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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-K

 

 

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the fiscal year ended October 31, 2017

 

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

 

For the transition period from ___________ to ___________

 

Commission File No.  333-202398

 

 

ARMA SERVICES, INC.
(Exact name of registrant as specified in its charter)

 

Nevada

(State or Other Jurisdiction of Incorporation or Organization)

8744

(Primary Standard Industrial Classification Number)

EIN 32-0449388

(IRS Employer

Identification Number)

 

 

7260 W. Azure Dr. Suite 140-928

Las Vegas, NV 89130

+17026599321

(Address and telephone number of principal executive offices)

 

Securities registered pursuant to Section 12(b) of the Act: None

 

Securities registered pursuant to Section 12(g) of the Act: None



Indicate by check mark whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [ ] No [X]

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes [ ] No [X]

 

Indicate by 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 shorter period that the registrant as 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 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. Yes [ ] No [X]

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of "accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer [ ]                        Accelerated filer [ ]

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

Emerging Growth company [ ]                          

 

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

 

As of October 31, 2017 the registrant had 6,240,000 shares of common stock issued and outstanding. No market value has been computed based upon the fact that no active trading market has been established as of October 31, 2017.


1

TABLE OF CONTENTS

 

 

 

PART 1

 

ITEM 1

Description of Business

4

ITEM 1A    

Risk Factors

5

ITEM 2   

Description of Property

5

ITEM 3   

Legal Proceedings                                             

5

ITEM 4

Submission of Matters to a Vote of Security Holders           

6

 

PART II

 

ITEM  5   

Market for Common Equity and Related Stockholder Matters      

6

ITEM  6  

Selected Financial Data                                       

6

ITEM  7 

Management's Discussion and Analysis of Financial Condition and Results of Operations

7

ITEM 7A      

Quantitative and Qualitative Disclosures about Market Risk   

8

ITEM 8

Financial Statements and Supplementary Data                  

9

ITEM 9    

Changes In and Disagreements with Accountants on Accounting and Financial Disclosure

9

ITEM 9A (T)

Controls and Procedures

9

 

PART III

 

ITEM 10

Directors, Executive Officers, Promoters and Control Persons of the Company

10

ITEM 11

Executive Compensation

11

ITEM 12

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

12

ITEM 13

Certain Relationships and Related Transactions

13

ITEM 14

Principal Accountant Fees and Services                       

14

 

PART IV

 

ITEM 15

Exhibits

14



PART I

2

 

 

Item 1. Description of Business

 

FORWARD-LOOKING STATEMENTS

 

This annual report contains forward-looking statements. These statements relate to future events or our future financial performance. These statements often can be identified by the use of terms such as "may," "will," "expect," "believe," "anticipate," "estimate," "approximate" or "continue," or the negative thereof. We intend that such forward-looking statements be subject to the safe harbors for such statements. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statements represent management's best judgment as to what may occur in the future. However, forward-looking statements are subject to risks, uncertainties and important factors beyond our control that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events.

 

GENERAL

    

Arma Services, Inc. was incorporated by our director in the State of Nevada on September 2, 2014. Our primary business will be destination management and event management services initially in the Russian Federation, but with plans at a later stage to spread our business to America and China. We will aim to provide a full range of services in the field of Meeting, Incentive, Conference, and Exhibition tourism in Russia for corporate customers from United States, China and Russia. We plan to create a variety of events for domestic and foreign companies, including; industry conferences and business meetings, dealer conferences for producers, motivational and incentive arrangements for key employees, and to organize participation in exhibitions and forums.

 

We have entered into a contract with Proekta LLC. This company has Mr. Sergey Gandin on board as its company director. Proekta LLC is in the hostel business, providing inexpensive, supervised lodging places.

 

The purpose of the contracts is for Proekta LLC to provide accommodation at a cost of $25 per double room, per night for the subcontractor personnel contracted with Arma Services Inc.

 

The main terms of this agreement are:

 

1.0 Proekta LLC is a Related party.

 

1.1. Proekta LLC shall provide Arma Services Inc.’s subcontractors double rooms for a fee of $25 a night at a Moscow address, Zvonarsky lane 5, Apt.6, Russian Federation 107031.

 

1.2. Double rooms are available for temporary accommodation for Arma Inc.’s sub-contractors.

 

Furthermore, Arma Services Inc. has an agreement with Gazetny   LLC. This company is contracted to provide banquet space for events of Arma Services for a fee.

 

The purpose of the contract is for Arma Services to have a secured location to accommodate some of the Company’s planned business.

 

The main terms of the agreement are:

 

 

3

 



1. Gazetny LLC shall provide Arma Services Inc. with banquet halls space for a fee of $150 per person, at an address 27 Gazetny Lane, Rostov-on-Don, Russian Federation.

 

2. Gazetny LLC is to provide the Banquet Halls upon request to Arma Services Inc. Halls are subject to availability.

 

 

 

We are still in the development stage and we have generated minimal revenues. Our independent registered public accounting firm has issued an audit opinion for our Company which includes an explanatory paragraph expressing substantial doubt as to our ability to continue as a going concern.

