UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

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

 

For the quarterly period ended September 30, 2018

OR

 

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

 

For the transition period from ___________ to ___________

 

Commission file number 333-228060

 

ENERGY ALLIANCE TECHNOLOGY CORP.

(Exact name of registrant as specified in its charter)

 

Nevada (State or other jurisdiction of incorporation or organization)

83-2484730 (I.R.S. Employer Identification Number)

 

11 Vista Hermosa Drive

Simi Valley, California 93065

(Address of principal executive offices)

 

(805) 304-2664

(Issuer’s telephone number, including area code)

 

Fortuneswell Corporation

(Former name, former address and former fiscal year, if changed since last report)

 

 

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ☐ No ☒

 

 

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

 

Large accelerated filer ☐		Accelerated filer ☐
Non-accelerated filer ☐		Smaller reporting company  ☒
		Emerging growth company ☐

 

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

 

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

 

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date.

 

Class		Outstanding at December 28, 2018
Common Stock, par value $.001 per share		8,000,000 shares

 

 

ENERGY ALLIANCE TECHNOLOGY CORP.

 

TABLE OF CONTENTS

 

	PAGE
PART I. FINANCIAL INFORMATION	4
Item 1. Financial Statements (unaudited)	4
Balance Sheets	4
Statements of Operations	5
Statements of Cash Flows	6
Notes to Unaudited Interim Financial Statements	7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	9
Item 3. Quantitative and Qualitative Disclosures About Market Risk	11
Item 4. Controls and Procedures	12
PART II. OTHER INFORMATION	13
Item 1. Legal Proceedings	13
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	13
Item 3. Defaults Upon Senior Securities	13
Item 4. Mine Safety Disclosures	13
Item 5. Other Information	13
Item 6. Exhibits	13
SIGNATURES	14

 

 

PART I. FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

Energy Alliance Technology Corp.

fka Fortuneswell Corporation

Condensed Balance Sheets

September 30, 2018

(Expressed in United States dollars) 

 

 

		September 30, 2018				December 31, 2017
		(unaudited)
ASSETS
Current Assets
Cash		$	-			$	-
Total Current Assets			-				-
TOTAL ASSETS		$	-			$	-
LIABILITIES & STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts payable		$	9,831			$	10,913
Due to related party			18,701				2,156
TOTAL LIABILITIES			28,532				13,069
STOCKHOLDERS' DEFICIT
Common Stock, $0.001 Par Value
Authorized Common Stock
75,000,000 shares at $0.001
Issued and Outstanding
8,000,000 Common Shares at September 30, 2018 and December 31, 2017			8,000				8,000
Additional Paid In Capital			-				-
Accumulated Deficit			(36,532	)			(21,069	)
TOTAL STOCKHOLDERS' DEFICIT			(28,532	)			(13,069	)
TOTAL LIABILITIES & STOCKHOLDERS' DEFICIT		$	-			$	-

 

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

 

 

Energy Alliance Technology Corp.

fka Fortuneswell Corporation

Condensed Statements of Operations

September 30, 2018

(Expressed in United States dollars)

(unaudited) 

 

 

		Three months ended September 30, 2018				Three months ended September 30, 2017				Nine months ended September 30, 2018				Nine months ended September 30, 2017
EXPENSES
General and administrative		$	1,176			$	1,186			$	3,193			$	1,186
Professional Fees			8,650				1,050				12,270				7,250
Total Expenses			9,826				2,236				15,463				8,436
Net Loss for the period		$	(9,826	)		$	(2,236	)		$	(15,463	)		$	(8,436	)
Basic and diluted loss per share		$	(0.00	)		$	(0.00	)		$	(0.00	)		$	(0.00	)
Weighted average number of shares outstanding			8,000,000				8,000,000				8,000,000				8,000,000

 

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

 

 

Energy Alliance Technology Corp.

fka Fortuneswell Corporation

Condensed Statements of Cash Flows

September 30, 2018

(Expressed in United States dollars)

(unaudited)

 

 

		Nine months ended September 30, 2018				Nine months ended September 30, 2017
OPERATING ACTIVITIES
Net loss for the period		$	(15,463	)		$	(8,436	)
Adjustment to reconcile net loss
to net cash used in operations:
Accounts payable			(1,081	)			8,336
Advance from related party			16,544				-
Net cash used in Operating Activities			-				(100	)
Net decrease in cash for period			-				(100	)
Cash at beginning of period			-				100
Cash at end of period		$	-			$	-
Supplemental Cash Flow Information:
Expenses paid by related party on Company's behalf		$	-			$	2,056
Cash paid for interest		$	-			$	-
Cash paid for taxes		$	-			$	-

