Item 1. Description of Business
Forward-looking Statements
This annual report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "will", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.
Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable laws, including the securities laws of the United States, we do not intend to update any of the forward-looking statements so as to conform these statements to actual results.
As used in this annual report, the terms "we", "us", "our", “the Company”, and "Tecton" mean Tecton Corporation, unless otherwise indicated.
All dollar amounts refer to US dollars unless otherwise indicated.
Overview
We were incorporated as a Nevada company on January 19, 2006 as a wholly owned subsidiary of Hemis Corporation, a public company quoted on the OTC Bulletin Board under the symbol “HMSO.OB”. On December 1, 2006 Hemis declared a dividend in the amount of one common share of Tecton for every $0.0001 of dividend declared, which equated to one common share of Tecton for every 100 shares of Hemis owned as at December 1, 2006. At the same time the dividend was declared, Hemis cancelled its share ownership in Tecton. The effect of this dividend declaration and share cancellation was that Tecton was spun off as an independent company.
The company discontinued operations on or about June, 2008 and has incurred losses of $4,881,101 since inception January 19, 2006 through January 31, 2013.
Our fiscal year end is January 31. We were quoted on the OTC Bulletin Board under the symbol “TTNC.OB”.
Recent Business Developments
On May 9, 2008, Bruno Weiss resigned from his position as our Chief Financial Officer. Mr. Weiss retains his position as our director. On May 13, 2008, Norman Meier was appointment to act as our Chief Financial Officer effective as of May 13, 2008.
On February 7, 2011, Norman Meier, sole officer and director, resigned from all offices he held and appointed Micah Eldred as Director and President, Chief Executive Officer, Secretary, Chief Financial Officer, and Treasurer. Immediately thereafter, Mr. Meier resigned from the Board of Directors, leaving the board with Mr. Eldred as the sole officer and director of Tecton.
On January 14, 2013, Mr. Eldred, believing it to be in the best interest of the Company to bring on additional board members and officers, pursuant to Sections 78.335(5) and the Bylaws, appointed Carl Dilley and Christine Zitman as Directors, to hold said director position until the next shareholder meeting, and Christine Zitman as Secretary/Treasurer, to hold said officer positions until removed by the Board, resignation, or death. Micah Eldred remains as Director, Chairman of the Board, President and Chief Executive Officer.
Our Business
We were engaged in the acquisition of uranium properties that are either past producers or have been the subject of prior work programs and/or contain historic resources. On or about June 1, 2008, the Company ceased operations.
In February of 2011, the Company brought all of its corporate filings with the State of Nevada up to date. As of January 31, 2013, the Company is a shell company and has no operations.
Research and Development Expenditures
We have not spent any amounts on research and development activities since our inception.
Employees and Consultants
During the final periods of operations our managers and directors worked part time until operations were discontinued.
Intellectual Property
We have not filed for any protection of our trademark. The only intellectual property we own is our trademark and logo for our company.
Item 1A.
Item 1A. Risk Factors
Not Applicable.
Item 1B.
Item 1B. Unresolved Staff Comments
None.
Item 2.
Item 2. Properties
Our principal executive offices are located at 15500 Roosevelt Blvd, Suite 301, Clearwater, FL 33760.
Item 3.
Item 3. Legal Proceedings
As of March 31, 2013, there are no material pending legal proceedings (other than ordinary routine litigation incidental to our business) to which we are a party or of which any of our properties is the subject. Also, our management is not aware of any legal proceedings contemplated by any governmental authority against us.
Tecton commenced negotiations with the holders of the unsecured claims in order to establish a consensus on the framework for a Chapter 11 plan of reorganization that would satisfy the requirements of section 524(g) of the Bankruptcy Code and treat all creditors and stakeholders fairly and equitably. In May 2011, counsel for Tecton began discussions with Tecton’s creditors to explore the feasibility of and the potential for a pre-negotiated Chapter 11 plan of reorganization that would afford all the stakeholders an opportunity for some recovery of their claim, if not all.
Upon receiving consensus among the Tecton’s creditors, the Company filed a pre-negotiated Plan of Reorganization with its Chapter 11 bankruptcy petition on February 2, 2012 in the United States Bankruptcy Court, Middle District of Florida (Case no. 8:12-bk-01564-KRM). Unfortunately, the US Trustee filed a Motion to Dismiss Case or Alternatively a Motion to Convert Case to Chapter 7. After discussions with the Trustee, and with the intent to preserve any existing shareholder value, the Company consented to the dismissal and the bankruptcy case was subsequently dismissed on order of the Court on April 2, 2012.
Item 4.
Item 4. Mine Safety Disclosures
The Company had no active mines at January 31, 2013.
PART II
Item 5.
