UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
☒
Annual Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the fiscal year ended April 30, 2019
☐
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: 333-219700
|
|
Treasure & Shipwreck Recovery, Inc.
Formerly Beliss Corp.
|
|
|
|
(Exact name of
registrant as specified in its charter)
|
|
|
|
|
|
|
Nevada
|
7310
|
37-1844836
|
|
(State
or Other Jurisdiction of Incorporation or Organization)
|
(Primary
Standard
Industrial Classification Code Number)
|
(IRS
Employer Identification No.)
|
|
|
|
|
|
|
13046 Racetrack Road, #234
Tampa, Florida 33626
|
|
|
|
(Address of
principal executive offices) (Zip code)
|
|
|
|
|
|
|
Registrant’s
telephone number: (813) 504-7831
|
||
|
None
|
|
Securities
registered under Section 12(b) of the Exchange Act
|
|
|
|
None
|
|
Securities
registered under Section 12(g) of the Exchange Act
|
1
Indicate
by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act. Yes
☐
No
☒
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
☒
Indicate
by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes
☒
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.
☐
Indicate by check
mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of “large accelerated
filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. (Check
one):
|
Large
accelerated filer
|
☐
|
|
Accelerated
filer
|
☐
|
|
|
|
|
|
|
|
Non-accelerated
filer
|
☐
|
|
Smaller
reporting company
|
☑
|
|
|
|
|
||
|
(Do not
check if a smaller reporting company)
|
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
☒
State
the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date:
5,035,000 common shares issued and outstanding as of August 10,
2019.
2
TABLE OF CONTENTS
|
|
|
Page
|
|
|
|
|
|
PART
I
|
|
|
|
|
|
|
|
Item
1.
|
Description of
Business.
|
4
|
|
Item
1A.
|
Risk
Factors.
|
6
|
|
Item
1B.
|
Unresolved Staff
Comments.
|
6
|
|
Item
2
|
Properties.
|
6
|
|
Item
3.
|
Legal
proceedings.
|
6
|
|
Item
4.
|
Mine
Safety Disclosures.
|
6
|
|
|
|
|
|
PART
II
|
|
|
|
|
|
|
|
Item
5.
|
Market
for Common Equity and Related Stockholder Matters.
|
7
|
|
Item
6.
|
Selected Financial
Data.
|
8
|
|
Item
7.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations.
|
8
|
|
Item
7A.
|
Quantitative and
Qualitative Disclosures About Market Risk.
|
9
|
|
Item
8.
|
Financial
Statements and Supplementary Data.
|
9
|
|
Item
9.
|
Changes
In and Disagreements With Accountants on Accounting and Financial
Disclosure.
|
10
|
|
Item 9A
(T).
|
Controls and
Procedures.
|
10
|
|
Item
9B.
|
Other
Information.
|
10
|
|
|
|
|
|
PART
III
|
|
|
|
|
|
|
|
Item
10
|
Directors,
Executive Officers, Promoters and Control Persons of the
Company.
|
11
|
|
Item
11.
|
Executive
Compensation.
|
12
|
|
Item
12.
|
Security Ownership
of Certain Beneficial Owners and Management and Related Stockholder
Matters.
|
13
|
|
Item
13.
|
Certain
Relationships and Related Transactions, and Director
Independence.
|
13
|
|
Item
14.
|
Principal
Accounting Fees and Services.
|
13
|
|
|
|
|
|
PART
IV
|
|
|
|
|
|
|
|
Item
15.
|
Exhibits
|
14
|
|
|
|
|
|
Signatures
|
15
|
|
3
PART I
Item 1. Description of Business
Forward-looking statements
Statements
made in this Form 10-K that are not historical or current facts are
"forward-looking statements" made pursuant to the safe harbor
provisions of Section 27A of the Securities Act of 1933 (the "Act")
and Section 21E of the Securities Exchange Act of 1934. 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. Weintend 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.
Financial
information contained in this report and in our financial
statements is stated in United States dollars and are prepared in
accordance with United States generally accepted accounting
principles.
Description of the Business
We were
incorporated in the State of Nevada on October 24th, 2016. The
Company was incorporated as Beliss Corp. however on June 26, 2019
the Company changed its name to Treasure & Shipwreck, Inc. by
which we will refer as “TSR,” Our original general
business plan was originally in the search engine optimization
(“SEO”), Internet markeing and web development
business. In January 2019, the Company entered into a series of
transactions to gain control of a company named Southern Amusement
Co. Inc. (“Southern Amusement”) a West Virginia based
business. With that acquisition TSR was to acquire Southern
Amusement as a wholly owned subsidiary company.
Southern
Amusement is an amusement machine provider located in Logan, West
Virginia. The company had some 525 West Virginia Limited Video
Lottery machines licensed under West Virginia law. The agreements
called for delivery of all shares of Southern Amusement owned by
John (J.D.) Brammer to be delivered in the transaction and be held
by TSR A private agreement was entered by Ajay Rajendron for
delivery of 2,700,000 shares of Beliss stock which he held of his
3,000,000 shares to JD. Brammer as part of the transaction became
the CEO and sole director while Rajanedron resigned. Subsequently
as set forth in the subsequent events, Brammer resigned and Craig
A. Huffman was appointed when the Southern Amusement transaction
did not occur.
Importantly,
under West Virginia law and regulation, control of any lottery
related company, including ownership must be majority owned by a
licensed and certified person by the Lottery Commission who must be
a West Virginia resident. So in the transaction the control and
majority control of Beliss as the owner of Southern, would have to
be a West Virgina resident. Thus, the then Chief Operating Officer
of Southern, John (J.D.) Brammer was appointed as CEO and director
of Beliss, since he was licensed in Southern and was a West
Virginia resident. After numerous legal consultations itwas decided
that due to the West Virginia laws, J.D. Brammer would have to be
the majority holder of Beliss. Thus after he was appointed as CEO
and director, and Ajay Rajendran resigned as CEO and director,
additional shares in the amount of 5,500,000 shares we issued to
J.D. Brammer under restrictions, that included such shares would be
surrendered if the transaction was not approved by the West
Virginia Lotter Commission or if the shares of Southern could not
be completely delivered. In such instance allinterest in such
shares by J.D. Brammer would be surrendered, and such shares would
go to an escrow agent for control until a future cancellation or
other action occurred. One additional agreement was with Vicki
Ferell, who was part owner of Sothern Amusement, so the agreement
with Ferell was for her to deliver her shares of Southern Amusement
to Beliss, in exchange for 571,429 shares of common stock. Such
shares were issued to Vicki Ferrell.
By
April 2019, the shares of Southern Amusement were not delivered to
Beliss after requests were made by counsel. It was then discovered
that there was an undisclosed obligation on such shares which was
not communicated to Beliss during the transaction. In exchange for
a mutual release which Beliss believed such action was merely a
mistake of fact, all such shares were abandoned by any interest by
J.D. Brammer (the issued 5,500,000 shares), including the 2,700,000
private shares he had received from Ajay Rajendron which were also
released to the control of the escrow agent and counsel for the
Company. On April 28, 2019 Brammer resigned and the transaction was
cancelled. At that point Craig A. Huffman
(“Huffman”),counsel for the Company, became acting
Chief Executive Officer (“CEO”) and sole Director of
the Company. At the same time as the settlement agreement, Vicki
Ferrell disclaimed any interest in the shares.
While
in the process of unwinding the transaction with the shareholders
of Southern Amusement, the Company began to review various business
opportunities. Subsequent to April 30, 2019 the Company elected to
focus its business plan on entering the treasure recovery business
by attempting to work with, partner with or hire experts in that
industry (See Note 9 - Subsequent Events) under the experience of
the new acting Chief Executive Officer and sole Director Craig A.
