating and capital requirements of the Company. Amounts raised will be used to further development of the Company's products, to provide financing for marketing and promotion, to secure additional property and equipment, and for other working capital purposes. While the Company is putting forth its best efforts to achieve the above plans, there is no assurance that any such activity will generate funds that will be available for operations.

 

 

6

 

 

 
 

 

 

AMERITEK VENTURES

Notes to the Unaudited Condensed Interim Financial Statements

August 31, 2017

 

These conditions raise substantial doubt about the Company's ability to continue as a going concern. These financial statements do not include any adjustments that might arise from this uncertainty.

 

 

NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES

 

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

Recent Accounting Pronouncements

The Company's management has evaluated all the recently issued accounting pronouncements through the filing date of these financial statements and does not believe that any of these pronouncements will have a material impact on the Company's financial position and results of operations.

 

 

NOTE 4 - STOCKHOLDERS' EQUITY AND CONTRIBUTED CAPITAL

 

Series B Preferred Stock

 

The Company is authorized to issue 5,000,000 shares of $0.001 par value Series B Preferred Stock. Series B Preferred Stock has liquidation and first position ownership rights on any assets owned by the Company. The Series B Preferred Stock has no voting rights and are not entitled to receive dividends. The holders of Series B Preferred Stock shall be entitled to interest payments on monies paid or loaned to the corporation for their Series B Preferred Shares and a first position in a security interest on any assets of the Company upon default of a loan to the Company, liquidation or dissolution of the Company. Further, the Company may call these shares at any time provided the holders of the Series B Preferred Stock are paid the amount of monies they paid for their Series B Preferred Stock along with any interest due. Upon the payment of principal and interest to the Series B Preferred Stock shareholders, the shares must be returned to the Company.

 

On May 24, 2011, the Company issued 25,000 shares of its Series B Preferred Stock to a shareholder and former director upon execution of a Promissory Note for cash of $25,000 and a collateral security interest in the Company's molding tool. The loan was to accrue interest of $1,250 per quarter until the note is paid-in-full, with the first payment due on November 30, 2011. On January 28, 2014, the shareholder and former director forgave the debt owed and returned 25,000 shares of Series B Preferred Stock for cancellation. As of August 31, 2017 and May 31, 2017, there is no Series B Preferred Stock outstanding.

 

 

7

 
 

 

AMERITEK VENTURES

Notes to the Unaudited Condensed Interim Financial Statements

August 31, 2017

 

 

Series A Preferred Stock

 

The Company is authorized to issue 5,000,000 shares of $0.001 par value Series A Preferred Stock. Series A Preferred Stock have no liquidation rights. Series A Preferred Stock shall not be entitled to receive any dividends nor are they entitled to any voting rights with respect to the Series A Preferred Stock. At any time and from time-to-time after the issuance of the Series A Preferred Stock, any holder may convert any or all of the shares of Series A Preferred Stock held by such holder at the ratio of one hundred (100) shares of Common Stock for every one (1) share of Series A Preferred Stock. However, the beneficial owner of such Series A Preferred Stock cannot convert their Series A Preferred stock where they will beneficially own in excess of 4.9% of the shares of the Common Stock.

 

On May 31, 2011, the Company issued 125,000 shares of its Series A Preferred Stock to shareholders in exchange for cash of $12,500. Each share of the Series A Preferred Stock can be exchanged for one hundred (100) shares of Common Stock of the Company. This Series A Preferred Stock was issued with a beneficial conversion feature totaling $112,500. This non-cash expense related to the beneficial conversion features of those securities and is recorded with a corresponding credit to paid-in-capital. If the issued and outstanding preferred stock were to be converted into common stock, and each beneficial owner held less than 4.9% of the stock, the common stock would be increased by 12,500,000 shares.

 

During the year ended May 31, 2015, two shareholders who owned 2,500 registered shares of the Series A Preferred Stock, exercised the conversion feature of the Preferred Stock and they converted their shares into common stock and received 250,000 registered common shares.

 

During the year ended May 31, 2017, Arden A. Johnson, who was the beneficial owner of the Company’s Series A Convertible Preferred Stock, entered into an agreement whereby he sold his ownership in Legal Beagle Services to J. Chad Guidry who is now currently the beneficial owner of the Company’s Series A Convertible Preferred Stock.