 

 

BUSINESS PLAN

 

Arma Services Inc. is formed with a purpose to be in the business of Destination Management Company (“DMC”), and will aim to provide a full range of services in the field of Meeting, Incentive, Conference, and Exhibition (“MICE”) tourism in Russia for corporate customers from the United States, China and Russia. We plan to create a variety of events for domestic and foreign companies, including; industry conferences and business meetings, dealer conferences for producers, motivational and incentive arrangements for key employees, and to organize participation in exhibitions and forums.

 

Acting as receiving party, we will aim to provide full support for our customers with all necessary services for the implementation of activities; rent of hotels, conference rooms, organization catering, hiring of personnel and equipment for sound, lighting, and video, booking of performers, promotion and press availability, transportation and more. Arma Services Inc. plans not to provide these services directly, but intends to be an intermediary (agent) between a customer and the end provider (hotel, transport company, restaurant, subcontractor). Our managers will try to ascertain from the customer the complete list of required services, find sub-contractors, check the quality of their services and sell the service to the customer. For the customer, we aim to act as the guarantor of this service quality and its compliance with the customer's expectations.

 

 

MARKETING

 

Our marketing strategy may include several components:

 

 

1.

Participation in international exhibitions – IMEX Frankfurt, IMEX America, IEBTM World Barcelona,

CIBTM China, MITT Moscow.

 

 

2.

Our website (armaservicesinc.com) and its further promotion on the Internet by means of SEO,

as well as active use of context advertising of Google Adwords, Yandex Direct, Baidu PPC.

 

 

3.

Active sales – “cold calls” to potential customers.

 

 

4.

E-mail distribution.

 

 

5.

Participation in professional associations – GBTA Russian Federation, ADME International  

Association of Destination Management Executives, ICCA-the International Congress and

Convention Association.

 

  

STRATEGY

 

4

Our strategy is to drive attention through multiple marketing facets which will enable us to attract the sufficient quantity of customers possible upon commencement of operations.

 

Our strategy is to create unique events for each customer and ensure the process of working with us is efficient, comfortable, and operationally seamless.

 

 

EMPLOYEES AND EMPLOYMENT AGREEMENTS

 

At present, we have no employees other than our officer and director.  We presently do not have pension, health, annuity, insurance, stock options, profit sharing or similar benefit plans; however, we may adopt such plans in the future.  There are presently no personal benefits available to any officers, directors or employees.

 

Item 1A.  Risk Factors

 

Not applicable to smaller reporting companies.

 

 

Item 2.  Description of Property

 

We do not own any real estate or other properties.  

 

Item 3.  Legal Proceedings

We know of no legal proceedings to which we are a party or to which any of our property is the subject which are pending, threatened or contemplated or any unsatisfied judgments against us.

 

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

 

None.

 

PART II

 

Item 5. Market for Common Equity and Related Stockholder Matters      

 

Market Information

 

There is a limited public market for our common shares.  Our common shares are not quoted on the OTC Bulletin Board at this time.  Trading in stocks quoted on the OTC Bulletin Board is often thin and is characterized by wide fluctuations in trading prices due to many factors that may be unrelated to a company’s operations or business prospects.  We cannot assure you that there will be a market in the future for our common stock.

 

OTC Bulletin Board securities are not listed or traded on the floor of an organized national or regional stock exchange.  Instead, OTC Bulletin Board securities transactions are conducted

 

5



through a telephone and computer network connecting dealers in stocks.  OTC Bulletin Board issuers are traditionally smaller companies that do not meet the financial and other listing requirements of a regional or national stock exchange.

 

As of October 31, 2017, no shares of our common stock have traded.

 

Number of Holders

 

As of October 31, 2017, the 6,240,000 issued and outstanding shares of common stock were held by our secretary and our shareholders.

 

Dividends

 

No cash dividends were paid on our shares of common stock during the fiscal years ended October 31, 2017 and 2016.  We have not paid any cash dividends since our inception and do not foresee declaring any cash dividends on our common stock in the foreseeable future. 

 

Recent Sales of Unregistered Securities

 

None.

 

Purchase of our Equity Securities by Officers and Directors

 

None.

 

Other Stockholder Matters

 

None.

 

 

Item 6. Selected Financial Data                                       

 

Not applicable.

 

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

 

The following discussion should be read in conjunction with our financial statements, including the notes thereto, appearing elsewhere in this annual report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs.  Our actual results could differ materially from those discussed in the forward-looking statements.   Our audited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.

 

RESULTS OF OPERATIONS

 

We have incurred recurring losses to date. Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation.

 

6



We expect we will require additional capital to meet our long term operating requirements. We expect to raise additional capital through, among other things, the sale of equity or debt securities.

 

FISCAL YEAR ENDED OCTOBER 31, 2017 COMPARED TO FISCAL YEAR ENDED OCTOBER 31, 2016.

 

Our net loss for the fiscal year ended October 31, 2017 is $15,363 compared to a net loss of $6,839 during the fiscal year ended October 31, 2016. During fiscal year ended October 31, 2017, the Company has generated $9,900 in revenue, compare to $5,600 in the year ended October 31, 2016.