Item 5. Market for Common Equity and Related Stockholder Matters
Market Information
Our common stock is not traded on any exchange. Our common stock became quoted on the OTC Bulletin Board and the OTC Markets marketplaces simultaneously in August 2007, under the trading symbol “TTNC”. On October 20, 2008 the TTNC quotation was removed from the OTC Bulletin Board, but remains quoted on the OTC Markets marketplace. The market for our stock is highly volatile. We cannot assure you that there will be a market in the future for our common stock. The OTC Bulletin Board and the OTC Markets securities (“OTC Securities”) are not listed and traded on the floor of an organized national or regional stock exchange. Instead, OTC Securities transactions are conducted through a telephone and computer network connecting dealers in stocks. OTC Securities are traditionally stocks of smaller companies that do not meet the financial and other listing requirements of a regional or national stock exchange.
The following table shows the high and low prices of our common shares reported to have been transacted on the .and OTC Markets The following prices reflect inter-dealer market participant reported transactions, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions:
Holders
As of March 31, 2013, there were 354 holders of record of our common stock.
Dividends
Holders of our common stock are entitled to dividends if declared by the Board of Directors out of funds legally available therefore. As of March 31, 2013 no cash dividends have been declared.
We do not intend to issue any cash or stock dividends in the near future. We intend to retain earnings, if any, to finance the development and expansion of our business. Future dividend policy will be subject to the discretion of the Board of Directors and will be contingent upon future earnings, if any, our financial condition, capital requirements, general business conditions and other factors.
On May 23, 2007 we issued a stock dividend in the amount of $0.00001 per share on the issued and outstanding common shares of Tecton as of May 23, 2006 for which we issued one common share of Tecton Uranium Corporation for every $0.00001 of dividend declared, which amounted to one share of Tecton Uranium Corporation for every 1 share of Tecton. Prior to the stock dividend, Tecton Uranium was a wholly owned subsidiary of Tecton. After the stock dividend, Tecton’s shares in Tecton Uranium were cancelled, so that Tecton now has no ownership interest in Tecton Uranium Corporation.
Equity Compensation Plans
As of March 31, 2013, we did not have any equity compensation plans.
Recent Sales of Unregistered Securities
Since inception on January 19, 2006 until March 25, 2008, we have completed the following sales of unregistered securities, not including shares registered on the Registration Statement on form SB-2 which was declared effective by the SEC on April 17, 2007.
·
On January 19, 2006 we issued 1,000,000 shares of our common stock to Hemis Corporation. This issuance was exempt from registration pursuant to Regulation S of the Securities Act. On December 1, 2006 the 1,000,000 shares of our common stock were cancelled.
·
On December 2, 2006 we issued an aggregate of 198,010 shares of our common stock to various non-U.S. investors, at a part value of $0.0001, in exchange for cash proceeds of $19.80. This issuance was exempt from registration pursuant to Section 4(2) and Regulation S of the Securities Act.
·
On December 2, 2006 we issued an aggregate of 49,000,000 shares of our common stock to Douglas Oliver, our former Chief Operating Officer and former director, and various non-U.S. investors, at a par value of $0.0001, in exchange for cash proceeds of $4,900. This issuance was exempt from registration pursuant to Section 4(2) and Regulation S of the Securities Act.
·
On December 10, 2006 we issued an aggregate of 5,220,000 shares of common stock to various investors in exchange for cash at $0.001 per share. This issuance was exempt from registration pursuant to Section 4(2) and Regulation S of the Securities Act.
·
On December 18, 2006 we also issued an aggregate of 2,520,000 shares of common stock to various non-U.S. investors in exchange for cash at $0.01 per share.
·
In February 2007 we issued an aggregate of 5,604,000 shares of common stock to various non-U.S. investors in exchange for cash at $0.10 and $0.01 per share resulting in net proceeds of $515,000 ($55,000 in commission was paid to Canaccord Capital as a result of this private placement). In addition, as commission for the private placement of the 5,604,000 shares, we issued 550,000 warrants to Canaccord Capital Inc. on February 5, 2007. On February 25, 2008 Canaccord Capital Inc. exercised 240,750 of the warrants at an exercise price of $0.10 per share for aggregate cash proceeds of $24,075. Canaccord Capital Inc. retained 309,250 warrants which are exercisable at a price of $0.10 per share until February 5, 2009. This issuance was exempt from registration pursuant to Regulation S of the Securities Act.
·
On February 5, 2007 we issued 1,000,000 common shares to Hudson Capital Corporation as compensation for $100,000 in investor relations and business development consulting services between February 1, 2007 and February 1, 2008. The shares issued in exchange for services were valued at approximately the fair value of shares issued during the period services were rendered. This issuance was exempt from registration pursuant to Regulation S of the Securities Act.
