NOTES TO FINANCIAL STATEMENTS
For the Years Ended November
30, 2016 and 2015
| 1. | Nature
of Operations and Going Concern |
Telco
Cuba, Inc. (fka CaerVision Global, Inc., fka American Mineral Group Minerals Inc.) (the “Company”) was incorporated
in the State of Nevada on August 10, 2007. Up until June 12, 2015, the company was previously engaged in the exploration,
development, and acquisition of mineral properties.
On
June 12, 2015, the Company consummated a Share Exchange with Amgentech, Inc., a Florida corporation. Under the terms of the
Share Exchange, the holders of Amgentech received 50,088 shares of Series B Preferred Stock that had been previously issued to
third parties in exchange for 100% of the issued and outstanding capital of Amgentech. Each share of Series B preferred is convertible
into 5,000 shares of common stock (254,440,000 shares total) and has voting rights of 5,000 per share (254,440,000 votes). As
a result of this transaction, Amgentech became a wholly owned subsidiary of the Company with control transferring to the previous
owners of Amgentech. Amgentech elected to be treated as the successor issuer for SEC reporting and accounting purposes. The Share
Exchange was accounted for as a reverse acquisition and re-capitalization. The Amgentech Shareholders obtained approximately 60%
of voting control on the date of Share Exchange. Amgentech was the acquirer for financial reporting purposes and the Company was
the acquired company. The Company filed an amendment to its articles of incorporation and changed its name to
Telco Cuba, Inc. Telco Cuba is foremost a technology solutions service provider offering services under the brand names “Amgentech”
and “Telco Cuba”.
Going
Concern
The
accompanying financial statements have been prepared on the basis of accounting principles applicable to a going concern; accordingly,
they do not give effect to adjustments that would be necessary should the Company be unable to continue as a going concern and
therefore be required to realize its assets and retire its liabilities in other than the normal course of business and at amounts
different from those in the accompanying financial statements. As shown in the accompanying financial statements, the Company
has an accumulated deficit of more than $5.7 million. The Company currently does not have the cash resources to meet its operating
commitments for the next twelve months and expects to have ongoing requirements for capital investment or debt to implement its
business plan. These factors, among others, raise substantial doubt that the Company will be able to continue as a going concern
for a reasonable period of time. Management plans to raise cash from public or private debt or equity financing, on an as needed
basis. The Company’s ability to continue as a going concern is in substantial doubt unless it can achieve profitable operations
and/or upon obtaining additional financing. The outcome of these matters cannot be predicted at this time.
| 2. | Significant
Accounting Policies |
The
accounting and reporting policies of the Company conform to United States generally accepted accounting principles.
| b) | Basic
and Diluted Loss per Share |
Basic
and diluted loss per share is based on the weighted average number of shares outstanding. Fully diluted shares are calculated
as follows:
Schedule
Of Earnings Per Share Basic And Diluted | |
| | | |
| | |
| |
November 30,
2016 | | |
November 30,
2015 | |
Weighted
average shares – basic | |
| 172,312,161 | | |
| 63,865,281 | |
Convertible
debentures | |
| 499,204,197 | | |
| 388,924,397 | |
Weighted
average shares – fully diluted | |
| 671,516,358 | | |
| 452,789,678 | |
Telco
Cuba, Inc.
NOTES TO FINANCIAL STATEMENTS
For the Years Ended November
30, 2016 and 2015
| c) | Fair
Value Measurements |
Valuation
Hierarchy
ASC
820 establishes a valuation hierarchy for disclosure of the inputs to valuation used to measure fair value. This hierarchy prioritizes
the inputs into three broad levels as follows. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets
or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable
for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the
financial instrument. Level 3 inputs are unobservable inputs based on the Company’s own assumptions used to measure assets
and liabilities at fair value. A financial asset or liability’s classification within the hierarchy is determined based
on the lowest level input that is significant to the fair value measurement.
