The financial data presented below should be read in conjunction with the more
detailed financial statements and related notes, which are included elsewhere in
this report. Information discussed herein, as well as elsewhere in this Annual
Report on Form 10-K, includes forward-looking statements or opinions regarding
future events or the future financial performance of the Company, and are
subject to a number of risks and other factors which could cause the actual
results to differ materially from those contained in forward-looking statements.
Among such factors are general business and economic conditions, and risk
factors as listed in this Form 10-K or listed from time to time in documents
filed by the Company with the Securities and Exchange Commission.
Financial Condition
As of November 30, 2016, the Company had total current assets of $26,864 and
total current liabilities of $5,381,900 for a net working capital deficit of
$5,355,036. As of November 30, 2015, the Company had total current assets of
$17,100 and total current liabilities of $6,200,054 for a net working capital
deficit of $6,182,954.
We need to raise additional money to meet our general and administrative
expenses, and we need to raise money to achieve our business objectives. The
additional funding will come from equity financing from the sale of Telco Cuba's
common stock or the issuance of debt securities. If we are successful in
completing an equity financing, existing shareholders will experience dilution
of their interest in Telco Cuba. The Company does not have any financing
arranged and we cannot provide investors with any assurance that the Company
will be able to raise sufficient funding from the sale of its common stock or
debt securities. In the absence of such financing, our business will fail.
Based on the nature of Telco Cuba's business, management anticipates incurring
operating losses in the foreseeable future. Management bases this expectation,
in part, on the fact that unrolling a telecommunications operation will cost a
substantial amount of money, and possibly take several years before becoming
profitable. The Company's future financial results are also uncertain due to a
number of factors, some of which are outside its control. These factors include,
but are not limited to:
Telco Cuba's ability to raise additional funding;
Telco Cuba's ability to capture market share; and
Due to the Company's lack of operating history and present inability to generate
revenues, our independent auditors have added an explanatory paragraph to their
audit opinion issued in connection with our financial statements for 2015, and
2016 indicating substantial doubt about Telco Cuba's ability to continue as a
going concern. This means that there is substantial doubt whether the Company
can continue as an ongoing business for the next 12 months unless we obtain
additional capital to pay our bills.
Liquidity
The Company's internal sources of liquidity will be loans that may be available
from management as well as revenue from its subsidiaries. Although Telco Cuba
has no written arrangements with its management, we expect that the officers may
provide the Company with nominal liquidity, when and if it is required.
The Company's external sources of liquidity will be private placements for
equity and debt financing. There are no assurances that Telco Cuba will be able
to achieve further sales of its common stock or any other form of additional
financing. If we are unable to achieve the financing necessary to continue its
plan of operations, then the Company will not be able to continue its operations
and its business will fail.
8
Capital Resources
As of November 30, 2016, the Company had total assets of $41,602, total
liabilities $5,381,900, and a working capital deficit of $5,355,036.
As of November 30, 2015, the Company had total assets of $32,101, total
liabilities $6,200,054, and a working capital deficit of $6,182,954.
The Company's current cash is not sufficient to fully finance its operations at
current and planned levels for the next 12 months. Management intends to manage
the Company's expenses and payments to preserve cash until the Company is
profitable, otherwise additional financing must be arranged. Specifically,
management is deferring payments due them until such time as there is sufficient
financing in place to permit their payment or the possible issuance of the
Company's stock in settlement of amounts due.
Results of Operations
We earned total revenues of $146,731 for the fiscal year ended November 30,
2016.
We earned total revenues of $173,560 for the fiscal year ended November 30,
2015.
We are presently in the development stage of our business, and we can provide no
assurance that we will be able to generate revenues from the sale of
telecommunications services in the future. The company's subsidiary, Amgentech,
Inc., has been actively providing infrastructure and telecommunication services
during these periods. The revenue presented is attributed to the acquisition of
Amgentech, Inc.
We incurred operating expenses in the amount of $359,634 during the fiscal year
ended November 30, 2016.
We incurred operating expenses in the amount of $657,927 during the fiscal year
ended November 30, 2015.
Other Income and Expense
During the years ended November 30, 2016 and 2015, the Company incurred interest
expense of $335,120, and $290,819, respectively, which was incurred on the
Company's third-party debt and convertible debentures.
