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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

FORM 10-K

 

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1933

For the fiscal year ended July 31, 2024

 

or

 

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1933

For the transition period from __________ to __________

 

Commission file number 333-260430

 

 

TOFLA MEGALINE INC.

(Exact name of registrant as specified in its charter)

 

Nevada   37-1911358   7372
(State or Other Jurisdiction of Incorporation or Organization)  

(IRS Employer

Identification Number)

   (Primary Standard Industrial Classification Code Number)
 
 

Blvd Porta Trento 122 CP, Blvd Porta Fontana. C.P. Leon,

Guanajuato, Mexico, 37134

 

Phone: +52 5541607366

Email: principal@tofla.top

  
  (Address, including Zip Code, and Telephone Number, including Area Code, of Registrant's Principal Executive Office)  
             

 

Securities registered under Section 12(b) of the Exchange Act:
 
Title of each class   Trading Symbol   Name of each exchange on which registered
N/a   N/a   N/a
         
Securities registered under Section 12(g) of the Exchange Act:
None

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes [ ]       No [X]

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.  Yes [ ]       No [X]

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X]       No [ ]

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes [X]       No [  ]

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act (check one):

 

Large accelerated Filer [ ] Accelerated Filer [ ]
Non-accelerated Filer [X] Smaller reporting company [X]
(Do not check if a smaller reporting company) Emerging growth company [X]

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. [ ]

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes [ ]       No [X]

 

The aggregate market value of the registrant’s voting equity held by non-affiliates of the registrant, computed by reference to the price at which the common stock was last sold as of the last business day of the registrant’s most recently completed fiscal year, was $0.

 

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 5,352,035 common shares issued and outstanding as of October 1, 2024.

 

 
 

 

TABLE OF CONTENTS

     
    Page
     
PART I    
     
Item 1. Description of Business. 4
Item 1A. Risk Factors. 6
Item 1B. Unresolved Staff Comments. 6
Item 2. Properties. 6
Item 3. Legal proceedings. 6
Item 4. Mine Safety Disclosures. 6
     
PART II    
     
Item 5. Market for Common Equity and Related Stockholder Matters. 6
Item 6. Selected Financial Data. 7
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. 7
Item 7A. Quantitative and Qualitative Disclosures about Market Risk. 9
Item 8. Financial Statements and Supplementary Data. 9
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. 23
Item 9A. Controls and Procedures. 23
Item 9B. Other Information. 24
     
PART III    
     
Item 10. Directors, Executive Officers, and Control Persons of the Company. 24
Item 11. Executive Compensation. 27
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. 28
Item 13. Certain Relationships and Related Transactions, and Director Independence. 28
Item 14. Principal Accounting Fees and Services. 29
     
PART IV    
     
Item 15. Exhibits. 29
     
Signatures 29

 

3

 
 

 

PART I

Item 1. Description of Business.

 

DESCRIPTION OF BUSINESS

 

In General

 

Tofla Megaline Inc. (“Tofla” or “we” or "the Company") was incorporated in the state of Nevada on August 31, 2018. Tofla has only one officer and director who is Rodolfo Guerrero Angulo. As a development stage company specializing in software for robotic devices, we provide cutting-edge AI solutions that enhance security and efficiency. Our focus is on developing easy-to-use, high-quality, and cost-effective automation solutions for both standalone and integrated applications. Our key feature is developing software for security purposes. We offer a comprehensive suite of software products designed to improve the capabilities of robotic units in surveillance, patrol, and navigation. Our solutions include advanced algorithms for real-time threat detection, intelligent software for precise route planning and management, and predictive maintenance capabilities to minimize downtime and reduce costs. Beyond our software offerings, we also provide comprehensive consulting and technical support services.

 

Our solutions can be integrated with established control equipment and security systems, or used as independent versions. Our current projects involve software integration with security and video surveillance systems, along with the development of customizable solutions that support long-distance navigation, and task completion.

 

Our technology integrates a modular system of specialized devices for data collection, advanced AI for real-time threat analysis, and sophisticated software for seamless integration and control. The modular system offers flexibility and scalability, allowing for easy updates, troubleshooting, and customization to meet diverse security requirements. AI processes collected data in real-time, detecting potential threats and initiating appropriate responses. Our software coordinates the various components, ensuring smooth communication and operation between the modular devices, AI algorithms, and other system elements.

 

By harnessing the power of our modular system, AI capabilities, and innovative software, we are redefining the future of security technology and delivering unparalleled protection to our clients.

 

Principal Products and Services

 

Tofla’s primary business includes developing AI-powered software for robotic security systems. We offer a range of software products designed to enhance the capabilities of these robotic units, including:

-Threat Detection Software: This software utilizes advanced algorithms to analyze video footage in real time, identifying potential security threats such as unauthorized access, suspicious activities, and other violations.
-Route Optimization Software: Designed to optimize patrol routes for robotic units, ensuring efficient coverage of designated areas and minimizing redundant movements.
-Predictive Maintenance Software: This software leverages AI to predict potential maintenance issues based on usage patterns and sensor data, allowing for proactive interventions and minimizing downtime.
-Integration Software: Our solutions can be seamlessly integrated with existing security systems and control equipment, providing a unified and comprehensive security solution.

 

 

4

 
 

These software products collectively enable robotic security systems to perform their duties more effectively, efficiently, and proactively, enhancing overall security and reducing the burden on human personnel.

 

Our Company is at the forefront of robotic security software development, leveraging years of investment in AI, autonomy, and efficiency. We offer a comprehensive suite of solutions designed to enhance the capabilities of robotic units in surveillance, patrol, and threat detection. Our software is tailored to meet the specific needs of both individual users and businesses seeking to improve their security posture. We are committed to providing personalized support and ensuring the highest standards of performance and reliability.

 

Marketing Plans

 

To enhance our market presence and drive growth, we will implement a comprehensive marketing strategy encompassing digital marketing, partnerships, and customer relationship management. Our digital marketing efforts will focus on SEO, PPC advertising, and email marketing to increase online visibility and generate leads.  To foster customer loyalty and provide exceptional service, we will implement a robust CRM system and prioritize customer satisfaction. By effectively executing these marketing strategies, we aim to position our Company as a leading player in the security software market and achieve our business goals.

 

Competition

 

The software development market is highly competitive, with a large number of companies operating in the space. Entry barriers are relatively low, leading to intense competition. To differentiate ourselves, we will focus on providing tailored solutions that address the specific needs of each client.

 

We do not maintain any insurance and do not intend to maintain insurance in the future. Because we do not have any insurance, if we are made a party of a products liability action, we may not have sufficient funds to defend the litigation. If that occurs, a judgment could be rendered against us that could cause us to cease operations.

 

Employees; Identification of Certain Significant Employees.

 

We have 1 (one) employee who is Rodolfo Guerrero Angulo, our officer and director. We may hire employees on an as needed basis following the process of implementing our business plan.

 

Offices

 

Our business office is located at Blvd Porta Trento 122 CP, Blvd Porta Fontana. C.P., Leon, Guanajuato, Mexico, 37134. This office space is provided by our President for the Company's needs at no cost. There is no formal rent agreement. Our telephone number is +525541607366.

 

Available Information

 

We are a public company, and our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any amendments to such reports are filed with the SEC. We are subject to the informational requirements of the Exchange Act and file or furnish reports, proxy statements, and other information with the SEC. Such reports and other information filed by us with the Securities and Exchange Commission (the “SEC”) is available at www.sec.gov. Our website is https://tofla.top/, and we can be contacted at principal@tofla.top.  The contents of the websites referred to above are not incorporated into this filing.

 

5

 
 

 

Government Regulation

 

We will be required to comply with all regulations, rules, and directives of governmental authorities and agencies applicable to our business in any jurisdiction which we would conduct activities. We do not believe that regulation will have a material impact on the way we conduct our business.

 

Item 1A.  Risk Factors.

 

Not applicable to smaller reporting companies.

 

Item 1B. Unresolved Staff Comments.

 

Not applicable to smaller reporting companies.

 

Item 2.  Properties.

 

We do not own any real estate or other properties.  

 

Item 3.  Legal Proceedings.

 

During the past ten years, none of the following occurred with respect to the President of the Company: (1) 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; (2) any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); (3) being subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of any competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting him involvement in any type of business, securities or banking activities; and (4) being found by a court of competent jurisdiction (in a civil action), the SEC or the commodities futures trading commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated.

 

We are not currently a party to any legal proceedings, and we are not aware of any pending or potential legal actions.

 

Item 4.  Mine Safety Disclosures.

 

Not applicable.

 

PART II

 

Item 5. Market for Common Equity and Related Stockholder Matters.      

 

MARKET INFORMATION

  

There is a limited public market for our common shares. The common shares of the Company are listed on OTC Markets under the ticker symbol of TFLM since December 28, 2023. Prior to that time, there was no public market for our stock.  

 

 

6

 
 


HOLDERS

  

As of October 2, 2024, the Company had 5,352,035 shares of our common stock issued and outstanding held by our shareholders.

