UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 10-Q

 

x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended March 31, 2018

 

or

 

¨ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

 

For the transition period from __________ to __________.

 

Commission file number 333-175692

 

North America Frac Sand, Inc.

(Name of small business issuer in its charter)

 

Florida

(State or other jurisdiction of incorporation or organization)

 

20-8926549

(I.R.S. Employer Identification No.)

 

215 North Jefferson, Box 591, Ossian, Indiana 46777

 (Address of principal executive offices and Zip Code)

 

Registrant’s telephone number, including area code: 260-490-9990

 

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ¨ No x

 

Indicate by check mark 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” “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	x
(Do not check if a smaller company)

 

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

 

The number of shares of the issuer’s common stock, par value $.00001 per share, outstanding as of May 23, 2018: 70,065,448 common shares

 

  

Table of Contents

 

Part I. Financial Information				4
Item 1.	Financial Statements.			4
Item 2.	Management’s Discussion and Analysis or Plan of Operations			15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.			18
Item 4.	Controls and Procedures.			18
Part II. Other Information				20
Item 1.	Legal Proceedings.			20
Item 1A.	Risk Factors			20
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.			20
Item 3.	Defaults Upon Senior Securities			20
Item 4.	Mine Safety Disclosures			20
Item 5.	Other Information.			20
Item 6.	Exhibits			21

 

2

  

Special Note Regarding Forward Looking Statements.

 

This report on Form 10-Q of North America Frac Sand, Inc. for the period ended March 31, 2018 contains certain forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created thereby. To the extent that such statements are not recitations of historical fact, such statements constitute forward looking statements which, by definition involve risks and uncertainties. In particular, statements under the Sections; Description of Business, Management’s Discussion and Analysis of Financial Condition and Results of Operations contain forward looking statements. Where in any forward looking statements, the Company expresses an expectation or belief as to future results or events, such expectation or belief is expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the statement of expectation or belief will result or be achieved or accomplished.

 

The following are factors that could cause actual results or events to differ materially from those anticipated, and include but are not limited to: general economic, financial and business conditions; changes in and compliance with governmental regulations; changes in tax laws; and the cost and effects of legal proceedings.

 

You should not rely on forward looking statements in this report. This report contains forward looking statements that involve risks and uncertainties. We use words such as “anticipates,” “believes,” “plans,” “expects,” “future,” “intends,” and similar expressions to identify these forward-looking statements. Prospective investors should not place undue reliance on these forward looking statements, which apply only as of the date of this report. Our actual results could differ materially from those anticipated in these forward-looking statements.

 

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Part I. Financial Information

 

Item 1. Financial Statements.

 

North America Frac Sand, Inc.
Consolidated Balance Sheets
		March 31, 2018				December 31, 2017
		(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents		$	-			$	-
Total Current Assets			-				-
TOTAL ASSETS		$	-			$	-
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts payable		$	391,525			$	358,374
Accounts payable, related party			294,783				294,783
Notes payable			171,148				172,287
Total Current Liabilities			857,456				825,444
TOTAL LIABILITIES			857,456				825,444
COMMITMENTS AND CONTINGENCIES
Preferred stock, Series A: 10 authorized; $0.00001 par value 1 and 1 shares issued and outstanding on March 31, 2018 and December 31, 2017, respectively			13,741,679				13,741,679
Preferred stock, Series B: 99,999,990 authorized; $0.00001 par value 46 and 46 shares issued and outstanding on March 31, 2018 and December 31, 2017, respectively			378				378
Common stock: 10,000,000,000 authorized; $0.00001 par value 70,065,448 and 70,065,448 shares issued and outstanding on March 31, 2018 and December 31, 2017, respectively			701				701
Additional paid in capital			21,843,590				21,843,590
Cumulative comprehensive income (loss)			10,520				9,862
Accumulated deficit			(36,454,324	)			(36,421,654	)
Total stockholders' deficit			(857,456	)			(825,444	)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT		$	-			$	-

 

See notes to unaudited consolidated financial statements

 

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North America Frac Sand, Inc.
Consolidated Statements of Operations
(Unaudited)
		Three Months Ended
		March 31, 2018				March 31, 2017
Cost and expenses:
Communication costs		$	4,336			$	3,589
Professional fees			29,190				42,092
Mineral exploration expense			-				1,762
General and administrative expenses			-				75
Total operating expenses			33,526				47,518
Other (income) expense
Interest expense			2,231				2,318
Exchange loss (gain)			(429	)			-
Total other expenses			1,802				2,318
Net income (loss)			(35,328	)			(49,836	)
Loss per common shares		$	(0.00	)		$	(0.00	)
Weighted average shares outstanding			67,749,010				50,247,640
Other Comprehensive Loss:
Unrealized exchange (loss) gain			(2,658	)			1,378
Net comprehensive (loss)		$	(32,670	)		$	(51,214	)

 

See notes to unaudited consolidated financial statements

 

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North America Frac Sand, Inc.
Consolidated Statements of Cash Flow
(Unaudited)
		Three Months Ended
		March 31, 2018				March 31, 2017
Cash flows from operating activities:
Net income (loss)		$	(35,328	)		$	(49,836	)
Change in non-cash working capital items:
Unrealized exchange (loss) gain			3,316				-
Accounts payable			33,151				45,371
Net cash (used in) provided by operating activities			1,139				(4,465	)
Cash flows from financing activities:
Notes payable assumed			(1,139	)			-
Proceeds from notes payable			-				4,465
Change in prefer shares			-				-
Net cash provided by financing activities			(1,139	)			4,465
Net change in cash and cash equivalents			-				-
Cash and cash equivalents
Beginning of period			-				-
Effect of exchange rate changes on cash and cash equivalents			-				-
End of period		$	-			$	-
Supplemental cash flow information and non cash financing activities:
Income taxes			-				-
Interest			2,231				-

 

See notes to unaudited consolidated financial statements

 

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North America Frac Sand, Inc.