 

During the fiscal year ended October 31, 2017, we incurred professional fees of $25,170 and bank service charges of $93 compared to professional fees of $12,255 and bank fees of $ 184 incurred during fiscal year ended October 31, 2016.  

 

The weighted average number of shares outstanding was 6,131,397 for the fiscal year ended October 31, 2017 and 4,001,148 for October 31, 2016.

 

LIQUIDITY AND CAPITAL RESOURCES

 

FISCAL YEAR ENDED OCTOBER 31, 2017 AND 2016

 

As of October 31, 2017, our total assets were $5,201 comprised of cash and cash equivalents of $201 and capitalized website development costs of $5,000; our total liabilities were $10,992 comprised of loan from our director $5,992 and accounts payable of $5,000.

 

As of October 31, 2016, our total assets were $4,295 and our total liabilities were $12,923 comprised of loan from our director $5,992 and accounts payable $6,931.  Stockholders’ equity (deficit) decreased from $(8,628) as of October 31, 2016 to $(5,791) as of October 31, 2017.  

 

Cash Flows from Operating Activities

 

For the fiscal year ended October 31, 2017, net cash flows used in operating activities were $17,294 consisting of net loss of $(15,363), accounts payable of $5,000 and accrued expenses of $(6,931). For the fiscal year ended October 31, 2016, net cash flows provided by operating activities were $92 consisting of net loss of $(6,839), accrued expenses of $6,931.

 

Cash Flows Provided by Investing Activities

 

For the fiscal year ended October 31, 2017, net cash flows used in investing activities were $ (5,000) invested in developing a website for the Company.  There were no investing activities during the fiscal year ended October 31, 2016.

 

Cash Flows from Financing Activities

 

For the fiscal year ended October 31, 2017, net cash from financing activities was $18,200 consisting of proceeds received from issuance of shares.  For the fiscal year ended October 31, 2016, net cash from financing activities was $4,200 consisting of proceeds received from issuance of shares.


7

PLAN OF OPERATION AND FUNDING

 

We expect that working capital requirements will continue to be funded through a combination of our existing funds and further issuances of securities. Our working capital requirements are expected to increase in line with the growth of our business.

 

Existing working capital, further advances and debt instruments, and anticipated cash flow are expected to be adequate to fund our operations over the next six months. We have no lines of credit or other bank financing arrangements. Generally, we have financed operations to date through the proceeds of the private placement of equity and debt instruments. In connection with our business plan, management anticipates additional increases in operating expenses and capital expenditures relating to: (i) acquisition of software; (ii) developmental expenses associated with a start-up business; and (iii) marketing expenses. We intend to finance these expenses with further issuances of securities, and debt issuances. Thereafter, we expect we will need to raise additional capital and generate revenues to meet long-term operating requirements. Additional issuances of equity or convertible debt securities will result in dilution to our current shareholders. Further, such securities might have rights, preferences or privileges senior to our common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, we may not be able to take advantage of prospective new business endeavors or opportunities, which could significantly and materially restrict our business operations.

 

 

MATERIAL COMMITMENTS

 

As of the date of this Annual Report, we do not have any material commitments.

 

PURCHASE OF SIGNIFICANT EQUIPMENT

 

We do not intend to purchase any significant equipment during the next twelve months.

 

OFF-BALANCE SHEET ARRANGEMENTS

 

As of the date of this Annual Report, we do not have any offbalance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

 

GOING CONCERN

 

The independent auditors' reports accompanying our October 31, 2017 and October 31, 2016 financial statements contains an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. The financial statements have been prepared "assuming that we will continue as a going concern," which contemplates that we will realize our assets and satisfy our liabilities and commitments in the ordinary course of business.

 

Item 7A. Quantitative and Qualitative Disclosures about Market Risk   

Not applicable to smaller reporting companies.

 

Item 8. Financial Statements and Supplementary Data      


8

INDEX TO FINANCIAL STATEMENTS

 

Reports of Independent Registered Public Accounting Firms (current)

 

F-1

 

 

 

Reports of Independent Registered Public Accounting Firms (former)

 

F-2

 

 

 

Balance Sheets as of October 31, 2017 and 2016

 

F-3

 

 

 

Statements of Operations for the years ended October 31, 2017 and 2016

 

F-4

 

 

 

Statements of Stockholders’ Equity for the years ended October 31, 2017 and 2016

 

F-5

 

 

 

Statements of Cash Flows for the years ended October 31, 2017 and 2016

 

F-6

 

 

 

Notes to Financial Statements

 

F-7

 

 

 

 

 

 

 

 

F-1



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

Board of Directors

Arma Services, Inc.

14/4, 98 Tashkentskaya St. Moscow

Russian Federation, 119019

 

We have audited the accompanying balance sheet of Arma Services, Inc. as of October 31, 2017 and the related statements of operations, stockholders’ deficit and cash flows for the year then ended. Arma Services’ management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audit.

 

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

 

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Arma Services, Inc. as of October 31, 2017 and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company has suffered losses and has not yet established a reliable, consistent and proven source of revenue to meet its operating costs on an ongoing basis and currently does not have sufficient available funding to fully implement its business plan. These factors raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

 

Haynie & Company

 

 

Salt Lake City, Utah

August 7, 2018

 

 


F-2


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

Board of Directors

Arma Services, Inc.