The
following table provides the assets and liabilities carried at fair value measured on a recurring and non-recurring basis as of
November 30, 2016, and 2015:
Derivative
liabilities
Schedule of Fair
Value Measurements, Recurring and Nonrecurring | |
| | | |
| | | |
| | | |
| | |
Fair
Value Measurements | |
| |
Total
Carrying
value | | |
Quoted
prices in active markets (Level 1) | | |
Significant
other
observable inputs
(Level 2) | | |
Significant
unobservable inputs
(Level 3) | |
November 30,
2016 | |
$ | 132,098 | | |
| | | |
| | | |
$ | 132,098 | |
November 30,
2015 | |
$ | 1,324,409 | | |
| - | | |
| - | | |
$ | 1,324,409 | |
The
derivative liabilities are measured at fair value using quoted market prices and estimated volatility factors based on historical
quoted market prices for the Company’s common stock, and are classified within Level 3 of the valuation hierarchy.
The
following is a reconciliation of the beginning and ending balances for assets and liabilities measured at fair value on a recurring
basis using significant unobservable inputs (Level 3):
Schedule of Fair Value, Liabilities Measured on Recurring Basis | |
| | | |
| | |
| |
November 30,
2016 | | |
November 30,
2015 | |
Beginning
balance | |
$ | 1,324,409 | | |
$ | 921,815 | |
Derivative
liabilities recorded | |
| - | | |
| 180,343 | |
Unrealized
(gain) loss attributable due to the change in liabilities | |
| (1,192,311 | ) | |
| 222,251 | |
Ending
balance | |
$ | 132,098 | | |
$ | 1,324,409 | |
The
fair value of the derivative liabilities was calculated using the Black-Scholes Option Pricing model under the assumptions detailed
in Note 8. Gains and losses (realized and unrealized) included in earnings (to change in fair value of derivative liability) for
the years ended November 30, 2016, and 2015, are reported in other expenses as follows:
Schedule of change in fair value of derivative liability | |
| | | |
| | |
| |
November 30,
2016 | | |
November 30,
2015 | |
(Gain)
Loss on derivative liabilities recorded during the period | |
| - | | |
| - | |
Debt
discount attributable to derivative liabilities recorded | |
| - | | |
| - | |
Derivative
liabilities converted during the period | |
| - | | |
| - | |
Unrealized
(gain) attributable due to the change in liabilities | |
$ | (1,192,311 | ) | |
$ | (222,251 | ) |
Net
unrealized (gain) loss included in earnings | |
$ | (1,192,311 | ) | |
$ | (222,251 | ) |
Telco
Cuba, Inc.
NOTES TO FINANCIAL STATEMENTS
For the Years Ended November
30, 2016 and 2015
The
Company did not have any Level 1 or Level 2 assets or liabilities as of November 30, 2016, and November 30, 2015 and
had Level 3 liabilities consisting of notes payable. The carrying amount of the notes payable at November 30, 2016, and 2015
approximate their respective fair value based on the Company’s incremental borrowing rate.
Cash
and cash equivalents include money market securities that are considered to be highly liquid and easily tradable as of November 30,
2016, and 2015, respectively. These securities are valued using inputs observable in active markets for identical securities and
are therefore classified as Level 1 within our fair value hierarchy.
In
addition, FASB ASC 825-10-25 Fair Value Option was effective at the time of adoption. ASC 825-10-25 expands opportunities to use
fair value measurements in financial reporting and permits entities to choose to measure many financial instruments and certain
other items at fair value. The Company did not elect the fair value options for any of its qualifying financial instruments.
Income
taxes are accounted for in accordance with the provisions of FASB ASC 740, Accounting for Income Taxes. Deferred tax assets and
liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying
amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using
enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered
or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that
includes the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amounts
expected to be realized.
| e) | Cash
and Cash Equivalents |
For
purposes of the statement of cash flows, cash includes demand deposits, saving accounts and money market accounts. The Company
considers all highly liquid instruments with maturities of three months or less when purchased to be cash equivalents.