Notes to unaudited consolidated financial statements

March 31, 2018

 

NOTE 1. NATURE OF BUSINESS

 

ORGANIZATION

 

The Company was incorporated in Florida on April 26, 2007. The Company was formed as New Found Shrimp, Inc. to provide consultation to the aquatic farming industry. It was the Company’s plan to provide consolidation opportunities for on-going and start up aquatic farming operations. The Company’s approach was to be to assist aquatic farming operations with the organizational structure, customer service and marketing aspects of their business, allowing our customers to focus on the business aspects of operating the farms. On April 25, 2014, the Company changed its name to Xterra Building Systems, Inc. On July 10, 2015, the Company entered into a Share Purchase Agreement with Canadian Sandtech Inc. to acquire its wholly owned subsidiary, North America Frac Sand (CA) Ltd. (“NAFS-CA”). In accordance with this Share Purchase Agreement, the Company issued 37,800,000 shares of common stock and placed these shares in escrow. On September 17, 2015, the Company changed its name to North America Frac Sand, Inc. On August 29, 2016, all subjects were removed by the Company to close on the acquisition of NAFS-CA. NAFS-CA has approximately 30,000 acres of mineral leases located approximately 30 kilometers east of Saskatoon Saskatchewan.

 

The Company is now headquartered in 215 North Jefferson Box 591 Ossian, Indiana 46777.

 

NOTE 2. GOING CONCERN

 

The Company has a history of losses, including ($32,670) and ($51,214) the periods ending March 31, 2018 and 2017, respectively. Total losses since inception have resulted in an accumulated deficit of ($36,454,324). The Company has negative working capital deficit of ($857,456) and ($825,444) as at March 31, 2018 and December 31, 2017 respectively. The Company’s financial statements are prepared using U.S. generally accepted accounting principles (“GAAP”) applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs, and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.

 

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan to obtain such resources for the Company include, obtaining capital from management and significant stockholders sufficient to meet its minimal operating expenses. However, management cannot provide any assurance that the Company will be successful in accomplishing any of its plans.

 

There is no assurance that the Company will be able to obtain sufficient additional funds when needed or that such funds, if available, will be obtainable on terms satisfactory to the Company. In addition, profitability will ultimately depend upon the level of revenues received from business operations. However, there is no assurance that the Company will attain profitability. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern

 

NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

USE OF ESTIMATES

 

The Company prepares its financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”), which require 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 reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

CASH AND CASH EQUIVALENTS

 

The Company considers all highly liquid investments with an original maturity of three months or less at the date of acquisition to be cash equivalents. Cash and cash equivalents totaled $-0- at March 31, 2018 and December 31, 2017, respectively.

 

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North America Frac Sand, Inc.

Notes to unaudited consolidated financial statements

March 31, 2018 

 

CASH FLOWS REPORTING

 

The Company follows ASC 230, Statement of Cash Flows, for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities, and provides definitions of each category, and uses the indirect or reconciliation method (“Indirect method”) as defined by ASC 230, Statement of Cash Flows, to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments; and (b) all items that are included in net income that do not affect operating cash receipts and payments. The Company reports the reporting currency equivalent of foreign currency cash flows, using the current exchange rate at the time of the cash flows, and the effect of exchange rate changes on cash held in foreign currencies is reported as a separate item in the reconciliation of beginning and ending balances of cash and cash equivalents and separately provides information about investing and financing activities not resulting in cash receipts or payments in the period.

 

INTANGIBLE ASSETS

 

The Company has applied the provisions of ASC topic 350 – Intangibles – Goodwill and Other, in accounting for its intangible assets. Intangible assets are being amortized by straight-line method on the basis of a useful life of 3 years, to begin upon the operational commencement. Intangible assets consist of website development costs. The balance at March 31, 2018 and December 31, 2017 was $-0- and $-0-, respectively.

 

IMPAIRMENT OF LONG- LIVED ASSETS

 

The Company reviews and evaluates long-lived assets for impairment when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. The assets are subject to impairment consideration under FASB ASC 360-10-35-17 if events or circumstances indicate that their carrying amount might not be recoverable. When the Company determines that an impairment analysis should be done, the analysis will be performed using the rules of FASB ASC 930-360-35, Asset Impairment, and 360-0 through 15-5, Impairment or Disposal of Long- Lived Assets.

 

FINANCIAL INSTRUMENTS

 

The Company’s balance sheet includes financial instruments, specifically accounts payable, accrued expenses, and payables to related parties. The carrying amounts of current assets and current liabilities approximate their fair values because of the relatively short period of time between the origination of these instruments and their expected realization.

 

ASC 820, Fair Value Measurements and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (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 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 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.

  

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of March 31, 2018. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments.

 

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North America Frac Sand, Inc.

Notes to unaudited consolidated financial statements

March 31, 2018

 

REVENUE RECOGNITION

 

The Company follows ASC 606, Revenue Recognition -The Company recognizes revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured. The Company has not generated any revenues for the periods presented.

 

RESEARCH AND DEVELOPMENT

 

The Company expenses research and development costs when incurred. Research and development costs include engineering and testing of product and outputs. Indirect costs related to research and developments are allocated based on percentage usage to the research and development. We spent $-0- in research and development costs for the periods March 31, 2018 and December 31, 2017.

 

DEFERRED INCOME TAXES AND VALUATION ALLOWANCE

 

The Company accounts for income taxes under ASC 740 Income Taxes. Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations. No deferred tax assets or liabilities were recognized as March 31, 2018 and December 31, 2017.

 

NET INCOME (LOSS) PER COMMON SHARE

 

Net income (loss) per share is calculated in accordance with ASC 260, Earnings per Share. The weighted-average number of common shares outstanding during each period is used to compute basic earning or loss per share. Diluted earnings or loss per share is computed using the weighted average number of shares and diluted potential common shares outstanding. Dilutive potential common shares are additional common shares assumed to be exercised.

 

Basic net income (loss) per common share is based on the weighted average number of shares of common stock outstanding at March 31, 2018 and December 31, 2017. The Series B Preferred stock can be converted to common shares at a rate determined by the Board of Directors.