Huffman (“Huffman”). Huffman possesses over 10 years of
experience working with treasure companies, including their
budgeting, due diligence, research issues, and gaining rights to
suspected or known wreck sites using United States Admiralty law in
United States Courts. As such, Huffman knew many of the experts and
opportunities in the treasure industry and had a business plan for
such operations to be implemented in the Company. In that realm, he
pursued which is explained in Note 9, subsequent
events.
4
The Company
Business Plan
Although
the Company has maintained its SEO, Internet marketing and web
development business in order to satisfy any customers who made
deposits for services related to this business, it is not currently
focused on generating any new business in this sector.
The
Company is focusing its business plan on the treasure recovery
business. We will be actively engaged in building out capital for
first operations, which we expect shortly off Cape Romain South
Carolina. We intend to support the recovery of treasure, which is
an expansive term, by contracting outside parties to work on sites
under the supervision of Dr. Spence. We may or may not choose to
own vessels, versus using the contracted third parties vessels. We
expect that we will have recovered items sold in different manners,
as well as keeping some items as assets. There are also
opportunities for both television and gaming development based on
treasure salvage, pirates, etc. being pursued.
In
order to limit costs and expenses at the Company, we will primarily
use subcontractors that are equipped with vessels, and other
necessary search and recovery items, instead of buying such
necessary equipment. We will then either make a split with them of
the artifacts with such contractors, or pay for their services. In
this way the Company will have a lower overhead and be able to
select entities and persons with the right equipment and
experience. The Company does have plans to have its own search and
recovery vessels as well as necessary equipment, when feasible and
in the best interest of certain projects.
The
term “treasure” as used here includes many things and
is not just gold, silver, coins or jewels. “Wreckage,”
“Artifacts,” and “Treasure” shall be used
interchangeably to include, but not necessarily be limited to, the
following types of items, regardless of their value or condition:
passenger’s and crew’s possessions/effects,
ship’s apparel, tackle, anchors, appurtenances, furnishings,
fittings, portholes, bells, horns, hull, frames, engines,
machinery, ballast, coal, ore, minerals, bottles, earthenware,
china, hollowware, flatware, coins, medallions, bullion and cargo
of any type whatsoever, as well as any other items that appear to
have been manufactured, made, processed, altered, gathered, used,
or lost by man. So it is an expansive list of what can encompass
“treasure.”
Revenue Sources
TSR has
numerous revenue routes. One is to keep many artifacts and treasure
as assets, to be shown in a planned TSR location and museum. Second
is sale of treasure and artifacts through certain auction houses
and arranged product sales for coins, etc. Third is private
collector sales. Fourth is road show and museum show fees. Finally,
holding rights to television and future gaming development
including an app development. The Company intends to keep a portion
or substantial amounts of recovered items as assets of the Company
in order to increase the value of the Company overall. The Company
does not anticipate generating any revenues for the foreseeable
future from the treasure recovery business.
Industry
The
treasure search and recovery business is very specialized and
requires special research and recovery abilities. The industry and
opportunity is huge. For three hundred years, Spanish and others,
pillaged the New World of treasure, shipping riches in thousands of
ships over time back to Europe for the enjoyment and funding of
those who never earned it. Along the way, an estimated one out of
ten never made it home. Estimates of lost treasure from these ships
in the Caribbean and the coast of Florida alone is conservatively
placed at $ 60 Billion The number of wrecks that have been found is
infinitesimal compared to those lost.
Current Site- Cape Romain, South Carolina
Cape
Romain shipwrecks site is a five mile radius site under U.S.
Admiralty Order off the coast of South Carolina, and outside State
waters. Therefore, all that is found in the area is the property of
TSR/Beliss and our partner, Sea Research Society. This is a very
large cluster of shipwrecks. Most have yet to be identified. They
seem to include Spanish, French, English, German, and American
merchant ships, slavers, and even privateers, which were lost over
several hundred years. Vessels were found around this shoal
sometimes with less than six feet of water over it at low tide,
even though it is located mere miles from the nearest shore. In
fact, it was the un-expected shallowness of the shoal that
repeatedly caused ships to be lost around it. One of the ships, a
steamer wrecked in the late 1800s, had been heavily involved in the
international smuggling of money and arms for a series of
revolutions on the island of Hispaniola. All of this protected by
United States Government Court Order making E. Lee Spence as the
owner of all wrecks in the area. Under our work and agreement with
Dr. Spence we are his partner on such site for an equal division of
all artifacts found.
Patents, Trademarks and Licenses
We
currently do not have any patents or trademarks; and we are not
party to any license, franchise, concession, or royalty agreements
or any labor contracts.
5
Competition
The
treasure recovery business is not extremely competitive in
traditional business sense. With over three million estimated
shipwrecks around the world, and thousands of valuable wrecks,
finding such wrecks outside the context of a competitor is not
difficult. There are always other wreck sites to go after, explore
and potentially recover artifacts and treasure. And when such wreck
site is found, then an admiralty claim is filed in U.S. Federal
Court to gain ownership of the wreck and site. There are other
treasure companies, but their only critical effect may be attempts
to gain funders from the same pool of persons and
entities.
Government Regulation
We are
not currently subject to direct federal, state or local regulation
other than regulations applicable to businesses generally or
directly applicable to electronic commerce. However, when we enter
into recovery of shipwreck salvage, when inside statewaters, we may
be subject to some regulations which require certain permitting.
The same would apply for waters in foreign countries if we choose
to do projects there. Our business plan is to stay out of state and
other nations waters so that we are not subject to such wreck
salvager permitting. Otherwise we may, when we have ships be
subject to some regulations regarding ship operations.
Research and Development Activities and Costs
We have
not incurred any expenses and have spent no time on specialized
research and development activities and have no plans to undertake
any research or development in the future. Any research done by the
Company will be historical in nature based on shipwreck records in
libraries and collections, and are not normal research and
development costs incurred by the traditional product or technology
company.
Compliance with Environmental Laws
There
are no operable environmental laws for the areas of operations
planned which are outside the three limit of state waters. If we
were to operate within the three mile limit in state waters
anywhere in the United States, then there could be environmental
issues that could arise with certain state agencies.
Employees
Other
than our sole officer and director, we have no full-time or
part-time employees of our business or operations who are employed
at will by the TSR. Mr. Huffman currently dedicates as much time as
needed to our business affairs. We plan to hire experienced
employees in the future when we have sufficient revenues. Our CEO
and director’s current training allows him to provide the
services we list in this report. Dr. Spence as Chief Operating
Officer will be working as an independent consultant in such
capacity as needed for the Company’s efforts.
Description of Property
Our
offices are currently located at 1501 Lake Ave. S.E. Largo,
Florida, which is the location of an office held by Craig A.
Huffman, our Acting CEO. Mr. Huffman does not charge rent for such
office use and there is no lease. The mailing address for the
Company is 13046 Racetrack Road, #234, Tampa, Florida 33626.
Management believes that new office space will be found nearer the
center of operations in South Carolina or Florida.
Item 1A. Risk Factors
Not
applicable to smaller reporting companies.
Item 1B. Unresolved Staff Comments
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
The
Company is not involved in any pending legal proceeding nor is it
aware of any pending or threatened litigation against
us.
Item 4. Mine Safety Disclosures
Not
applicable to smaller reporting companies.
6
PART II
Market Information
Our
common stock is presently quoted on the Pink Sheets under the
symbol “BLIS”, as reflected below, though the current
trading volume is small. No assurance can be given that any market
for our common stock will continue in the future or be maintained.