 

Also during the year ended May 31, 2017, Legal Beagle Services exercised the conversion feature of 3,300 shares owned by them of the Series A Preferred Stock. These shares converted into 330,000 shares of registered Common Stock.

 

During the quarter ended August 31, 2017, there were no issuances or conversions of Series A Preferred Stock. As of August 31, 2017 and May 31, 2017, there were 119,200 shares of Series A Preferred Stock issued and outstanding, respectively.

 

Series C Preferred Stock

 

The Company is authorized to issue 5,000,000 shares of $0.001 par value Series C Preferred Stock, of which no shares are issued and outstanding as of August 31, 2017 and May 31, 2017, respectively. The designation of these shares have yet to be determined by the Board of Directors.

  

Common Stock

The Company is authorized to issue 185,000,000 shares of its $0.001 par value common stock, of which 7,230,004 shares are issued and outstanding as of August 31, 2017 and May 31, 2017, respectively.

 

 

8

 
 

 

AMERITEK VENTURES

Notes to the Unaudited Condensed Interim Financial Statements

August 31, 2017

 

On September 14, 2016, the Company underwent a change of control of ownership. Hal Heyer, former CEO of the Company, entered into an agreement on September 23, 2016 whereby he sold his ownership of 5,100,000 control block shares to Mark Cole. Mark Cole paid cash consideration of ten thousand ($10,000) for the 5,100,000 control block shares. The terms of this agreement were fulfilled on September 20, 2016. 

 

During the year ended May 31, 2017, a shareholder who owned 3,300 registered shares of the Series A Preferred Stock, exercised the conversion feature of the Preferred Stock and they converted their shares into common stock and received 330,000 registered common shares.

 

On August 30, 2017, the Company entered into an Asset Purchase Agreement with Clinton L. Stokes, the Company’s Chief Executive Officer, whereby 19,770,000 unregistered restricted common shares of stock were approved for issuance by the Board of Directors, along with payment of $100,000, in exchange for fiber optic assets. The terms of this agreement were fulfilled on September 15, 2017.

 

On August 30, 2017, the Company sold 71,429 shares of its common stock to Meridian Pacific Holdings, LLC, in exchange for $100,000. These shares were subsequently issued on October 3, 2017. The aforementioned shares were sold with an exemption from registration pursuant to Section 4(a)(2) of the Securities Act of 1933.

 

Contributed Capital

On November 19, 2014, Hal Heyer, M.D., former President, Chief Executive Officer and Chairman of the Board of Directors personally loaned $250,000 to VoCare, Inc., an Indiana company. The $250,000 Promissory Note pays 12% interest per annum with a maturity date of December 31, 2017. On December 10, 2014, Hal Heyer, M.D., assigned this Promissory Note to the Company. On June 2, 2015, VoCare, Inc. repaid a portion of the Promissory Note in the amount of $120,000 directly to Hal Heyer, M.D., the payment was recorded as a reduction of the Promissory Note as well as a non-cash distribution and related reduction in paid-in-capital in the quarter-ended August 31, 2015.

 

During the quarter ended November 30, 2015, the Company recorded a valuation adjustment for the outstanding interest that had accrued per the terms of the original terms of the promissory note. On March 20, 2017, the Company reassigned the remaining note receivable amount of $130,000 to Hal Heyer.

 

 

 

9

 

 
 

 

AMERITEK VENTURES

Notes to the Unaudited Condensed Interim Financial Statements

August 31, 2017

 

 

NOTE 5 - RELATED PARTY TRANSACTIONS

 

During the quarter ended August 31, 2017, an officer and current majority shareholder of the Company advanced $200 to the Company for operating expenses. Total advances from the Company’s officer and current majority shareholder amounted to $10,200 and $10,000 at August 31, 2017 and May 31, 2017, respectively. Total advances from the Company’s former Director and Chief Executive officer amounted to $50,500 at August 31, 2017 and May 31, 2017, respectively. These advances are payable on demand and bears no interest. The total balance owed at August 31, 2017 was $60,700.