  

DIVIDEND POLICY

  

We have not declared or paid dividends on our common stock since our formation, and we do not anticipate paying dividends in the foreseeable future. Declaration or payment of dividends, if any, in the future, will be at the discretion of our Board of Directors and will depend on our then current financial condition, results of operations, capital requirements and other factors deemed relevant by the Board of Directors. There are no contractual restrictions on our ability to declare or pay dividends.

  

SECURITIES AUTHORIZED UNDER EQUITY COMPENSATION PLANS

  

We have no equity compensation or stock option plans.

 

RECENT SALES OF UNREGISTERED SECURITIES

 

None.

 

OTHER STOCKHOLDER MATTERS

 

None.

 

Item 6. Selected Financial Data.

 

Not applicable to smaller reporting companies.

 

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.

 

Results of Operations for the years ended July 31, 2024 and 2023:

 

Revenue

 

During the year ended July 31, 2024 and the year ended July 31, 2023, we generated $63,700 and $61,350 of revenue, respectively, due to the general growth of our business and increased marketing and sales efforts.

 

Operating expenses

 

Total operating expenses for the year ended July 31, 2024 and 2023 were $88,240 and $60,701, respectively. The operating expenses for the year ended July 31, 2024 and 2023 included General and Administrative expenses of $48,876 and $39,528; Amortization Expense of $20,164 and $10,053; and Server Rental of $19,200 and $11,120, respectively. The increase in general and administrative expense was due to professional services received in the current period to develop the software for sale with no similar cost incurred in the prior period. The increase in server rental expenses was due to server price increases at the internet service provider and the increase in amortization expense was due to the acquisition of intangible assets over time.

 

 

7

 
 

 

Net Income (Loss)

 

Our net income (loss) for the years ended July 31, 2024, and 2023 was $(24,540) and $649, respectively, due to the reasons explained above.

 

Liquidity and Capital Resources and Cash Requirements

 

As of July 31, 2024 the Company had cash of $0 ($22,010 as of July 31, 2023) and negative working capital of $85,801 (negative $25,425 as of July 31, 2023).

 

During the year ended July 31, 2024 the Company had $42,876 of cash provided by its operating activities due to its net loss $24,540, decrease in Accounts Payable $5,700, and an increase in Prepaid Expense of $32,800, offset by Amortization expense of $20,164. During the year ended July 31, 2023 the Company had $13,222 of cash provided by its operating activities due to its net income $649, Amortization expense of $10,053 and increase in Accounts Payable $6,000, offset by an increase in Prepaid Expense of $3,480.

 

During the year ended July 31, 2024 and 2023, the Company used $56,000 and $22,500 of cash in investing activities, respectively, for the purchase of intangible assets.

 

During the year ended July 31, 2024 the Company generated $76,866 of cash from financing activities due to proceeds from related party loans of $142,216, offset by repayments on related party loans of $65,350. During the year ended July 31, 2023 the Company generated $30,852 of cash from financing activities, made up of $25,561 received from the sale of common stock and $23,391 of proceeds from related party loans, offset by $18,100 in repayments to related parties.

 

Critical Accounting Policies

 

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

Revenue Recognition

The Company recognizes revenue in accordance with Accounting Standards Codification (“ASC”) 606, “Revenue from Contracts with Customers”. The core principle of ASC 606 is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. An entity recognizes revenue in accordance with that core principle by applying the following steps: Step 1: Identify the contract with the customer. Step 2: Identify the performance obligations in the contract. Step 3: Determine the transaction price. Step 4. Allocate the transaction price. Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.

 

 

8

 
 

 

The Company generates revenue through the sale of software and by providing consulting or technical support services. For the sale of software, revenue is recognized at the point in time when the ownership of software (as approved by the customer) is transferred per the terms of a contract. The Company shall not be liable for any failure to perform its obligations if such failure is due to circumstances beyond its reasonable control. Any liability of the Company shall be limited to the total of all amounts paid by the customer for services under the contract. For consulting or technical support services, revenue is recognized as the services are provided.

 

The Company generally collects payment from customers prior to transferring ownership of software or at the end of any service period and may require deposits from customers at the time an order is placed. When deposits are collected prior to transferring ownership of software or before services are performed the Company recognizes deferred revenue until the transfer is made or services are provided.

 

Recent Accounting Pronouncements

 

The Company has reviewed all the recent accounting pronouncements issued to date of the issuance of these financial statements, and does not believe any of these pronouncements will have a material impact on the Company’s financial reporting.

 

OFF BALANCE SHEET ARRANGEMENTS

  

We have no off-balance sheet arrangements including arrangements that would affect our liquidity, capital resources, market risk support and credit risk support or other benefits.

 

Item 7A. Quantitative and Qualitative Disclosures about Market Risk.   

 

Not applicable to smaller reporting companies.

 

Item 8. Financial Statements and Supplementary Data.   

 

 

9

 

 
 

 

TOFLA MEGALINE INC.

 

FINANCIAL STATEMENTS

 

TABLE OF CONTENTS

 

 

    Page
Report of Independent Registered Public Accounting Firm (PCAOB ID: 6258)   11-12
     
Balance Sheets as of July 31, 2024 and 2023   13
     
Statements of Operations for the years ended July 31, 2024 and 2023   14
     
Statements of Changes in Stockholders’ Equity (Deficit) for the years ended July 31, 2024 and 2023   15
     
Statements of Cash Flows for the years ended July 31, 2024 and 2023   16
     
Notes to the Audited Financial Statements as of July 31, 2024   17

 

 

 

 

 

 

 

 

 

10

 
 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

 

Board of Directors and Shareholders

Tofla Megaline Inc.

 

Opinion on the Financial Statements

 

We have audited the accompanying balance sheets of Tofla Megaline Inc. as of July 31, 2024 and 2023, and the related statements of operations, stockholders’ equity (deficit), and cash flows for the years then ended and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of Tofla Megaline Inc. as of July 31, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period ended July 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

 

Going Concern

 

The accompanying financial statements have been prepared assuming that the entity will continue as a going concern. As discussed in Note 2 to the financial statements, the entity has reported losses, limited revenues, an accumulated deficit and expects losses in the development of its business, all of which raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Basis for Opinion

 

These financial statements are the responsibility of the entity’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to Tofla Megaline Inc. in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Tofla Megaline Inc. is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control over financial reporting. Accordingly, we express no such opinion.

 

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

 

 

  

11

 
 

Critical Audit Matters

 

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

/s/ Mac Accounting Group & CPAs, LLP

 

We have served as Tofla Megaline's auditor since 2021.

 

Midvale, Utah

October 2, 2024 

 

12

 

 
 

TOFLA MEGALINE INC.

BALANCE SHEETS

 

    July 31, 2024   July 31, 2023
         
ASSETS        
Current Assets        
Cash $ - $ 22,010
Prepaid Expenses   39,200   6,400
Total Current Assets   39,200   28,410
         
Intangible Assets, Net   62,411   26,575
         
TOTAL ASSETS $ 101,611 $ 54,985
         
LIABILITIES & STOCKHOLDERS’ EQUITY (DEFICIT)        
Liabilities        
Current Liabilities        
Accounts Payable $ 300 $ 6,000
Related Party Loan   124,701   47,835
Total Current Liabilities   125,001   53,835
Total Liabilities   125,001   53,835
         
Stockholders’ Equity (Deficit)        

Common Stock, $0.001 par value, 75,000,000

shares authorized, 5,352,035 shares issued and outstanding as of July 31, 2024 and 2023

   5,352   5,352
Additional Paid-in Capital   24,709   24,709
Accumulated Deficit   (53,451)   (28,911)
Total Stockholders’ Equity (Deficit)   (23,390)   1,150
TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY (DEFICIT) $ 101,611 $ 54,985

 

 

 

 

The accompanying notes are an integral part of these audited financial statements.

 

13

 
 

TOFLA MEGALINE INC.

STATEMENT OF OPERATIONS

 

   

Year ended

July 31, 2024

  

Year ended

July 31, 2023

Revenues        
      Software Sales $ 63,700 $ 48,350
Consulting or Technical Support Services   -   13,000
Total Revenues   63,700   61,350
         
Operating Expenses        
General and Administrative Expenses   48,876   39,528
Amortization Expense   20,164   10,053
Server Rental   19,200   11,120
Total Operating Expenses   88,240   60,701
         
Net Income (Loss) from Operations   (24,540)   649
         
Provision for Income Taxes   -   -
         
Net Income (Loss)  $ (24,540) $ 649
         
Income (Loss) per Common Share – Basic & Diluted $ (0.01) $ 0.00
         
Weighted Average Number of Common Shares Outstanding-Basic & Diluted   5,352,035   5,352,035
         

 

 

 

The accompanying notes are an integral part of these audited financial statements.

 

14

 
 

TOFLA MEGALINE INC.