If an “established trading market” ever develops in the
future, the sale of “restricted securities” (common
stock) pursuant to Rule 144 of the Securities and Exchange
Commission by members of management, consultants, promissory note
holders or others may have a substantial adverse impact on any such
market and the sale of restricted securities by management or
others may significantly depress the market price of the
Company’s shares. There is currently a limited trading market
for our securities on the Pink Sheets. We cannot assure when and if
an active-trading market in our shares will be established, or
whether any such market will be sustained or sufficiently liquid to
enable holders of shares of our common stock to liquidate their
investment in our company. If an active public market should
develop in the future, the sale of unregistered and restricted
securities by current shareholders may have potentially have a
substantial negative impact on any such market. The Company’s
share price is quoted on the Pink Sheets. Accordingly, an
investment in our securities should only be considered by those
investors who do not require liquidity and can afford to suffer a
total loss of their investment. An investor should consider
consulting with professional advisers before making such an
investment. Furthermore, the price of our common stock may be
subject to a very high degree of volatility, which makes owning
shares of our common stock highly risky. Our stock price fluctuated
between $3.65 and $5.00 for the year ended April 30, 2019, and
$5.00 for the year ended April 30, 2018. The price of our shares
may fluctuate significantly despite the absence of any apparent
reason. In addition, our stock is thinly traded, leading to even
greater volatility. You should expect this volatility to continue
into the foreseeable future.
Number of Holders
As of
April 30, 2019, the 5,035,000 issued and outstanding shares of
common stock were held by a total of 44 shareholder of
record.
Dividends
No cash
dividends were paid on our shares of common stock during the fiscal
year ended April 30, 2019 and 2018.
Recent Sales of Unregistered Securities
The
Company has 75,000,000, $0.001 par value shares of common stock
authorized.
In
April 2017, the Company issued 3,000,000 shares of common stock to
a director for cash proceeds of $3,000 at $0.001 per
share.
In
December 2017 the Company issued 750,000 shares for cash proceeds
of $15,000 at $0.02 per share.
In
January 2018 the Company issued 1,135,000 shares for cash proceeds
of $22,700 at $0.02 per share.
In
February 2018 the Company issued 150,000 shares
for cash proceeds of $3,000 at
$0.02 per share.
There
were 5,035.000 shares of common stock issued and outstanding as of
April 30, 2019.
Purchase of our Equity Securities by Officers and
Directors
During
the Year ended April 30, 2018 the Company offered and sold
3,000,000 restricted shares of common stock to our president and
director, Ajay Rajendran, for a purchase price of $0.001 per share,
for aggregate offering proceeds of $3,000, pursuant to Section 4(2)
of the Securities Act of 1933 as he is a sophisticated investor and
is in possession of all material information relating to us.
Further, no commissions were paid to anyone in connection with the
sale of these shares and general solicitation was not made to
anyone. Subsequently there has been no other sales of securities to
officers and directors. Mr. Rajendran is no longer an officer of
director of the Company.
Other Stockholder Matters
In
February 2019 the Company issued 5,500,000 restricted control
shares to J.D. Brammer under the acquisition agreement in order for
Mr. Brammer to meet the qualification of Southern Amusement being
acquired into the Companywhere the State of West Virginia required
control of the company since it was involved in the lottery
business, to be held by a registered and cleared individual which
Mr. Brammer is and has been. So the additional shares were issued
under certain restrictions to Mr. Brammer for purposes of control
under West Virginia law. In the eventthe transaction could not
occur or licensing issued occurred then Mr. Brammer surrendered
control of such shares to the Escrow Agent. Effective April 28,
2019, such transaction was cancelled and such shares changed
control to Mr. Craig A. Huffman, the Escrow Agent and Counsel for
the Company for later transaction, via agreement. The shares
continued under Mr. Brammers name on book form with the transfer
agent, but all rights to such shares were surrendered by Mr.
Brammer. In order to purchase the control of Southern Amusement, an
additional 571,429 shares of restricted common stock were issued to
Vicki Ferrell
who was part owner of Southern for the Company to
receive her shares. At the cancellation of the transaction, those
shares were also under the control of Craig A. Huffman for
cancellation as required in the immediate future upon direction of
the board of directors.
7
Item 6. Selected Financial Data
Not
applicable to smaller reporting companies
.
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 for the year ended April 30, 2019 and April 30,
2018:
Revenue and cost of goods sold
For the year ended April 30, 2019 and April 30, 2018, the Company
generated total revenue of $14,150 and $15,200 from website
development and SEO services The cost of goods sold for the year
ended April 30, 2019 and April 30, 2018 was $0 and
$11
.
Operating expenses
Total
operating expenses for the year ended April 30, 2019 and April 30,
2018 were $62,732 and $54,645. The operating expenses for the year
ended April 30, 2019 included bank service charges of $490;
computer and internet expenses of $14,642; depreciation expenseof
$3,566; professional fees of $13,735; accounting and audit fees of
$8,523; legal fees of $2,000; rent expense of $1,710; and
miscellaneous expense of $18,066. The operating expenses for the
year ended April 30, 2018 included advertising expense of $9,050;
bank charges of $1,782; computer and internet expenses of $2,200;
depreciation expense of $2,485; audit fees of $19,898; legal fees
of $8,000; rent expense of $2,280; repairs and maintenance of
$5,950; miscellaneous of $3,000.
The net loss for the year ended April 30, 2019 and April 30, 2018
was $48,582 and $39,456 accordingly.
Liquidity and Capital Resources and Cash Requirements
At year
ended April 30, 2019, the Company had cash of $0 ($7,397 as of
April 30, 2018). Furthermore, the Company had a working capital
deficit of $45,152 (deficit of $17,856 as of April 30, 2018). The
increase in working capital deficit is attributed to related party
loans.
During
the year ended April 30, 2019, the Company used $31,247 of cash in
operating activities due to its net loss and decrease in prepaid
expenses; decrease in accounts payable; and increase in customer
deposits.
During
the year ended April 30, 2019 the Company used $0 of cash in
investing activities.
During
the year ended April 30, 2019, the Company generated $23,990 of
cash in financing activities.
We
cannot guarantee that we will manage to sell all the shares
required. We will attempt to raise the necessary funds to proceed
with all phases of our plan of operation.
As of
the date of this report, the current funds available to the Company
will not be sufficient to continue maintaining a reporting status.
The Company’s sole officer and director, Craig A. Huffman,
has a master promissory note with TSR in order to fund matters
necessary for the running of the Company until the new business
plan for treasure recovery is entered into and
ongoing.
Our
auditors have issued a “going concern” opinion, meaning
that there is substantial doubt we can continue as an on-going
business for the next twelve months unless we obtain additional
capital. Our only sources for cash at this time are investments by
others in this offering, selling our paper dung products and loans
from our director. We must raise cash to implement our plan and
stay in business.
Management
believes that current trends toward lower capital investment in
start-up companies pose the most significant challenge to the
Company’s success over the next year and in future years.
Additionally, the Company will have to meet all the financial
disclosure and reporting requirements associated with being a
publicly reporting company. The Company’s management will
have to spend additional time on policies and procedures to make
sure it is compliant with various regulatory requirements,
especially that of Section 404 of the Sarbanes-Oxley Act of 2002.
This additional corporate governance time required of management
could limit the amount of time management has to implement is
business plan and impede the speed of its operations.
8
Limited operating history; need for additional capital
There
is no historical financial information about us upon which to base
an evaluation of our performance. We are in a start-up stage of
operations and have generated limited revenues since inception. We
cannot guarantee that we will be successful in our business
operations. Our business is subject to risks inherent in the
establishment of a new business enterprise, including limited
capital resources and possible cost overruns due to price and cost
increases in services and products.
Off-Balance Sheet Arrangements
The
Company does not have any off-balance sheet arrangements that have
or are reasonably likely to have a current or future effect on the
Company's financial condition, changes in financial condition,
revenues or expenses, results of operations, liquidity, capital
expenditures or capital resources.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
Not
applicable to smaller reporting companies.
Item 8. Financial Statements and Supplementary Data
9
Treasure & Shipwreck Recovery Inc.