14/4, 98 Tashkentskaya St. Moscow

Russian Federation, 119019 

 

We have audited the accompanying balance sheet of Arma Services, Inc. as of October 31, 2016 and the related statements of operations, changes in stockholders' deficit and cash flows for the year then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

 

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

 

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Arma Services, Inc. as of October 31, 2016 and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company has suffered continuing losses and has not yet established a reliable, consistent and proven source of revenue to meet its operating costs on an ongoing basis and currently does not have sufficient available funding to fully implement its business plan. These factors raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. 

 

/s/ Pritchett, Siler & Hardy, P.C.

 

Pritchett, Siler & Hardy, P.C.

Salt Lake City, Utah

February 23, 2017


F-3


ARMA SERVICES, INC.

Balance Sheets as of October 31, 2017 and 2016

 

ASSETS

 

October 31, 2017

 

October 31, 2016

Current Assets

 

 

Cash and cash equivalents

$             201            

$          4,295            

 

Total Current Assets

201

4,295

 

 

 

Other Assets

 

 

Website development

5,000

-

Total Assets

$           5,201

$          4,295

 

 

 

LIABILITIES AND STOCKHOLDERS’ DEFICIT

 

 

Liabilities

 

 

Current Liabilities

 

 

Accounts payable

$          5,000

$          6,931

Loan from director

5,992

5,992

 

 

 

Total Liabilities

10,992

12,923

 

Commitments and Contingencies

 

 

 

Stockholders’ Deficit

 

 

Common stock, par value $0.001; 75,000,000 shares authorized, 6,240,000 and 4,420,000 shares issued and outstanding at October 31, 2017 and 2016 respectively:

6,240

4,420

Additional paid in capital

20,160

3,780

Accumulated deficit

(32,191)

(16,828)

Total Stockholders’ Deficit

(5,791)

(8,628)

 

 

 

Total Liabilities and Stockholders’ Deficit

$          5,201

$          4,295

 

 

 

 

 

 

 

 

See accompanying notes to financial statements.

F-4

 

 

 


 
 
 

ARMA SERVICES, INC.

Statements of Operations for the years ended

 

October 31, 2017 and 2016

 

 

 

Year ended October 31, 2017

Year ended October 31, 2016

 

 

 

REVENUES

$                 9,900

$                 5,600

 

 

 

OPERATING EXPENSES

 

 

Professional Fees

25,170

12,255

Bank Service Charges

93

184

TOTAL OPERATING EXPENSES

25,263

12,439

NET LOSS FROM OPERATIONS

(15,363)

(6,839)

 

PROVISION FOR INCOME TAXES

-

-

NET LOSS

$            (15,363)

$              (6,839)

 

 

 

NET LOSS PER SHARE: BASIC AND DILUTED

$                (0.00)

$                (0.00)

 

 

 

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: BASIC AND DILUTED

6,131,397

4,001,148

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying notes to financial statements.

F-5

 

 



 

ARMA SERVICES, INC.

Statement of Stockholder’s Deficit

For the Years Ended October 31, 2017 and 2016

 

Common Stock

 

 

Additional Paid-in

 

 

Accumulated

Total Stockholders’

 

Shares

Amount

Capital

Deficit

Equity

 

 

 

 

 

 

Balance, October 31, 2015

4,000,000

$     4,000

$   -

$       (9,989)

$         (5,989)

 

 

 

 

 

 

Shares issued for cash at $0.01 per share on October 31, 2016

420,000

      420

3,780

-

          4,200

Net loss for the year ended October 31, 2016

-

-

-

(6,839)

(6,839)

 

 

 

 

 

 

Balance, October 31, 2016

4,420,000

$     4,420

$     3,780

$       (16,828)

$         (8,628)

 

 

 

 

 

 

Shares issued for cash at $0.01 per

share as of October 31, 2017

1,820,000

1,820

16,380

-

18,200

 

 

 

 

 

 

Net loss for the year ended October 31, 2017

-

-

-

(15,363)

(15,363)

 

 

 

 

 

 

Balance, October 31, 2017

6,240,000

$      6,240

$   20,160

$      (32,191)

  $        (5,791)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying notes to financial statements.

F-6

 

 

 



ARMA SERVICES, INC.

 

Statement of Cash Flows for the Years Ended

October 31, 2017 and 2016

 

 

 

 

Year ended October 31, 2017

Year ended  October 31, 2016

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

Net loss for the period

$        (15,363)

$        (6,839)

Changes in assets and liabilities:

 

 

Accounts Payable

5,000

-

Increase (decrease) in accrued expenses

(6,931)

6,931

CASH FLOWS PROVIDED (USED) IN OPERATING ACTIVITIES

(17,294)

92

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

Website Development

(5,000)

-

CASH USED IN INVESTING ACTIVITIES

(5,000)

-

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES  

 

 

Proceeds from sale of common stock

18,200

4,200

CASH FLOWS PROVIDED BY FINANCING ACTIVITIES

18,200

4,200

 

 

 

NET INCREASE (DECREASE) IN CASH

(4,094)

4,292

Cash, beginning of period

 4,295

 3

 

 

 

Cash, end of period

$             201          

$          4,295          

 

 

 

SUPPLEMENTAL CASH FLOW INFORMATION:

 

 

Interest paid

$                 -

$                 -

Income taxes paid

$                 -

$                 -

 

 

 

 

 

 

 

 

 

 

See accompanying notes to financial statements.