For the years ended November 30, 2016 and 2015, the Company recorded a gain of
$1,192,310, and a loss of $(222,251), respectively, attributable to fluctuations
in the valuation of the derivative liability.
Off-Balance Sheet Arrangements
The Company has no off-balance sheet arrangements.
Material Agreements
In July 2015, the Company entered into an agreement with Next Group Holdings
pursuant to which Next Group agreed to provide a virtual call processing
platform for telecommunications, a web portal and sales portal. In exchange, the
Company agreed to pay $50,000 and use Next Group as its provider for local and
international voice, data, and text services as part of its operational
platform.
9
Subsequent Events
The Company evaluated subsequent events from December 1, 2016 through the date
this filing was completed, noting the following:
During the month of December 2016, the company issued 10,000,000 common shares
in connection with the conversion of $2,000.00 of convertible debentures and
accrued interest. The conversions had an average price of $0.0003
In February 2017, an officer converted a portion ($1,344) of salary due to him
into 2,240,000 common shares.
During the month of February 2017, the company wrote off accrued expenses and
payroll former officers which resulted in a 1.3 million gain, which is reported
in the statements of operations as other income.
During the month of July 2017, the company procured settlements with three note
holders. The settlements were a result of the company's renegotiating of the
terms of the original notes. The new terms included the waiving of all
additional interest, waiving of default fees, conversion standstill and
restrictions on the number of conversions per month, and fixed balances. The
notes affected by these settlements were with EMA Financial, Essex Global
Investment Corp, and LG Capital.
During the month of August 2017, the company wrote off a promissory note which
resulted in a $2,000,000 gain, which is reported in the statements of operations
as other income. The write off occurred as a result of the rescission, by the
prior owner of a transaction involving a working interest the company had in a
certain oil property. The original transaction occurred during the month of
July, in the year 2014.
On October 25, 2017, the Company entered into a definitive purchase agreement
with Net Bee Wireless, Inc. The purchase was contingent on the Company making
the purchase price payment. The deal was rescinded in February 2018 as a result
of the company not opting to follow through on the purchase.
During the month of December 2017, the company issued a promissory note in the
amount of $60,000 in exchange for the assets of Naked Papers, Inc.
During the month of December 2017, the Company converted a total of $26,031.55
in convertible debt and accrued interest owed to unaffiliated third-party
accredited investors in 276,163,333 shares of restricted common stock.
During the month of December 2017, the Company issued 500,000 Preferred C Stock
to the Company's CEO in exchange for services rendered to the Company.
During the first quarter 2018, the company acquired the assets of Naked Papers
and is currently selling the product under its brand name, Naked Papers under
the subsidiary, Naked Papers Brand, Inc., incorporated in the state of Florida.
During the month of January 2018, the Company converted a total of $63,734.00 in
convertible debt and accrued interest owed to unaffiliated third-party
accredited investors in 1,262,266,666 shares of restricted common stock.
During the month of February 2018, the Company converted a total of $38,925.56
in convertible debt and accrued interest owed to unaffiliated third-party
accredited investors in 768,225,915 shares of restricted common stock.
During the month of March 2018, the Company converted a total of $14,550.00 in
convertible debt and accrued interest owed to unaffiliated third-party
accredited investors in 306,000,000 shares of restricted common stock.
10
Anthony J Rivera brought a lawsuit against the company on May 29, 2018. Case
number: CACE18012914 in the 17th circuit court of Broward County, Florida. The
note holder sued for enforcement of a note issued by the company on December 1,
2015. The case was settled, and the note was amended with a more favorable 50%
discount, 5 day look back term on the note. The settlement occurred on
September, 2018. The company is working with the note holder to convert the
settled amount into stock of the company.
On September 28, 2018, the company filed a lawsuit against Cuentas, Inc. (OTCQB:
CUEN), f/k/a Next Group Holdings, Inc/Meimoun & Mammon, LLC/Next Mobile, LLC in
the 11th circuit court of Miami-Dade County, Florida. Case number:
2018-032974-CA-01 is still ongoing. The case was filed due to CUEN failing to
perform on a contract signed on July, 2015. The company is suing for damages and
the return of the funds paid for the undelivered Mobile Virtual Network Operator
(MVNO) platform.