FINANCIAL STATEMENTS
As of April 30, 2019 and April 30, 2018
Table of Contents
|
|
|
|
|
|
|
Page
|
|
Report
of Independent Registered Public Accounting Firm
|
|
F-2
|
|
Balance
Sheets as of April 30, 2019 and April 30, 2018
|
|
F-3
|
|
Statements of
Operations for the years ended April 30, 2019 and April 30,
2018
|
|
F-4
|
|
Statement of
Changes in Stockholders’ Equity as of
April 30, 2019 and April 30,
2018
|
|
F-5
|
|
Statements of Cash
Flows for the year ended April 30, 2019 and April 30,
2018
|
|
F-6
|
|
Notes
to Financial Statements
|
|
F-7
|
F-1
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the
Shareholders and Board of Directors,
Treasure
& Shipwreck Recovery Inc.
Opinion on the Consolidated Financial Statements
We have
audited the accompanying balance sheets of Treasure & Shipwreck
Recovery Inc. (formerly known as Beliss Corp., the
“Company”) as of April 30, 2019 and 2018, the related
statement of operations, stockholders’ deficit, and cash
flows for the years then ended, and the related notes (collectively
referred to as the “financial statements”). In our
opinion, the financial statements present fairly, in all material
respects, the financial position of the Company as of April 30,
2019 and 2018, and the results of its operations and its cash flows
for the years then ended, in conformity with accounting principles
generally accepted in the United States.
Going Concern Matter
The
accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Note
2 to the financial statements, the Company has suffered recurring
losses from operations that raises substantial doubt about its
ability to continue as a going concern. Management’s plans in
regard to these matters are also described in Note 2. The financial
statements do not include any adjustments that might result from
the outcome of this uncertainty.
Basis for Opinion
These
financial statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on the
Company’s financial statements based on our audit. We are a
public accounting firm registered with the Public Company
Accounting Oversight Board (United States) (“PCAOB”)
and are required to be independent with respect to the Company in
accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and
the PCAOB.
We
conducted our audit in accordance with the standards of the PCAOB.
Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements
are free of material misstatement, whether due to error or fraud.
The Company is not required to have, nor were we engaged to
perform, an audit of its internal control over financial reporting.
As part of our audits we are required to obtain an understanding of
internal control over financial reporting 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.
Our
audits included performing procedures to assess the risks of
material misstatement, whether due to error or fraud, and
performing procedures that respond to those risks. Such procedures
included examining, on a test basis, evidence regarding the amounts
and disclosures in the consolidated financial statements. Our audit
also included evaluating the accounting principles used and
significant estimates made by management, as well as evaluating the
overall presentation of the financial statements. We believe that
our audit provides a reasonable basis for our opinion.
/s/
TAAD LLP
We have
served as the Company’s auditor since 2018
Diamond
Bar, California
August
16, 2019
F-2
Treasure
& Shipwreck Recovery Inc.
BALANCE
SHEETS
As of April 30, 2019 and 2018
|
ASSETS
|
April 30,
2019
|
April 30,
2018
|
|
Current
Assets
|
|
|
|
Cash
|
$
-
|
7,257
|
|
Prepaid
expenses
|
-
|
950
|
|
Total
Current Assets
|
$
-
|
8,207
|
|
|
|
|
|
Fixed
Assets
|
|
|
|
Equipment and
furniture, net
|
$
-
|
21,286
|
|
Total
Fixed Assets
|
$
-
|
21,286
|
|
|
|
|
|
Total
Assets
|
$
-
|
29,493
|
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
|
|
|
Liabilities
|
|
|
|
Current
Liabilities
|
|
|
|
Accounts
Payable
|
1,899
|
8,500
|
|
Customer
Deposits
|
8,700
|
7,000
|
|
Short
Term Loans
|
16,763
|
-
|
|
Related
Party Loan
|
17,790
|
10,563
|
|
Total
Current Liabilities
|
$
45,152
|
26,063
|
|
|
|
|
|
Total
Liabilities
|
$
45,152
|
26,063
|
|
|
|
|
|
Stockholder’s
Equity
|
|
|
|
Common stock, par
value $0.001; 75,000,000 shares authorized,5,035,000 and 5,035,000
shares issued and outstanding
|
5,035
|
5,035
|
|
Additional paid in
capital
|
38,665
|
38,665
|
|
Accumulated
deficit
|
(88,852
)
|
(40,270
)
|
|
Total
Stockholder’s Equity
|
$
(45,152
)
|
3,430
|
|
|
|
|
|
Total
Liabilities and Stockholder’s Equity
|
$
-
|
29,493
|
See
accompanying notes, which are an integral part of these financial
statements
F-3
Treasure & Shipwreck Recovery Inc.
STATEMENTS OF OPERATIONS
Years ended April 30, 2019 and 2018
|
|
Year
ended
April 30,
2019
|
Year
ended April 30, 2018
|
|
|
|
|
|
REVENUES
|
$
14,150
|
15,200
|
|
Cost of
Revenues
|
-
|
11
|
|
Gross
Profit
|
14,150
|
15,189
|
|
|
|
|
|
OPERATING
EXPENSES
|
|
|
|
General and
Administrative Expenses
|
62,732
|
54,645
|
|
TOTAL
OPERATING EXPENSES
|
(62,732
)
|
(54,645
)
|
|
|
|
|
|
NET
LOSS FROM OPERATIONS
|
(48,582
)
|
(39,456
)
|
|
|
|
|
|
PROVISION FOR
INCOME TAXES
|
-
|
-
|
|
|
|
|
|
NET
LOSS
|
$
(48,582
)
|
(39,456
)
|
|
|
|
|
|
NET
LOSS PER SHARE: BASIC AND DILUTED
|
$
(0.00
)
|
(0.00
)
|
|
|
|
|
|
WEIGHTED
AVERAGE NUMBER OF SHARES OUTSTANDING: BASIC AND
DILUTED
|
5,035,000
|
3,825,623
|
|
|
|
|
See
accompanying notes, which are an integral part of these financial
statements
F-4
Treasure & Shipwreck Recovery Inc.
STATEMENT OF CHANGES IN STOCKHOLDER’S EQUITY
Years ended April 30, 2019 and 2018
|
|
Common
Stock
|
Additional
Paid-in
|
Deficit
Accumulated
|
Total
Stockholders’
|
|
|
|
Shares
|
Amount
|
Capital
|
|
Equity
|
|
|
|
|
|
|
|
|
Balance, April 30,
2017
|
3,000,000
|
$
3,000
|
$
-
|
$
(814
)
|
$
2,186
|
|
|
|
|
|
|
|
|
Shares issued for
cash
|
2,035,000
|
2,035
|
38,665
|
-
|
40,700
|
|
|
|
|
|
|
|
|
Net (loss) for the period ended
April 30,
2018
|
-
|
-
|
-
|
(39,456
)
|
(39,456
)
|
|
|
|
|
|
|
|
|
Balance,
April 30,
2018
|
5,035,000
|
$
5,035
|
$
38,665
|
$
(40,270
)
|
$
3,430
|
|
|
|
|
|
|
|
|
Net (loss) for the
period ended April 30,
2019
|
-
|
-
|
-
|
(48,582
)
|
(48,582
)
|
|
|
|
|
|
|
|
|
Balance,
April 30,
2019
|
5,035,000
|
$
5,035
|
$
38,665
|
$
(88,852
)
|
$
(45,152
)
|
See
accompanying notes, which are an integral part of these financial
statements
F-5
Treasure & Shipwreck Recovery Inc.