 

On August 30, 2017, the Company entered into an Asset Purchase Agreement with Clinton L. Stokes, the Company’s Chief Executive Officer, whereby 19,770,000 unregistered restricted common shares of stock were approved for issuance by the Board of Directors, along with payment of $100,000, in exchange for fiber optic assets. The terms of this agreement were fulfilled on September 15, 2017.

 

 

NOTE 6 - NOTE PAYABLE

 

On July 31, 2017, the Company entered into a convertible note with a purchase price of $65,000 and a principal amount of $70,200 which is due on April 31, 2018. This note accumulates interest at a rate of 8% from the original issue date through the maturity date. At any time while there is an outstanding balance, the note may be converted at a conversion price for the principal and interest in connection with voluntary conversions by the holder shall be 75% multiplied by the market price, representing a discount rate of 25%. The note also provides for warrants of up to 208,000 shares of common stock which may be exercised any time from the issuance date of July 31, 2017 (initial exercise date) until July 31, 2022 (termination date). The exercise price of this warrant is $1.35. Further, if at any time after the initial exercise date, there is no effective registration statement registering the warrant shares, or no current prospectus available for the resale of the warrant shares by the holder, then the warrant may be exercised at the holder’s election, in whole or in part, at such times by means of a cashless exercise in which the holder shall be entitled to receive a number of warrant shares equal to the quotient obtained by dividing [(A-B)(X)] by (A), where (A) equals the VWAP on the trading day immediately preceding the date on which the holder elects to exercise the warrant; (B) equals the exercise price of the warrant; and (X) equals the number of warrant shares that would be issuable upon exercise of the warrant if such exercise were by means of a cash exercise rather than a cashless exercise. Regardless, on the termination date if there is no effective Registration Statement registering the warrant shares, or no current prospectus available for the resale of the warrant shares by the holder, then the warrant shall be automatically exercised via cashless exercise. Failure of the Company to issue shares in a timely manner will result in a late issuance penalty of $10 per trading day, increasing to $20 per trading day after the fifth trading day, for each $1,000 of exercise price of the warrant shares.

 

 

10

 
 

 

AMERITEK VENTURES

Notes to the Unaudited Condensed Interim Financial Statements

August 31, 2017

 

 

On August 25, 2017, the Company entered into a convertible note with a purchase price of $64,000 and a principal amount of $69,120 which is due on August 25, 2018. This note accumulates interest at a rate of 8% from the original issue date through the maturity date. At any time while there is an outstanding balance, the note may be converted at a conversion price for the principal and interest in connection with voluntary conversions by the holder shall be 75% multiplied by the market price, representing a discount rate of 25%. The note also provides for warrants of up to 204,800 shares of common stock which may be exercised any time from the issuance date of August 25, 2017 (initial exercise date) until August 25, 2022 (termination date). The exercise price of this warrant is $1.35. Further, if at any time after the initial exercise date, there is no effective registration statement registering the warrant shares, or no current prospectus available for the resale of the warrant shares by the holder, then the warrant may be exercised at the holder’s election, in whole or in part, at such times by means of a cashless exercise in which the holder shall be entitled to receive a number of warrant shares equal to the quotient obtained by dividing [(A-B)(X)] by (A), where (A) equals the VWAP on the trading day immediately preceding the date on which the holder elects to exercise the warrant; (B) equals the exercise price of the warrant; and (X) equals the number of warrant shares that would be issuable upon exercise of the warrant if such exercise were by means of a cash exercise rather than a cashless exercise. Regardless, on the termination date if there is no effective Registration Statement registering the warrant shares, or no current prospectus available for the resale of the warrant shares by the holder, then the warrant shall be automatically exercised via cashless exercise. Failure of the Company to issue shares in a timely manner will result in a late issuance penalty of $10 per trading day, increasing to $20 per trading day after the fifth trading day, for each $1,000 of exercise price of the warrant shares.

 

 

NOTE 7 – INCOME TAXES

 

The Company accounts for income taxes under FASB Accounting Standard Codification ASC 740 "Income Taxes". ASC 740 provides that deferred tax assets and liabilities are recorded based on the differences between the tax basis of assets and liabilities and their carrying amounts for financial reporting purposes, referred to as temporary differences. Deferred tax assets and liabilities at the end of each period are determined using the currently enacted tax rates applied to taxable income in the periods in which the deferred tax assets and liabilities are expected to be settled or realized.