The
Companies follow the guidance of the FASB ASC 605-10-S99 “Revenue Recognition Overall – SEC Materials”. The
Companies record revenue when persuasive evidence of an arrangement exists, product delivery has occurred, the sales price to
the customer is fixed or determinable, and collectability is reasonably assured. Revenues consist primarily of product sales.
The
preparation of financial statements in conformity with US generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent liabilities at
the date of the financial statements, and the reported amounts of revenues and expenditures during the reporting period. Actual
results could differ from those reported.
| h) | Accounts
receivable and concentration of credit risk |
The
Company provides credit to its clients in the form of payment terms. The Company limits its credit risk by performing credit evaluations
of its clients and maintaining a reserve, if deemed necessary, for potential credit losses. Such evaluations include the review
of a customer’s outstanding balances with consideration towards such customer’s historical collection experience,
as well as prevailing economic and market conditions and other factors. The Company currently has no accounts receivable in 2016
and, therefore, does not currently have a concentrated credit risk associated with trade receivables.
Telco
Cuba, Inc.
NOTES TO FINANCIAL STATEMENTS
For the Years Ended November
30, 2016 and 2015
Inventory
is carried at the lower of cost or net realizable value, with the cost being determined on a first-in, first-out (FIFO) basis.
The Company reviews physical inventory for obsolescence and/or excess and will record a reserve if necessary. As of the date of
this report, no reserve was deemed necessary.
Fixed
assets are stated at cost less accumulated depreciation, with depreciation recognized on a straight-line basis over the shorter
of the estimated useful life of the asset or the lease term, if applicable. When assets are retired or disposed, the cost and
accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income. Repairs and
maintenance are charged to expense in the period incurred.
Fixed
assets consist primarily of computer equipment and furniture and fixtures. The estimated useful lives range from three to five
years..
The
Company’s property and equipment are individually reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable from the undiscounted future cash flows of such asset over the anticipated
holding period. An impairment loss is measured by the excess of the asset’s carrying amount over its estimated fair value.
Impairment
analyses are based on management’s current plans, asset holding periods, and currently available market information. If
these criteria change, the Company’s evaluation of impairment losses may be different and could have a material impact to
the consolidated financial statements.
For
the years ended November 30, 2016, and 2015, based on the results of management’s impairment analyses, there were no
impairment losses.
At
November 30, 2016 and 2015, fixed assets consisted of the following:
Schedule of fixed assets | |
| | | |
| | |
| |
November 30,
2016 | | |
November 30,
2015 | |
Furniture
and fixtures | |
$ | 3,153 | | |
$ | 3,153 | |
Computer
equipment | |
| 18,271 | | |
| 18,271 | |
Less:
accumulated depreciation | |
| (6,686 | ) | |
| (6,423 | ) |
Fixed
assets, net | |
$ | 14,738 | | |
$ | 15,001 | |
During
the years ended November 30, 2016, and 2015, there were no additions to fixed assets. Depreciation expense for the years
ended November 30, 2016, and 2015 was $263 and $13,192, respectively.
| k) | Recently
Adopted Accounting Pronouncements |
Management
does not believe that any recently issued but not yet effective accounting pronouncements if currently adopted would have a material
effect on the accompanying financial statements.
Telco
Cuba, Inc.
NOTES TO FINANCIAL STATEMENTS
For the Years Ended November
30, 2016 and 2015
As
of November 30, 2016, authorized capital stock consists of:
975,000,000
common shares with a par value of $0.001 per share; and
400,000
preferred shares with a par value of $0.001 per share
As of November 30, 2015, authorized capital stock consists of:
975,000,000
common shares with a par value of $0.001 per share; and
300,000
preferred shares with a par value of $0.001 per share
For
the year ended November 30, 2016:
During
the month of December 2015, 3,000 Series A shares were returned to the company from the holder.
Between
February 1st 2016 and July 31st 2016, the company issued 57,525,192 common shares in connection with the conversion
of $26,394 of convertible debentures and accrued interest. The conversions had an average price of $0.0003 per share and resulted
in no gain or loss.