STATEMENTS OF CASH FLOWS
Years ended April 30, 2019 and 2018
|
|
Year
ended
April 30,
2019
|
From
inception to
April 30,
2018
|
|
CASH
FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
Net
loss
|
$
(48,582
)
|
$
(39,456
)
|
|
Adjustments to
reconcile net loss to net cash used in operating
activities:
Depreciation
|
3,566
|
2,485
|
|
Loss on disposal of
fixed assets
|
17,720
|
-
|
|
Changes in
operating assets and liabilities:
|
|
|
|
Increase in Prepaid
Expenses
|
950
|
(950
|
|
Increase in
Accounts Payable
|
(6,601
)
|
8,310
|
|
Increase in
Customer Deposits
|
1,700
|
-
|
|
CASH
FLOWS USED IN OPERATING ACTIVITIES
|
(31,247
)
|
(29,611
|
|
|
|
|
|
CASH
FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
Purchase of
equipment
|
-
|
(21,129
)
|
|
CASH
FLOWS USED IN INVESTING ACTIVITIES
|
-
|
(21,129
)
|
|
|
|
|
|
CASH
FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
Increase in Short
Term Loans
|
6,200
|
-
|
|
Increase in related
party Loan
|
17,790
|
9,900
|
|
Proceed from sales
of Capital Stock
|
-
|
40,700
|
|
CASH
FLOWS PROVIDED BY FINANCING ACTIVITIES
|
23,990
|
50,600
|
|
|
|
|
|
NET
DECREASE IN CASH
|
(7,257
)
|
(140
|
|
|
|
|
|
Cash,
beginning of period
|
7,257
|
7,397
|
|
|
|
|
|
Cash,
end of period
|
$
-
|
$
7,257
|
|
|
|
|
|
SUPPLEMENTAL
CASH FLOW INFORMATION:
|
|
|
|
Interest
paid
|
$
-
|
$
-
|
|
Income
taxes paid
|
$
-
|
$
-
|
See
accompanying notes, which are an integral part of these financial
statements
F-6
Treasure & Shipwreck Recovery Inc.
NOTES TO THE FINANCIAL STATEMENTS
April 30, 2019 and 2018
Note 1 –
ORGANIZATION AND
NATURE OF BUSINESS
Beliss
Corp, which changed its name to Treasure & Shipwreck
Recovery Corp. (“the Company”, “we”,
“us” or “our”), was incorporated in the
State of Nevada on October 24, 2016. Our general business plan
initially included in the development of high impact internet
marketing, search engine optimization (
“
SEO
”
) software and
techniques, and the development of digital properties to internet
based businesses and small businesses. Since incorporation,
we have maintained our own website at www.belisscorp.com, have
created contracts for clients and have engaged in negotiations with
potential clients concerning services we might provide to them.
Subsequent to April 30, 2019 the Company has shifted its business
strategy to the focus on the sunken treasure industry (See Note 9
– SUBSEQENT EVENTS) and does not expect to generate much, if
any at all, revenue from its web development and SEO
business.
Our
general business strategy is to be actively engaged in the sunken
treasure industry, researching, surveying, finding and recovering
from valuable historical shipwrecks from the 15
th
to the current
century. We have taken on certain persons who are experts in the
necessary fields of treasure finds, as well as securing the rights
for treasure salvage through court and other means. We will
contract with outside service providers to conduct salvage
operations. Any recovered finds by the Company are split with Dr.
Lee Spence who is the worlds foremost treasure expert and has taken
on the role of Chief Operating Officer as well as Chairman of the
Board.
Note 2 –
GOING
CONCERN
The
accompanying financial statements have been prepared in conformity
with generally accepted accounting principles, which contemplate
continuation of the Company as a going concern. For year
ended April 30, 2019 the Company had total revenues of
$14,150. The Company currently has losses and has not
completed its efforts to establish a stabilized source of revenues
sufficient to cover operating costs over an extended period of
time. Therefore, there is substantial doubt about the
Company’s ability to continue as a going concern for one year
after the date the financial statements are issued. 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 will be able to
raise additional funds through the capital markets. Despite
management’s ongoing 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 3 –
SIGNIFCANT
ACCOUNTING POLICIES
Basis of presentation
The
accompanying financial statements have been prepared in accordance
with generally accepted accounting principles in the United States
of America. The Company’s year-end is April
30.
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.
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 $0 of cash as of April 30, 2019 and $7,257 as of April
30, 2018.
Customer Deposit
Customer
Deposit discloses an amount paid by a customer to a company prior
to the company providing it with goods or services. The company
receiving the money has an obligation to provide the goods or
services to the customer or to return the money. The Company had
$8,700 in customer deposits as of April 30, 2019 and $7,000 as of
April 30, 2018.
Depreciation, Amortization, and Capitalization
The
Company records depreciation and amortization when appropriate
using straight-line balance method over the estimated useful life
of the assets. We estimate that the useful life of furniture is 5
years. Expenditures for maintenance and repairs are charged to
expense as incurred. Additions, major renewals and replacements
that increase the property's useful life are capitalized. Property
sold or retired, together with the related accumulated depreciation
is removed from the appropriated accounts and the resultant gain or
loss is included in net income. We incurred $3,567 and $2,485 of
depreciation expense during the years ended April 30, 2019 and
April 30, 2018.
F-7
Treasure & Shipwreck Recovery Inc.
NOTES TO THE FINANCIAL STATEMENTS
April 30, 2019 and 2018
Fair Value of Financial Instruments
As
topic 820 "Fair Value Measurements and Disclosures" establishes a
three-tier fair value hierarchy, which prioritizes the inputs in
measuring fair value. The hierarchy prioritizes the inputs into
three levels based on the extent to which inputs used in measuring
fair value are observable in the market.
These
tiers include:
|
|
|
|
Level
1:
|
defined
as observable inputs such as quoted prices in active
markets;
|
|
Level
2:
|
defined
as inputs other than quoted prices in active markets that are
either directly or indirectly observable;
|
|
Level
3:
|
defined
as unobservable inputs in which little or no market data exists,
therefore requiring an entity to develop its own
assumptions.
|
The
carrying value of cash and the Company’s loan from
shareholder approximates its fair value due to their short-term
maturity.
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.
Revenue Recognition
The
Company recognizes revenue in accordance with Accounting Standards
Codification No. 605, “Revenue Recognition”
("ASC-605"), ASC-605 requires that four basic criteria must be met
before revenue can be recognized: (1) persuasive evidence of an
arrangement exists; (2) delivery has occurred; (3) the selling
price is fixed and determinable; and (4) collectability is
reasonably assured. Determination of criteria (3) and (4) are based
on management's judgments regarding the fixed nature of the selling
prices of the products delivered and the collectability of those
amounts. Provisions for discounts and rebates to customers,
estimated returns and allowances, and other adjustments are
provided for in the same period the related sales are recorded. The
Company will defer any revenue for which the product has not been
delivered or is subject to refund until such time that the Company
and the customer jointly determine that the product has been
delivered or no refund will be required. Our product is
providing high impact internet marketing to internet based
businesses and small businesses seeking to create websites and
provide better search engine optimization (“SEO”)
software and techniques to small internet based businesses and
people seeking to create websites.
Basic Loss per Share
The
Company computes loss per share in accordance with FASB ASC 260
“Earnings per Share”. Basic loss per share is computed
by dividing net loss available to common shareholders by the
weighted average number of outstanding common shares during the
period. Diluted loss per share gives effect to all dilutive
potential common shares outstanding during the period.
Dilutive loss per share excludes all potential common shares if
their effect is anti-dilutive. As of April 30, 2019 and April 30,
2018 there were no potentially dilutive debt or equity instruments
issued or outstanding.
Recent Accounting Pronouncements
We have reviewed all the recently issued, but not yet effective,
accounting pronouncements and we do not believe any of these
pronouncements will have a material impact on the
Company.
In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842),
which issued new guidance related to leases that outlines
a comprehensive lease accounting model and supersedes the
current lease guidance. The new guidance requires lessees to
recognize lease liabilities and corresponding right-of-use assets
for all leases with lease terms of greater than 12 months. It also
changes the definition of a lease and expands the disclosure
requirements of lease arrangements. The new guidance must be
adopted using the modified retrospective approach and will be
effective for the Company in the fiscal year beginning October 1,
2019. Early adoption is permitted. The Company has
reviewed this guidance and believes it has no impact on its
financial statements and related disclosures.