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

For the years ended July 31, 2024 and 2023

 

                   
  Common Stock   Additional Paid-in-   Accumulated    
  Shares   Amount   Capital   Deficit   Total
                   
Balance as of July 31, 2022 4,500,000 $ 4,500 $ - $ (29,560) $ (25,060)
                   
Common shares issued for cash 852,035   852   24,709   -   25,561
Net income for the period -   -   -   649   649
                   
Balance as of July 31, 2023 5,352,035   5,352   24,709   (28,911)   1,150
                   
Net loss for the period -   -   -   (24,540)   (24,540)
                   
Balance as of July 31, 2024 5,352,035 $ 5,352 $ 24,709 $ (53,451) $ (23,390)
                   

 

 

 

 

The accompanying notes are an integral part of these audited financial statements.

 

15

 
 

TOFLA MEGALINE INC.

STATEMENTS OF CASH FLOWS

 

   

Year ended

July 31,

2024

  

Year ended

July 31, 2023

OPERATING ACTIVITIES        
Net Income (Loss) $ (24,540) $ 649
Adjustments to reconcile Net Income
to net cash provided by operations:		        
    Amortization   20,164   10,053
Changes in operating assets and liabilities:        
    Prepaid Expense   (32,800)   (3,480)
    Accounts Payable   (5,700)   6,000
Cash Flows Provided by (Used in) Operating Activities   (42,876)   13,222
         
INVESTING ACTIVITIES        
    Purchase of Intangible Assets   (56,000)   (22,500)
Cash Flows Used in Investing Activities   (56,000)   (22,500)
         
FINANCING ACTIVITIES        
    Proceeds from the sale of common stock   -   25,561
    Repayments on related party loan   (65,350)   (18,100)
    Proceeds from related party loan   142,216   23,391
Cash Flows Provided by Financing Activities   76,866   30,852
         
Net cash increase (decrease) for period   (22,010)   21,574
Cash at beginning of period   22,010   436
Cash at end of period $ - $ 22,010
         
SUPPLEMENTAL CASH FLOW INFORMATION        
Cash paid during the period for:        
    Interest $ - $ -
    Income taxes $ - $ -
         

 

 

 

The accompanying notes are an integral part of these audited financial statements.

 

16

 
 

TOFLA MEGALINE INC.

NOTES TO THE AUDITED FINANCIAL STATEMENTS

JULY 31, 2024

 

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

 

Tofla Megaline Inc. (“the Company” or “we”) was incorporated under the laws of the State of Nevada, U.S. on August 31, 2018 (Inception). We are a development-stage company operating in the business of developing software for security systems.

 

NOTE 2 - GOING CONCERN

 

The financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future.  

 

The Company incurred net loss of $24,540 for the year ended July 31, 2024. The Company has limited revenues and an accumulated deficit of $53,451 as of July 31, 2024 and further losses are anticipated in the development of its business. Accordingly, there is substantial doubt about the Company’s ability to continue as a going concern.

 

The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management expects revenue growth to continue over the next twelve months. In the event that revenue is not available to cover all expenses, the Company intends to finance operating costs with loans from directors and/or private placement of common stock.

 

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

The financial statements of the Company are presented in US dollars and the Company has adopted a July 31 fiscal year end.

 

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date the financial statements and the reported amount of revenues and expenses during the reporting period.  Actual results could differ from those estimates.

 

Cash and Cash Equivalents

The Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes.

 

Fair Value of Financial Instruments

ASC 820 "Fair Value Measurements and Disclosures" establishes a three-tier fair value hierarchy, which prioritizes the inputs in measuring fair value.  The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market.

 

 

17

 
 

 

These tiers include:

 

Level 1: defined as observable inputs such as quoted prices in active markets;

 

Level 2: defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and

 

Level 3:  defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

 

The carrying value of cash and the Company's loan from shareholder approximates fair value due to their short-term maturity.

 

The Company continually monitors events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell.

 


Impairment of Long-Lived Assets

The Company continually monitors events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell.

 

Property and Equipment

Property and equipment are stated at cost and depreciated on the straight-line method over the estimated life of the asset, which is three years.

 

Intangible Asset

The Company accounts for its intangible assets in accordance with ASC Subtopic 350-40, Internal-Use Software-Computer Software Developed or Obtained for Internal Use, and ASC Subtopic 360-10, Accounting for the Impairment or Disposal of Long-Lived Assets. ASC Subtopic 350-40 requires assets to be recorded at the cost to develop the asset and requires an intangible asset to be amortized over its useful life and for the useful life to be evaluated every reporting period to determine whether events or circumstances warrant a revision to the remaining period of amortization. If the estimate of useful life is changed, the remaining carrying amount of the intangible asset is amortized prospectively over the revised remaining useful life. Costs incurred to renew or extend the life of an intangible asset are expensed as incurred. The Company recognizes amortization in the month after the asset is placed in service.

 

In September 2021 the Company capitalized website development costs of $6,325, which is being amortized over a three-year life. As of July 31, 2024, the accumulated amortization for the software was $5,997.

 

 

18

 
 

 

In June 2022 the Company also purchased video recording software at a cost of $10,000, which will be amortized over three years. As of July 31, 2024, the accumulated amortization related to the software was $7,083.

 

In November 2022 the Company purchased software for solutions for designing a perimeter security system at a cost of $15,500 which will be amortized over three years. As of July 31, 2024, the accumulated amortization related to the software was $8,611.

 

In January 2023 the Company purchased a global brandmauer for remote management via the internet at a cost of $7,000 which will be amortized over three years. As of July 31, 2024, the accumulated amortization for the software was $3,500.

 

In August 2023 the Company bought navigation and mapping software at a cost of $20,000 which will be amortized over three years. As of July 31, 2024, the accumulated amortization for the software was $6,667.

 

In June 2024 the Company bought the threat detection suite software at a cost of $20,000 which will be amortized over three years. As of July 31, 2024, the accumulated amortization for the software was $556.

 

In July 2024 the Company bought the route management software at a cost of $16,000 which will be amortized over three years. As of July 31, 2024, the accumulated amortization for the software was $0.

 

The Company had the following intangible assets as of July 31, 2024 and 2023:

 

  As of July 31, 2024 As of July 31, 2023
Website Development Costs $ 6,325 $ 6,325
Video Recording Software   10,000   10,000
Software for Solutions for Designing a Perimeter Security System   15,500   15,500
Global Brandmauer for Remote Management via the Internet   7,000   7,000
Navigation and Mapping Software   20,000   -
Threat Detection Suite Software   20,000   -
Route Management Software   16,000   -
Accumulated Amortization   (32,414)   (12,250)
Intangible Assets, Net $ 62,411 $ 26,575

 

During the years ended July 31, 2024 and 2023 the Company recorded amortization expense of $20,164 and $10,053, respectively.

 

The Company expects to recognize amortization expense of $29,411 for the fiscal year ending July 31, 2025, amortization expense of $21,556 for the fiscal year ending July 31, 2026, and amortization expense of $11,444 for the fiscal year ending July 31, 2027.

 

Income Taxes

The Company follows the liability method of accounting for income taxes.  Under this method, deferred income tax assets and liabilities are recognized for the estimated tax consequences attributable to differences between the financial statement carrying values and their respective income tax basis (temporary differences).  The effect on deferred income tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. 

 

 

19

 
 

 

Revenue Recognition

The Company recognizes revenue in accordance with Accounting Standards Codification (“ASC”) 606, “Revenue from Contracts with Customers”. The core principle of ASC 606 is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. An entity recognizes revenue in accordance with that core principle by applying the following steps:

 

Step 1: Identify the contract with the customer.

Step 2: Identify the performance obligations in the contract.

Step 3: Determine the transaction price.

Step 4. Allocate the transaction price.

Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.

 

The Company generates revenue through the sale of software and by providing consulting or technical support services. For the sale of software, revenue is recognized at the point in time when the ownership of software (as approved by the customer) is transferred per the terms of a contract. The Company shall not be liable for any failure to perform its obligations if such failure is due to circumstances beyond its reasonable control. Any liability of the Company shall be limited to the total of all amounts paid by the customer for services under the contract. For consulting or technical support services, revenue is recognized as the services are provided.

 

The Company generally collects payment from customers prior to transferring ownership of software or at the end of any service period and may require deposits from customers at the time an order is placed. When deposits are collected prior to transferring ownership of software or before services are performed the Company recognizes deferred revenue until the transfer is made or services are provided. During the years ended July 31, 2024 and 2023, the Company’s revenue was $67,300 and $61,350, respectively. As of July 31, 2024 and 2023 the Company had no deferred revenue.

 

During the year ended July 31, 2024 one customer made up 66% of our total revenues and during the year ended July 31, 2023 we had two customers that made up 60% and 16% of our total revenues.

 

Basic Income (Loss) Per Share

The Company computes earnings (loss) per share in accordance with ASC 260-10-45 ‘Earnings per Share, which requires the presentation of both basic and diluted earnings per share on the face of the statement of operations. Basic earnings (loss) per share is computed by dividing net earnings (loss) available to common stockholders by the weighted average number of outstanding common shares during the period. Diluted earnings (loss) per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive earnings (loss) per share excludes all potential common shares if their effect is anti-dilutive. The Company has no potential dilutive instruments, and therefore, basic and diluted earnings (loss) per share are equal.

 

Recent Accounting Pronouncements

The Company has reviewed all the recent accounting pronouncements issued to date of the issuance of these financial statements, and does not believe any of these pronouncements will have a material impact on the Company’s financial reporting.