F-7

 

 

 

 



 

ARMA SERVICES, INC.

NOTES TO THE FINANCIAL STATEMENTS

October 31, 2017 and 2016

 

NOTE 1 – ORGANIZATION AND NATURE OF BUSINESS

 

Arma Services Inc. (the “Company”, “we”, “us” or “our”) was incorporated under the laws of the State of Nevada on September 2, 2014. Arma Services Inc. is a Destination Management Company (“DMC”), which aims to provide a full range of services in the field of Meeting, Incentive, Conference, and Exhibition (“MICE”) tourism in Russia for corporate customers from United States, China and internal Russian clients. We plan to create a variety of events for domestic and foreign companies, including; industry conferences and business meetings, dealer conferences for producers, motivational and incentive arrangements for key employees, and to organize participation in exhibitions and forums.

 

 

NOTE 2 – SUMMARY OF SIGNIFCANT ACCOUNTING POLICIES

 

 

Basis of Presentation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars.  

 

Accounting Basis

The Company uses the accrual basis of accounting and accounting principles generally accepted in the United States of America (“GAAP” accounting).  The Company has adopted an October 31 fiscal year end.

 

Cash and Cash Equivalents

The Company considers all highly liquid investments with the original maturities of three months or less to be cash equivalents. The Company had $201 of cash and $5,000 in accounts payable as of October 31, 2017 and $4,295 of cash and $6,931 in accounts payable as of October 31, 2016.

 

Fair Value of Financial Instruments

The Company’s financial instruments consist of cash and cash equivalents, accounts payable and amounts due to director. The carrying amount of these financial instruments approximates fair value due either to length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial statements.

 

Income Taxes

Income taxes are computed using the asset and liability method.  Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws.  A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.

 

 

F-8

 

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 the financial statements and the reported amount of revenues and expenses during the reporting period.  Actual results could differ from those estimates.

 

Revenue Recognition

 

The purpose of our business is to provide a full range of services in the field of Meeting, Incentive, Conference, and Exhibition (“MICE”) tourism in Russia for corporate customers from the United States, China and internal Russian clients.

 

Services are provided through industry conferences and business meetings, dealer conferences for producers, motivational and incentive arrangements for key employees, and to organize participation in exhibitions and forums.

 

The Company will recognize revenue in accordance with ASC topic 606 “Revenue Recognition”. The Company recognizes revenue when our services have been provided and accepted by the customer and collection is reasonably assured.

 

 

Stock-Based Compensation

Stock-based compensation is accounted for at fair value in accordance with ASC Topic 718.  To date, the Company has not adopted a stock option plan and has not granted any stock options.

 

Intangibles

 

The Company has capitalized the development costs related to its website.  The site was completed near year-end so no amortization was expensed during the year ended October 31, 2017.  In accordance with Accounting Standards Codification (“ASC”) Topic 350 Intangibles-Goodwill and Other, the costs will be amortized to expense over the expected useful life of the website which we estimate will be five years.

 

Basic Income (Loss) Per Share

Basic income (loss) per share is calculated by dividing the Company’s net income (loss) applicable to common shareholders by the weighted average number of common shares during the period. Diluted income (loss) per share is calculated by dividing the Company’s net income (loss) available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. There are no such common stock equivalents outstanding as of October 31, 2017 and 2016.  In loss years common stock equivalents would not be included as they would be anti-dilutive.

 

 

 

 

 

F-9

 

 

Comprehensive Income

The Company has established standards for reporting of comprehensive income, its components and accumulated balances.  When applicable, the Company would disclose this information on its



Statement of Stockholders’ Equity.  Comprehensive income comprises equity except those resulting from investments by owners and distributions to owners. The Company has not had any significant transactions that are required to be reported in other comprehensive income.

 

 

 

NOTE 3 – LOANS FROM DIRECTOR

 

In support of the Company’s efforts and cash requirements, it may rely 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 shareholders.  Amounts represent advances or amounts paid in satisfaction of liabilities. The advances are considered temporary in nature and have not been formalized by a promissory note.  

 

As of October 31, 2017 and 2016, the Company had a loan outstanding with the Company’s sole director Mr. Sergey Gandin in the amount of $5,992. The loan is non-interest bearing, due upon demand and unsecured. 

 

NOTE 4  REVENUE

 

During the year ended October 31, 2017, the Company generated total revenues of $9,900 from one customer.  During the year ended October 31, 2016, the Company generated total revenues of $5,600 from two customers.  The company did not incur any direct costs or expenses related to these revenues.  The Company does have two service contracts in effect with vendors to provide banquet space, food and accommodations. An agreement with Proekta LLC provides for double rooms for accommodations at $25 per night.  The Proekta agreement expires during December 2018.  An agreement with Gazetny LLC provides for banquet rooms and food at a rate of $150 per person.  The Gazetny agreement expired during March 2018 but is subject to negotiated extensions.  Both Proekta LLC and Gazetny LLC are entities related to officers of the Company.  