ASC 606, Revenue from Contracts with Customers, was issued jointly
by the FASB and IASB on May 28, 2014. It was originally effective
for annual reporting periods (including interim reporting
periods within those periods) beginning after December 15, 2016,
for public entities.
Early application was not permitted (however, early adoption was
optional for entities reporting under IFRSs). On August 12, 2015,
the FASB issued an ASU, Revenue from Contracts with Customers
(Topic 606): Deferral of the Effective Date, which deferred for one
year the effective date of the new revenue standard for public and
nonpublic entities reporting under U.S. GAAP. The Company
has reviewed this guidance and believes it has no impact on its
financial statements and related disclosures.
F-8
Treasure & Shipwreck Recovery Inc.
NOTES TO THE FINANCIAL STATEMENTS
April 30, 2019 and 2018
Note 4 –
FIXED
ASSETS
As of
April 30, 2019, our fixed asset balance was $0. The Company
determined that it would not be cost effective to move its
furniture and office equipment from India to the United States so
the Company wrote down its previous fixed asset balance of $17,720
to $0.
Note 5 –
LOANS
Loan from Officer
As of April 30, 2019, our sole officer and director provided loans
to the Company of $17,790 under a convertible promissory note. This
convertible promissory note is unsecured, non-interest bearing, and
is convertible into common shares of the Company stock at $2.75 per
share and due on demand. The balance due to the director was
$17,790 as of April 30, 2019, and $0 as of April 30,
2018.
Our previous CEO Ajay Rajendron assigned
’
$14,063 of a loan
balance of $16,763 to a third party.
Short Term Loans
As of April 30, 2019, the Company had loans totaling $16,763 with
two non-related parties, a loan in the amount of $14,063 and a loan
in the amount of $2,700. These loans are unsecured, non-interest
bearing and due on demand.
Note 6 –
COMMON
STOCK
The
Company has 75,000,000, $0.001 par value shares of common stock
authorized.
In
April 2017, the Company issued 3,000,000 shares of common stock to
a director for cash proceeds of $3,000 at $0.001 per
share.
In
December 2017 the Company issued 750,000 shares for cash proceeds
of $15,000 at $0.02 per share.
In
January 2018 the Company issued 1,135,000 shares for cash proceeds
of $22,700 at $0.02 per share.
In
February 2018 the Company issued 150,000 shares
for cash proceeds of $3,000 at
$0.02 per share.
Other Stock Issuances
In
February 2019 the Company issued 5,500,000 restricted control
shares to J.D. Brammer under the acquisition agreement in order for
Mr. Brammer to meet the qualification of Southern Amusement being
acquired into the Company where the State of West Virginia required
control of the company since it was involved in the lottery
business, to be held by a registered and cleared individual which
Mr. Brammer is and has been. So the additional shares were issued
under certain restrictions to Mr. Brammer for purposes of control
under West Virginia law. In the event the transaction could not
occur or licensing issued occurred then Mr. Brammer surrendered
control of such shares to the Escrow Agent. Effective April 28,
2019, such transaction was cancelled and such shares changed
control to Mr. Craig A. Huffman, the Escrow Agent and Counsel for
the Company for later transaction, via agreement. The shares
continued under Mr. Brammers name on book form with the transfer
agent, but all rights to such shares were surrendered by Mr.
Brammer. In order to purchase the control of Southern Amusement, an
additional 571,429 shares of restricted common stock were issued to
Vicki Ferrell who was part owner of Southern for the Company to
receive her shares. At the cancellation of the transaction, those
shares were also under the control of Craig A. Huffman for
cancellation as required in the immediate future upon direction of
the board of directors.
The
company does not have any other classes of stock issued or
outstanding as of April 30, 2019 and 2018. The Company does not
have any warrants or options as of April 30, 2019 and
2018.
Note 7 –
COMMITMENTS AND
CONTINGENCIES
The
Company had no commitment and contingencies for the periods ending
April 2018 and April 30, 2019.
F-9
Treasure & Shipwreck Recovery Inc.
NOTES TO THE FINANCIAL STATEMENTS
April 30, 2019 and 2018
Note 8 –
INCOME
TAXES
The Company adopted the provisions of uncertain tax positions as
addressed in ASC 740-10-65-1. As a result of the implementation of
ASC 740-10-65-1, the Company recognized no increase in the
liability for unrecognized tax benefits.
The Company has no tax position at April 30, 2019 for which the
ultimate deductibility is highly certain but for which there is
uncertainty about the timing of such deductibility. The Company
does not recognize interest accrued related to unrecognized tax
benefits in interest expense and penalties in operating expenses.
No such interest or penalties were recognized during the period
presented. The Company had no accruals for interest and penalties
at April 30, 2019. The Company’s utilization of any net
operating loss carry forward may be unlikely as a result of its
intended activities.
The valuation allowance at April 30, 2019 was $18,659. The net
change in valuation allowance during the year ended April 30, 2019
was $4,967. In assessing the realizability of deferred tax assets,
management considers whether it is more likely than not that some
portion or all of the deferred income tax assets will not be
realized. The ultimate realization of deferred income tax assets is
dependent upon the generation of future taxable income during the
periods in which those temporary differences become deductible.
Management considers the scheduled reversal of deferred income tax
liabilities, projected future taxable income, and tax planning
strategies in making this assessment. Based on consideration of
these items, management has determined that enough uncertainty
exists relative to the realization of the deferred income tax asset
balances to warrant the application of a full valuation allowance
as of April 30, 2019 and 2018. All tax years since inception
remains open for examination only by taxing authorities of US
Federal and state of Nevada.
Reconciliation
between the provision for income taxes and the expected tax benefit
using the federal statutory rate of 21% for 2019 and 34% for 2018
is as follows:
|
|
For the
Year Ended
|
For the
Year Ended
|
|
|
April
30, 2019
|
April
30, 2018
|
|
|
|
|
|
Income
tax at federal statutory rate
|
21.00%
|
34.00%
|
|
Valuation
allowance
|
(21.00)%
|
(34.00)%
|
|
Income
tax expense
|
-
|
-
|
The Company has a net operating loss carryforward for tax purposes
totaling $88,852 at April 30, 2019, expiring through 2035. There is
a limitation on the amount of taxable income that can be offset by
carryforwards after a change in control (generally greater than a
50% change in ownership). Temporary differences, which give rise to
a net deferred tax asset, are as follows:
|
|
As of
April 30, 2019
|
As of
April 30, 2018
|
|
Non-current
deferred tax assets:
|
|
|
|
Net
operating loss carryforward
|
$
18,659
|
13,692
|
|
Valuation
allowance
|
$
(18,659
)
|
(13,692
)
|
|
Net
deferred tax assets
|
$
-
|
-
|
The
Company is currently in the process of gathering the information
necessary for filing tax returns for past years, due to the
Company’s lack of revenue since inception management does not
believe that there is any income tax liability for past
years.
F-10
Treasure &
Shipwreck Recovery Inc.
NOTES TO THE FINANCIAL STATEMENTS
April 30, 2019 and 2018
Note 9 –
SUBSEQENT
EVENTS
Subsequent
to April 30, 2019 the Company focused its efforts on entering the
treasure recovery business and securing the services of a known
historic shipwreck treasure expert, Dr. E. Lee Spence
(“Spence”), to be involved and to use his resources,
including a potential historic shipwreck site located off the Cape
Romain, South Carolina as a search and recovery area for the
Company. Subsequently, on June 26, 2019, Spence was appointed as a
Director and took the role of being a Chief Operating Officer. At
that time the Company name was changed with the State of Nevada to
Treasure & Shipwreck Recovery, Inc. The Company is in the
process of cancellation of the shares issued to J.D. Brammer and
Vicki Ferrel from the cancelled Southern Amusement transaction. All
such shares are held in escrow under our Counsel and CEO for
cancellation.
