This Annual Report on Form 10-K contains forward-looking statements. Our actual
results could differ materially from those set forth because of general economic
conditions and changes in the assumptions used in making such forward-looking
statements. The following discussion and analysis of our financial condition and
results of operations should be read together with the audited consolidated
financial statements and accompanying notes and the other financial information
appearing elsewhere in this Report. The analysis set forth below is provided
pursuant to applicable
The following is management's discussion and analysis of financial condition and results of operations and is provided as a supplement to the accompanying financial statements and notes to help provide an understanding of our financial condition, results of operations and cash flows during the periods included in the accompanying financial statements.
In this Annual Report on Form 10-K, "Company," "the Company," "us," and "our"
refer to
We intend the following discussion to assist in the understanding of our
financial position as of
Results of Operations General
We were incorporated under the laws of the
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As of the date of this Form 10-K, we continue to expand our operations and
expect to increase our revenues with additional working capital by increasing
our advertising and marketing. Our chief executive officer and director, Victor
Shvetsky, and our director and president,
We have raised
Our administrative office is located at
In 2018, we generated
In 2018, we continued to focus our business operations on the development of our
distribution agreements and reseller network as well as continue to advertise on
the Internet. We plan to continue to utilize our website to promote the products
to home renovation contractors and other purchasers of detection devices. We are
promoting the detection products by advertising our website and marketing to
independent distributors and others interested in detection devices. We purchase
the products from QRR, which is owned by our minority shareholder and is the
original manufacturer for RADEX product line. Under an oral agreement with QRR,
we have the exclusive distribution rights for sale of QRR products in
Critical Accounting Policy and Estimates. Our Management's Discussion and
Analysis of Financial Condition and Results of Operations section discusses our
financial statements, which have been prepared in accordance with accounting
principles generally accepted in
Inventories are stated at the lower of cost or market (net realizable value). We
periodically review the value of items in inventory and provide write-downs or
write-offs of inventory based on its assessment of market conditions.
Write-downs and write-offs are charged to cost of goods sold. Our inventory
consists entirely of finished goods available for sale. We analyze our accounts
receivable to determine if a reserve for non-collectible receivables is
necessary. There is no allowance recorded at
The following discussion of our financial condition and results of operations
should be read in conjunction with our audited financial statements for the year
ended
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For the Year Ended
Revenues. Our net revenues decreased
The decrease was due to a reduction in the sale of our RD1503 model. We attribute the decrease to a decrease in demand due to an increase in sales price and a period of interrupted sales to EU during early 2019.
Cost of Goods Sold. Our Cost of Goods Sold decreased
Operating Expenses. For the year ended
? General and administrative expenses, including advertising, increased
or 65.42%, to
the comparable period in 2018. The increase is primarily attributable to the
Company's reserve for a potential liability in connection with a tax
examination by certain European taxing authorities.
? Professional and consulting fees decreased
The decrease is due to a reduction in accounting and legal fees for certain
projects.
? Research and development cost decreased
decrease is attributable to the Company's reduction of research contract costs
to develop and maintain new and existing devices.
Net Loss. Our net loss increased by
Liquidity and Capital Resources. During the year ended
Our total assets were
Our total liabilities were
Our stockholders' equity/(deficit) was
We had
We had no cash provided by investing activities for year ended
We had no cash provided by financing activities for the year ended
We do not have sufficient funds for pursuing our plan of operation, but we are in the process of trying to procure funds sufficient to fund our operations until we are able to finance our operations through cash flow. There can be no assurance that we will be able to procure funds sufficient for such purpose. If operating difficulties or other factors (many of which are beyond our control) delay our realization of revenues or cash flows from operations, we may be limited in our ability to pursue our business plan. Moreover, if our resources from obtaining additional capital or cash flows from operations, once we commence them, do not satisfy our operational needs or if unexpected expenses arise due to unanticipated pressures or if we decide to expand our business plan beyond its currently anticipated level or otherwise, we will require additional financing to fund our operations, in addition to anticipated cash generated from our operations. Additional financing might not be available on terms favorable to us, or at all. If adequate funds were not available or were not available on acceptable terms, our ability to fund our operations, take advantage of unanticipated opportunities, develop or enhance our business or otherwise respond to competitive pressures would be significantly limited. In a worst-case scenario, we might not be able to fund our operations or to remain in business, which could result in a total loss of our stockholders' investment. If we raise additional funds through the issuance of equity or convertible debt securities, the percentage ownership of our stockholders would be reduced, and these newly issued securities might have rights, preferences or privileges senior to those of existing stockholders.
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The Company had no formal long-term lines of credit or other bank financing
arrangements as of
The Company has no current plans for the purchase or sale of any plant or equipment.
The Company has no current plans to make any changes in the number of employees.
The Company's financial statements are prepared using accounting principles
generally accepted in
Management intends to focus on raising funds going forward. The Company cannot provide any assurance or guarantee that it will be able to raise funds. Potential investors must be aware if it is unable to raise funds through the sale of its common stock and generate sufficient revenues, any investment made into the Company would be lost in its entirety.
The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
Income Tax Expense (Benefit)
The Company has a prospective income tax benefit resulting from a net operating loss carry forward and startup costs that may offset any future operating profit.
Impact of Inflation
The Company believes that inflation has had a negligible effect on operations over the past year.
Capital Expenditures
The Company expended no amounts on capital expenditures for the years ended
Plan of Operation
Our business strategy is to continue to market our website (www.quartarad.com). We have used our website to market products for sale to consumers as well to third party distributors. We will continue to strengthen our presence on e-commerce sites. We are also focusing on expanding our reseller network by targeting large consumer retail chains.
The number of detection devices, which we will be able to sell will depend upon the success of our marketing efforts through our website and the distributors that we will enter into agreement with to sell the products.
We intend to implement the following tasks within the next twelve months:
Inventory: We intend to purchase inventory to increase our sales. We believe
that these funds will be initially sufficient for us to increase our inventory
from
Marketing: (Estimated cost
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If we are able to successfully complete the above goals within the estimated timeframes set forth and are able to raise additional proceeds that may be needed to secure inventory and marketing funds, those funds would be allocated as follows:
Secure Distribution Agreements: (Estimated cost
Our management does not anticipate the need to hire additional full or part- time employees over the next six (6) months, as the services provided by our officers and directors and our independent contractor appear sufficient at this time. We believe that our operations are currently on a small scale that is manageable by these two individuals as well as our independent contractor. Our management's responsibilities are mainly administrative at this early stage. While we believe that the addition of employees is not required over the next six (6) months, the professionals we plan to utilize will be considered independent contractors. We do not intend to enter into any employment agreements with any of these professionals. Thus, these persons are not intended to be employees of our company.
We currently do not own any plants or equipment that we would seek to sell in the near future; we do not have any off-balance sheet arrangements; and we have not paid for expenses on behalf of our directors.
Off-Balance Sheet Arrangements
None.
Recent Accounting Pronouncements
We have adopted all recently issued accounting pronouncements. The adoption of the new accounting pronouncements is not anticipated to have a material effect on our operations.
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