 

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

 

 

ENERGY ALLIANCE TECHNOLOGY CORPORATION
FKA FORTUNESWELL CORPORATION

NOTES TO CONDENSED FINANCIAL STATEMENTS

September 30, 2018

 

 

NOTE 1 – NATURE OF OPERATIONS

 

Fortuneswell Corporation (“the Company”) was incorporated in the State of Nevada on June 17, 2014 and has elected a December 31 fiscal year end.  The principal business objective of the Company is to sell and promote a portfolio of bulk fuel supplements for Energy Alliance Technology Company (“EATC”). The portfolio of bulk fuel supplements is based on the science of Bio-Thermogenics. 

 

In September 2018, the Company changed its name to Energy Alliance Technology Corp.

 

The unaudited interim financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles (“US GAAP”) have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading. It is suggested that these financial statements be read in conjunction with the audited financial statements and the notes thereto included in the Company’s Form 10-K as of December 31, 2017.

 

In the opinion of management, all adjustments necessary to fairly present the Company’s financial position as of September 30, 2018, and results of its operations and cash flows for the nine months then ended have been made.

 

The accompanying financial statements have been prepared in conformity with US GAAP, which contemplate continuation of the Company as a going concern. The Company currently has limited liquidity and has not completed its efforts to establish a stabilized source of revenues sufficient to cover operating costs over an extended period of time. Management has evaluated these factors and as determined that they raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued.

 

Recently Issued Accounting Pronouncements

 

On January 1, 2018, the Company adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASU 2014-09"), which amended the existing accounting standards for revenue recognition. ASU 2014-09 establishes principles for recognizing revenue upon the transfer of promised goods or services to customers, in an amount that reflects the expected consideration received in exchange for those goods or services. The Company adopted ASU 2014-09 in the first quarter of 2018 and applied the modified retrospective approach. There was no impact to the Company’s recognition of revenue as a consequence of adopting this new standard.

 

Other than as noted above the Company has not implemented any pronouncements that had material impact on the financial statements and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

 

 

NOTE 2 – RELATED PARTY TRANSACTIONS

 

A significant shareholder has paid expenses on behalf of the Company. At September 30, 2018 and December 31, 2017, the amounts owed this shareholder are $18,701 and $2,156, respectively. The loans are unsecured, payable on demand, and carry no interest.

On June 14, 2017, the Company entered into a 3-year agreement with Energy Alliance Technology Company (EATC) to sell and promote EATC’s patented fuel supplements in the United States, Canada, and Mexico. After the initial term, the agreement will stay in effect until such either party terminates it by providing 90 days’ notice. The Company’s duties, per the agreement, include promotion, sales, preparation of a yearly business plan, creation of customer profiles including credit applications, receipt and fulfillment of product orders, and collection of funds owed for such orders in exchange for a commission 15% of the net sales price of the products.

 

 

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

 

The following discussion and analysis should be read in conjunction with our financial statements, including the notes thereto, appearing in this report and are hereby referenced. 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. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this report. You should not place undue certainty on these forward-looking statements, which apply only as of the date of this report. We believe it is important to communicate our expectations. However, our management disclaims any obligation to update any forward-looking statements whether as a result of new information, future events or otherwise.

 

These forward-looking statements are based on our management’s current expectations and beliefs and involve numerous risks and uncertainties that could cause actual results to differ materially from expectations. You should not rely upon these forward-looking statements as predictions of future events because we cannot assure you that the events or circumstances reflected in these statements will be achieved or will occur. You can identify a forward-looking statement by the use of the forward-terminology, including words such as “may”, “will”, “believes”, “anticipates”, “estimates”, “expects”, “continues”, “should”, “seeks”, “intends”, “plans”, and/or words of similar import, or the negative of these words and phrases or other variations of these words and phrases or comparable terminology. These forward-looking statements relate to, among other things: our sales, results of operations and anticipated cash flows; capital expenditures; depreciation and amortization expenses; sales, general and administrative expenses; our ability to maintain and develop relationship with our existing and potential future customers; and, our ability to maintain a level of investment that is required to remain competitive. Many factors could cause our actual results to differ materially from those projected in these forward-looking statements, including, but not limited to: variability of our revenues and financial performance; risks associated with technological changes; the acceptance of our products in the marketplace by existing and potential customers; disruption of operations or increases in expenses due to our involvement with litigation or caused by civil or political unrest or other catastrophic events; general economic conditions, government mandates; and, the continued employment of our key personnel and other risks associated with competition.