·
On February 9, 2007 we issued an aggregate of 3,000,000 shares of common stock to two non-U.S. persons pursuant to a mining agreement that we entered into in relation to the Wapata Lake Property. This issuance was exempt from registration pursuant to Regulation S of the Securities Act.
·
On February 16, 2007 we issued an aggregate of 580,000 shares of common stock to various non-U.S. investors in exchange for cash at $0.25 per share. This issuance was exempt from registration pursuant to Regulation S of the Securities Act.
·
In March 2007 we issued an aggregate of 4,912,000 shares of common stock to various non-U.S. investors in exchange for cash at $0.25 per share. This issuance was exempt from registration pursuant to Regulation S of the Securities Act.
·
In April 2007 we issued an aggregate of 490,600 shares of common stock, at $0.25 per share, to various non-U.S. investors in exchange for cash proceeds of $111,044. This issuance was exempt from registration pursuant to Regulation S of the Securities Act.
·
In May 2007 we issued an aggregate of 765,000 shares of common stock, at $0.25 per share, to various non-U.S. investors in exchange for cash proceeds of $191,250. This issuance was exempt from registration pursuant to Regulation S of the Securities Act.
·
On June 7, 2007 we issued an aggregate of 100,000 shares of our common stock to one non-U.S. investor in exchange for cash at $0.25 per share. This issuance was exempt from registration pursuant to Regulation S of the Securities Act.
·
On June 7, 2007 we also issued 200,000 shares of our common stock to GeoXplor Corp. in order to maintain our interest in the Firefly property. The shares were issued pursuant to Section 4(2) of the Securities Act.
·
In July 2007 we issued an aggregate of 3,691,000 shares of common stock, at $0.25 per share, to various non-U.S. investors in exchange for cash proceeds of $834,000. This issuance was exempt from registration pursuant to Regulation S of the Securities Act.
·
In August 2007 we issued an aggregate of 440,000 shares of common stock, at $0.25 per share, to one non-U.S. investor in exchange for cash proceeds of $110,000. This issuance was exempt from registration pursuant to Regulation S of the Securities Act.
·
On September 13, 2007 we issued 430,000 shares of our common stock, at $0.25 per share, to one non-U.S. investor for cash proceeds of $92,500. We also issued 60,000 shares of our common stock to a consultant in exchange for services rendered with an approximate value of $15,000. The shares issued in exchange for services were valued at $0.25 per share, approximately the fair value of shares issued during the period services were rendered. These issuances were exempt from registration pursuant to Regulation S of the Securities Act.
·
On October 15, 2007 we issued 200 shares of our common stock to one non-U.S. investor pursuant to a settlement agreement. This issuance was exempt from registration pursuant to Regulation S of the Securities Act.
·
On November 20, 2007 we issued 95,000 shares of our common stock to a non-U.S. individual pursuant to the terms of a finder’s fee agreement. This issuance was exempt from registration pursuant to Regulation S of the Securities Act.
·
On January 23, 2008, 80,000 shares of our common stock became issuable to a non-U.S. investor, at $0.55 per share per share, in exchange for cash proceeds of $44,000. This issuance was exempt from registration pursuant to Regulation S of the Securities Act.
·
On February 7, 2008 440,000 shares of our common stock became issuable to a non-U.S. investor, at $0.25 per share, in exchange for cash proceeds of $110,000. This issuance was exempt from registration pursuant to Regulation S of the Securities Act.
·
On February 21, 2008 we issued 400,000 shares of our common stock a non-U.S. investor, at $0.42 per share, in exchange for cash proceeds of $168,000. This issuance was exempt from registration pursuant to Regulation S of the Securities Act.
·
On March 12, 2008 we issued 150,000 shares of our common stock a non-U.S. investor, at $0.42 per share, in exchange for cash proceeds of $63,000. This issuance was exempt from registration pursuant to Regulation S of the Securities Act.
·
On March 25, 2008 we issued 180,000 shares of our common stock a non-U.S. investor, at $0.25 per share, in exchange for cash proceeds of $45,000. This issuance was exempt from registration pursuant to Regulation S of the Securities Act.
In April 2008, the Company entered into a subscription agreement with a non-U.S. investor for the purchase of 533,333 at a price of $0.42 per share, resulting in cash proceeds of $224,000. As of January 31, 2012, the issuance of these shares had not yet been approved by the Board. This issuance was exempt from registration pursuant to Regulation S of the Securities Act. The company was unable to issue these shares and at January 31, 2012 and 2011, considers this common stock issuable.