 

 

 

NOTE 5 – GOING CONCERN

  

The accompanying financial statements have been prepared in conformity with generally accepted accounting principle, which contemplate continuation of the Company as a going concern. However, the Company had limited revenues as of October 31, 2017. The Company currently has a working capital deficit, and has not completed its efforts to establish a stabilized source of revenues sufficient to cover operating costs over an extended period of time.  This raises substantial doubt about its ability to continue as a going concern.

 

 

 

 

F-10

 

 

Management anticipates that the Company will be dependent, for the near future, on additional investment capital to fund operating expenses. The Company intends to position itself so that it



may be able to raise additional funds through the capital markets. In light of management’s efforts, there are no assurances that the Company will be successful in this or any of its endeavors or become financially viable and continue as a going concern.

 

 

NOTE 6 – COMMON STOCK

 

The Company has 75,000,000, $0.001 par value shares of common stock authorized. During the

year ended October 31, 2017, the Company sold 1,820,000 shares of common stock for $18,200. As of October 31, 2017, the Company had 6,240,000 shares issued and outstanding.  As of October 31, 2016, the Company had 4,420,000 shares issued and outstanding.

 

NOTE 7 – RELATED PARTY TRANSACTIONS

 

As of October 31, 2017 and 2016 the Company had a non-interest bearing loan payable to its sole director in the amount of $5,992.

 

The Company’s officers and director provide services and office space to the Company without compensation.

 

The Company has entered into vendor agreements with Proekta LLC and Gazetny LLC, which are entities related to officers of the Company.

 

NOTE 8 – COMMITMENTS AND CONTINGENCIES

 

The Company neither owns nor leases any real or personal property. An officer has provided office services without charge.  There is no obligation for the officer to continue this arrangement.  Such costs are immaterial to the financial statements and accordingly are not reflected herein.  The officers and directors are involved in other business activities and most likely will become involved in other business activities in the future.

 

 

NOTE 9 – INCOME TAXES

 

As of October 31, 2017, the Company had net operating loss carry forwards of approximately $32,191 that may be available to reduce future years’ taxable income in varying amounts through 2037. Future tax benefits which may arise as a result of these losses have not been recognized in these financial statements, as their realization is determined not likely to occur and accordingly, the Company has recorded a valuation allowance for the deferred tax asset relating to these tax loss carry-forwards.

 

 

 

 

 

F-11

 

 

 

The provision for Federal income tax consists of the following:



 

October 31, 2017

October 31,

2016

Federal income tax benefit attributable to:

 

 

Current Operations

$             3,226

$             2,394

Less: valuation allowance

3,226

(2,394)

Net provision for Federal income taxes

$                    -

$                    -

 

The cumulative tax effect at the expected rate of 21% of significant items comprising our net deferred tax amount is as follows:

 

 

October 31, 2017

October 31,

2016

Deferred tax asset attributable to:

 

 

Net operating loss carryover

$             6,760

$             3,496

Less: valuation allowance

(6,760)

(3,496)

Net deferred tax asset

$                    -

$                    -

 

Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards of approximately $32,191 for Federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur net operating loss carry forwards may be limited as to use in future years.

 

 

NOTE 10 – SUBSEQUENT EVENTS

 

In accordance with ASC 855-10 the Company has analyzed its operations subsequent to October 31, 2017 and to the date these financial statements were issued, and has determined that it does not have any material subsequent events to disclose in these financial statements.

 

 

 

 

 

 

 

F-12

 

Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure



None.

 

Item 9A(T). Controls and Procedures

 

Management’s Report on Disclosure Controls and Procedures

Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f)). The Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, the Company conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting as of October 31, 2017 using the criteria established in “ Internal Control - Integrated Framework ” issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO").

 

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. In its assessment of the effectiveness of internal control over financial reporting as of October 31, 2017, the Company determined that there were control deficiencies that constituted material weaknesses, as described below.

 

1.We do not have an Audit Committee – While not being legally obligated to have an audit committee, it is the management’s view that such a committee, including a financial expert member, is an utmost important entity level control over the Company’s financial statement. Currently the Board of Directors acts in the capacity of the Audit Committee, and does not include a member that is considered to be independent of management to provide the necessary oversight over management’s activities. 

 

2.We did not maintain appropriate segregation of duties and cash controls – As of October 31, 2017, the Company has not maintained sufficient internal controls over financial reporting for the cash process, including failure to segregate cash handling and accounting functions, and did not require dual signature on the Company’s bank accounts. Alternatively, the effects of poor cash controls were mitigated by the fact that the Company had limited transactions in their bank accounts. 

 

3.We did not implement appropriate information technology controls – As at October 31, 2017, the Company retains copies of all financial data and material agreements; however there is no formal procedure or evidence of normal backup of the Company’s data or off-site storage of data in the event of theft, misplacement, or loss due to unmitigated factors.  