 

SHARE-BASED EXPENSE

 

ASC 718, Compensation – Stock Compensation, prescribes accounting and reporting standards for all share-based payment transactions in which employee services are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other equity instruments such as employee stock ownership plans and stock appreciation rights. Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period).

 

The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC 505-50, Equity – Based Payments to Non-Employees. Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued.

 

Share-based expenses for the periods March 31, 2018 and December 31, 2017 are $-0- and $-0-, respectively.

 

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North America Frac Sand, Inc.

Notes to unaudited consolidated financial statements

March 31, 2018 

 

RECENT ACCOUNTING PRONOUNCEMENTS

 

In June 2014, FASB issued Accounting Standards Update (ASU) No. 2014-12 Compensation — Stock Compensation (Topic 718), Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. A performance target in a share-based payment that affects vesting and that could be achieved after the requisite service period should be accounted for as a performance condition under Accounting Standards Codification (ASC) 718, Compensation — Stock Compensation. As a result, the target is not reflected in the estimation of the award’s grant date fair value. Compensation cost would be recognized over the required service period, if it is probable that the performance condition will be achieved. The guidance is effective for annual periods beginning after 15 December 2015 and interim periods within those annual periods. Early adoption is permitted. Management has reviewed the ASU and believes that they currently account for these awards in a manner consistent with the new guidance, therefore there is no anticipation of any effect to the consolidated financial statements.

 

In August 2014, FASB issued Accounting Standards Update (ASU) No. 2014-15 Preparation of Financial Statements – Going Concern (Subtopic 205-40), Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. Under U.S. generally accepted accounting principles (“GAAP”)continuation of a reporting entity as a going concern is presumed as the basis for preparing financial statements unless and until the entity’s liquidation becomes imminent. Preparation of financial statements under this presumption is commonly referred to as the going concern basis of accounting. If and when an entity’s liquidation becomes imminent, financial statements should be prepared under the liquidation basis of accounting in accordance with Subtopic 205-30, Presentation of Financial Statements—Liquidation Basis of Accounting. Even when an entity’s liquidation is not imminent, there may be conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern. In those situations, financial statements should continue to be prepared under the going concern basis of accounting, but the amendments in this Update should be followed to determine whether to disclose information about the relevant conditions and events. The amendments in this Update are effective for the year ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The Company will evaluate the going concern considerations in this ASU, however, at the current period, management does not believe that it has met conditions which would subject these financial statements for additional disclosure.

 

We have reviewed the FASB issued Accounting Standards Update (“ASU”) accounting pronouncements and interpretations thereof that have effectiveness dates during the periods reported and in future periods. The Company has carefully considered the new pronouncements that alter previous generally accepted accounting principles and does not believe that any new or modified principles will have a material impact on the corporation’s reported financial position or operations in the near term. The applicability of any standard is subject to the formal review of our financial management and certain standards are under consideration.

 

On April 26, 2017, the Company acquired the rights to the by entering into a leasing agreement for the mineral rights of the Eagle Creek Properties.

 

NOTE 4. INVESTMENT IN EAGLE CREEK PROPERTY

 

On August 29, 2016, the Company acquired the Eagle Creek Properties through NAFS-CA.

 

A description of the Company’s mineral leases is as follows:

 

Lease		Description of Lease		Lease Rate
# 1		Section 11, NE ¼ of Section 2, N (½) of Section 3, in Township 38, Range 10, West of the 3rd Meridian, as to the surface rights referenced in the Certificate of Title.		Ten-year lease dated April 26, 2017, automatically extended for second 10 years if royalties are being paid. Lease rate is $1 per acre per year. Royalty rate is $5.00 per ton of processed ore sold at $80 per metric ton or less, and $5.00 plus the 10% of the difference between sales price greater than $80 and $80 per metric ton.

 

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North America Frac Sand, Inc.

Notes to unaudited consolidated financial statements

March 31, 2018 

 

Prior to acquisition, the leases were explored through extensive drilling operations. Unfortunately, the data provided by the previous exploration activities were not consistent with the methodology required for providing NI 53-101 guidance. Consequently, because no third party valuation could be provided through an economic evaluation of the mineral resources, the Company expensed as Impairment of mineral leases the total of $1,539,430. On May 27, 2016, the Company entered into an agreement with Northwest Corporation to undertake exploration activities and to prepare an economic evaluation through the preparation NI43-101 report on the mineral leases. As of December 30, 2017, the Company had expended approximately $113,934. As these expenditures were undertaken prior to the effective date of the transaction, they have not been incorporated into the consolidated financial statements.

 

On March 22, 2018 the Company filed an amended report containing the additional requirements of National Instrument 43-101 Standards of Disclosure for Mineral Projects (NI 43-101) by Norwest Corporation (Norwest) of Calgary, Alberta, signed by Qualified Person(s) William A. Turner, Ivan Minev and Michael Allen. The report covers exploration to date on a portion of NAFS' leased areas (approximately 12,100 hectares [29,900 acres]). Between 2009 and 2016 a portion of the property was explored by 112 test pits and 104 drill holes, of which 145 pits and drill holes were sampled. The last 38 holes were drilled under the supervision of Norwest in 2016. Following Norwest's development of the mineral resource model, an in-place sand resource of commonly used frac sand size fractions in the tested area was calculated. A bulk density of 1.5 g/cm3 was used. Totaling 7,799 K Tonnes, (8,597 K Tons) the inferred mineral resource for each size fraction is:

 

	·	20/40: 3,758 K Tonnes (4,142 K Tons);
	·	40/70: 3,155 K Tonnes ( 3,478 K Tons);
	·	70/140: 886 K Tonnes ( 977 K Tons).