Our reliance upon the exemption under Section 4(2) of the Securities Act of 1933 was based on the fact that the issuance of these shares did not involve a “public offering.” Each offering was not a "public offering" as defined in Section 4(2) due to the insubstantial number of persons involved in the deal, size of the offering, manner of the offering and number of securities offered. We did not undertake an offering in which we sold a high number of shares to a high number of investors. In addition, the investors had the necessary investment intent as required by Section 4(2) since they agreed to and received a share certificate bearing a legend stating that such shares are restricted pursuant to Rule 144 of the Securities Act. This restriction ensures that these shares would not be immediately redistributed into the market and therefore not be part of a "public offering." The investors negotiated the terms of the transactions directly with our executive officers.
No general solicitation was used, no commission or other remuneration was paid in connection with these transactions, and no underwriter participated. Based on an analysis of the above factors, these transactions were effected in reliance on the exemption from registration provided in Section 4(2) of the Securities Act for transactions not involving any public offering.
Our reliance upon the exemption under of Regulation S of the Securities Act was based on the fact that the sale of the securities was completed in an "offshore transaction", as defined in Rule 902(h) of Regulation S. We did not engage in any directed selling efforts, as defined in Regulation S, in the US in connection with the sale of the securities. Each investor was not a US person, as defined in Regulation S, and was not acquiring the securities for the account or benefit of a US person.
On April 18, 2007 the SEC declared our registration statement on Form SB-2 effective. This registered 34,408,000 shares of our common stock for resale by approximately 85 selling shareholders. This registration statement did not include a public offering.
Since inception on January 19, 2006 we have made no purchases of equity securities.
Item 6.
Item 6. Selected Financial Data
Not applicable.
Item 7.
Item 7. Management's Discussion and Analysis or Plan of Operation
We were formerly an exploration stage company with limited operations and no revenues from our business operations. Our auditors have issued a going concern opinion. This means that our auditors believe there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional financing to fund our operations.
Forward-Looking Statements
This report contains forward-looking statements that involve risks and uncertainties. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology including, "could" "may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential" and the negative of these terms or other comparable terminology. These statements are only predictions. Actual events or results may differ materially.
While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested in this Prospectus.
Plan of Operations
The company is currently preparing the necessary documents to bring the past due filings current. There are no operations and no plan of operations at this time but the company is investigating ways to increase shareholder value and desires to begin operations in the future.
Results of Operations
The company incurred $6,338 in legal fees and $325 in filing fees during the year ended January 31, 2013 pertaining to the bankruptcy that was discontinued in April of 2012 for total operating expenses of $6,663, as compared to operating expenses of $27,609 for the year ended January 31, 2012.
Interest expense for the year ended January 31, 2013 was $2,705 pertaining to a note payable to a related party, as compared to interest expense of $0 for the year ended January 31, 2012.
The company expects to incur additional accounting, auditing and transfer agency fees moving forward. As of March 31, 2013 there has been no revenue or operating income. The board of directors and management are investigating and pursuing various alternatives to increase shareholder value. As of March 31, 2013 there have been no definitive agreements in this regard.
Liquidity and Capital Resources
As of January 31, 2013, we had no cash or liquid assets.
Our net loss of $4,881,101 from January 19, 2006 (date of inception) to January 31, 2013 was funded by a combination of our equity and debt financing.
Going Concern
We are currently a shell company with no operations. Our existence is dependent on funding from related parties or investors. For these reasons our auditors stated in their report that they have substantial doubt we will be able to continue as a going concern.
Future Financings
None scheduled at this time.
Off-Balance Sheet Arrangements
We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.
Inflation
The effect of inflation on our revenue and operating results has not been significant.
Item 7A.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
Not Applicable
Item 8.
Item 8. Financial Statements and Supplementary Data
TECTON CORPORATION
FINANCIAL STATEMENTS
JANUARY 31, 2013
2451 N. McMullen Booth Road
Suite.308
Clearwater, FL 33759
855.334.0934 Toll free
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors and Stockholders
Tecton Corporation
We have audited the accompanying balance sheets of Tecton Corporation as of January 31, 2013 and 2012, and the related statements of losses, stockholders’ deficiency, and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, 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. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Tecton Corporation, Inc. as of January 31, 2013 and 2012, 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 of America.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As shown in the accompanying financial statements, the Company has significant net losses and cash flow deficiencies. Those conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans regarding those matters are described in Note B. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ DKM Certified Public Accountants
DKM Certified Public Accountants
Clearwater, Florida
April 8, 2013
TECTON CORPORATION
BALANCE SHEETS
The accompanying notes are an integral part of these financial statements
TECTON CORPORATION
STATEMENTS OF OPERATIONS
The accompanying notes are an integral part of these financial statements
TECTON CORPORATION
STATEMENTS OF STOCKHOLDERS' DEFICIENCY
The accompanying notes are an integral part of these financial statements
TECTON CORPORATION
STATEMENTS OF CASH FLOWS
The accompanying notes are an integral part of these financial statements
TECTON CORPORATION
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2013
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A summary of the significant accounting policies applied in the preparation of the accompanying financial statements follows.