 

 

 

20

 
 

 

NOTE 4 – COMMON STOCK

 

The Company has 75,000,000 common shares authorized with a par value of $0.001 per share. 

 

During August 2022 the Company issued 40,834 shares of common stock for cash proceeds of $1,225 at $0.03 per share.

 

During September 2022 the Company issued 29,333 shares of common stock for cash proceeds of $880 at $0.03 per share.

 

During October 2022 the Company issued 168,134 shares of common stock for cash proceeds of $5,044 at $0.03 per share.

 

During November 2022 the Company issued 328,400 shares of common stock for cash proceeds of $9,852 at $0.03 per share.

 

During December 2022 the Company issued 285,334 shares of common stock for cash proceeds of $8,560 at $0.03 per share.

 

As of July 31, 2024 and 2023, the Company had 5,352,035 shares issued and outstanding.

 

NOTE 5 – RELATED PARTY TRANSACTIONS

 

In support of the Company’s efforts and cash requirements, it may rely on advances from related parties until such time that the Company can support its operations or attains adequate financing through sales of its equity or traditional debt financing. There is no formal written commitment for continued support by shareholders or directors. Amounts represent advances or amounts paid in satisfaction of liabilities.

 

Effective August 31, 2018 the Company’s Chief Executive Officer (“CEO”), Rodolfo Guerrero Angulo, formally agreed to advance funds to the Company to pay for professional fees and operating expenses under a $50,000 Loan Agreement. Effective April 20, 2022 the Company’s CEO formally agreed to advance additional funds to the Company to pay for professional fees and operating expenses under a second $50,000 Loan Agreement. Effective June 12, 2024 the Company entered into an amended and restated loan agreement with its CEO that consolidated all earlier loans and increased the loan amount by an additional $50,000. The outstanding loan agreement is non-binding and discretionary, bears no interest, is unsecured, and has no fixed due date, therefore, any amounts outstanding under the agreement is considered due on demand. The Company’s CEO was due $124,701 as of July 31, 2024 under the amended and restated loan agreement, where during the year ended July 31, 2024 $142,216 was advanced to the Company and the Company made repayments of $65,350.

 

NOTE 6 – COMMITMENTS AND CONTINGENCIES

 

Contractual Commitments

The Company has entered into no contractual commitments as of July 31, 2024. 

 

Litigation

The Company was not subject to any legal proceedings during the period from August 31, 2018 (Inception) to July 31, 2024 and no legal proceedings are currently pending or threatened to the best of our knowledge.

 

 

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NOTE 7 – INCOME TAXES

 

The Company has no tax position at July 31, 2024 for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. No such interest or penalties were recognized during the periods presented. The Company had no accruals for interest and penalties at July 31, 2024. The Company’s utilization of any net operating loss carryforward may be unlikely as a result of its intended activities.

 

The valuation allowance at July 31, 2024 was $11,225. The net change in valuation allowance from July 31, 2023 to July 31, 2024 was $5,153. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred income tax assets will not be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred income tax liabilities, projected future taxable income, and tax planning strategies in making this assessment.

 

Based on consideration of these items, management has determined that enough uncertainty exists relative to the realization of the deferred income tax asset balances to warrant the application of a full valuation allowance as of July 31, 2024 and 2023. All tax years since inception remain open for examination only by taxing authorities of US Federal and state of Nevada.

 

The Company has a net operating loss carryforward for tax purposes totaling $53,541 at July 31, 2024. According to current tax laws, the losses can carryforward indefinitely. There is a limitation on the amount of taxable income that can be offset by carryforwards after a change in control (generally greater than a 50% change in ownership).

 

The components of the Company’s deferred tax asset computed at the federal statutory rate of 21% is as follows:

 

  July 31, 2024   July 31, 2023
Net operating loss carryforward $ (53,451)   $ (28,911)
Effective tax rate   21%     21%
Deferred tax asset   11,225     6,071
Less: Valuation allowance   (11,225)     (6,071)
Net deferred asset $ -   $ -

 

The income tax provision differs from the amount of income tax determined by applying the statutory income tax rates to pretax income from continuing operations for the year ended May 31, 2024 due to the following:

 

  Year Ended July 31, 2024   Year Ended July 31, 2023
Book loss $ (5,153)   21%   $ 136 21%
Valuation allowance   5,153   (21)%     (136) (21)%
  $ -       $ -  

 

  

NOTE 8 – SUBSEQUENT EVENTS

 

The Company has evaluated subsequent events from July 31, 2024 to the date the financial statements were issued and has determined that it does not have any material subsequent events to disclose in these financial statements other than those described below.

 

In August and September 2024, the Company’s CEO advanced $8,191 to the Company for the Company’s operating expenses.

 

Effective August 30, 2024, Marquez Hernandez Maria De Lourdes was appointed to serve as Independent Director of the Company.

 

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Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

 

None.

 

Item 9A. Controls and Procedures.

 

Evaluation of Disclosure Controls and Procedures

 

Our Principal Executive Officer and Principal Financial Officer conducted an evaluation of the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”). Based on this evaluation, our Principal Executive Officer and Principal Financial Officer concluded that in light of the material weaknesses described below, our disclosure controls and procedures were not effective as of July 31, 2024. See material weaknesses discussed below in Management’s Annual Report on Internal Control over Financial Reporting.

 

Management’s Report on Internal Control over Financial Reporting

 

Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f)). The Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, the Company conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting as of July 31, 2024, using the criteria established in “Internal Control - Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO - 2013").

 

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. In its assessment of the effectiveness of internal control over financial reporting as of July 31, 2024, the Company determined that there were control deficiencies that constituted material weaknesses, as described below.

 

1.We lack an adequate internal control structure – Due to the size of the Company we do not have the appropriate control activities, risk assessment procedures, controls over information and communication, or effective monitoring controls.  

 

2.We do not have appropriate segregation of duties or adequate accounting resources – The Company has only one employee that does not have sufficient accounting knowledge, experience, and understanding of US GAAP or SEC rules, therefore no expertise or reviews are in place to ensure adequate financial reporting. Further, while not being legally obligated to have an audit committee, it is the management’s view that such a committee, including a financial expert member, is an utmost important entity level control over the Company’s financial statements. Currently the Board of Directors acts in the capacity of the Audit Committee, and does not include a member that is considered to be independent of management to provide the necessary oversight over management’s activities. 

 

 

23

 
 

 

3.We do not have appropriate information technology controls – The Company retains copies of all financial data and material agreements; however, there is no formal procedure or evidence of normal backup of the Company’s data or off-site storage of data in the event of theft, misplacement, or loss due to unmitigated factors.  Further there are no IT controls in place to prevent changes to, or misstatement in, financial reporting.

 

Accordingly, the Company concluded that these control deficiencies resulted in a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis by the company’s internal controls.

 

As a result of the material weaknesses described above, management has concluded that the Company did not maintain effective internal control over financial reporting as of July 31, 2024 based on criteria established in Internal Control-Integrated Framework issued by COSO.

 

Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that is designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

  

Changes in Internal Controls over Financial Reporting

 

There has been no change in our internal control over financial reporting occurred during the year ended July 31, 2024, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

Item 9B. Other Information.

 

None.

 

PART III

 

Item 10. Directors, Executive Officers, and Control Persons of the Company.

 

DIRECTORS, EXECUTIVE OFFICERS, AND CONTROL PERSONS

  

Our executive officer's and director's and their respective ages are as follows:

  

Name Age Positions
Rodolfo Guerrero Angulo  53 President, Treasurer, Secretary and Director (Principal Executive, Financial and Accounting Officer)

 

Set forth below is a brief description of the background and business experience of our executive officers and directors for the past five years.

 

 

24

 
 

 

 

Rodolfo Guerrero Angulo

 

Rodolfo Guerrero Angulo has acted as our President, Treasurer, Secretary and sole Director since we incorporated on August 31, 2018. Mr. Angulo owns 100% of the outstanding shares of our common stock. As such, it was unilaterally decided that Mr. Angulo was going to be our sole President, Chief Executive Officer, Treasurer, and Chief Financial Officer, Chief Accounting Officer, Secretary and member of our board of directors. Between 2011 and 2018, Mr. Angulo worked as IT project manager in real estate sector for Afkal Develop (Leon, Mexico). Mr. Angulo’s responsibilities included managing the Company’s projects and he was responsible for programming and extensions for project teams. In 2006, Mr. Angulo decided to change his field of work and started working as a freelance IT manager for a small firm in Leon, Mexico, where he worked until 2011. Between 1996 and 2005, Mr. Angulo worked in the area of car dealership called Leonveh ltd. in Leon, Mexico. Mr. Angulo studied at University of Leon in Leon, Mexico from 1989 to 1995 and he did not graduate. Mr. Angulo prioritized experience in business over education. This enabled him to obtain more experience sooner and start new business with additional knowledge.

During the past ten years, Mr. Angulo has not been the subject to any of the following events:

1. Any bankruptcy petition filed by or against any business of which Mr. Angulo was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time.