  

NOTE 5. INCOME TAXES

 

At March 31, 2018, the Company had a net operating loss carry–forward for Federal income tax purposes of $904,503 that may be offset against future taxable income through 2032. No tax benefit has been reported with respect to these net operating loss carry-forwards in the accompanying financial statements because the Company believes that the realization of the Company’s net deferred tax assets of $189,946 calculated at an effective tax rate of 21%, was not considered more likely than not and accordingly, the potential tax benefits of the net loss carry-forwards are fully offset by a valuation allowance of $189,946.

 

Year Ended		Net Loss				Permanent Differences				Taxable Loss
December 31, 2011		$	7,789			$	-			$	7,789
December 31, 2012			20,533,321				20,450,000				83,321
December 31, 2013			122,089				-				122,089
December 31, 2014			13,780,487				13,741,679				38,808
December 31, 2015			64,416				-				64,416
December 31, 2016			1,670,950				1,360,800				310,150
December 31, 2017			242,602				-				242,602
March 31, 2018			35,328				-				35,328
Estimated Loss carried forward		$	36,456,982			$	35,552,479			$	904,503
Tax rate											21	%
Potential Tax Benefit Carried Forward										$	189,946

 

Deferred tax assets consist primarily of the tax effect of NOL carry-forwards. The Company has provided a full valuation allowance on the deferred tax assets because of the uncertainty regarding its ability to be realized.

 

The Company has open tax periods, subject to IRS audit for the years ending December 31, 2013 through 2017.

 

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North America Frac Sand, Inc.

Notes to unaudited consolidated financial statements

March 31, 2018 

 

NOTE 6. SHAREHOLDERS' EQUITY

 

COMMON STOCK

 

On September 17, 2014, the Company amended its Articles of Incorporation. The Company has been authorized to issue 10,000,000,000 shares of common stock, $0.00001 par value. Each share of issued and outstanding common stock shall entitle the holder thereof to fully participate in all shareholder meetings, to cast one vote on each matter with respect to which shareholders have the right to vote, and to share ratably in all dividends and other distributions declared and paid with respect to common stock, as well as in the net assets of the corporation upon liquidation or dissolution. On July 27, 2016, the Company amended its Articles of Incorporation reducing the authorized capital from 10,000,000,000 to 500,000,000 shares of common stock, $0.00001 par value

 

On July 10, 2015, the Company issued 37,800,000 shares of the Company pursuant to a Share Purchase Agreement. The 37,800,000 shares were placed into escrow pending the Closing of the acquisition of NAFS-CA.

 

On July 17, 2015, the Company allowed several non-related parties to convert a total of 15 shares of Series B Preferred stock into 3,750,000 unrestricted shares of common stock. The conversion rate was done at par, $0.00001 according to the stated articles of designation.

 

On August 25, 2015, the Company allowed several non-related parties to convert a total of 2 shares of Series B Preferred stock into 500,000 unrestricted shares of common stock. The conversion rate was done at par, $0.00001 according to the stated articles of designation.

 

On September 18, 2015, the Company allowed several non-related parties to convert a total of 3 shares of Series B Preferred stock into 750,000 unrestricted shares of common stock. The conversion rate was done at par, $0.00001 according to the stated articles of designation

 

On October 13, 2015, the Company allowed several non-related parties to convert a total of 8 shares of Series B Preferred stock into 2,000,000 unrestricted shares of common stock. The conversion rate was done at par, $0.00001 according to the stated articles of designation

 

At December 31, 2015, there were 45,665,448 shares of common stock issued and outstanding.

 

On March 28, 2016, the Company allowed a non-related party to convert a total of 2 shares of Series B Preferred stock into 500,000 unrestricted shares of common stock. The conversion rate was done at par, $0.00001 according to the stated articles of designation.

 

On April 1, 2016, the Company allowed several non-related parties to convert a total of 5 shares of Series B Preferred stock into 1,250,000 unrestricted shares of common stock. The conversion rate was done at par, $0.00001 according to the stated articles of designation

 

On June 20, 2016, the Company allowed a non-related party to convert a total of 10 shares of Series B Preferred stock into 2,500,000 unrestricted shares of common stock. The conversion rate was done at par, $0.00001 according to the stated articles of designation.

 

On July 28, 2016, the Company allowed a non-related party to convert a total of 14 shares of Series B Preferred stock into 3,500,000 unrestricted shares of common stock. The conversion rate was done at par, $0.00001 according to the stated articles of designation.

 

On October 28, 2016, the Company allowed a non-related party to convert a total of 10 shares of Series B Preferred stock into 2,500,000 unrestricted shares of common stock. The conversion rate was done at par, $0.00001 according to the stated articles of designation.

 

At December 31, 2016, there were 55,915,448 shares of common stock issued and outstanding.

 

On January 10, 2017, the Company allowed a non-related party to convert a total of 10 shares of Series B Preferred stock into 2,500,000 unrestricted shares of common stock. The conversion rate was done at par, $0.00001 according to the stated articles of designation.

 

On May 17, 2017, the Company allowed a non-related party to convert a total of 11 shares of Series B Preferred stock into 2,750,000 unrestricted shares of common stock. The conversion rate was done at par, $0.00001 according to the stated articles of designation.

 

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North America Frac Sand, Inc.

Notes to unaudited consolidated financial statements

March 31, 2018 

 

On May 23, 2017, the Company allowed a non-related party to convert a total of 11 shares of Series B Preferred stock into 2,750,000 unrestricted shares of common stock. The conversion rate was done at par, $0.00001 according to the stated articles of designation.

 

On May 25, 2017, the Company allowed a non-related party to convert a total of 6 shares of Series B Preferred stock into 1,500,000 unrestricted shares of common stock. The conversion rate was done at par, $0.00001 according to the stated articles of designation.

 

On June 19, 2017, the Company allowed a non-related party to convert a total of 8 shares of Series B Preferred stock into 2,000,000 unrestricted shares of common stock. The conversion rate was done at par, $0.00001 according to the stated articles of designation.

 

On July 10, 2017, the Company allowed a non-related party to convert a total of 10 shares of Series B Preferred stock into 2,500,000 unrestricted shares of common stock. The conversion rate was done at par, $0.00001 according to the stated articles of designation.