Business and Basis of Presentation
The company was incorporated as a Nevada company on January 19, 2006 as a wholly owned subsidiary of Hemis Corporation, a public company quoted on the OTC Bulletin Board under the symbol “HMSO.OB”. On December 1, 2006 Hemis declared a dividend in the amount of one common share of Tecton for every $0.0001 of dividend declared, which equated to one common share of Tecton for every 100 shares of Hemis owned as at December 1, 2006. At the same time the dividend was declared, Hemis cancelled its share ownership in Tecton. The effect of this dividend declaration and share cancellation was that Tecton was spun off as an independent company.
The company discontinued operations on or about June 1, 2008 and has incurred losses of $4,881,101 since inception January 19, 2006 through January 31, 2013. We are currently a shell company with no operations.
Cash
For purposes of the Statements of Cash Flows, the Company considers all highly liquid debt instruments purchased with a maturity date of three months or less to be cash equivalents.
Income Taxes
The Company uses the liability method to record income tax activity. Deferred taxes are determined based upon the estimated future tax effects of differences between the financial reporting and tax reporting bases of assets and liabilities given the provisions of currently enacted tax laws.
The accounting for uncertainty in income taxes recognized in an enterprise’s financial statements uses the threshold of more-likely-than-not to be sustained upon examination for inclusion or exclusion. Measurement of the tax uncertainty occurs if the recognition threshold has been met.
Net Earnings (Losses) Per Common Share
The Company computes earnings per share under. Net loss per common share is computed by dividing net loss by the weighted average number of shares of common stock and dilutive common stock equivalents outstanding during the year. Dilutive common stock equivalents may consist of shares issuable upon conversion of convertible preferred shares and the exercise of the Company's stock options and warrants (calculated using the treasury stock method). During the period January 19, 2006 (date of inception) to January 31, 2013, the Company has no potentially dilutive common stock equivalents to consider in the calculation of the weighted average number of common shares outstanding. Common stock issuable is considered outstanding as of the original approval date for purposes of earnings per share computations.
Capital assets
Capital assets are recorded at cost. When retired or otherwise disposed, the related carrying value and accumulated depreciation are removed from the respective accounts and the net difference less any amount realized from disposition, is reflected in earnings. For financial statement purposes, capital assets are recorded at cost and are depreciated using the reducing balance method at 30% and 20 % per annum.
Fair Value of Financial Instruments
The fair value of financial instruments, which include cash, loans receivable, accounts payable and accrued expenses and advances from related parties were estimated to approximate their carrying values due to the immediate or short-term maturity of these financial instruments. Management is of the opinion that the Company is not exposed to significant interest, currency or credit risks arising from financial instruments.
Foreign Currency Translation
The Company records changes in foreign currency by translating assets and liabilities at current exchange rates in effect at the end the period. Revenues and expenses are translated at the average rate of exchange throughout the year. Resulting translation adjustments are recorded as a separate component in stockholder's equity. Foreign currency transaction gains and losses, if any, are included in the statement of operations.
Comprehensive Income
The Company records comprehensive income as the change in equity of a business during a period from transactions and other events and circumstances from non-owner sources. It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners. Other comprehensive income (loss) includes foreign currency translation adjustments and unrealized gains and losses on available-for-sale securities. As of January 31, 2013 the Company had no items that represent comprehensive loss and, therefore, has not included a schedule of comprehensive loss in the financial statements.
Stock Based Compensation
Stock based compensation costs are measured at fair value on date of grant and recognition of compensation over the service period for awards expected to vest. The Company determines the fair value of awards using the Black - Scholes valuation model. As of January 31, 2013, the Company has not issued any awards that qualify as stock based compensation.
Use of Estimates
The preparation of financial statements in conformity with U.S. 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 of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
New Accounting Pronouncements
The Company reviews new accounting standards as issued. No new standards had any material effect on these financial statements. The accounting pronouncements issued subsequent to the date of these financial statements that were considered significant by management were evaluated for the potential effect on these consolidated financial statements. Management does not believe any of the subsequent pronouncements will have a material effect on these consolidated financial statements as presented and does not anticipate the need for any future restatement of these consolidated financial statements because of the retro-active application of any accounting pronouncements issued subsequent to January 31, 2013 through the date these financial statements were issued.
NOTE B - GOING CONCERN MATTERS
The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the accompanying financial statements for the period January 19, 2006 (date of inception) to January 31, 2013, the Company incurred losses of $4,881,101. The Company has no liquid assets. These factors, among others, indicate that the Company will be unable to continue as a going concern for a reasonable period of time.