During the first quarter 2019, the company acquired Advanced Satellite Systems,
Inc. and all of its assets, and is continuing to offer its services under the
Advanced Cable service mark. Advanced Satellite Systems, Inc, is incorporated in
the state of Florida and is registered as a subsidiary of Telco Cuba, Inc.
During the month of February 2019, the company issued a promissory note in the
amount of $100,000.00 to purchase Advanced Satellite Systems, Inc.
During the month of February 2019, the Company converted a total of $16,900.00
in convertible debt and accrued interest owed to unaffiliated third-party
accredited investors in 338,000,000 shares of restricted common stock.
During the month of March 2019, the Company converted a total of $18,500.00 in
convertible debt and accrued interest owed to unaffiliated third-party
accredited investors in 370,000,000 shares of restricted common stock.
During the month of March 2019, the Company issued 250,000,000 shares to Mr.
Roland H Malo as part of the compensation he received for staying on with
Advanced Satellite Systems, Inc.
During the month of May 2019, JMZ Alliance forgave all debt owed to JMZ Alliance
by Telco Cuba, Inc. The note securing the debt as well as all interest was
forgiven by JMZ.
During the month of April 2019, the Company converted a total of $15,000.00 in
convertible debt and accrued interest owed to unaffiliated third-party
accredited investors in 300,000,000 shares of restricted common stock.
During the month of December 2020, the Company converted a total of $3,900.00 in
convertible debt and accrued interest owed to unaffiliated third-party
accredited investors in 93,000,000 shares of common stock.
During the month of January 2021, the Company converted a total of $51,388.81 in
convertible debt and accrued interest owed to unaffiliated third-party
accredited investors in 599,867,533 shares of common stock.
During the month of January 2021, the Company converted the partial monetary
value of a consultants' contract into 441,977,932 restricted common shares.
During the month of February 2021, the Company converted the partial monetary
value of a consultants' contract into 34,000,000 restricted common shares.
During the month of February 2021, a shareholder converted 55,555 Series A
shares into 55,555,000 restricted common shares. These common shares have an
effective date of February 11, 2021 and are denoted as such in section 3A of
this disclosure.
11
During the month of February 2021, the Company converted a total of $49,259.66
in convertible debt and accrued interest owed to unaffiliated third-party
accredited investors in 164,198,867 shares of common stock.
During the month of March 2021, 23,574,570 restricted common shares were issued
to appointed members of the board of directors.
During the month of March 2021, preferred B shareholders converted 6,000
preferred shares into 30,000,000 restricted common shares.
During the month of March 2021, the Company converted a total of $7,000.00 in
convertible debt to an unaffiliated third-party accredited investor into
46,666,667 shares of common stock.
During the month of April 2021, the company converted a total of $62,966 in
convertible debt and accrued interest owed to an unaffiliated third-party
accredited investor into 155,471,605 shares of common stock.
During the month of May 2021, the company restated a promissory note as
convertible in the amount of $100,000.00. The holder, an unaffiliated
third-party unaccredited investor converted the note principle and accrued
interest owed into 400,000,000 restricted common shares. These common shares
have an effective date of May 6, 2021, and are denoted as such in section 3A of
this disclosure.
During the month of May 2021, the company converted a total of $54,934.69 in
convertible debt and accrued interest owed to an unaffiliated third-party
accredited investor into 73,246,253 shares of common stock. These common shares
have an effective date of May 6, 2021, and are denoted as such in section 3A of
this disclosure.
During the month of May 2021, a third-party accredited investor/noteholder
cancelled and returned 155,471,605 common shares to the company due to a
reversal of a third party note purchase.
During the month of May 2021, 25,000,000 restricted common shares were issued to
appointed members of the board of directors.
During the month of May 2021, the company converted a total of $52,021.00 in
convertible debt and accrued interest owed to an unaffiliated third-party
accredited investor into 115,602,222 shares of common stock.
During the month of May 2021, the company sold 40,000,000 shares of restricted
common stock to an unaffiliated third-party accredited investor for $10,000.00.
These common shares have an effective date of May 26, 2021.
We evaluated subsequent events after the balance sheet date through the date the
financial statements were issued. We did not identify any additional material
events or transactions occurring during this subsequent event reporting period
that required further recognition or disclosure in these financial statements.
Critical Accounting Policies
The following accounting policies were in effect for all periods presented:
Accounting Principles
The accounting and reporting policies of the Company conform to United States
generally accepted accounting principles.
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