 

On July 19, 2017, the Company allowed a non-related party to convert a total of 2.6 shares of Series B Preferred stock into 650,000 unrestricted shares of common stock. The conversion rate was done at par, $0.00001 according to the stated articles of designation.

 

At December 31, 2017, there were 70,065,448 shares of common stock issued and outstanding. For the years ending December 31, 2015 – 2017, the Company allowed non-related parties to convert a total of 127.6 shares of Series B Preferred stock into 31,900,000 unrestricted shares of common stock.

 

At March 31, 2018, there were 70,065,448 shares of common stock issued and outstanding. For the years ending December 31, 2015 – March 31, 2018, the Company allowed non-related parties to convert a total of 127.6 shares of Series B Preferred stock into 31,900,000 unrestricted shares of common stock.

 

PREFERRED STOCK

 

On September 17, 2014, the Company amended its Articles of Incorporation. The Company has been authorized to issue 1,000,000,000 shares of $0.00001 par value Preferred Stock. The Board of Directors is expressly vested with the authority to divide any or all of the Preferred Stock into series and to fix and determine the relative rights and preferences of the shares of each series so established, within certain guidelines established in the Articles of Incorporation. On July 28, 2016, the Company amended its Articles of Incorporation reducing the authorization to issue 1,000,000,000 to 100,000,000 shares of $0.00001 par value Preferred Stock.

 

Series A: 10 shares of preferred stock have been designated as Series A. The certificate of designations for the Preferred A Stock provides that it may only be issued in exchange for the partial or full retirement of debt held by management, employees or consultants, or as directed by a majority vote of the Board of Directors. Whereas the September 17, 2014 amendment enabled the Series A may be convertible into the number of shares of common stock which equals four times the sum of (i) the total number of shares of common stock which are issued and outstanding at the time of conversion, plus (ii) the total number of shares of Series B and Series C preferred stocks which are issued and outstanding at the time of conversion; the July 28, 2016 amendment eliminated all conversion rights associated with this class of stock. The Series A class possesses a number of votes equal to the number of common stock equivalents, if converted.

 

Series B: 99,999,990 shares of preferred stock have been designated as Series B. This is a reduction from the 999,999,990 shares of preferred stock previously designated as Series B. The certificate of designation for the Preferred B Stock provides that as a class shall be entitled to receive dividends when, as and if declared by the Board of Directors, in its sole discretion. Preferred Series B will have liquidation rites, an amount equal to $1.00 per share, plus any declared but unpaid dividends for each share held. Each share will have 10 votes. Each share of Series B Preferred Stock shall be convertible into common shares, at any time, and/or from time to time, into the number of shares of the Corporation’s Common Stock, par value $0.00001 per share, equal to the price of the Series B Preferred Stock, divided by the par value of the Common Stock, subject to adjustment as may be determined by the Board of Directors from time-to-time (the “Conversion Rate”).

 

On September 17, 2014, the Company’s amended its Articles of Incorporation and modified the terms of the Preferred Series A conversion exchange to common stock. Because of this modification, the Company did not have sufficient common shares to settle both the Preferred Series A and Preferred Series B share conversions. Consequently, the requirement for extinguishment accounting was triggered. Under the terms of extinguishment accounting, the Company is required to determine a fair value of the Preferred Series A. SEC guidelines request that the Company use fair value as determined by an arm’s length transaction with an unrelated third party, and that there are no unstated rights or privileges. The Preferred Series A was deemed to have a fair value of $13,741,679, based upon the converted valuation approach as the primary driver of value in the instrument, its common stock equivalency. The Preferred Series A were to be classified as mezzanine equity. On July 28, 2016, the Company eliminated the rights of the Preferred Series A to convert into common stock. Consequently, the requirement for extinguishment accounting has been removed.

 

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North America Frac Sand, Inc.

Notes to unaudited consolidated financial statements

March 31, 2018 

 

As a result of the July 28, 2016 amendment, the Company now has sufficient shares to settle Preferred Series A and Preferred Series B and accordingly has re-classed the shares to permanent equity from mezzanine equity.

 

At December 31, 2016 and December 31, 2015, there were 104 and 76,105 shares of Series B Convertible Preferred Stock issued and outstanding, respectively.

 

At December 31, 2017 and December 31, 2016, there was 1 and 1 share of Series A Convertible Preferred Stock issued and outstanding.

 

At December 31, 2017, there were 46 shares of Series B Convertible Preferred Stock issued and outstanding.

 

At March 31, 2018, there was 1 share of Series A Convertible Preferred Stock issued and outstanding.

 

At March 31, 2018, there were 46 shares of Series B Convertible Preferred Stock issued and outstanding.

 

OPTIONS AND WARRANTS

 

There are no warrants or options outstanding to acquire any additional shares of common stock of the Company.

 

NOTE 7. RELATED PARTY TRANSACTIONS

 

NOTES PAYABLE

 

In support of the Company’s efforts and cash requirements, it has relied on advances from related parties until such time that the Company can support its operations, or attains adequate financing through sales of its equity or traditional debt financing. There is no formal written commitment for continued support by these related parties. Amounts represent advances or amounts paid in satisfaction of liabilities of the Company. The advances are considered temporary in nature and have not been formalized by a promissory note.

 

As of December 31, 2017, Mr. David Alexander accrued unpaid consulting fees per month of $10,000, or $120,000 annually ($14,000 – 2016).

 

Amounts due to related parties at December 31, 2017 and December 31, 2016 totaled $294,783 and $195,627, respectively. See the current liabilities section of the balance sheet.

 

OTHER

 

The officers and directors of the Company are involved in other business activities and may, in the future, become involved in other business opportunities that become available. They may face a conflict in selecting between the Company and other business interests. The Company has not formulated a policy for the resolution of such conflicts.

 

The Company does not own or lease property, or lease office space. The Company has been provided office space by a member of the Board of Directors at no cost. The above amounts are not necessarily indicative of the amounts that would have been incurred had comparable transactions been entered into with independent third parties.

