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 1934

 

For the fiscal year ended:  March 31, 2022

 

or

 

[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ____________ to ___________

 

Commission File Number: 000-55150

TORTEC GROUP CORPORATION

(Exact Name of Registrant as specified in its Charter)

 

Nevada 45-5593622
(State or other Jurisdiction of Incorporation or organization) (I.R.S. Employer Identification No.)

 

30 N Gould St., Suite 2489

Sheridan, WY 82801 USA

(Address of Principal Executive Offices)

 

(307) 248-9177

(Registrant’s Telephone Number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act: None

 

Securities registered pursuant to Section 12(g) of the Act: Common Stock, par value $0.001.

 

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 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.

(1) Yes [X] No [  ]     (2) 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 [  ]

 

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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 definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer [  ] Accelerated filer [  ]
Non-accelerated filer [X] Smaller reporting company [X]
  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 13(a) of the Exchange Act. [  ]

 

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. [ ]

 

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  

Yes [  ] No [X]

 

Market Value of Non-Affiliate Holdings

 

State the aggregate market value of the voting and non-voting common stock held by non-affiliates computed by reference to the price at which the common stock was last sold, or the average bid and asked price of such common stock, as of the last business day of the Registrant’s most recently completed second fiscal quarter.

 

The aggregate market value of the voting and non-voting common stock of the Registrant was approximately $26,804,466 based on 44,666,666 shares being held by non-affiliates as of September 30, 2021, the end of the Registrant’s second fiscal quarter, at the closing bid price of $0.60.

 

Applicable only to Registrants Involved in Bankruptcy Proceedings during the Preceding Five Years

 

Indicate by check mark whether the Registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities and Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.  Yes [  ]   No [  ]

 

Not Applicable.

 

Outstanding Shares

 

As of August 11, 2022, the Registrant had 100,074,854 shares of common stock outstanding.

 

Documents Incorporated by Reference

 

See Part IV, Item 15.

 

 

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PART I

 

FORWARD-LOOKING STATEMENTS

 

This Annual Report includes forward-looking statements based on management’s beliefs, assumptions and plans for the future, information currently available to management and other statements that are not historical in nature. Forward-looking statements include statements in which words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” estimate,” “consider,” or similar expressions are used.  These forward-looking statements are not guarantees of future performance and involve risks, uncertainties and assumptions, including among others: a general economic downturn; a downturn in the securities markets; regulations that affect trading in the securities of “penny stocks”; the enactment or amendment of laws, rules and regulations that could have a materially adverse impact on current and intended operations; and other risks and uncertainties.

 

Our future results and shareholder values may differ materially from those expressed in these forward-looking statements.  Many of the factors that will determine these results and values are beyond our ability to control or predict.  We may be required to update forward-looking statements from time to time as circumstances change; however, we undertake no duty to do so.  

 

References

 

References to “we,” “our” or “us” and words of similar import under this heading refer to “TORtec Group Corporation,” the Registrant, unless the context implies otherwise.

 

ITEM 1.  BUSINESS

 

 

Introduction

 

Past Operations

 

On June 13, 2012, we were formed as a wholly-owned subsidiary of Geo Point Technologies, Inc., a Utah corporation (“Geo Point Utah”), and into which Geo Point Utah simultaneously authorized the conveyance of the segment of its business comprising all of its Environmental and Engineering Divisions’ assets, business, operations, rights or otherwise, along with its “Hydrocarbon Identification Technology” (“HI Technology”) License Agreement dated January 31, 2008 (the “License Agreement”), subject to the assumption by us of all related liabilities and the indemnification of Geo Point Utah by us from any liabilities relating to these assets and operations.  Also on June 13, 2012, the Board of Directors of Geo Point Utah approved a stock dividend that resulted in a spin-off of all of our shares of common stock to the Geo Point Utah stockholders, pro rata, on a one share for one share basis, on the record date (the “Spin-Off”).  The Spin-Off had a record date of January 17, 2013; and ex-dividend date of January 15, 2013; and a Spin-Off payment date of April 22, 2013.  On the effective date of the Spin-Off, there were approximately 1,002,167 outstanding shares of our common stock.  For additional information about the Spin-Off, see our Prospectus dated January 7, 2013, and filed with the SEC on January 8, 2013; and our 8-K Current Report dated April 22, 2013, and filed with the SEC on such date.  See Part IV, Item 15.  

 

The Environmental and Engineering Divisions comprised the initial operations of Geo Point Utah at its inception and were commenced as a “DBA” in 1997, by Geo Point Utah’s founder, William C. Lachmar, who then served as our President and sole director, in the State of California. The Company operated this business until February 2018 when Mr. Lachmar died. The Company has no plans to continue this business following Mr. Lachmar’s death.

 

On November 22, 2017, the Company acquired TORtec Group, Inc (“TORtec Group”) as part of a plan to license and operate a nano milling technology to provide nano milled products and services to industry (“TOR-technology”). After expending our best efforts to since that acquisition to develop a profitable business, our Board of Directors concluded it was in our best interests to pursue another direction. Accordingly, on March 20, 2021 at our Annual Shareholders Meeting, the shareholders approved the sale of TORtec Group and all other assets of the Company to Capital Vario CR S.A. (“Capital Vario”) in complete and final settlement of the Company’s debts owed to Capital

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Vario. The Company presently has no assets and is conducting a search for an attractive business opportunity and acquisition.

 

Our Former Acquisition of TORtec Group

 

As described above, the Company operated this business until March 20, 2021 when the transfer of the Company’s subsidiary which held substantially all Company assets to Capital Vario in satisfaction of all indebtedness of the Company, was approved by the shareholders at its annual shareholders meeting. The Company is now searching for an alternative business.