2. Any conviction in a criminal proceeding or being subject to a pending criminal proceeding.

3. An order, judgment, or decree, not subsequently reversed, suspended or vacated, or any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting Mr. Angulo’s involvement in any type of business, securities or banking activities.

4. Found by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission or the Commodity Future Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated.

5. Was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right to engage in any activity described in paragraph (f)(3)(i) of this section, or to be associated with persons engaged in any such activity;

 

6. Was found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated;

7. Was the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of:

i. Any Federal or State securities or commodities law or regulation; or

ii. Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or

iii. Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or

 

 

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8. Was the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

 

DIRECTOR INDEPENDENCE

 

Our Board of Directors is currently composed of one member, Rodolfo Guerrero Angulo, who does not qualify as an independent director. Our board of directors has not made a subjective determination as to each director that no relationships exist which, in the opinion of our board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. Had our Board of Directors made these determinations, our board of directors would have reviewed and discussed information provided by the directors and us with regard to each director’s business and personal activities and relationships as they may relate to us and our management.

 

INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS

 

No director, executive officer, significant employee or control person of the Company has been involved in any legal proceeding listed in Item 401(f) of Regulation S-K in the past 10 years.

 

AUDIT COMMITTEE, COMPENSATION COMMITTEE, AND FINANCIAL EXPERT

 

We do not have an Audit Committee or Compensation Committee because the Company’s sole employee is also the sole member of management and sole director. Additionally, we have no persons currently receiving any compensation due to our start-up nature. Our sole director performs some of the same functions of an Audit Committee and Compensation Committee, such as: recommending a firm of independent certified public accountants to audit the annual financial statements; reviewing the independent auditor’s independence, the financial statements, and their audit report; reviewing management’s administration of the system of internal accounting controls, and determining all compensation amounts. The Company does not currently have a written audit committee charter or a compensation committee charter or any similar documents.

 

We have no financial expert. We believe the cost related to retaining a financial expert at this time is prohibitive. Further, because of our start-up operations, we believe the services of a financial expert are not warranted.

 

CODE OF ETHICS

 

The Company has not adopted a formal written code of ethics due to the small size of the organization and start-up nature, along with the fact that the Company’s sole employee is also the sole member of management and sole director.

 

 

26

 
 

 

Item 11. Executive Compensation.

 

EXECUTIVE COMPENSATION SUMMARY COMPENSATION TABLE

 

The following table sets forth information regarding each element of compensation that we paid or awarded to our named executive officers for fiscal years July 31, 2024 and 2023:

 

 Name and

Principal

Position

 Period

Salary

($)

Bonus

($)

Stock

Awards

($)*

Option

Awards

($)*

Non-Equity

Incentive Plan

Compensation

($)

Nonqualified

Deferred

Compensation

($)

All Other

Compensation

($)

Total

($)

Rodolfo Guerrero Angulo, President 2024 0 0 0 0 0 0 0 0
2023 0 0 0 0 0 0 0 0

 

Rodolfo Guerrero Angulo has not received monetary compensation since our inception to the date of this Form 10-K. We currently do not pay any compensation to any officer or any member of our board of directors.

 

EMPLOYMENT AGREEMENTS

 

The Company is not a party to any employment agreement and has no compensation agreement with any officer or director.

 

DIRECTOR COMPENSATION

 

The following table sets forth director compensation as of July 31, 2024 and 2023:

 

Name Period

Fees

Earned or Paid in Cash

($)

Stock

Awards

($)

Opinion

Awards

($)

Non-Equity

Incentive Plan

Compensation

($)

Nonqualified

Deferred

Compensation

Earnings

($)

All Other

Compensation

($)

  

Total

($)

Rodolfo Guerrero Angulo, President 2024 0 0 0 0 0 0 0
2023 0 0 0 0 0 0 0

 

We have not compensated our directors for their service on our Board of Directors since our inception. There are no arrangements pursuant to which directors will be compensated in the future for any services provided as a director.

  

 

 

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Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

 

The following table lists, as of the date of this form 10-K, the number of shares of common stock of our Company that are beneficially owned by (i) each person or entity known to our Company to be the beneficial owner of more than 5% of the outstanding common stock; (ii) each officer and director of our Company; and (iii) all officers and directors as a group. Information relating to beneficial ownership of common stock by our principal shareholders and management is based upon information furnished by each person using "beneficial ownership" concepts under the rules of the Securities and Exchange Commission. Under these rules, a person is deemed to be a beneficial owner of a security if that person has or shares voting power, which includes the power to vote or direct the voting of the security, or investment power, which includes the power to vote or direct the voting of the security. The person is also deemed to be a beneficial owner of any security of which that person has a right to acquire beneficial ownership within 60 days.

 

Under the Securities and Exchange Commission rules, more than one person may be deemed to be a beneficial owner of the same securities, and a person may be deemed to be a beneficial owner of securities as to which he or she may not have any pecuniary beneficial interest. Except as noted below, each person has sole voting and investment power.

 

The percentages below are calculated based on 5,352,035 shares of our common stock issued and outstanding as of the date of this Form 10-K. We do not have any outstanding warrant, options or other securities exercisable for or convertible into shares of our common stock.

 

 

Title of class

  

 

Name and Address of

Beneficial Owner

 

Amount and Nature of Beneficial

Ownership

 

Percent of

Common Stock

  Common Stock Rodolfo Guerrero Angulo 4,000,000 74.74%

 

Item 13. Certain Relationships and Related Transactions, and Director Independence.

   

Effective August 31, 2018 the Company’s CEO and sole director formally agreed to advance funds to the Company to pay for professional fees and operating expenses under a $50,000 Loan Agreement. Effective April 20, 2022 the Company’s CEO and sole director formally agreed to advance additional funds to the Company to pay for professional fees and operating expenses under a second $50,000 Loan Agreement. Effective June 12, 2024 the Company entered into an amended and restated loan agreement with its CEO and sole director that consolidated all earlier loans and increased the loan amount by an additional $50,000. The outstanding loan agreement is non-binding and discretionary, bears no interest, is unsecured, and has no fixed due date, therefore, any amounts outstanding under the agreement is considered due on demand. The Company’s CEO and sole director was due $124,701 as of July 31, 2024 under the amended and restated loan agreement, where during the year ended July 31, 2024 $142,216 was advanced to the Company and the Company made repayments of $65,350.

 

 

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Item 14. Principal Accountant Fees and Services. 

 

The following table sets forth the fees billed to our company for the years ended July 31, 2024 and 2023 for professional services rendered by Mac Accounting Group, LLP, the independent auditor:

 

Fees   2024     2023  
Audit Fees $ 14,850   $ 13,500  
Audit Related Fees   -     -  
Tax Fees   -     -  
Other Fees   -     -  
Total Fees $ 14,850   $ 13,500  

 

 

PART IV

 

Item 15. Exhibits.

 

Exhibit No.   Description
31.1    Certification of Chief Executive Officer and Chief Financial Officer pursuant to Securities Exchange Act of 1933 Rule 13a-14(a) or 15d-14(a).
     
32.1    Certifications pursuant to Securities Exchange Act of 1933 Rule 13a-14(b) or 15d-14(b) and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002.

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1933, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

TOFLA MEGALINE INC.
     
Date:   October 2, 2024 By: /s/ Rodolfo Guerrero Angulo
   

Rodolfo Guerrero Angulo

Chief Executive Officer

President, Treasurer and Secretary

(Principal Executive, Financial and Accounting Officer) 

 

 

 

 

29


     

Exhibit 31.1

  

Certification

 

 

 

I, Rodolfo Guerrero Angulo, certify that:

 

1. I have reviewed this Annual Report on Form 10-K of  Tofla Megaline Inc.;

  

2. 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 we 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 o

 

f 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 most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) 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 the registrant’s board of directors (or persons performing the equivalent functions):

 

     
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.
         
             

 

 

 

Tofla Megaline Inc.
     
Date:   October 2, 2024 By: /s/ Rodolfo Guerrero Angulo
   

Rodolfo Guerrero Angulo

 

Chief Executive Officer

President, Treasurer and Secretary

(Principal Executive, Financial and Accounting Officer) 

 

 

 

 

 

 

 

Exhibit 32.1

  

  

CERTIFICATION

  

 

In connection with theAnnual Report of Tofla Megaline Inc. (the “Company”) on Form 10-K for the fiscal year ended  July 31, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”) I, Rodolfo Guerrero Angulo, Principal Executive, Financial and Accounting Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

  

   
   
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

  

   
   
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

 

 

Tofla Megaline Inc.    
     