During
the month of February 2016, the Company issued 1,200,000 common shares to unaffiliated third-party accredited investors in
connection with the conversion of 240 preferred B shares. This conversion was within the terms of preferred stock conversion feature
and resulted in no gain or loss on the exchange.
During
the month of March 2016, the Company issued 5,800,000 common shares to unaffiliated third-party accredited investors in connection
with the conversion of 1,160 preferred B shares. This conversion was within the terms of preferred stock conversion feature and
resulted in no gain or loss on the exchange.
During
the month of March 2016, the Company issued 5,000,000 shares as payment for consulting services valued at $14,370.
During
the month of March 2016, the Company sold and issued 15,000 preferred B shares for $112,500.
On
November 1, 2016, the Company issued 100,000 shares of Series C Preferred Stock to the Company’s CEO in exchange for
services rendered to the Company.
During
the month of November 2016, the Company sold and issued 55,555 Series A shares for $25,000.
During
the month of November 2016, the Company sold and issued 10,000,000 common stock shares for $5,000.00.
During
the month of November 2016, William Sanchez converted 2,400 Preferred B shares into 12,000,000 common shares. This conversion
was within the terms of preferred stock conversion feature and resulted in no gain or loss on the exchange.
Telco
Cuba, Inc.
NOTES TO FINANCIAL STATEMENTS
For the Years Ended November
30, 2016 and 2015
For
the year ended November 30, 2015:
During
December 2014, the Company converted a total of $17,520 in convertible debt and accrued interest owed to unaffiliated third-party
accredited investors into 12,130,729 shares of restricted common stock resulting in gain or loss.
Between
February and April 2015, the Company issued 12,230,000 common shares to unaffiliated third-party accredited investors in
connection with the conversion of 2,446 shares of Preferred B Shares resulting in no gain or loss.
Between
May 2015 and November 1, 2015, the Company issued 49,450,000 common shares to unaffiliated third-party accredited investors
in connection with the conversion of 9,890 preferred B shares resulting in no gain or loss.
On
September 4, 2015, the Company issued 100,000 shares of Series C Preferred Stock to the Company’s CEO and 3,007,146
common shares in exchange for services rendered to the Company.
For
the year ended November 30, 2016:
The
Company has 400,000 shares of preferred stock authorized of which 300,000 shares were designated in three series as follows:
Series
A Senior Convertible Voting Non-Redeemable Preferred Stock (the “Series A Preferred”) – 100,000 shares authorized,
3,000 shares issued and outstanding;
Series
B Senior Subordinated Convertible Voting Redeemable Preferred Stock (the “Series B Preferred”) – 100,000 shares
authorized, 71,344 shares issued and outstanding; and
Series
C Senior Subordinated Convertible Voting Redeemable Preferred Stock (the “Series C Preferred”) – 200,000 shares
authorized, issued and outstanding;
Each
share of Series A Preferred is convertible into 1,000 restricted shares of common stock. Each share of Series B Preferred is convertible
into 5,000 restricted shares of common stock. Series C Preferred Stock is convertible into 100,000 votable shares, but not convertible
to common shares otherwise. Conversion is at the discretion of the preferred shareholder, and no additional consideration is paid.
The
Company Preferred Stock has no dividend rights but does have liquidation rights as follows: The Series A Preferred is senior in
liquidation preference to all other series or classes of capital stock, preferred or common; the Series B Preferred is senior
in liquidation preference to all series or classes of capital stock other than the Series A Preferred; the Series C Preferred
is senior in liquidation preference to all classes of Common Stock.
Telco
Cuba, Inc.
NOTES TO FINANCIAL STATEMENTS
For the Years Ended November
30, 2016 and 2015
For
the year ended November 30, 2015:
The
Company has 400,000 shares of preferred stock authorized of which 300,000 shares were designated in three series as follows:
Series
A Senior Convertible Voting Non-Redeemable Preferred Stock (the “Series A Preferred”) – 100,000 shares authorized,
3,000 shares issued and outstanding;
Series
B Senior Subordinated Convertible Voting Redeemable Preferred Stock (the “Series B Preferred”) – 100,000 shares
authorized, 71,344 shares issued and outstanding; and
Series
C Senior Subordinated Convertible Voting Redeemable Preferred Stock (the “Series C Preferred”) – 100,000 shares
authorized, issued and outstanding.