The Company's existence is dependent upon management's ability to develop profitable operations and resolve its liquidity problems. The accompanying financial statements do not include any adjustments that might result should the Company be unable to continue as a going concern.
NOTE C - ADVANCES FROM RELATED PARTIES AND RELATED PARTY TRANSACTIONS
Prior to the period ended January 31, 2009, the Company's significant shareholders had advanced funds to the Company for working capital purposes. During the years ended January 31, 2013 and 2012, stockholders advanced funds to the Company for bankruptcy proceedings and reinstatement of the Company in Nevada.
On April 27, 2011, the Company borrowed $25,000 from Island Capital Management, LLC, under a promissory note bearing interest at 6%. Island Capital Management, LLC is related through common shareholders. The original maturity of the note was April 27, 2012. The note is currently in default.
Total amounts due to related parties through advances and the promissory note were $169,150 and $129,988 as of January 31, 2013 and 2012. Except for the terms stipulated in the promissory note, all other amounts advanced are unsecured, non-interest bearing and have no specific terms of repayment.
NOTE D - INCOME TAXES
Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company has net operating losses of $4,881,101 since inception on January 19, 2006. The Company computes tax asset benefits for net operating losses carried forward. Potential benefit of net operating losses have not been recognized in these financial statements because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years. The net operating loss will start to expire in the year ended January 31, 2026. Due to discontinuing operation in June 2008 and the change in ownership, restrictions may apply.
The components of the net deferred tax asset at January 31, 2013 and 2012 and the statutory tax rate, the effective tax rate and the elected amount of the valuation allowance are indicated below:
The tax years ended January 31, 2010, 2011 and 2012 are open for audit by both federal and state taxing authorities.
NOTE E - COMMON STOCK ISSUABLE
In April 2008, the Company entered into a subscription agreement with a non-U.S. investor for the purchase of 533,333 at a price of $0.42 per share, resulting in cash proceeds of $224,000. As of January 31, 2009, the issuance of these shares had not yet been approved by the Board. The company has been unable to issue these shares and at January 31, 2013 considers this common stock issuable and has recorded it in the equity section. These issuances were exempt from registration pursuant to Regulation S of the Securities Act.
NOTE F - SUBSEQUENT EVENTS
None
Item 9.
Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure
Since inception, we have had no changes in or disagreements with our accountants. Our audited financial statements for the fiscal year ended January 31, 2013 and 2012 have been included in this annual report in reliance upon DKM Certified Public Accountants, Independent Registered Public Accounting Firm, as an expert in accounting and auditing.
Item 9A.
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our principal executive officer and the principal financial officer (our president), we have conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as of the end of the period covered by this report. Based on this evaluation, our principal executive officer and principal financial officer concluded as of the evaluation date that our disclosure controls and procedures were effective such that the material information required to be included in our Securities and Exchange Commission reports is accumulated and communicated to our management, including our principal executive and financial officer, recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms relating to our company, particularly during the period when this report was being prepared.
Management's Annual Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, for the Company.
Internal control over financial reporting includes those policies and procedures that: (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of its management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
Management recognizes that there are inherent limitations in the effectiveness of any system of internal control, and accordingly, even effective internal control can provide only reasonable assurance with respect to financial statement preparation and may not prevent or detect material misstatements. In addition, effective internal control at a point in time may become ineffective in future periods because of changes in conditions or due to deterioration in the degree of compliance with our established policies and procedures.
Under the supervision and with the participation of our president, management conducted an evaluation of the effectiveness of our internal control over financial reporting, as of January 31, 2013, based on the framework set forth in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on our evaluation under this framework, management concluded that our internal control over financial reporting was not effective as of the evaluation date.
The following material weaknesses were noted in the past:
1. The Company has no audit committee and none of its directors is considered independent. There is no policy on fraud and no code of ethics at this time.
2. The Company has no financial expert on its Board of directors who is able to detect a material misstatement.
3. There are no processes in place for someone to review and determine financial impacts of contracts and agreements.
Changes in Internal Controls over Financial Reporting
With the change in control, the new management is in the process of establishing the necessary controls over financial reporting to address the above material weaknesses. There were no changes in our internal control over financial reporting that occurred during the last fiscal quarter for our fiscal year ended January 31, 2013 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART III
Item 10.
Item 10. Directors, Executive Officers, Promoters and Control Persons; Compliance with Section 16(a) of the Exchange Act.
Our bylaws allow the number of directors to be fixed by the Board of Directors. Our Board of Directors has fixed the number of directors at three.
Our current directors and officers are as follows:
The directors will serve as directors until our next annual shareholder meeting or until a successor is elected who accepts the position. Officers hold their positions at the will of the Board of Directors. There are no arrangements, agreements or understandings between non-management shareholders and management under which non-management shareholders may directly or indirectly participate in or influence the management of our affairs.