F-11
Item 9. Changes In and Disagreements with Accountants on Accounting
and Financial Disclosure
None
Item 9A(T) Controls and Procedures
Management’s Report on Internal Controls over Financial
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
April 30, 2019 using the criteria established in “Internal
Control - Integrated Framework” issued by the Committee of
Sponsoring Organizations of the Tread way 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
April 30, 2019, 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 cash controls – As of April
30, 2019, 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 April 30, 2019, 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.
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 April 30, 2019 based on
criteria established in Internal Control- Integrated Framework
issued by COSO.
System of Internal Control over Financial Reporting
Our
management is responsible for establishing and maintaining a system
of disclosure controls and procedures (as defined in Rule 13a-15(e)
and 15d-15(e) under the Exchange Act) that is designed to ensure
that information required to be disclosed by us in the reports that
we file or submit under the Exchange Act is recorded, processed,
summarized and reported, within the time periods specified in the
Commission’s rules and forms. Disclosure controls and
procedures include, without limitation, controls and procedures
designed to ensure that information required to be disclosed by an
issuer in the reports that it files or submits under the Exchange
Act is accumulated and communicated to the issuer’s
management, including its principal executive officer or officers
and principal financial officer or officers, or persons performing
similar functions, as appropriate to allow timely decisions
regarding required disclosure.
An
evaluation was conducted under the supervision and with the
participation of our management of the effectiveness of the design
and operation of our disclosure controls and procedures as of April
30, 2018. Based on that evaluation, our management concluded that
our disclosure controls and procedures were not effective as of
such date to ensure that information required to be disclosed in
the reports that we file or submit under the Exchange Act, is
recorded, processed, summarized and reported within the time
periods specified in SEC rules and forms.
Changes in Internal Control over Financial Reporting
There
was no change in the Company’s internal control over
financial reporting during the quarterly period covered by this
report that has materially affected, or is reasonably likely to
materially affect, the Company’s internal control over
financial reporting.
Item 9B. Other Information.
None.
10
PART III
Item 10. Directors, Executive Officers, Promoters and Control
Persons of the Company
Directors
of the Company are elected by the shareholders to a term of one
year and serve until their successors are elected and qualified.
Officers of the Company are appointed by the Board of Directors to
a term of one year and serve until their successors are duly
appointed and qualified, or until the officer is removed from
office. The Board of Directors has no nominating, auditing or
compensation committees.
The
name, age and position of the company officer and director is set
forth below:
|
|
|
|
|
|
Name
|
Age
|
Position
|
Since
|
|
Craig
A. Huffman
|
53
|
President, Chief
Executive Officer, Treasurer, Chief Financial Officer and Director
of the Company
|
April
28, 2019
|
|
|
|
|
|
|
E. Lee
Spence
|
72
|
Director
|
June
26, 2019
|
Craig
A. Huffman has held the offices/positions since the resignation of
the prior CEO and Director of the Company, and he is expected to
hold said offices/positions until the next annual meeting of the
shareholders. The persons named above are the Company’s only
officer, director, promoter and control person.
Background Information about The Company’s Officer and
Directors
Chief Executive Officer, Chief Financial Officer and Director.
Craig A. Huffman has over 11 years’ experience in the
treasure industry representing numerous treasure recovery
companies, including working on permitting, and admiralty claims.
He has teamed with Dr. Lee Spence to create TSR. His background
includes being a Deputy Sheriff for 5 years, 20 years as an Army
Reserve Officer, and 21 years as an attorney. He has acted as
counsel to over 50 public companies and large-scale investors.
Craig has been a public company CEO two times before for SEC fully
reporting companies, besides being a director for numerous
companies. He has over 100 jury trials in complex narcotics,
conspiracy, white-collar area, international contracts, and
numerous securities cases, he has also authored over 50 appeals.
Mr. Huffman has appeared in courts around the country, and recently
argued before he Nevada Supreme Court. Mr. Huffman received his
B.A. from the University of Tampa with three majors in History,
Pol. Sci. and Military Science, and his J.D. from Stetson
University College of Law (cum laude). Craig has attended four
major Army Officer Courses as a Field Artillery Officer and JAG
officer, as well as numerous law enforcement training academies and
courses, including hostage negotiation, sex crimes, and numerous
others.
Director and Chairman. E. Lee Spence is also a published editor and
author of non-fiction reference books; a magazine editor (Diving
World, Atlantic Coastal Diver, Treasure, Treasure Diver, and
Treasure Quest), and magazine publisher (ShipWrecks, Wreck Diver);
and a published photographer. Spence was twelve years old when he
found his first five shipwrecks. He has been involved in treasure
and shipwreck salvage all over the world. Hefounded the Sea
Research Society in 1972, an existing non-profit for sea research,
as well as the International Diving Institute. Lee Spence's past
work has been funded by such institutions as the Savannah Ships of
the Sea Museum, the College of Charleston, the South Carolina
Committee for the Humanities and the National Endowment for the
Humanities. In 1991 and 1992, Spence served as Chief of Underwater
Archeology for San Andres y Providencia, a 40,000 square-mile,
Colombian-owned archipelago in the western Caribbean. He has worked
on the wrecks of Spanish galleons, pirate ships, Great Lakes
freighters, modern luxury liners (cruise ships), Civil War blockade
runners and submarines.
Corporate Governance
The
Company does not have a compensation committee and it does not have
an audit committee financial expert. It does not have a
compensation committee because its Board of Directors consists of
only one director whom is not independent, as he is also an
officer. There is no independent audit committee financial expert
because it is believed the cost related to retaining a financial
expert at this time is prohibitive due to the current circumstances
of the Company. Further, because there are only minimal operations
at the present time, it is believed the services of a financial
expert are not warranted.
Conflicts
of Interest
The
Company does not currently foresee any conflict of
interest.
Section 16(a) Beneficial Ownership Reporting
Compliance
16(a)
of the Securities Exchange Act of 1934 requires the company
directors and executive officers, and persons who own more than ten
percent of the Company’s common stock, to file with the
Securities and Exchange Commission initial reports of ownership and
reports of changes of ownership of its common stock. Officers,
directors and greater than ten percent shareholders are required by
SEC regulation to furnish the company with copies of all Section
16(a) forms they file. The Company intends to ensure to the best of
its ability that all Section 16(a) filing requirements applicable
to its officers, directors and greater than ten percent beneficial
owners are complied with in a timely fashion.
11
Item 11. Executive Compensation
The
following summary compensation table sets forth all compensation
awarded to, earned by, or paid to our named executive officer paid
by us during the period ended April 30, 2018, in all capacities for
the accounts of our executives, including the Chief Executive
Officer (CEO) and Chief Financial Officer (CFO):
SUMMARY COMPENSATION TABLE
|
|
|
|
|
|
|
|
|
|
|
|
Name
and Principal Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards ($)
|
Option
Awards ($)
|
Non-Equity
Incentive Plan Compensation ($)
|
Non-Qualified
Deferred Compensation Earnings ($)
|
All
Other Compensations ($)
|
Totals
($)
|
|
Ajay
Rajendran, President, Chief Executive Officer, Treasurer, and
Director
|
2018-Jan. 26,
2019
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
Craig
A. Huffman, President, Chief Executive Officer, Treasurer and
Director
|
April
28, 2019- Present
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|
|
|
|
|
|
|
|
|
|
|
Narrative
Disclosure to Summary Compensation Table
There
are no compensatory plans or arrangements, including payments to be
received from the Company with respect to any executive officer,
that would result in payments to such person because of his or her
resignation, retirement or other termination of employment with the
Company, or its subsidiaries, any change in control, or a change in
the person’s responsibilities following a change in control
of the Company.