 

NOTE 8. COMMITMENTS AND CONTINGENCIES

 

From time-to-time, the Company may be a party to litigation matters involving claims against the Company. Management believes that there are no current matters that would have a material effect on the Company’s financial position or results of operations.

  

NOTE 9. SUBSEQUENT EVENTS

 

On April 28, 2018 North America Frac Sand, Inc. (“NAFS”) has entered into a non binding Letter of Intent (“LOI”) with Urban Select to sell 100% of the rights to approximately 29,900 leased acres located in the province of Saskatchewan, Canada, more commonly known as the Eagle Creek Property (“Eagle Creek” or the “Property”). Under the terms of the LOI, Urban will have an exclusive period of up to 60 days of signing the LOI to conduct its due diligence on Eagle Creek. Upon satisfactory due diligence, a Definitive Agreement will be executed pursuant to which Urban Select can acquire the Property in consideration of issuing 20 million common shares of Urban Select to NAFS. It is Urban Select’s intention to assign its rights to the Property to a newly incorporated Saskatchewan subsidiary.

 

The transaction is subject to a number of conditions precedent first being met, including (i) TSX Venture Exchange approval, (ii) NAFS obtaining the approval of its shareholders, if required, and (iii) Urban Select completing a private placement to raise at least $500,000. Upon closing, NAFS Board of Directors shall distribute the Urban Select shares received to enhance its shareholder value.

 

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Item 2. Management’s Discussion and Analysis or Plan of Operations

 

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Risk Factors” and elsewhere in this report. The management’s discussion, analysis of financial condition, and results of operations should be read in conjunction with our financial statements and notes thereto contained elsewhere in this prospectus.

 

DESCRIPTION OF BUSINESS

 

North America Frac Sand, Inc. is a Florida corporation, (the "Company"). The Company’s name, as incorporated, was New Found Shrimp, Inc. The Company has been providing marketing of consulting services primarily to independent aquatic farming operators and other market participants located in the Midwest of the United States of America (the “U.S.”). Historically, we conducted initial marketing and sales activities to take advantage of opportunities related to time, location and quality of aquatic farming operations. We have conducted our operations primarily in Indiana.

 

We were founded in April 2007 in Indianapolis, Indiana. In June of 2012 we changed our domicile from the state of Indiana to the State of Florida. On February 9, 2015 David Cupp resigned as CEO and Director, and David Alexander has been appointed CEO and President.

 

In 2014, we reviewed opportunities in the modular building systems markets in Alberta, Canada. At that time, we changed our name, from New Found Shrimp Inc., to Innovate Building Systems Inc, and subsequently to Xterra Building Systems Inc. On July 10, 2015, we entered into a share purchase agreement with Canadian Sandtech Inc. (“CSI”) to acquire 100% of the issued and outstanding shares of North America Frac Sand (CA) Ltd. (“NAFS-CA”) by issuing to CSI 37,800,000 shares of the Company into escrow. At that time, we changed our name from Xterra Building Systems to North America Frac Sand Inc.

 

NAFS-CA was incorporated in Alberta on June 8, 2015 and was a wholly owned subsidiary of CSI. NAFS-CA owns approximately 30,000 acres of mineral leases about 30 kilometers east of Saskatchewan, Canada, called the Eagle Creek leases. On August 29, 2016 this lease was assigned and transferred to the Company. On April 26, 2017, the remaining lease was made with the Company directly.

 

A description of the Eagle Creek mineral leases is as follows:

 

Lease		Description of Lease		Lease Rate
# 1		Section 11, NE ¼ of Section 2, N (½) of Section 3, in Township 38, Range 10, West of the 3rd Meridian, as to the surface rights referenced in the Certificate of Title.		Up front payment of $3,000. Ten-year lease dated April 26, 2017, automatically extended for second 10 years if royalties are being paid. Lease rate is $1 per acre per year. Royalty rate is $5.00 per ton of processed ore sold at $80 per metric ton or less, and $5.00 plus the 10% of the difference between sales price greater than $80 and $80 per metric ton.

 

There has been significant exploration activity on 1,680 acres of the Eagle Creek property. Since 2008, CSI has drilled 173 holes on the Eagle Creek property. 149 of the drill holes were 300-foot spacing. 7 drill holes and 17 backhoe holes were 600-foot spacing. The average sand thickness per hole was 10.5 feet and the size of the tested area was approximately 12.9 million square feet. With respect to frac sand, there are approximately 75 lbs. of frac sand per cubic foot. CSI transferred ownership of the Eagle Creek property to its wholly owned subsidiary NAFS-CA in early August 2015. A summary of the activities undertaken on the property to date is as follows:

 

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Date		Description of activities
Aug-Oct 2008		CSI recognized the sand qualities on the leased property and the fact that these sands warranted further testing. This lead to CSI entering into lease agreements.
Jun 2009		CSI tested 107 holes backhoed under the supervision of Independent Engineer Green Engineering Ltd. ("GEL) and determined that significant quantities of suitable sand were present and that additional testing from an Independent engineer was required.
Nov-Dec 2009		CSI core drilled 66 holes under the supervision of Independent Engineer GEL and began lab testing of core samples.
June 2010		Saskatchewan Government confirmed CSI’s sand deposit (frac sands) fall under “Sand and Gravel” and are the property of the surface right holder. No disposition under the Quarry Regulations, 1957 was required to exploit the frac sand deposit.
Nov 2010 – Jan 2013		Further laboratory testing was conducted by SGS & Met Solve Labs and results determined the sands tested passed American Petroleum Industry (API) standards.
Jan 2013 – August 2015		CSI began gathering production data, plant design and cost, financial data and compiled other data to assist in the preparation of a NI 43-101 report required for additional financing.
Aug 2015		Property lease was transferred to NAFS-CA
July-Sept 2016		NorWest Engineering completed a field testing program which was to test historic data by drilling and sampling 40 core holes to 10 meters.
May 2017		NorWest Engineering completed a second field testing program by drilling and sampling 45 core holes to 10 meters, and by completing an NI43-101 report.
March 2018		NorWest Engineering amended NI43-101 report filed in May 2017. The report covers exploration to date on a portion of NAFS' leased areas (approximately 12,100 hectares [29,900 acres]). Between 2009 and 2016 a portion of the property was explored by 112 test pits and 104 drill holes, of which 145 pits and drill holes were sampled. The last 38 holes were drilled under the supervision of Norwest in 2016.