 

 

Accordingly, the Company concluded that these control deficiencies resulted in a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis by the company’s internal controls.


9

As a result of the material weaknesses described above, management has concluded that the Company did not maintain effective internal control over financial reporting as of October 31, 2017 based on criteria established in Internal Control—Integrated Framework issued by COSO.

Changes in Internal Control over Financial Reporting

 

There has been no change in our internal control over financial reporting identified in connection with our evaluation we conducted of the effectiveness of our internal control over financial reporting as of October 31, 2017, that occurred during our fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

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

PART III

 

Item 10. Directors, Executive Officers, Promoters and Control Persons of the Company

 

 

DIRECTORS AND EXECUTIVE OFFICERS

The name, address and position of our present officers and directors are set forth below:

 

 

Name and Address of Executive

Officers and Director

Age

Position

 

SERGEY GANDIN

Tashkentskaya 14/4, Unit 98

Moskow

Russian Federation 109444

 

 

Ruslan Mishin

Vilkina st. 15-5

Vakhrushevo, Ukraine 94560

 

 

33

 

 

 

 

 

 

31

 

President, Treasurer and Director

 

 

 

 

 

 

Secretary

 

 

Biographical Information and Background of officer and director

 

Sergey Gandin, Director, President, CEO and CFO

 

Schooling, experience and qualifications of our director Sergey Gandin in a position of manager or supervisor, in the past ten years, and organizing business in number of companies, brought us to conclusion that he is qualified for the position for a director of our company.2000-2002 - Higher Education at Rostov Economical University – Tourism and Hospitality 2012- to date - LLC “Proekta”, General Manager- Company management, recruitment, sales development and personal control over key clients handling,


10

participation in industry events. Control and presence at major projects. Control over accounting, payments and debt. Interaction with all departments of the company.

 2010-2012 - LLC “Jtb”, Business Development manager- development of company, attraction of new customers and development of relationship with existing ones. Optimization of internal processes in the company, the introduction of project management systems. Control over the sales department. Presentation of the company at public events. Maintenance and implementation of large projects. Participation in tenders, preparation of documentation and commercial proposals.

2008-2010 - LLC “Coral Travel”, MICE manager – organization of corporate events in Turkey, Egypt, Thailand, Tunisia, Morocco, Vietnam. Preparation of business proposals, contracts, accounting records, control over payments from customers. Assistance in organization of events.

2003-2008 - LLC “City of events”, Event manager- cooperation with private and corporate clients. Development of individual concepts of events, preparation of cost estimates of the project and contract documentation. Meetings with clients and presentation of proposals. Search for contractors, platforms and artists. Monitoring of the implementation of the project. Control over all contractors, coordination among all participants of the event, the presence during on-site activities.

Ruslan Mishin, Corporate, Secretary

The education and considerable experience of Ruslan Mishin as sales manager, executive manager, and general manager at various companies led us to conclusion that he is qualified to serve as our secretary.

2002-2004 – Higher Education Information technologies at Lugansk State University 2004-2008 LLC Voryag Trading company, working as Sales manager.- processing of the incoming flow of customers, attraction of new customers, preparation of commercial offers. Execution of contracts, accounting documents. Coordination with other departments of the company. Participation in trade fairs and exhibitions.

2008-2011 LLC Vestel Ukraine, working as Executive Sales Manager for goods and products. – development of sales department, attraction of new customers and development of relationship with existing ones. Support of key customers, preparation of business proposals, preparation of tender documents. Preparation of legal and accounting documents. Development of a new product line, marketing and entering the market.

2011-to date, LLC Auto shelter Automobile Rental Company, Deputy General Manager. – control over all departments of the company, control over key indicators of the company. Fulfillment of assignments of the General Manager. Implementation of the company's operating activities, resolving of problems, recruitment. Development of the company, attraction of new sales channels, planning of advertising campaigns, planning and implementation of partnership actions to promote services of the company.

Compliance with Section 16(a) of the Securities Exchange Act of 1934

Our common stock is not registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Accordingly, our officers, directors, and principal stockholders are not subject to the beneficial ownership reporting requirements of Section 16(a) of the Exchange Act.

Code of Ethics

We have not yet adopted a code of ethics that applies to our sole officer and director, or persons performing similar functions because we are in the start-up phase and are in the process of establishing our operations. We plan to adopt a code of ethics as and when our company grows to a sufficient size to warrant such adoption.


11

Audit Committee

As we have only a sole director, we have not established an audit committee as at the date of this registration statement, nor do we have plans to establish an audit committee until such time as we have established our full operations, and retained sufficient independent directors as members of our board of directors willing to be appointed to the audit committee and carry out the customary functions of an audit committee.

Director Nominees

We do not have a nominating committee. Our sole director will in the future select individuals to stand for election as members of our board of directors. The company does not have a policy with regards to the consideration of any director candidates recommended by our security holders. Our board has determined that it is in the best position to evaluate our company’s requirements as well as the qualifications of each candidate when it considers a nominee for a position on our board. If security holders wish to recommend candidates directly to our board, they may do so by communicating directly with our sole officer and director at the address specified on the cover of this registration statement.