Date:   October 2, 2024 By: /s/ Rodolfo Guerrero Angulo
   

Rodolfo Guerrero Angulo

Chief Executive Officer

President, Treasurer and Secretary

(Principal Executive, Financial and Accounting Officer) 

 

 

 

v3.24.3
Cover - USD ($)
 12 Months Ended
Jul. 31, 2024
Oct. 01, 2024
Cover [Abstract]    
Document Type 10-K  
Amendment Flag false  
Document Annual Report true  
Document Transition Report false  
Document Period End Date Jul. 31, 2024  
Document Fiscal Period Focus FY  
Document Fiscal Year Focus 2024  
Current Fiscal Year End Date --07-31  
File Number 333-260430  
Registrant Name TOFLA MEGALINE INC.  
Entity Central Index Key 0001885849  
Tax Identification Number 37-1911358  
Incorporation State NV  
Address Line1 Blvd Porta Trento 122 CP, Blvd Porta Fontana. C.P. Leon  
Address City Guanajuato  
Address Country MX  
Address Posta lZip Code 37134  
City Area Code 52  
Phone Number 5541607366  
WellKnownSeasonedIssuer No  
VoluntaryFilers No  
Current Reporting Status Yes  
IInteractive Data Current Yes  
Filer Category Non-accelerated Filer  
Small Business true  
Emerging Growth Company true  
extended transition period false  
Shell Company false  
Public Float $ 0  
Common Stock Shares Outstanding   5,352,035
Document Financial Statement Error Correction [Flag] false  
Email Address Email: principal@tofla.top  
Auditor Firm Id 6258  
Auditor Name Mac Accounting Group & CPAs, LLP  
Auditor Location Midvale, Utah  
v3.24.3
BALANCE SHEETS - USD ($)
Jul. 31, 2024
Jul. 31, 2023
Current Assets    
Cash $ 22,010
Prepaid Expenses 39,200 6,400
Total Current Assets 39,200 28,410
Intangible Assets, Net 62,411 26,575
TOTAL ASSETS 101,611 54,985
Current Liabilities    
Accounts Payable 300 6,000
Related Party Loan 124,701 47,835
Total Current Liabilities 125,001 53,835
Total Liabilities 125,001 53,835
Stockholders’ Equity (Deficit)    
Common Stock, $0.001 par value, 75,000,000 shares authorized, 5,352,035 shares issued and outstanding as of July 31, 2024 and 2023 5,352 5,352
Additional Paid-in Capital 24,709 24,709
Accumulated Deficit (53,451) (28,911)
Total Stockholders’ Equity (Deficit) (23,390) 1,150
TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY (DEFICIT) $ 101,611 $ 54,985
v3.24.3
BALANCE SHEETS (Parenthetical) - $ / shares
Jul. 31, 2024
Jul. 31, 2023
Statement of Financial Position [Abstract]    
Stated Value Per Share $ 0.001 $ 0.001
Common Stock Shares Authorized 75,000,000 75,000,000
CommonStockSharesIssued 5,352,035 5,352,035
CommonStockShares Outstanding 5,352,035 5,352,035
v3.24.3
STATEMENT OF OPERATIONS - USD ($)
 12 Months Ended
Jul. 31, 2024
Jul. 31, 2023
Revenues    
      Software Sales $ 63,700 $ 48,350
Consulting or Technical Support Services 13,000
Total Revenues 63,700 61,350
Operating Expenses    
General and Administrative Expenses 48,876 39,528
Amortization Expense 20,164 10,053
Server Rental 19,200 11,120
Total Operating Expenses 88,240 60,701
Net Income (Loss) from Operations (24,540) 649
Provision for Income Taxes
Net Income (Loss)  $ (24,540) $ 649
Income (Loss) per Common Share – Basic & Diluted $ (0.01) $ 0.00
Weighted Average Number of Common Shares Outstanding-Basic & Diluted 5,352,035 5,352,035
v3.24.3
Statements of Stockholders' Equity - USD ($)
Common Stock [Member]
Additional Paid-in Capital [Member]
Retained Earnings [Member]
Total
Balance, shares       4,500,000
Beginning balance, value at Jul. 31, 2022 $ 4,500 $ (29,560) $ (25,060)
Common shares issued for cash 852 24,709 $ 25,561
Common shares issued for cash       852,035
Net loss for the period 649 $ 649
Ending balance, value at Jul. 31, 2023 5,352 24,709 (28,911) $ 1,150
Balance, shares       5,352,035
Net loss for the period (24,540) $ (24,540)
Ending balance, value at Jul. 31, 2024 $ 5,352 $ 24,709 $ (53,451) $ (23,390)
Balance, shares       5,352,035
v3.24.3
STATEMENTS OF CASH FLOWS - USD ($)
 12 Months Ended
Jul. 31, 2024
Jul. 31, 2023
OPERATING ACTIVITIES    
Net Income (Loss) $ (24,540) $ 649
    Amortization 20,164 10,053
    Prepaid Expense (32,800) (3,480)
    Accounts Payable (5,700) 6,000
Cash Flows Provided by (Used in) Operating Activities (42,876) 13,222
INVESTING ACTIVITIES    
    Purchase of Intangible Assets (56,000) (22,500)
Cash Flows Used in Investing Activities (56,000) (22,500)
FINANCING ACTIVITIES    
    Proceeds from the sale of common stock 25,561
    Repayments on related party loan (65,350) (18,100)
    Proceeds from related party loan 142,216 23,391
Cash Flows Provided by Financing Activities 76,866 30,852
Net cash increase (decrease) for period (22,010) 21,574
Cash at beginning of period 22,010 436
Cash at end of period 22,010
SUPPLEMENTAL CASH FLOW INFORMATION    
    Interest
    Income taxes
v3.24.3
ORGANIZATION AND DESCRIPTION OF BUSINESS
 12 Months Ended
Jul. 31, 2024
Accounting Policies [Abstract]  
ORGANIZATION AND DESCRIPTION OF BUSINESS

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

 

Tofla Megaline Inc. (“the Company” or “we”) was incorporated under the laws of the State of Nevada, U.S. on August 31, 2018 (Inception). We are a development-stage company operating in the business of developing software for security systems.

 
v3.24.3
GOING CONCERN
 12 Months Ended
Jul. 31, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
GOING CONCERN

NOTE 2 - GOING CONCERN

 

The financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future.  

 

The Company incurred net loss of $24,540 for the year ended July 31, 2024. The Company has limited revenues and an accumulated deficit of $53,451 as of July 31, 2024 and further losses are anticipated in the development of its business. Accordingly, there is substantial doubt about the Company’s ability to continue as a going concern.

 

The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management expects revenue growth to continue over the next twelve months. In the event that revenue is not available to cover all expenses, the Company intends to finance operating costs with loans from directors and/or private placement of common stock.

 
v3.24.3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 12 Months Ended
Jul. 31, 2024
Accounting Policies [Abstract]  
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

The financial statements of the Company are presented in US dollars and the Company has adopted a July 31 fiscal year end.

 

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date the financial statements and the reported amount of revenues and expenses during the reporting period.  Actual results could differ from those estimates.

 

Cash and Cash Equivalents

The Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes.

 

Fair Value of Financial Instruments

ASC 820 "Fair Value Measurements and Disclosures" establishes a three-tier fair value hierarchy, which prioritizes the inputs in measuring fair value.  The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market.

 

 

17

 

These tiers include:

 

Level 1: defined as observable inputs such as quoted prices in active markets;

 

Level 2: defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and

 

Level 3:  defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

 

The carrying value of cash and the Company's loan from shareholder approximates fair value due to their short-term maturity.

 

The Company continually monitors events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell.

 


Impairment of Long-Lived Assets

The Company continually monitors events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell.

 

Property and Equipment

Property and equipment are stated at cost and depreciated on the straight-line method over the estimated life of the asset, which is three years.

 

Intangible Asset

The Company accounts for its intangible assets in accordance with ASC Subtopic 350-40, Internal-Use Software-Computer Software Developed or Obtained for Internal Use, and ASC Subtopic 360-10, Accounting for the Impairment or Disposal of Long-Lived Assets. ASC Subtopic 350-40 requires assets to be recorded at the cost to develop the asset and requires an intangible asset to be amortized over its useful life and for the useful life to be evaluated every reporting period to determine whether events or circumstances warrant a revision to the remaining period of amortization. If the estimate of useful life is changed, the remaining carrying amount of the intangible asset is amortized prospectively over the revised remaining useful life. Costs incurred to renew or extend the life of an intangible asset are expensed as incurred. The Company recognizes amortization in the month after the asset is placed in service.

 

In September 2021 the Company capitalized website development costs of $6,325, which is being amortized over a three-year life. As of July 31, 2024, the accumulated amortization for the software was $5,997.

 

 

18

 

In June 2022 the Company also purchased video recording software at a cost of $10,000, which will be amortized over three years. As of July 31, 2024, the accumulated amortization related to the software was $7,083.

 

In November 2022 the Company purchased software for solutions for designing a perimeter security system at a cost of $15,500 which will be amortized over three years. As of July 31, 2024, the accumulated amortization related to the software was $8,611.

 

In January 2023 the Company purchased a global brandmauer for remote management via the internet at a cost of $7,000 which will be amortized over three years. As of July 31, 2024, the accumulated amortization for the software was $3,500.

 

In August 2023 the Company bought navigation and mapping software at a cost of $20,000 which will be amortized over three years. As of July 31, 2024, the accumulated amortization for the software was $6,667.

 

In June 2024 the Company bought the threat detection suite software at a cost of $20,000 which will be amortized over three years. As of July 31, 2024, the accumulated amortization for the software was $556.