 

During the recent quarter the Company release a NI43-101 Report on the Eagle Creek properties.The NI-43-101 report, completed by Norwest Corporation, a Calgary based mineral engineering company recommended that we continue to drill out the property, to establish the both the size and quality of the frac sand resource evident on the mineral leases, and to provide working capital to the Company. The Company has continued to borrow funds from its management to complete the requisite work and to make the minimum lease payments..

 

Although we are not presently engaged in any other capital raising activities, we anticipate that we may engage in one or more private offerings of our company’s securities. We would most likely rely upon the transaction exemptions from registration provided by Regulation D, Rule 506 or conduct a private offering under Section 4(2) of the Securities Act of 1933.

 

The implementation of our business strategy is estimated to take approximately 12 months. Once we are able to secure funding, implementation will begin immediately. The major parts of the strategy to be immediately implemented will be the sales and marketing and office equipment and human resource procurement.

 

Results of Operations for the period ended March 31, 2018 and 2017

 

2018 expenses are $13,992 lower than 2017 due to the decrease of business activities.

 

Financial Condition

 

Total Assets. Total assets at March 31, 2018 and December 31, 2017 were $Nil and $Nil, respectively.

 

Total Liabilities. Total liabilities at March 31, 2018 and December 31, 2017 were $857,456 and $825,444, respectively.

 

Liquidity

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern which contemplates, among other things, the realization of assets and satisfaction of liabilities in the ordinary course of business.

 

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The Company sustained a loss for the period ended March 31, 2018 and 2017 of $32,670 and $51,214 respectively. The Company has an accumulated deficit of $36,454,324. Because of the absence of positive cash flows from operations, the Company will require additional funding for continuing the development and marketing. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

  

We are presently not able to meet our obligations as they come due. At March 31, 2018 we had working capital deficit of $857,456. Our working capital deficit is due to the results of operations.

 

Net cash used in operating activities for the periods ended March 31, 2018 and 2017 was $1,139 and -$4,465, respectively.

 

Net cash used in investment activities for the periods ended March 31, 2018 and 2017 was $nil and $nil, respectively.

 

Net cash provided by financing activities for the periods ended March 31, 2018 and 2017 was -$1,139 and $4,465, respectively.

 

We anticipate that our future liquidity requirements will arise from the need to fund our growth from operations, pay current obligations and future capital expenditures. The primary sources of funding for such requirements are expected to be cash generated from operations and raising additional funds from the private sources and/or debt financing. However, we can provide no assurances that we will be able to generate sufficient cash flow from operations and/or obtain additional financing on terms satisfactory to us, if at all, to remain a going concern. Our continuation as a going concern is dependent upon our ability to generate sufficient cash flow to meet our obligations on a timely basis and ultimately to attain profitability. Our Plan of Operation for the next twelve months is to raise capital to continue to expand our operations. Although we are not presently engaged in any capital raising activities, we anticipate that we may engage in one or more private offering of our company’s securities after the completion of this offering. We would most likely rely upon the transaction exemptions from registration provided by Regulation D, Rule 506 or conduct another private offering under Section 4(2) of the Securities Act of 1933. See “Note 2 – Going Concern” in our financial statements for additional information as to the possibility that we may not be able to continue as a “going concern.”

 

We have no known demands or commitments and are not aware of any events or uncertainties that will result in or that are reasonably likely to materially increase or decrease our current liquidity.

 

We are not aware of any trends or known demands, commitments, events or uncertainties that will result in or that are reasonably likely to result in material increases or decreases in liquidity.

 

Capital Resources

 

We have no material commitments for capital expenditures as of March 31, 2018.

 

Off-Balance Sheet Arrangements

 

We have made no 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 is material to investors.

 

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Item 3. Quantitative and Qualitative Disclosures about Market Risk.

 

We are a Smaller Reporting Company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

 

Item 4. Controls and Procedures.

 

(a) Management’s Quarter Report on Internal Control over Financial Reporting

 

The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control over financial reporting is a process designed under the supervision of the Company’s Chief Executive Officer and Chief Financial Officer 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 the U.S. generally accepted accounting principles.

 

As of September 30, 2017, under the supervision and with the participation of our management, we conducted an evaluation of the effectiveness of the design and operations of our disclosure controls and procedures, as defined in Rule 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934 and based on the criteria for effective internal control described Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013). Based on this evaluation, management concluded that our financial disclosure controls and procedures were not effective so as to timely identify correct and disclose information required to be included on our Securities and Exchange Commission (“SEC”) reports due to the Company’s limited internal resources and lack of ability to have multiple levels of transaction review. Through the use of external consultants and the review process, management believes that the financial statements and other information presented herewith are materially correct.

 

The management including its Chief Executive Officer and Chief Financial Officer, our sole officer, does not expect that its disclosure controls and procedures, or its internal controls will prevent all error and all fraud. A control system no matter how well conceived and operated, can provide only reasonable not absolute assurance that the objectives of the control system are met. Further, the design of control system must reflect the fact that there are resource constraints, and the benefit of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any within the Company have been detected.

 

Material weaknesses identified by management included: lack of an audit committee and audit committee financial expert; 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; inadequate segregation of duties consistent with control objectives and affecting the functions of authorization, recordkeeping, custody of assets, and reconciliation; and, management dominated by a single individual without adequate compensating controls.

 

Management believes that the material weaknesses set forth above did not have an effect on our financial results. 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.

 

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Management’s Remediation Initiatives

 

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:

 

We will create a position to segregate duties consistent with control objectives and will increase our personnel resources and technical accounting expertise within the accounting function when funds are available to us. And, 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.