Each
share of Series A Preferred is convertible into 1,000 restricted shares of common stock. Each share of Series B Preferred is convertible
into 5,000 restricted shares of common stock. Series C Preferred Stock is convertible into 10,000 votable shares, but not convertible
to common shares otherwise. Conversion is at the discretion of the preferred shareholder, and no additional consideration is paid.
The
Company Preferred Stock has no dividend rights but liquidation rights as follows: The Series A Preferred is senior in liquidation
preference to all other series or classes of capital stock, preferred or common; the Series B Preferred is senior in liquidation
preference to all series or classes of capital stock other than the Series A Preferred; the Series C Preferred is senior in liquidation
preference to all classes of Common Stock.
Issuance
of Preferred Stock
During
the month of December 2015, 3,000 Series A shares were cancelled and returned to the company. No consideration was paid for
the return of these shares. There were no further issuances or redemptions of Preferred Stock Series A during the fiscal year
ending November 30, 2016.
There
were no issuances or redemptions of Preferred Stock Series A during the fiscal year ending November 30, 2015.
During
the month of March 2016 15,000 Preferred Stock Series B shares were sold to 5 accredited investors. There were 3,800 Preferred
Stock Series B shares redeemed into 19,000,000 common stock shares. There were no further issuances or redemptions of Preferred
Stock Series B during the fiscal year ending November 30, 2016.
There
were no new issuances of Preferred Stock Series B during the fiscal year ending November 30, 2015. There were 12,136 Preferred
Stock Series B shares redeemed into 60,680,000 common stock shares. There were no further redemptions of Preferred Stock Series
B during the fiscal year ending November 30, 2015.
100,000
shares of Preferred Stock Series C were issued during November 2016. These shares are included in the financial statements
as Stock Based Compensation and are valued at $394,618. There were no further issuances of Preferred Stock Series C during the
fiscal year ending November 30, 2016.
100,000
shares of Preferred Stock Series C were newly issued during September 2015. 100,000 Preferred Stock Series C shares represent
the entire authorized of this class of non-converting class of preferred shares for year ended November 30, 2015.
For
the year ended November 30, 2016, and 2015 there are no outstanding stock options and warrants.
Telco
Cuba, Inc.
NOTES TO FINANCIAL STATEMENTS
For the Years Ended November
30, 2016 and 2015
The
Company’s financial instruments consist of cash, accounts payable and accrued liabilities. It is management’s opinion
that the Company is not exposed to significant interest or credit risks arising from these financial instruments. Because of the
short maturity and capacity of prompt liquidation of such assets and liabilities, the fair values of these financial instruments
approximate their carrying values.
Financial
instruments which potentially subject the Company to concentrations of credit risk consist principally of cash. The Company places
its cash with high credit quality financial institutions in the United States. Bank deposits in the United States did not exceed
federally insured limits as of November 30, 2015, and 2016.
The
Company may operate outside the United States of America and thus may have significant exposure to foreign currency risk in the
future due to the fluctuations between the currency in which the Company operates and the U.S. dollar.
A
reconciliation of income taxes at statutory rate with the reported income taxes is as follows:
Schedule of Income
Taxes | |
| | | |
| | |
Period
ended November 30, | |
2016 | | |
2015 | |
Income
tax expense (benefit) at Federal statutory rate of 35% | |
$ | 225,500 | | |
$ | (409,800 | ) |
(Utilization)
increase in tax loss carryforward | |
| (225,500 | ) | |
| 409,800 | |
Net
income tax | |
$ | - | | |
$ | - | |
At
November 30, 2016 the Company has available net operating losses of approximately $7.1 million which may be carried forward
to apply against future taxable income. These losses will expire in 2034. Deferred tax assets related to these losses have not
been recorded due to uncertainty regarding their utilization.