Micah Eldred has served as Chief Executive Officer (“CEO”) of Endeavour Cooperative Partners, LLC, and its subsidiaries, Spartan Securities Group, Ltd., Island Capital Management, LLC, and Endeavour Insurance Partners, LLC, for over ten (10) years. Mr. Eldred holds NASD series 24, 66, and 7 securities licenses and performs retail, investment banking and new listing services functions for Spartan.
Carl Dilley has served as president of Island Stock Transfer, a subsidiary of Island Capital Management, LLC, from 2003 to present and acts as senior executive officer responsible for oversight of day to day operations and is actively involved in the sales and marketing process. He is also an employee of Spartan Securities Group and holds NASD series 24, 66, and 7 securities licenses and performs retail, investment banking and new listing services functions for Spartan. He is also president of Vacation Travel Corp, which operates an on-line travel agency and tour operations situated in Costa Rica and Panama.
Christine Zitman has served as Chief Financial Officer of the Endeavour Cooperative Partners, LLC and its subsidiaries since joining the company in March of 2006. Christine is responsible for oversight of day to day financial operations including but not limited to providing timely, accurate, and compliant financial data. She is responsible for all financial reporting functions of Endeavour and its subsidiaries. She is also involved in the marketing process to increase our client base for the various companies. Christine received a Bachelor of Science in Accounting from St Francis College in New York City in 1994.
During the past ten (10) years there have been no legal proceedings material to an evaluation of the ability or integrity of Mr. Eldred, Mr. Dilley, nor Ms. Zitman.
Director Nominees
We do not have a nominating committee. The Board of Directors, sitting as a Board, selects individuals to stand for election as members of the Board. Since the Board of Directors does not include a majority of independent directors, the decision of the Board as to director nominees is made by persons who have an interest in the outcome of the determination. The Board will consider candidates for directors proposed by security holders, although no formal procedures for submitting candidates have been adopted. Unless otherwise determined, not less than 90 days prior to the next annual Board of Directors' meeting at which the slate of Board nominees is adopted, the Board will accept written submissions of proposed nominees that include the name, address and telephone number of the proposed nominee; a brief statement of the nominee’s qualifications to serve as a director; and a statement as to why the shareholder submitting the proposed nominee believes that the nomination would be in the best interests of shareholders. If the proposed nominee is not the same person as the shareholder submitting the name of the nominee, a letter from the nominee agreeing to the submission of his or her name for consideration should be provided at the time of submission. The letter should be accompanied by a résumé supporting the nominee's qualifications to serve on the Board of Directors, as well as a list of references.
The Board identifies director nominees through a combination of referrals from different people, including management, existing Board members and security holders. Once a candidate has been identified, the Board reviews the individual's experience and background and may discuss the proposed nominee with the source of the recommendation. If the Board believes it to be appropriate, Board members may meet with the proposed nominee before making a final determination whether to include the proposed nominee as a member of management's slate of director nominees submitted to shareholders for election to the Board.
Among the factors that the Board considers when evaluating proposed nominees are their knowledge of, and experience in business matters, finance, capital markets and mergers and acquisitions. The Board may request additional information from the candidate prior to reaching a determination. The Board is under no obligation to formally respond to all recommendations, although as a matter of practice, it will endeavor to do so.
Audit Committee
The functions of the Audit Committee are currently carried out by our Board of Directors. Our Board of Directors has determined that we do not have an audit committee financial expert on our Board of Directors carrying out the duties of the Audit Committee. The Board of Directors has determined that the cost of hiring a financial expert to act as a director of us and to be a member of the Audit Committee or otherwise perform Audit Committee functions outweighs the benefits of having a financial expert on the Audit Committee.
Significant Employees
Other than the senior officers described above, we do not expect any other individuals to make a significant contribution to our business.
Family Relationships
There are no family relationships among our officers or directors.
No Legal Proceedings
None of our directors, executive officers, promoters or control persons have been involved in any of the following events during the past five years:
·
any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;
·
any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);
·
being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or
·
being found by a court of competent jurisdiction (in a civil action), the SEC or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.
Section 16(a) Beneficial Ownership Compliance Reporting
Section 16(a) of the Securities Exchange Act of 1934 requires a company’s directors and officers, and persons who own more than ten-percent (10%) of the company’s common stock, to file with the Securities and Exchange Commission reports of ownership on Form 3 and reports of change in ownership on Forms 4 and 5. Such officers, directors and ten-percent stockholders are also required to furnish the company with copies of all Section 16(a) reports they file. Based solely on our review of the copies of such forms received by us and on written representations from certain reporting persons, we believe that all Section 16(a) reports applicable to our officers, directors and ten-percent stockholders with respect to the fiscal year ended January 31, 2013 were filed.