 

Management believes that the appointment of one or more outside directors, who shall be appointed to a fully functioning audit committee, will remedy the lack of a functioning audit committee and a lack of a majority of outside directors on our Board.

 

We will work as quickly as possible to implement these initiatives; however, the lack of adequate working capital and positive cash flow from operations will likely slow this implementation.

 

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

 

This report shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liabilities of this section, and is not incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

 

Change in internal controls

 

We have not made any significant changes to our internal controls subsequent to the Evaluation Date. We have not identified any significant deficiencies or material weaknesses or other factors other than those specified above that could significantly affect these controls, and therefore, no corrective action was taken.

 

By December 31st 2014, COSO 2013 was used.

 

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Part II. Other Information

 

Item 1. Legal Proceedings.

 

None.

 

Item 1A. Risk Factors

 

We are a Smaller Reporting Company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

 

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

 

During the period ending March 31, 2018, the Company did not issue any unregistered shares of its common stock.

 

Item 3. Defaults Upon Senior Securities

 

None.

 

Item 4. Mine Safety Disclosures

 

Not applicable.

 

Item 5. Other Information.

 

None.

 

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Item 6. Exhibits

 

Exhibit Number and Description					Location Reference
(a)	Financial Statements				Filed herewith
(b)	Exhibits required by Item 601, Regulation S-K;
	(3.0)	Articles of Incorporation			See Exhibit Key
	(3.1)	Amended Articles of Incorporation filed with Form 8-K on April 24, 2014			See Exhibit Key
	(3.2)	Bylaws filed with S-1 Registration Statement on July 21, 2011.			See Exhibit Key
	(3.3)	Amended Articles of Incorporation			Filed herewith
	(10.0)	Material Contracts
		(10.1)	Consulting Agreement dated May 24, 2011 Filed with S-1 Registration Statement on July 21, 2011.		See Exhibit Key
		(10.2)	Consulting Agreement dated May 8, 2012		See Exhibit Key
		(10.3)	Consulting Agreement dated May 8, 2012		See Exhibit Key
		(10.4)	Share Purchase Agreement dated April 25, 2014		See Exhibit Key
		(10.5)	Amendment to Share Purchase Agreement dated June 11, 2014		See Exhibit Key
		(10.6)	Termination of Share Purchase Agreement dated August 27, 2014		See Exhibit Key
		(10.7)	Share Purchase Agreement dated July 10, 2015		See Exhibit Key
		(10.8)	Amendment to Share Purchase Agreement dated October 5, 2015		See Exhibit Key
		(10.9)	Amendment to Share Purchase Agreement dated November 25, 2015		See Exhibit Key
		(10.10)	Close on Share Purchase Agreement dated July 27  2016		See Exhibit Key
		(11.0)	Statement re: computation of per share Earnings		Note 2 to  Financial Stmts.
		(14.0)	Code of Ethics		See Exhibit Key
		(31.1)	Certificate of Chief Executive Officer and Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002		Filed herewith
		(32.1)	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002		Filed herewith
(101.INS)		XBRL Instance Document			Filed herewith
(101.SCH)		XBRL Taxonomy Ext. Schema Document			Filed herewith
(101.CAL)		XBRL Taxonomy Ext. Calculation Linkbase Document			Filed herewith
(101.DEF)		XBRL Taxonomy Ext. Definition Linkbase Document			Filed herewith
(101.LAB)		XBRL Taxonomy Ext. Label Linkbase Document			Filed herewith
(101.PRE)		XBRL Taxonomy Ext. Presentation Linkbase Document			Filed herewith

  

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Exhibit Key 

 

3.0		Incorporated by reference herein to the Company’s Form S-1 Registration Statement filed with the Securities and Exchange Commission on July 21, 2011.
3.1		Incorporated by reference herein to the Company’s Form 8-K filed with the Securities and Exchange Commission on April 24, 2014
3.2		Incorporated by reference herein to the Company’s Form S-1 Registration Statement filed with the Securities and Exchange Commission on July 21, 2011.
10.1		Incorporated by reference herein to the Company’s Form S-1 Registration Statement filed with the Securities and Exchange Commission on July 21, 2011.
10.2		Incorporated by reference herein to the Company’s Form 10-Q filed with the Securities and Exchange Commission on May 14, 2012
10.3		Incorporated by reference herein to the Company’s Form 10-Q filed with the Securities and Exchange Commission on May 14, 2012
10.4		Incorporated by reference herein to the Company’s Form 8K filed with the Securities and Exchange Commission on May 9, 2014
10.5		Incorporated by reference herein to the Company’s Form 8K filed with the Securities and Exchange Commission on June 11, 2014
10.6		Incorporated by reference herein to the Company’s Form 8K filed with the Securities and Exchange Commission on August 27, 2014
10.7		Incorporated by reference herein to the Company’s Form 8K filed with the Securities and Exchange Commission on July 17, 2015
10.8		Incorporated by reference herein to the Company’s Form 8K filed with the Securities and Exchange Commission on October 5, 2015
10.9		Incorporated by reference herein to the Company’s Form 8K filed with the Securities and Exchange Commission on November 27, 2015
10.10		Incorporated by reference herein to the Company’s Form 8K filed with the Securities and Exchange Commission on August 29, 2016
14.0		Incorporated by reference herein to the Company’s Form S-1 Registration Statement filed with the Securities and Exchange Commission on July 21, 2011.

  

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Signatures

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

NORTH AMERICA FRAC SAND, INC.

 

NAME		TITLE		DATE
/s/ Joe Kistler		Principal Executive Officer,		May 25, 2018
Joe Kistler		Principal Accounting Officer, Chief Financial Officer, Secretary and Chairman of the Board of Directors

 

Supplemental Information to be furnished With Reports Filed Pursuant to Section 15(d) of the Act by Registrants

Which Have Not Registered Securities Pursuant to Section 12 of the Act

 

None

 

 

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