Audit Committee and Audit Committee Financial Expert

We do not currently have an audit committee or a committee performing similar functions. The board of directors as a whole participates in the review of financial statements and disclosure.

Our board of directors has determined that it does not have a member of its audit committee that qualifies as an “audit committee financial expert” as defined in Item 407(d)(5)(ii) of Regulation S-K, and is “independent” as the term is used in Item 7(d)(3)(iv) of Schedule 14A under the Securities Exchange Act of 1934, as amended.

SIGNIFICANT EMPLOYEES

 

We have no employees other than our President, Sergey Gandin, who currently devotes approximately thirty hours per week to company matters and Ruslan Mishin, our secretary, who currently devotes 20 hours per week to our operations.  As our business expands, Ruslan Mishin intends to devote as much time as the Board of Directors deems necessary to manage the affairs of the company.

 

Item 11. EXECUTIVE COMPENSATION

 

MANAGEMENT COMPENSATION

 

The following tables set forth certain information about compensation paid, earned or accrued for services by our President, and Secretary (collectively, the “Named Executive Officers”) from inception on September 2, 2014 until October 31, 2017:

 

Summary Compensation Table

 

Name and 

Principal

Position

 

Year

 

Salary

($)

 

 

Bonus

($)

 

 

Stock

Awards

($)

 

 

Option

Awards

($)

 

 

Non-Equity

Incentive Plan

Compensation

($)

 

 

Nonqualified

Deferred

Compensation

($)

 

 

All Other

Compensation

($)

 

 

Total

($)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sergey Gandin, President,

Treasurer

 

September 2, 2014 to October 31, 2017

 

 

-0- 

 

 

 

-0- 

 

 

 

-0- 

 

 

 

-0- 

 

 

 

-0- 

 

 

 

-0- 

 

 

 

-0- 

 

 

 

-0- 

 


12

Ruslan Mishin

Secretary

 

September 2, 2014 to October 31, 2017

 

 

-0- 

 

 

 

-0- 

 

 

 

-0- 

 

 

 

-0- 

 

 

 

-0- 

 

 

 

-0- 

 

 

 

-0- 

 

 

 

-0- 

 

 

 

There are no current employment agreements between the company and its officers. The compensation discussed herein addresses all compensation awarded to, earned by, or paid to our named executive officer. There are no other stock option plans, retirement, pension, or profit sharing plans for the benefit of our officers and directors other than as described herein.

 

CHANGE OF CONTROL

 

As of October 31, 2017, we had no pension plans or compensatory plans or other arrangements that provide compensation in the event of a termination of employment or a change in our control.

 

 

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

 

The following table provides certain information regarding the ownership of our common stock, as of October 31, 2017 and as of the date of the filing of this annual report by:

 

 

 

each of our executive officers;

 

 

each director;

 

 

each person known to us to own more than 5% of our outstanding common stock; and

 

 

all of our executive officers and directors and as a group.

 

 

Title of Class

 

Name and Address 

of

Beneficial Owner

 

Amount and Nature of 

Beneficial Ownership

 

Percentage

 

 

 

 

 

 

 

 

 

Common Stock

 

Ruslan Mishin

Vilkina st. 15-5

Vakhrushevo, Ukraine 94560

 

 

 

 

4,000,000 shares of common stock (secretary)

 

 

 

 

 

 

64%

 

 

 

                     

  

 

 

 

 

 

 

 

 

 

 

 

The percent of class is based on 6,240,000 shares of common stock issued and outstanding as of the date of this annual report.

 

 

Item 13. Certain Relationships and Related Transactions

 

During the year ended October 31, 2017, we had not entered into any transactions with our sole officer or director, or persons nominated for these positions, beneficial owners of 5% or more of


13

our common stock, or family members of these persons wherein the amount involved in the transaction or a series of similar transactions exceeded the lesser of $120,000 or 1% of the average of our total assets for the last three fiscal years.

 

Item 14. Principal Accountant Fees and Services 

 

The aggregate fees billed for the most recently completed fiscal year ended October 31, 2017 and for the fiscal year ended October 31, 2016 for professional services rendered by the principal accountants Haynie & Company and Pritchett, Siter & Hardy P.C for the audits of our annual financial statements and review of the financial statements included in our quarterly reports on Form 10-Q and services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for these fiscal periods were as follows:  

 

Year Ended

October 31, 2017
$

October 31, 2016
$

Audit Fees

4,000

4,000

Audit Related Fees

-

-

Tax Fees

-

-

All Other Fees

120

-

Total

4,120

-

Our board of directors pre-approves all services provided by our independent auditors. All of the above services and fees were reviewed and approved by the board of directors either before or after the respective services were rendered.

Our board of directors has considered the nature and amount of fees billed by our independent auditors and believes that the provision of services for activities unrelated to the audit is compatible with maintaining our independent auditors’ independence.

 

 

 

SIGNATURES

 

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


14

 

               ARMA SERVICES, INC.

 

Dated: August 9, 2018

By: /s/ Sergey Gandin

 

 

Sergey Gandin, President and Chief Executive Officer and Chief Financial Officer