Outstanding Equity Awards at Fiscal Year-End
No
executive officer received any equity awards, or holds exercisable
or unexercisable options, as of the period ended April 30,
2019.
Long-Term Incentive Plans
There
are no arrangements or plans in which the Company would provide
pension, retirement or similar benefits for our director or
executive officer.
Compensation Committee
The
Company currently does not have a compensation committee of the
Board of Directors. The Board of Directors as a whole determines
executive compensation.
Compensation of Directors
Directors
are permitted to receive fixed fees and other compensation for
their services as directors. The Board of Directors has the
authority to fix the compensation of directors. No amounts have
been paid to, or accrued to, directors in such
capacity.
Security Holders Recommendations to Board of Directors
The
Company welcomes comments and questions from the shareholders.
Shareholders can direct communications to the Chief Executive
Officer, Craig A. Huffman, at our executive offices. However, while
the Company appreciates all comments from shareholders, it may not
be able to individually respond to all communications. Management
attempts to address shareholder questions and concerns in press
releases and documents filed with the SEC so that all shareholders
have access to information about the Company at the same time.
Craig A. Huffman collects and evaluates all shareholder
communications. All communications addressed to the director and
executive officer will be reviewed by Craig A. Huffman, unless the
communication is clearly frivolous.
12
Item 12. Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters
The
following table sets forth certain information at April 30, 2019,
with respect to the beneficial ownership of shares of Common Stock
by (i) each person known to the Company who owns beneficially more
than 5% of the outstanding shares of Common Stock (based upon
reports which have been filed and other information known to the
Company), (ii) the Director, (iii) the Executive Officer and (iv)
our Executive Officer and Director as a group. As set forth
elsewhere, such shares are now subject to cancellation at the
control of the Counsel and Chief Executive Officer due to the
cancellation of the Southern Amusement Agreements.
|
Beneficial Name of
Owner
|
No. of
Shares
|
Percentage of
Ownership
|
|
|
J. D.
Brammer (
Subject to Escrow Agent
and CEO Control for cancellation
)
|
8,200,000
|
74%
|
|
(1)
Under Rule 13d-3 promulgated under the Exchange Act, a beneficial
owner of a security includes any person who, directly or
indirectly, through any contract, arrangement, understanding,
relationship, or otherwise has or shares: (i) voting power, which
includes the power to vote, or to direct the voting of shares; and
(ii) investment power, which includes the power to dispose or
direct the disposition of shares. Certain shares may be deemed to
be beneficially owned by more than one person (if, for example,
persons share the power to vote or the power to dispose of the
shares). In addition, shares are deemed to be beneficially owned by
a person if the person has the right to acquire the shares (for
example, upon exercise of an option) within 60 days of the date as
of which the information is provided. In computing the percentage
ownership of any person, the amount of shares is deemed to include
the amount of shares beneficially owned by such person (and only
such person) by reason of these acquisition rights.
Changes in Control
There
are no present arrangements or pledges of the Company’s
securities which may result in a change in control of the
Company.
Future Sales by Principal Shareholders
A total
of 8,771,429 shares have been issued to both J.D. Brammer as the
former Company officer, director and affiliate, and to Vicki Ferell
in the Southern Amusement Transaction. With the Cancellation of
that transaction, such shares are under the control of our current
Counsel as the Escrow agent for cancellation and are restricted
securities, as that term is defined in Rule 144 of the Rules and
Regulations of the SEC promulgated under the Act. Under Rule 144,
such shares can be publicly sold, subject to volume restrictions
and certain restrictions on the manner of sale, commencing one year
after their acquisition. Any sale of these shares (after applicable
restrictions expire) may have a depressive effect on the price of
the Company’s common stock in any market that may develop, of
which there can be no assurance. The principal shareholders do not
have any plans to sell their shares at any time after this offering
is complete.
Item 13. Certain Relationships and Related
Transactions
We
received our initial funding of $3,000 through the sale of common
stock to our past President, Ajay Rajendran, who purchased
3,000,000 shares of our common stock at $0.001 per share on April
10, 2017.
The
shares that were issued to Ajay Rajendran were issued in
transactions that were exempt from the registration requirements of
the Securities Act pursuant to Section 4(2) of the Securities
Act.
Except
for the foregoing, none of the following persons has any direct or
indirect material interest in any transaction to which the Company
was or is a party since the beginning of the last fiscal year, or
in any proposed transaction to which the Company proposes to be a
party:
●
(A) any of the director(s) or
executive officer(s);
●
(B) any nominee for election as
one of the Company
’
s
direction
●
(C) any person who is known by
the Company to beneficially own, directly or indirectly, shares
carrying
more than 5% of the voting rights
attached to the Company
’
s
Common Stock, or
●
(D) any member of the immediate
family (including spouse, parents, children, siblings and in-laws)
of ny of the foregoing persons named in paragraph (A),(B) or (C)
above.
There
are not currently any conflicts of interest by or among the
Company’s current officer, director, key employee or
advisors. The Company has not yet formulated a policy for handling
conflicts of interest, if any arise; however, it intends to do so
upon completion of this offering and, in any event, prior to hiring
any additional employees.
Item 14. Principal Accountant Fees and Services
During fiscal
year ended April 30, 2019, we incurred approximately $8,523 in
fees to our principal independent accountants for professional
services rendered in connection with the audit of our April 30,
2018 financial statements and for the reviews of our financial
statements for the quarters ended July 31, 2018, October 31, 2018,
and January 31, 2019.
13
PART
IV
Item
15. Exhibits
|
Exhibit No.
|
Description
|
|
|
|
|
|
|
|
|
|
|
101.INS
|
XBRL
Instance Document.
|
|
|
|
|
101.SCH
|
XBRL
Taxonomy Extension Schema.
|
|
|
|
|
101.CAL
|
XBRL
Taxonomy Extension Calculation Linkbase.
|
|
|
|
|
101.DEF
|
XBRL
Taxonomy Extension Definition Linkbase.
|
|
|
|
|
101.LAB
|
XBRL
Taxonomy Extension Label Linkbase.
|
|
|
|
|
101.PRE
|
XBRL
Taxonomy Extension Presentation Linkbase.
|
14
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.
|
|
Treasure
& Shipwreck Recovery, Inc.
|
|
|
|
|
|
|
|
|
|
|
Date: August 16,
2019
|
By:
|
/s/ Craig Huffman
|
|
|
|
Craig
Huffman
Acting Chief
Executive Officer and Principal Accounting
Officer
(Principal
Executive Officer and Principal Accounting Officer)
|
15
TABLE OF CONTENTS
Part IItem 1. Description Of BusinessItem 1A. Risk FactorsItem 1B. Unresolved Staff CommentsItem 2. Description Of PropertyItem 3. Legal ProceedingsItem 4. Mine Safety DisclosuresPart IIItem 5. Market For Common Equity and Related Stockholder MattersItem 6. Selected Financial DataItem 7. Management's Discussion and Analysis Of Financial Condition and Results Of OperationsItem 7A. Quantitative and Qualitative Disclosures About Market RiskItem 8. Financial Statements and Supplementary DataNote 1 Organization and Nature Of BusinessNote 2 Going ConcernNote 3 Signifcant Accounting PoliciesNote 4 Fixed AssetsNote 5 LoansNote 6 Common StockNote 7 Commitments and ContingenciesNote 8 Income TaxesNote 9 Subseqent EventsItem 9. Changes in and Disagreements with Accountants on Accounting and Financial DisclosureItem 9a(t) Controls and ProceduresItem 9B. Other InformationPart IIIItem 10. Directors, Executive Officers, Promoters and Control Persons Of The CompanyItem 11. Executive CompensationItem 12. Security Ownership Of Certain Beneficial Owners and Management and Related Stockholder MattersItem 13. Certain Relationships and Related TransactionsItem 14. Principal Accountant Fees and ServicesPart IVItem 15. Exhibits