 

The principal business objective of the Company is to sell and promote a portfolio of bulk fuel supplements for Energy Alliance Technology Company (herein after referred to as “EATC”) to the multifaceted fuels industry. The portfolio of bulk fuel supplements is based on the science of Bio-Thermogenics. The formulary of the portfolio of products alter the burn pattern and combustion characteristics of all fossil fuels. EATC’s products increase fuel efficiency, increases engine and equipment life, and can reduce emissions more than 80% thereby introducing the potential for immediate and long term positive environmental impacts. EATC’s product line of fuel supplements are 100% natural, non-petroleum based, and non-agricultural impacting.

 

Plan of Operation

 

The business of the Company is to sell and promote a portfolio of bulk fuel supplements for Energy Alliance Technology Company (herein after referred to as “EATC”). EATC has signed a three year Sales Representative Agreement for the Territory defined as North America. The North America Territory includes all of the 50 United States, Canada and Mexico. The Company plans to market the portfolio of emissions reducing fuel technologies and products for all classifications of fossil fuel. After 12 years of extensive research and field testing, EATC has developed a family of patented, proprietary fossil fuel supplements that are ready to be marketed and sold under the trade name Bio-T. EATC has developed patented “neutral-catalytic” reagent that perform traditional catalytic functions, but without expensive or toxic heavy metal catalysts. Coupled with other biological system reagents, dynamic feedback control of the combustion process is achieved resulting in higher efficiency, more complete combustion, higher power output, and lower emissions.

 

 

Results of Operations for the Three and Nine Months Ended September 30, 2018 Compared to the Three and Nine Months Ended September 30, 2017

 

Revenues. The Company’s revenues were $0 for the three and nine month periods ended September 30, 2018 and June 30, 2017.

 

Selling, General and Administrative Expenses. Selling, general and administrative expenses for the three months ended September 30, 2018 were $1,176 as compared to $1,186 for the three months ended September 30, 2017, and $3,193 for the nine months ended September 30, 2018 as compared to $1,186 for the nine months ended September 30, 2017. General and administrative expenses increased due to the Company’s filings with the Securities and Exchange Commission and fees related to the Company’s new business plan.

 

Professional Fees. Professional fees for the three months ended September 30, 2018 were $8,650 as compared to $1,050 for the three months ended September 30, 2017, and $12,270 for the nine months ended September 30, 2018 as compared to $7,250 for the nine months ended September 30, 2017. Professional fees increased as a result of the Company’s filings with the Securities and Exchange Commission ad fees related to the Company’s new business plan.

 

Liquidity and Capital Resources

 

We measure our liquidity in a number of ways, including the following:

 

		As of September 30, 2018				As of December 31, 2017
Cash		$	-			$	-
Related Party Loans			18,701				2,156
Working Capital			(28,532	)			(13,069	)
Total Current Liabilities			28,532				13,069

 

 

The Company has not yet established an ongoing source of revenue 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. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

 

Impact of Inflation

 

We believe that the rate of inflation has had negligible effect on our operations. We believe we can absorb most, if not all, increased non-controlled operating costs by increasing sales prices, whenever deemed necessary and by operating our Company in the most efficient manner possible.

 

Net Cash Used in Operating Activities

 

We experienced net cash used in operating activities for the nine-month period ended September 30, 2018 of $16,544 due to cash used to fund a net loss of $15,463. We experienced net cash used in operating activities of $100 for the nine-month period ended September 30, 2017 due to cash used to fund a net loss of $8,436 and offset by an increase in accounts payable. 

 

 

Net Cash Used in Investing Activities

 

The net cash used in investing activities during the nine months ended September 30, 2018 and 2017 was $0.

 

Net Cash Provided by Financing Activities

 

Net cash provided by financing activities during the nine-month period ended September 30, 2018 was $16,544 due to related party making payments on the Company’s behalf, and $0 during the nine-month period ended September 30, 2017.

 

Availability of Additional Funds

 

Based on our working capital deficit as of September 30, 2018 and zero revenues, we expect to need additional equity and/or debt financing to continue our operations during the next 12 months. We expect that our current cash on hand will not fund our operations through December 2018.