 

As of August 31, 2017 and May 31, 2017, the Company did not have any eligible net operating loss carry forwards as the Company has not filed the appropriate federal and state income tax returns so any accumulated net operating losses could be subject to the respective tax agency disallowance. Any actual net operating losses would be limited by a valuation allowance, as their realization, as determined by management, is determined to be not likely to occur and accordingly, the Company would have recorded a valuation allowance for the deferred tax asset relating to the tax potential net operating loss carry-forwards. Additionally, actual net operating losses carry-forwards and the related deferred tax assets would also be limited due to the change in control that is described in Note 4.

 

 

11

 

 
 

 

AMERITEK VENTURES

Notes to the Unaudited Condensed Interim Financial Statements

August 31, 2017

 

 

NOTE 8 - SUBSEQUENT EVENTS

 

The Company has evaluated subsequent events through the date the financial statements were available to be issued.

 

The terms of the Asset Purchase Agreement with Clinton L. Stokes, the Company’s Chief Executive Officer, which was entered into on August 30, 2017 were fulfilled on September 15, 2017, whereby 19,770,000 unregistered restricted common shares of stock were issued to Clinton L. Stokes along with payment of $100,000, in exchange for fiber optic assets.

 

On October 3, 2017 the Company issued 71,249 shares of its common stock to Meridian Pacific Holdings, LLC which were part of a subscription agreement entered into on August 30, 2017. The Company sold such shares in exchange for $100,000 which was received by the Company during the quarter ended August 31, 2017. The aforementioned shares were sold with an exemption from registration pursuant to Section 4(a)(2) of the Securities Act of 1933.

 

There were no other subsequent events.

 

 

 

 

 

12

 

 

 
 


Item 2. - Management's Discussion and Analysis of Financial Condition and Results of Operations

 

Forward-Looking Information

 

This Quarterly Report on Form 10-Q contains forward-looking statements. When used in this Quarterly Report on Form 10-Q, the words "anticipate," "believe," "estimate," "will," "plan," "seeks," "intend," and "expect" and similar expressions identify forward-looking statements. Although we believe that our plans, intentions, and expectations reflected in any forward-looking statements are reasonable, these plans, intentions, or expectations may not be achieved. Our actual results, performance, or achievements could differ materially from those contemplated, expressed, or implied, by the forward-looking statements contained in this Quarterly Report on Form 10-Q. Important factors that could cause actual results to differ materially from our forward-looking statements are set forth in this Quarterly Report on Form 10-Q All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements set forth in this Quarterly Report on Form 10-Q. Except as required by federal securities laws, we are under no obligation to update any forward-looking statement, whether as a result of new information, future events, or otherwise.

 

 

Critical Accounting Policies

 

There have been no material changes to our critical accounting policies and estimates from the information provided in Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations", included in our Annual report on Form 10-K for the fiscal year ended May 31, 2017.

 

 

Business of the Issuer

 

Ameritek Ventures (the "Company" or the "Registrant") was incorporated on December 27, 2010 as Ameritek Ventures, as a Nevada Company. We consider ourselves to be an emerging growth company under applicable federal securities laws and will be subject to reduced public company reporting requirements.

 

In August 2017, the Company completed its move into a new production and design facility in Roanoke, Virginia. On August 30, 2017, the Company entered into an Asset Purchase Agreement to acquire fiber optic assets from its largest shareholder and director. The terms of this agreement were subsequently fulfilled on September 15, 2017. These assets will be used to fabricate and assemble machines incorporating its new PCVD (Plasma Chemical Vapor Deposition) technology that is used in the manufacturing of specialty optical fiber preforms, which is the basis for specialized optical fiber production to satisfy a variety of fiber optic cable applications. In addition to building PCVD machines, the Company will be finalizing design work for its first 5 million km/year VAD/OVD (Vapor Axial Deposition/Outside Vapor Deposition) optical fiber preform production line, slated for assembly, testing and production in 2018. This process makes optical fiber preforms that are the mainstay for fiber optic cable that is used in the telecommunications industry to transmit large amounts of data to and from communication towers for the Internet, cable television and telephone industries. This new VAD/OVD production line represents the first phase of a planned 20 million km/year preform manufacturing facility. Ameritek Ventures’ brand new design and technology hub will help execute the Company's sustained growth and emergence strategy as a provider of high quality optical fiber preforms for the rapidly expanding Fiber Optic Cable worldwide market that in the past has been dominated by firms like Corning Incorporated, Shin-Etsu Chemical Co. Ltd., Prysmian SpA, Jiangsu Fasten Co. Ltd and Fujikura Ltd.