 

In July 2024 the Company bought the route management software at a cost of $16,000 which will be amortized over three years. As of July 31, 2024, the accumulated amortization for the software was $0.

 

The Company had the following intangible assets as of July 31, 2024 and 2023:

 

  As of July 31, 2024 As of July 31, 2023
Website Development Costs $ 6,325 $ 6,325
Video Recording Software   10,000   10,000
Software for Solutions for Designing a Perimeter Security System   15,500   15,500
Global Brandmauer for Remote Management via the Internet   7,000   7,000
Navigation and Mapping Software   20,000   -
Threat Detection Suite Software   20,000   -
Route Management Software   16,000   -
Accumulated Amortization   (32,414)   (12,250)
Intangible Assets, Net $ 62,411 $ 26,575

 

During the years ended July 31, 2024 and 2023 the Company recorded amortization expense of $20,164 and $10,053, respectively.

 

The Company expects to recognize amortization expense of $29,411 for the fiscal year ending July 31, 2025, amortization expense of $21,556 for the fiscal year ending July 31, 2026, and amortization expense of $11,444 for the fiscal year ending July 31, 2027.

 

Income Taxes

The Company follows the liability method of accounting for income taxes.  Under this method, deferred income tax assets and liabilities are recognized for the estimated tax consequences attributable to differences between the financial statement carrying values and their respective income tax basis (temporary differences).  The effect on deferred income tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. 

 

 

19

 

Revenue Recognition

The Company recognizes revenue in accordance with Accounting Standards Codification (“ASC”) 606, “Revenue from Contracts with Customers”. The core principle of ASC 606 is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. An entity recognizes revenue in accordance with that core principle by applying the following steps:

 

Step 1: Identify the contract with the customer.

Step 2: Identify the performance obligations in the contract.

Step 3: Determine the transaction price.

Step 4. Allocate the transaction price.

Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.

 

The Company generates revenue through the sale of software and by providing consulting or technical support services. For the sale of software, revenue is recognized at the point in time when the ownership of software (as approved by the customer) is transferred per the terms of a contract. The Company shall not be liable for any failure to perform its obligations if such failure is due to circumstances beyond its reasonable control. Any liability of the Company shall be limited to the total of all amounts paid by the customer for services under the contract. For consulting or technical support services, revenue is recognized as the services are provided.

 

The Company generally collects payment from customers prior to transferring ownership of software or at the end of any service period and may require deposits from customers at the time an order is placed. When deposits are collected prior to transferring ownership of software or before services are performed the Company recognizes deferred revenue until the transfer is made or services are provided. During the years ended July 31, 2024 and 2023, the Company’s revenue was $67,300 and $61,350, respectively. As of July 31, 2024 and 2023 the Company had no deferred revenue.

 

During the year ended July 31, 2024 one customer made up 66% of our total revenues and during the year ended July 31, 2023 we had two customers that made up 60% and 16% of our total revenues.

 

Basic Income (Loss) Per Share

The Company computes earnings (loss) per share in accordance with ASC 260-10-45 ‘Earnings per Share, which requires the presentation of both basic and diluted earnings per share on the face of the statement of operations. Basic earnings (loss) per share is computed by dividing net earnings (loss) available to common stockholders by the weighted average number of outstanding common shares during the period. Diluted earnings (loss) per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive earnings (loss) per share excludes all potential common shares if their effect is anti-dilutive. The Company has no potential dilutive instruments, and therefore, basic and diluted earnings (loss) per share are equal.

 

Recent Accounting Pronouncements

The Company has reviewed all the recent accounting pronouncements issued to date of the issuance of these financial statements, and does not believe any of these pronouncements will have a material impact on the Company’s financial reporting.

 

 

 

20

 
v3.24.3
COMMON STOCK
 12 Months Ended
Jul. 31, 2024
Accounting Policies [Abstract]  
COMMON STOCK

NOTE 4 – COMMON STOCK

 

The Company has 75,000,000 common shares authorized with a par value of $0.001 per share. 

 

During August 2022 the Company issued 40,834 shares of common stock for cash proceeds of $1,225 at $0.03 per share.

 

During September 2022 the Company issued 29,333 shares of common stock for cash proceeds of $880 at $0.03 per share.

 

During October 2022 the Company issued 168,134 shares of common stock for cash proceeds of $5,044 at $0.03 per share.

 

During November 2022 the Company issued 328,400 shares of common stock for cash proceeds of $9,852 at $0.03 per share.

 

During December 2022 the Company issued 285,334 shares of common stock for cash proceeds of $8,560 at $0.03 per share.

 

As of July 31, 2024 and 2023, the Company had 5,352,035 shares issued and outstanding.

 
v3.24.3
RELATED PARTY TRANSACTIONS
 12 Months Ended
Jul. 31, 2024
Related Party Transactions [Abstract]  
RELATED PARTY TRANSACTIONS

NOTE 5 – RELATED PARTY TRANSACTIONS

 

In support of the Company’s efforts and cash requirements, it may rely on advances from related parties until such time that the Company can support its operations or attains adequate financing through sales of its equity or traditional debt financing. There is no formal written commitment for continued support by shareholders or directors. Amounts represent advances or amounts paid in satisfaction of liabilities.

 

Effective August 31, 2018 the Company’s Chief Executive Officer (“CEO”), Rodolfo Guerrero Angulo, formally agreed to advance funds to the Company to pay for professional fees and operating expenses under a $50,000 Loan Agreement. Effective April 20, 2022 the Company’s CEO formally agreed to advance additional funds to the Company to pay for professional fees and operating expenses under a second $50,000 Loan Agreement. Effective June 12, 2024 the Company entered into an amended and restated loan agreement with its CEO that consolidated all earlier loans and increased the loan amount by an additional $50,000. The outstanding loan agreement is non-binding and discretionary, bears no interest, is unsecured, and has no fixed due date, therefore, any amounts outstanding under the agreement is considered due on demand. The Company’s CEO was due $124,701 as of July 31, 2024 under the amended and restated loan agreement, where during the year ended July 31, 2024 $142,216 was advanced to the Company and the Company made repayments of $65,350.

 
v3.24.3
COMMITMENTS AND CONTINGENCIES
 12 Months Ended
Jul. 31, 2024
Commitments and Contingencies Disclosure [Abstract]  
COMMITMENTS AND CONTINGENCIES

NOTE 6 – COMMITMENTS AND CONTINGENCIES

 

Contractual Commitments

The Company has entered into no contractual commitments as of July 31, 2024. 

 

Litigation

The Company was not subject to any legal proceedings during the period from August 31, 2018 (Inception) to July 31, 2024 and no legal proceedings are currently pending or threatened to the best of our knowledge.

 

 

21

 
v3.24.3
INCOME TAXES
 12 Months Ended
Jul. 31, 2024
Income Tax Disclosure [Abstract]  
INCOME TAXES

NOTE 7 – INCOME TAXES

 

The Company has no tax position at July 31, 2024 for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. No such interest or penalties were recognized during the periods presented. The Company had no accruals for interest and penalties at July 31, 2024. The Company’s utilization of any net operating loss carryforward may be unlikely as a result of its intended activities.

 

The valuation allowance at July 31, 2024 was $11,225. The net change in valuation allowance from July 31, 2023 to July 31, 2024 was $5,153. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred income tax assets will not be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred income tax liabilities, projected future taxable income, and tax planning strategies in making this assessment.

 

Based on consideration of these items, management has determined that enough uncertainty exists relative to the realization of the deferred income tax asset balances to warrant the application of a full valuation allowance as of July 31, 2024 and 2023. All tax years since inception remain open for examination only by taxing authorities of US Federal and state of Nevada.

 

The Company has a net operating loss carryforward for tax purposes totaling $53,541 at July 31, 2024. According to current tax laws, the losses can carryforward indefinitely. There is a limitation on the amount of taxable income that can be offset by carryforwards after a change in control (generally greater than a 50% change in ownership).

 

The components of the Company’s deferred tax asset computed at the federal statutory rate of 21% is as follows:

 

  July 31, 2024   July 31, 2023
Net operating loss carryforward $ (53,451)   $ (28,911)
Effective tax rate   21%     21%
Deferred tax asset   11,225     6,071
Less: Valuation allowance   (11,225)     (6,071)
Net deferred asset $ -   $ -

 

The income tax provision differs from the amount of income tax determined by applying the statutory income tax rates to pretax income from continuing operations for the year ended May 31, 2024 due to the following:

 

  Year Ended July 31, 2024   Year Ended July 31, 2023
Book loss $ (5,153)   21%   $ 136 21%
Valuation allowance   5,153   (21)%     (136) (21)%
  $ -       $ -  

 

  
v3.24.3
SUBSEQUENT EVENTS
 12 Months Ended
Jul. 31, 2024
Accounting Policies [Abstract]  
SUBSEQUENT EVENTS

NOTE 8 – SUBSEQUENT EVENTS

 

The Company has evaluated subsequent events from July 31, 2024 to the date the financial statements were issued and has determined that it does not have any material subsequent events to disclose in these financial statements other than those described below.

 

In August and September 2024, the Company’s CEO advanced $8,191 to the Company for the Company’s operating expenses.