Code of Ethics
We have not yet adopted a code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions because we have not yet finalized the content of such a code.
Item 11.
Item 11. Executive Compensation
There was no executive compensation paid in the two years ended January 31, 2013 and January 31, 2012.
We made no grants of stock options or stock appreciation rights since our inception to January 31, 2013.
Employment and Consulting Agreements
The company currently has no employment or consulting agreements in place,
Pension, Retirement or Similar Benefit Plans
There are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers. We have no material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers, except that stock options may be granted at the discretion of the Board of Directors or a committee thereof.
Compensation Committee
We currently do not have a compensation committee of the Board of Directors. The Board of Directors as a whole determines executive compensation.
Compensation of Directors
We reimburse our directors for expenses incurred in connection with attending board meetings but did not pay director's fees or other cash compensation for services rendered as a director in the year ended January 31, 2013.
We have no standard arrangement pursuant to which our directors are compensated for their services in their capacity as directors. The Board of Directors may award special remuneration to any director undertaking any special services on behalf of our company other than services ordinarily required of a director. No director received and/or accrued any compensation for his services as a director, including committee participation and/or special assignments.
Item 12.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The following table sets forth certain information concerning the number of shares of our common stock owned beneficially as of March 31, 2013 by: (i) each of our former directors and (ii) each of our named former executive officers. There was no other person or group known by us to beneficially own more than 5% of our outstanding shares of common stock. Unless otherwise indicated, the shareholders listed below possess sole voting and investment power with respect to the shares they own. All persons named have sole voting and investment power with respect to the shares, except as otherwise noted. The number of shares described below includes shares which the beneficial owner described has the right to acquire within 60 days of the date of this Prospectus.
(1)
Bruno Weiss was our director and as of May 9, 2008, our former Chief Financial Officer.
Item 13.
Item 13. Certain Relationships, Related Transactions and Director Independence
Other than as described above, we have not entered into any transactions with our officers, directors, persons nominated for these positions, beneficial owners of 5% or more of our common stock, or family members of these persons wherein the amount involved in the transaction or a series of similar transactions exceeded the lesser of $120,000 or 1% of the average of our total assets for the last three fiscal years.
Item 14.
Item 14. Principal Accountant Fees and Services.
Audit and Non-Audit Fees
The following table represents fees for the professional audit services and fees billed for other services rendered by our auditors, and any other fees billed for other services rendered by DKM Certified Public Accountants during these periods. All fees are paid by US dollars.
Since our inception, our Board of Directors, performing the duties of the Audit Committee, reviews all audit and non-audit related fees at least annually. The Board of Directors as the Audit Committee pre-approved all audit related services in the fiscal year 2013 and 2012.
PART IV
Item 15.
Item 15. Exhibits and Financial Statement Schedules
(a) (1) Financial Statements
See “Index to Consolidated Financial Statements” set forth on page.
(a) (2) Financial Statement Schedules
None. The financial statement schedules are omitted because they are inapplicable or the requested information is shown in our financial statements or related notes thereto.
Exhibits
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.
TECTON CORPORATION
(Registrant)
Date: April 9, 2013
/s/ Christine Zitman
Christine Zitman
Director, Principal Accounting Officer, Secretary, Treasurer
(Authorized Officer and Chief Financial Officer)
Pursuant to the requirements of the Exchange Act this Report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Date: April 9, 2013
/s/ Micah Eldred
Micah Eldred
Chief Executive Officer
/s/ Christine Zitman
Christine Zitman
Chief Financial Officer
Exhibit 31.1
CERTIFICATION PURSUANT TO
RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
I, Micah Eldred, as Chief Executive officer, and Christine Zitman, as Chief Financial Officer, of Tecton Corporation, certifies that:
1.
I have reviewed this quarterly report on Form 10-K of Tecton Corporation;
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors:
a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: April 9, 2013
/s/ Micah Eldred
Micah Eldred
Chief Executive Officer
/s/ Christine Zitman
Christine Zitman,
Chief Financial Officer
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
In connection with the Tecton Corporation (the “registrant”) on Form 10-K for the year ended January 31, 2013, as filed with the Securities and Exchange Commission on the date hereof (the “report”), I, Micah Eldred, Chief Executive Officer of the registrant, and Christine Zitman, Chief Financial Officer of the registrant, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
(1) The report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(2) The information contained in the report fairly presents, in all material respects, the financial condition and results of operations of the registrant.
Date: April 9, 2013
/s/ Micah Eldred
Micah Eldred
Chief Executive Officer
/s/ Christine Zitman
Christine Zitman
Chief Financial Officer