 

 

13

 
 

 

Market Size

 

The current market value of the optical fiber industry is $3 billion US dollars, and is projected to grow to over $5 billion US dollars by 2021. An increase of almost 10,000 tons of perform is projected in the next five years, which is equivalent to more than 300 million kilometers per year of performs.

 

 

Competition

 

We will be involved in intense competition with other business entities, many of which will have a competitive edge over us by virtue of their more substantial financial resources and prior experience in business. Some examples include firms like Corning Incorporated, Shin-Etsu Chemical Co. Ltd., Prysmian SpA, Jiangsu Fasten Co. Ltd and Fujikura Ltd. We also face numerous other smaller companies at the same stage of development as we are. 

 

 

Patents, Trademarks and Licenses

 

We do not have any trademarks, patents, or other intellectual property.

 

Based on the nature of our business, we do not expect to file any trademarks or patents.

 

  

Properties

 

The Company's corporate headquarters are located at: 1980 Festival Plaza Drive, Suite 530, Las Vegas, Nevada 89135. The Company does not own any real property, however rents warehouse space for its production facility in Roanoke, Virginia at a cost of $2,812.50 per month. This lease has a one year term, and will thereafter renew month to month.

 

 

RESULTS OF OPERATIONS

 

For the three month periods ending August 31, 2017, the Company recognized no revenues.

 

For the three month period ending August 31, 2017, the Company incurred total operating losses of $85,191. This compares to the same period ending August 31, 2016 where the Company incurred total operating losses of $3,000, which consisted of professional fees. The net loss applicable to common shareholders was $86,165 for the three months ending August 31, 2017 or $(0.01) per common share basic and diluted for the period ending as compared to a net loss applicable to common shareholders of $3,000 or $(0.00) per common share for the same period last year.

 

Going Concern

 

Our ability to continue as a going concern is contingent upon the successful completion of additional financing arrangements and our ability to achieve and maintain profitable operations.

 

 

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Therefore, management plans to raise equity capital to finance the operating and capital requirements of the Company. While the Company is devoting its best efforts to achieve the above plans, there is no assurance that any such activity will generate funds that will be available for operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern.

 

Summary of product research and development that we will perform for the term of our plan of operation.

 

We have no plans to perform any product research and development at this time.

 

Expected purchase or sale of plant and significant equipment

 

Management is currently identifying equipment needed in order to begin manufacturing.

 

Significant changes in the number of employees

 

Ameritek Ventures currently has two employees, its CEO and CFO. We are dependent upon sole officers for our future business development. As our operations expand, we anticipate the need to hire additional employees, consultants and professionals; however, the exact number is not quantifiable at this time.

 

Liquidity and Capital Resources

 

As of August 31, 2017, Ameritek Ventures had $107,718 in cash and cash equivalents, $22,500 of cash held in escrow and total current assets of $130,739. As of August 31, 2017, Ameritek Ventures had total current liabilities of $210,674.

 

The Company has limited financial resources available, which has had an adverse impact on the Company's liquidity, activities and operations. These limitations have adversely affected the Company's ability to obtain certain projects and pursue additional business. Without realization of additional capital, it would be unlikely for the Company to continue as a going concern. Management intends to raise additional debt or equity financing to fund ongoing operations and necessary working capital. However, there is no assurance that such financing plans will be successful or be obtained in amounts sufficient to meet the Company’s needs.

 

Notwithstanding, Ameritek Ventures anticipates generating losses and therefore may be unable to continue operations in the future. Ameritek Ventures anticipates it will require additional capital in order to develop its business. Ameritek Ventures may use a combination of equity and/or debt instruments to funds its growth strategy or enter into a strategic arrangement with a third party.