As
of November 30, 2016, and 2015, the Company has issued and outstanding, convertible debt totaling $572,843 and $395,479,
of which all but one note for $15,000 in 2016 and $1,973 in 2015 were held by unrelated third parties. As of November 30,
2016, these debts were all due on demand, bear interest at the rates between 8% and 12% per annum and are convertible at a discount
to the stock’s market price of between 15% and 55%, based on a look back period of between 10 and 30 days prior to conversion.
Combined, these convertible instruments can be converted into 499,204,917 and 388,924,397 shares of common stock as of November 30,
2016, and 2015, respectively.
The
following table provides a summary of the changes in the Company’s convertible notes, as of November 30, 2016, and
2015:
Schedule of Convertible Debentures | |
| | | |
| | |
| |
November 30,
2016 | | |
November 30,
2015 | |
Prior
year balance forward | |
$ | 395,479 | | |
$ | 375,925 | |
Issuance
of new convertible notes | |
| 216,642 | | |
| 305,343 | |
Discount
upon issuance of new notes | |
| - | | |
| (180,343 | ) |
Amortization
of discount | |
| 119,366 | | |
| 60,977 | |
Principal
payments | |
| (68,250 | ) | |
| (149,150 | ) |
Conversion
of notes | |
| (26,394 | ) | |
| (17,273 | ) |
Balance
as of yearend | |
$ | 636,843 | | |
$ | 395,479 | |
Telco
Cuba, Inc.
NOTES TO FINANCIAL STATEMENTS
For the Years Ended November
30, 2016 and 2015
For
the years ended November 30, 2016, and 2015, interest expense attributable to convertible debentures was $41,111, and $27,662,
while accrued interest was $64,372, and $69,071, respectively.
During
the year ended November 30, 2015, the Company issued four notes total of $140,000 in new convertible debentures. Due to the
variable conversion price associated with the above convertible debentures, the Company has determined that the conversion feature
is considered a derivative liability. The accounting treatment of derivative financial instruments requires that the Company record
the fair value of the derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair value as
of each subsequent balance sheet date. The initial fair value of the embedded debt derivative at the date of issuance was $180,343
allocated as a debt discount and derivatives liability. The debt discount is being amortized over the term of the convertible
promissory notes.
In
addition, the Company recorded $336,810 in convertible debentures previously issued by Telco Cuba prior to the merger with Amgentech.
These debts bear interest at the rates between 8% and 12% per annum, and are convertible at a discount to the stock’s market
price of between 15% and 55%, based on a look back period of between 10 and 30 days prior to conversion. Combined, these convertible
instruments can be converted into 499,204,197 and 388,394,927 shares of common stock as of November 30, 2016 and November 30,
2015, respectively.
In
June 2008, the FASB finalized ASC 815, “Determining Whether an Instrument (or Embedded Feature) is indexed to an Entity’s
Own Stock.” Under ASC 815, instruments which do not have fixed settlement provisions are deemed to be derivative instruments.
The Company has determined that it needs to account for convertible debentures issued for its shares of common stock, as derivative
liabilities, and apply the provisions of ASC 815. The instruments have a ratchet provision that adjust either the exercise price
and/or quantity of the shares as the conversion price equals to variable % of the “market price” at the time of conversion,
as a result, the instruments need to be accounted for as derivative liabilities. In accordance with ASC 815, these convertible
debentures have been re-characterized as derivative liabilities. ASC 815, “Accounting for Derivative Instruments and Hedging
Activities” (“ASC 815”) requires that the fair value of these liabilities be re-measured at the end of every
reporting period with the change in fair value reported in the statement of operations.
The
fair value of the derivative liabilities was measured using the Black-Scholes option pricing model.