 

Critical Accounting Policies and Estimates

 

Our unaudited interim financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis. The preparation of unaudited interim financial statements in conformity with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the unaudited interim financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from these estimates. Our significant estimates and assumptions include the fair value of our stock and the valuation allowance relating to the Company’s deferred tax assets.

 

Material Commitments

 

There were no material commitments during the nine months ended September 30, 2018.

 

Recent Accounting Pronouncements

 

On January 1, 2018, the Company adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASU 2014-09"), which amended the existing accounting standards for revenue recognition. ASU 2014-09 establishes principles for recognizing revenue upon the transfer of promised goods or services to customers, in an amount that reflects the expected consideration received in exchange for those goods or services. The Company adopted ASU 2014-09 in the first quarter of 2018 and applied the modified retrospective approach. There was no impact to the Company’s recognition of revenue as a consequence of adopting this new standard.

 

The Company has reviewed all recent accounting pronouncements and, other than shown above, has determined that it is unlikely that any will have a material impact on its financial position or results of operations.

 

Off Balance Sheet Arrangements

 

As of September 30, 2018, we had no off balance sheet arrangements.

 

Item 3. Quantitative and Qualitative Disclosures about Market Risk

 

Disclosure under this section is not required for a smaller reporting company.

 

 

Item 4. Controls and Procedures

 

We maintain disclosure controls and procedures that are designed to ensure that the information required to be disclosed in the reports that we file under the Securities Exchange Act of 1934 (the "Exchange Act") is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our President and Treasurer, as appropriate, to allow timely decisions regarding required disclosures. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can only provide reasonable assurance of achieving the desired control objectives, and in reaching a reasonable level of assurance, management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

 

As required by SEC Rule 13a-15(b), we carried out an evaluation, under the supervision and with the participation of our management, including our President and Treasurer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of our third fiscal quarter covered by this report. Based on the foregoing, our President and Treasurer concluded that our disclosure controls and procedures were not effective at the reasonable assurance level at September 30, 2018. It should be noted that the design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.

 

Changes in Internal Control Over Financial Reporting

 

There were no changes in our internal controls over financial reporting that occurred during the quarter ended September 30, 2018 which were identified in connection with management’s evaluation required by paragraph (d) of Rules 13a-15 and 15d-15 under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

 

/s/ Andrew Soulakis

Andrew Soulakis

CEO, President, and CFO

 

 

PART II OTHER INFORMATION

 

Item 1. Legal Proceedings

 

None.

 

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

 

None.

 

Item 3. Defaults Upon Senior Securities

 

None.

 

Item 4. Mine Safety Disclosures

 

Not applicable.

 

Item 5. Other Information

 

None.

 

Item 6. Exhibits

 

(a) Exhibits

 

Exhibit No.		Description
31.1		302 Certification – Andrew Soulakis
32.1		906 Certification – Andrew Soulakis

 

(b) Reports of Form 8-K

 

ITEM 5.02

DEPARTURES OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF PRINCIPAL OFFICER

 

Effective September 17, 2018, J. Daniel Thatcher resigned as Chief Executive Officer and as a Director. Effective September 17, 2018, Andrew Soulakis was appointed as Chief Executive Officer and a Director. Preston Tyree was appointed to the board of directors and Harry Hibler was appointed to the board of directors. J. Daniel Thatcher was appointed as the Chief Operating Officer and remains the Secretary and Treasurer. All officers and directors will serve in these positions until the next regularly scheduled elections.

 

ITEM 5.03

AMENDMENT TO ARTICLES OF INCORPORATION OR BYLAWS; CHANGE IN  FISCAL YEAR

 

On September 17, 2018, our board approved an amendment to our Articles of Incorporation to change our name to "Energy Alliance Technology Corp.", effective November 16, 2018.  We have filed a Certificate of Amendment to our Articles of Incorporation with the Nevada Secretary of State reflecting the above action.

 

 

SIGNATURES

 

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

 

ENERGY ALLIANCE TECHNOLOGY CORP.

 

 

 

DATE: December 28, 2018

 

 

By: /s/ Andrew Soulakis

Andrew Soulakis

Chairman, President, Chief Executive Officer

(Principal Accounting Officer

and Authorized Officer)

 

 

By: /s/ J. Daniel Thatcher

J. Daniel Thatcher

Chief Operating Officer, Secretary and Treasurer

 

 

Energy Alliance Technology Corp.

 

Index to Exhibits

 

 

Exhibit No.		Description
31.1		302 Certification – Andrew Soulakis
32.1		906 Certification – Andrew Soulakis

 

 

15