  

Off-Balance Sheet Arrangements

 

We do not have any 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 or operations, liquidity, capital expenditures or capital resources that is material to investors.

 

Critical Accounting Policies and Estimates

 

Revenue Recognition: The Company recognizes revenue related to product sales when (i) persuasive evidence of the arrangement exists, (ii) shipment has occurred, (iii) the fee is fixed or determinable, and (iv) collectability is reasonably assured.

 

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Recent Pronouncements

 

The Company's management has evaluated all the recently issued accounting pronouncements through the filing date of these financial statements and does not believe that any of these pronouncements will have a material impact on the Company's financial position and results of operations.

 

 

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

 

Not applicable.

 

Item 4T. Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures

 

Our disclosure controls and procedures, as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), 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 rules and forms adopted by the SEC, and that such information is accumulated and communicated to management, including the Chief Executive Officer and the Chief Accounting Officer, to allow timely decisions regarding required disclosures.

 

Management, with the participation of the Chief Executive Officer and the Chief Accounting Officer, who is also the sole member of our Board of Directors, has evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Form 10-Q. Based on such evaluation, the Chief Executive Officer and the Chief Accounting Officer concluded that, as of August 31, 2017, our disclosure controls and procedures were not effective. Our disclosure controls and procedures were not effective because of the "material weaknesses" described below under "Management's annual report on internal control over financial reporting," which are in the process of being remediated as described below under "Management Plan to Remediate Material Weaknesses."

 

Management's Report on Internal Control over Financial Reporting

 

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting, as defined in rules promulgated under the Exchange Act, is a process designed by, or under the supervision of, our Chief Executive Officer and Chief Accounting Officer and affected by our Board of Directors, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with 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 our assets;

 

· provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and our Board of Directors; and

 

· provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements

 

 

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Because of its inherent limitations, a system of internal control over financial reporting can provide only reasonable, not absolute, assurance that the objectives of the control system are met and may not prevent or detect misstatements. Internal control over financial reporting is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. Internal control over financial reporting also can be circumvented by collusion or improper override. Because of such limitations, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process, and it is possible to design into the process safeguards to reduce, though not eliminate, this risk. Further, over time control may become inadequate because of changes in conditions or the degree of compliance with the policies or procedures may deteriorate.

 

Our management assessed the effectiveness of our internal control over financial reporting as of August 31, 2016. In making its assessment, management used the criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). Based on its assessment, management has concluded that we had certain control deficiencies described below that constituted material weaknesses in our internal controls over financial reporting. As a result, our internal controls over financial reporting was not effective as of August 31, 2017.

 

A "material weakness" is defined under SEC rules as a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of a company's annual or interim financial statements will not be prevented or detected on a timely basis by the company's internal controls. As a result of management's review of the investigation issues and results, and other internal reviews and evaluations that were completed after the end of the quarter ending August 31, 2017, related to the preparation of management's report on internal controls over financial reporting required for this quarterly report on Form 10-Q, management concluded that we had material weaknesses in our control environment and financial reporting process consisting of the following:

 

1) lack of a functioning audit committee due to a lack of a majority of independent members and a lack of a majority of outside directors on our board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; and

 

2) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements.

 

We do not believe the material weaknesses described above caused any meaningful or significant misreporting of our financial condition and results of operations for the period ended August 31, 2017. However, management believes that the lack of a functioning audit committee and the lack of a majority of outside directors on our board of directors results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods.

 

Management Plan to Remediate Material Weaknesses

 

Management is pursuing the implementation of corrective measures to address the material weaknesses described below. In an effort to remediate the identified material weaknesses and other deficiencies and enhance our internal controls, we have initiated, or plan to initiate, the following series of measures:

 

 

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We plan to appoint one or more outside directors to our board of directors who shall be appointed to an audit committee resulting in a fully functioning audit committee who will undertake the oversight in the establishment and monitoring of required internal controls and procedures such as reviewing and approving estimates and assumptions made by management when funds are available to us. Additionally, we will create written policies and procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements

 

We believe the remediation measures described above will remediate the material weaknesses we have identified and strengthen our internal control over financial reporting. We are committed to continuing to improve our internal control processes and will continue to diligently and vigorously review our financial reporting controls and procedures. As we continue to evaluate and work to improve our internal control over financial reporting, we may determine to take additional measures to address control deficiencies or determine to modify, or in appropriate circumstances not to complete, certain of the remediation measures described above.