At
November 30, the fair value of the embedded derivatives was determined using Binomial Option Pricing Model based on the following
assumptions:
Schedule of assumptions | |
| | | |
| | |
| |
November 30,
2016 | | |
November 30,
2015 | |
(1)
dividend yield | |
| 0 | % | |
| 0 | % |
(2)
expected volatility | |
| 352.94 | % | |
| 352.94 | % |
(3)
weighted average risk-free interest rate, | |
| 4 | % | |
| 4 | % |
(4)
expected life, and | |
| 0.25
Year | | |
| 0.25
Year | |
(5)
estimated fair value of the Company’s common stock per share. | |
| $.004 | | |
| $.004 | |
Telco
Cuba, Inc.
NOTES TO FINANCIAL STATEMENTS
For the Years Ended November
30, 2016 and 2015
The
following table provides a summary of the changes in the Company’s notes payables, as of November 30, 2016, and 2015:
Schedule of Notes Payable | |
| | | |
| | |
| |
November 30,
2016 | | |
November 30,
2015 | |
Prior
year balance forward: | |
| | | |
| | |
Due
to non-affiliated third parties | |
$ | 2,233,361 | | |
$ | 2,337,938 | |
Due
to related parties | |
| 132,577 | | |
| 104,577 | |
Issuance
of notes to related party | |
| - | | |
| 28,000 | |
Note
repayments to related party | |
| (12,000 | ) | |
| - | |
Balance
on November 30 | |
$ | 2,353,938 | | |
$ | 2,365,938 | |
For
the years ended November 30, 2016, and 2015, interest expense attributable to notes payable was $145,669, and $168,851, respectively
| 9. | Related
party transactions |
Officers
have from time-to-time lent money to the Company. At November 30, 2016, and 2015, they had a balance owed to them (included
in the balances above in footnotes 6 and 8) of $135,577, and $134,550, respectively. The balances do not bear interest and are
due on demand. The notes are discounted using an imputed interest rate of 12%.
| 10. | Commitments
and Contingencies |
From
time to time, we may be involved in litigation relating to claims arising out of our operations in the normal course of business.
As of the date of filing of this report, there were no pending or threatened lawsuits.
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.
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 on 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 in convertible debt and accrued interest owed to unaffiliated
third-party accredited investors into 276,163,333 shares of restricted common stock.
Telco
Cuba, Inc.
NOTES TO FINANCIAL STATEMENTS
For the Years Ended November
30, 2016 and 2015
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 in convertible debt and accrued interest owed to unaffiliated
third-party accredited investors into 1,262,266,666 shares of restricted common stock.
During
the month of February 2018, the Company converted a total of $38,925 in convertible debt and accrued interest owed to unaffiliated
third-party accredited investors into 768,225,915 shares of restricted common stock.
During
the month of March 2018, the Company converted a total of $14,550 in convertible debt and accrued interest owed to unaffiliated
third-party accredited investors into 306,000,000 shares of restricted common stock.
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 in 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 in 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 month of February 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 February 2019, the Company converted a total of $16,900 in convertible debt and accrued interest owed to unaffiliated
third-party accredited investors into 338,000,000 shares of restricted common stock.
During
the month of March 2019, the Company converted a total of $18,500 in convertible debt and accrued interest owed to unaffiliated
third-party accredited investors into 370,000,000 shares of restricted common stock.
During
the month of April 2019, the Company converted a total of $15,000 in convertible debt and accrued interest owed to unaffiliated
third-party accredited investors into 300,000,000 shares of restricted common stock.
During
the month of December 2020, the Company converted a total of $3,900 in convertible debt and accrued interest owed to unaffiliated
third-party accredited investors into 93,000,000 shares of common stock.
During
the month of January 2021, the Company converted a total of $51,388 in convertible debt and accrued interest owed to unaffiliated
third-party accredited investors into 599,867,533 shares of common stock.
Telco
Cuba, Inc.
NOTES TO FINANCIAL STATEMENTS
For the Years Ended November
30, 2016 and 2015
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.
During
the month of February 2021, the Company converted a total of $49,259 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 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. 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.
During
the month of May 2021, the company converted a total of $54,934 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.
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. These common shares have an effective date of May 26, 2021.