 

Effective August 30, 2024, Marquez Hernandez Maria De Lourdes was appointed to serve as Independent Director of the Company.
v3.24.3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)
 12 Months Ended
Jul. 31, 2024
Accounting Policies [Abstract]  
Basis of Presentation

Basis of Presentation

The financial statements of the Company are presented in US dollars and the Company has adopted a July 31 fiscal year end.

 
Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date the financial statements and the reported amount of revenues and expenses during the reporting period.  Actual results could differ from those estimates.

 
Cash and Cash Equivalents

Cash and Cash Equivalents

The Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes.

 
Fair Value of Financial Instruments

Fair Value of Financial Instruments

ASC 820 "Fair Value Measurements and Disclosures" establishes a three-tier fair value hierarchy, which prioritizes the inputs in measuring fair value.  The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market.

 

 

17

 

These tiers include:

 

Level 1: defined as observable inputs such as quoted prices in active markets;

 

Level 2: defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and

 

Level 3:  defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

 

The carrying value of cash and the Company's loan from shareholder approximates fair value due to their short-term maturity.

 

The Company continually monitors events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell.

 
Impairment of Long-Lived Assets


Impairment of Long-Lived Assets

The Company continually monitors events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell.

 
Property and Equipment

Property and Equipment

Property and equipment are stated at cost and depreciated on the straight-line method over the estimated life of the asset, which is three years.

 
Intangible Asset

Intangible Asset

The Company accounts for its intangible assets in accordance with ASC Subtopic 350-40, Internal-Use Software-Computer Software Developed or Obtained for Internal Use, and ASC Subtopic 360-10, Accounting for the Impairment or Disposal of Long-Lived Assets. ASC Subtopic 350-40 requires assets to be recorded at the cost to develop the asset and requires an intangible asset to be amortized over its useful life and for the useful life to be evaluated every reporting period to determine whether events or circumstances warrant a revision to the remaining period of amortization. If the estimate of useful life is changed, the remaining carrying amount of the intangible asset is amortized prospectively over the revised remaining useful life. Costs incurred to renew or extend the life of an intangible asset are expensed as incurred. The Company recognizes amortization in the month after the asset is placed in service.

 

In September 2021 the Company capitalized website development costs of $6,325, which is being amortized over a three-year life. As of July 31, 2024, the accumulated amortization for the software was $5,997.

 

 

18

 

In June 2022 the Company also purchased video recording software at a cost of $10,000, which will be amortized over three years. As of July 31, 2024, the accumulated amortization related to the software was $7,083.

 

In November 2022 the Company purchased software for solutions for designing a perimeter security system at a cost of $15,500 which will be amortized over three years. As of July 31, 2024, the accumulated amortization related to the software was $8,611.

 

In January 2023 the Company purchased a global brandmauer for remote management via the internet at a cost of $7,000 which will be amortized over three years. As of July 31, 2024, the accumulated amortization for the software was $3,500.

 

In August 2023 the Company bought navigation and mapping software at a cost of $20,000 which will be amortized over three years. As of July 31, 2024, the accumulated amortization for the software was $6,667.

 

In June 2024 the Company bought the threat detection suite software at a cost of $20,000 which will be amortized over three years. As of July 31, 2024, the accumulated amortization for the software was $556.

 

In July 2024 the Company bought the route management software at a cost of $16,000 which will be amortized over three years. As of July 31, 2024, the accumulated amortization for the software was $0.

 

The Company had the following intangible assets as of July 31, 2024 and 2023:

 

  As of July 31, 2024 As of July 31, 2023
Website Development Costs $ 6,325 $ 6,325
Video Recording Software   10,000   10,000
Software for Solutions for Designing a Perimeter Security System   15,500   15,500
Global Brandmauer for Remote Management via the Internet   7,000   7,000
Navigation and Mapping Software   20,000   -
Threat Detection Suite Software   20,000   -
Route Management Software   16,000   -
Accumulated Amortization   (32,414)   (12,250)
Intangible Assets, Net $ 62,411 $ 26,575

 

During the years ended July 31, 2024 and 2023 the Company recorded amortization expense of $20,164 and $10,053, respectively.

 

The Company expects to recognize amortization expense of $29,411 for the fiscal year ending July 31, 2025, amortization expense of $21,556 for the fiscal year ending July 31, 2026, and amortization expense of $11,444 for the fiscal year ending July 31, 2027.

 
Income Taxes

Income Taxes

The Company follows the liability method of accounting for income taxes.  Under this method, deferred income tax assets and liabilities are recognized for the estimated tax consequences attributable to differences between the financial statement carrying values and their respective income tax basis (temporary differences).  The effect on deferred income tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. 

 

 

19

 
Revenue Recognition

Revenue Recognition

The Company recognizes revenue in accordance with Accounting Standards Codification (“ASC”) 606, “Revenue from Contracts with Customers”. The core principle of ASC 606 is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. An entity recognizes revenue in accordance with that core principle by applying the following steps:

 

Step 1: Identify the contract with the customer.

Step 2: Identify the performance obligations in the contract.

Step 3: Determine the transaction price.

Step 4. Allocate the transaction price.

Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.

 

The Company generates revenue through the sale of software and by providing consulting or technical support services. For the sale of software, revenue is recognized at the point in time when the ownership of software (as approved by the customer) is transferred per the terms of a contract. The Company shall not be liable for any failure to perform its obligations if such failure is due to circumstances beyond its reasonable control. Any liability of the Company shall be limited to the total of all amounts paid by the customer for services under the contract. For consulting or technical support services, revenue is recognized as the services are provided.

 

The Company generally collects payment from customers prior to transferring ownership of software or at the end of any service period and may require deposits from customers at the time an order is placed. When deposits are collected prior to transferring ownership of software or before services are performed the Company recognizes deferred revenue until the transfer is made or services are provided. During the years ended July 31, 2024 and 2023, the Company’s revenue was $67,300 and $61,350, respectively. As of July 31, 2024 and 2023 the Company had no deferred revenue.

 

During the year ended July 31, 2024 one customer made up 66% of our total revenues and during the year ended July 31, 2023 we had two customers that made up 60% and 16% of our total revenues.

 
Basic Income (Loss) Per Share

Basic Income (Loss) Per Share

The Company computes earnings (loss) per share in accordance with ASC 260-10-45 ‘Earnings per Share, which requires the presentation of both basic and diluted earnings per share on the face of the statement of operations. Basic earnings (loss) per share is computed by dividing net earnings (loss) available to common stockholders by the weighted average number of outstanding common shares during the period. Diluted earnings (loss) per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive earnings (loss) per share excludes all potential common shares if their effect is anti-dilutive. The Company has no potential dilutive instruments, and therefore, basic and diluted earnings (loss) per share are equal.

 
Recent Accounting Pronouncements

Recent Accounting Pronouncements

The Company has reviewed all the recent accounting pronouncements issued to date of the issuance of these financial statements, and does not believe any of these pronouncements will have a material impact on the Company’s financial reporting.
v3.24.3
INCOME TAXES (Tables)
 12 Months Ended
Jul. 31, 2024
Income Tax Disclosure [Abstract]  
deferred tax asset

The components of the Company’s deferred tax asset computed at the federal statutory rate of 21% is as follows:

 

  July 31, 2024   July 31, 2023
Net operating loss carryforward $ (53,451)   $ (28,911)
Effective tax rate   21%     21%
Deferred tax asset   11,225     6,071
Less: Valuation allowance   (11,225)     (6,071)
Net deferred asset $ -   $ -
v3.24.3
GOING CONCERN (Details Narrative)
 12 Months Ended
Jul. 31, 2024
USD ($)
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Net Income Loss $ 24,540
accumulated deficit $ 53,451
v3.24.3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)
 12 Months Ended
Jul. 31, 2024
Jul. 31, 2023
Accounting Policies [Abstract]    
Accumulated Amortization $ 5,997  
Intangible Assets, Net 62,411 $ 26,575
revenue 67,300  
revenue $ 63,700 $ 61,350
v3.24.3
COMMON STOCK (Details Narrative) - shares
Jul. 31, 2024
Jul. 31, 2023
Accounting Policies [Abstract]    
shares issued and outstanding 5,352,035 5,352,035
v3.24.3
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)
 2 Months Ended 12 Months Ended
Sep. 30, 2024
Jul. 31, 2024
Related Party Transactions [Abstract]    
director advanced $ 8,191 $ 142,216
repayments   $ 65,350
v3.24.3
deferred tax asset (Details) - USD ($)
Jul. 31, 2024
Jul. 31, 2023
Income Tax Disclosure [Abstract]    
Net operating loss carryforward $ (53,451) $ (28,911)
Deferred tax asset 11,225 6,071
Less: Valuation allowance (11,225) (6,071)
Net deferred asset
v3.24.3
SUBSEQUENT EVENTS (Details Narrative) - USD ($)
 2 Months Ended 12 Months Ended
Sep. 30, 2024
Jul. 31, 2024
Accounting Policies [Abstract]    
advance $ 8,191 $ 142,216
Tofla Megaline (QB) (USOTC:TFLM)
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