 

Changes in Internal Control over Financial Reporting

 

There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

In May 2013, COSO released an updated version of its Internal Control - Integrated Framework ("2013 Framework"). Initially issued in 1992, the original framework ("1992 Framework") provided guidance to organizations to design, implement and evaluate the effectiveness of internal control concepts and simplify their use and application. The 2013 Framework is intended to improve upon systems of internal control over external financial reporting by formalizing the principles embedded in the 1992 Framework, incorporating business and operating environment changes and increasing the framework’s ease of use and application. The 1992 Framework remained available until December 15, 2014, after which it was superseded by the 2013 Framework. As of August 31, 2016, the Company has transitioned to the 2013 Framework. The Company did not experience significant changes to its internal control over financial reporting as a result from the transition to the 2013 Framework.

 

This report does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to temporary rules of the SEC that permit the Company to provide only the management's report in this report.

 

 

 

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PART II. OTHER INFORMATION

 

Item 1 - Legal Proceedings

 

From time to time, we may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.

 

We are not presently a party to any material litigation, nor to the knowledge of management is any litigation threatened against us, which may materially affect us.

 

 

Item 1A - Risk Factors

 

See Risk Factors set forth in Part I, Item 1A of the Company's Annual Report on Form 10-K for the fiscal year ended May 31, 2017 and the discussion in Item 1, above, under "Liquidity and Capital Resources."

 

 

Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds

 

On August 30, 2017, the Company entered into an Asset Purchase Agreement with Clinton L. Stokes whereby 19,770,000 unregistered restricted common shares of stock were issued along with payment of $100,000 in exchange for fiber optic assets.

 

On August 30, 2017, the Company sold 71,429 shares of its common stock to Meridian Pacific Holdings, LLC, in exchange for $100,000. These shares were subsequently issued on October 3, 2017. The aforementioned shares were sold with an exemption from registration pursuant to Section 4(a)(2) of the Securities Act of 1933.

 

 

Item 3 - Defaults Upon Senior Securities

 

None.

 

 

Item 4 - Submission of Matters to a Vote of Security Holders

 

None.

 

 

Item 5 - Other Information

 

None.

 

 

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Item 6 - Exhibits

 

        Incorporated by reference
  Exhibit Exhibit Description Filed herewith Form Period Ending Exhibit Filing Date
  3.1 Articles of Incorporation, as currently in effect   S-1    3.1 09/19/2011
  3.2 Bylaws, as currently in effect   S-1    3.2 09/19/2011
  10.1 Promissory Note between Ameritek Ventures and Dan Berger dated May 23, 2011   S-1 Aug. 31, 2011 10.1 11/08/2011
  10.2 Addendum to Promissory Note for Callable and Convertible Preferred Shares Secured by Ownership Rights in Tooling Mold dated April 13, 2012   S-1 Feb. 29, 2012 10.2 04/26/2012
  10.3 Asset Purchase Agreement   8-K Aug. 30, 2017 10.3 09/06/2017
  31.1 Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. X        
  31.2 Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002. X        

 

 

 

 

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

Ameritek Ventures

Registrant

 
     
     
Date:  October 24, 2017        /s/ Clinton L. Stokes III  
  Name: Clinton L. Stokes III  
   

Title: Chief Executive Officer

Principal Executive Officer

 

     
Date:  October 24, 2017         /s/ Kenneth P. Mayeaux  
  Name:  Kenneth P. Mayeaux  
   

Title: Chief Accounting Officer

Principal Accounting Officer

 

         

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the following persons on behalf of the Registrant and in the capacities and on the dates indicated have signed this report below.

 

Signature   Title   Date
         

/s/ Clinton L. Stokes III

(Clinton L. Stokes III)

 

Chief Executive Officer

Principal Executive Officer

  October 24, 2017
         

/s/ Kenneth P. Mayeaux

(Kenneth P. Mayeaux)

 

Corporate Secretary and

Chief Accounting Officer

  October 24, 2017

 

 

 

 

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