 

On November 22, 2017, the Company entered into a Share Exchange Agreement (the “Agreement”) with TORtec Group, Inc. a Wyoming corporation (“TORtec Group”) and all of the shareholders of TORtec Group, pursuant to which the Company acquired 100% of the issued and outstanding shares of common stock of TORtec Group. The acquisition of TORtec Group by the Company was successfully consummated on December 4, 2017.

 

Under the terms of the Agreement, a total of 90,000,000 shares of the Company’s restricted common stock were issued to the seventeen TORtec Group shareholders as consideration in exchange for all 10,000,000 issued and outstanding shares of TORtec Group common stock being transferred to the Company, making TORtec Group a wholly-owned subsidiary of the Company. As a result, the TORtec Group shareholders collectively own ninety percent (90.0%) of our issued and outstanding shares of our common stock immediately following the acquisition. New directors and officers of the Company were appointed in connection with the acquisition.

 

Stephen Smoot was a former officer of Capital Vario CR S.A. (Capital Vario), which was the controlling shareholder of the Company prior to the acquisition, but resigned from his affiliation with Capital Vario prior to a $500,000 debt-to-equity conversion by Capital Vario with the Company. Smoot became the President/CEO and Director of TORtec Group on September 8, 2017.

 

As part of the closing of the acquisition, the Company’s then sole director (William C. Lachmar) elected Franc Smidt, Alex Schmidt, Maksim Goncharenko, Jeffrey R. Brimhall, Stephen H. Smoot, and Irina Kochetkova to the Company’s Board of Directors before resigning as an officer and director of the Company. The following persons were then elected as officers of the Company: Franc Smidt – Chairman of the Board of Directors (since resigned as Chairman and director), Stephen H. Smoot - President and CEO, Alex Schmidt – Vice President, and Irina Kochetkova – Secretary and Treasurer. Jeffrey R. Brimhall resigned as an officer of the Company but has been appointed to serve as a director. Maksim Goncharenko subsequently resigned as a director on July 3, 2018.

 

For additional information concerning the acquisition of TORtec Group, see the Company’s Current Report on Form 8-K dated December 4, 2017 and filed with the SEC on December 8, 2017, as amended in a Form 8-K/ Amendment dated June 22, 2018 and filed with the SEC on June 22, 2018.

 

Licensing and Operations of TOR-technology

 

Upon completing the acquisition of TORtec Group, we became engaged, through our subsidiary TORtec Group, in the business of harnessing the natural implosion forces of a vortex (tornado), employing resonating frequencies, to disintegrate soft to ultra-hard materials into micron or nano-sized particles.

 

On September 9, 2017, TORtec Group entered into General Agreement No. US-17 with Scientific Research Institute of Technological Progress, Limited, a limited company organized under the laws of Cyprus (“SRITP”) for the cooperation and joint activities on commercialization of TOR-technologies, introduction of new productions, products and services in the markets of North, Central and South America (the “Exclusive License Agreement”) with the parties that invented the TOR-technology. The Exclusive License Agreement granted to TORtec Group an exclusive license to utilize the technology for certain purposes throughout North, Central and South America. The ‘TOR-technology’ equipment is best described as a cascaded adiabatic resonance vortex mill utilizing compressed air as the energy in the system. This proprietary technology includes the ability to size and classify material processed by elemental composition and specific gravity.A more detailed description of the acquisition is included in the Company’s two Current Reports on Form 8-K: (a) dated November 22, 2017 and filed with the SEC on November 29, 2017; and (b) dated December 4, 2017 and filed with the SEC on December 8, 2017, as amended in a

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Form 8-K/ Amendment dated June 22, 2018 and filed with the SEC on June 22, 2018; both of which are incorporated herein by this reference.

 

On June 18, 2018, TORtec Group entered into License Agreement No. W-1/18 with Forschunginstitut GmbH a limited liability company registered in Switzerland, the successor-in-interest to SRITP, pursuant to which it was granted a license to use the TOR technology and the utility model “Tornado” documentation for certain purposes, for which TORtec Group paid an initial royalty of 30,000 Euros, and agreed to pay an annual royalty equal to 10% of any after tax profit received by TORtec Group (and any subsidiaries) by the year’s result. A copy of this License Agreement is attached to our Annual Report on Form 10-K for the fiscal year ended March 31, 2018 as Exhibit 10.1.

 

On September 9, 2017, TORtec Group entered into an agreement with MTM Center GmbH, then a shareholder of TORtec, for the construction of a mobile machine that utilizes the TOR-technology, referred to as the Tornado M. The total purchase price was 394,000 Euros ($474,159 as of September 9, 2017 date of the agreement). On March 3, 2018 the agreement was amended to the amount of 305,535 Euros or $367,696 representing the original amount of 394,000 Euros or $474,159 less the amount of 88,465 Euros or $106,463 originally allocated to the Kaeser screw-compressor, plus the additional amount of 48,040 Euros or $57,814 in the form of prepayment for transportation and expenses of technical personnel to come to the USA to commission the mobile “TORNADO M” unit and payment in advance for an additional vortex chamber with resonating frequency rings for additional applications for the mobile “TORNADO M” unit, including transportation & insurance to Idaho.

 

On February 19, 2019, TORtec Group entered into an agreement with TORtecForschungsinstitut GmbH, the successor-in-interest to SRITP. This license enlarged the original license with TORtec Forschungsinstitut GmbH and SRITP and granted exclusive worldwide rights to use the TOR-technology in the following applications:

 

Mining industry and mineral processing, including: methods of disintegration of mineral raw materials, methods and technologies of further enrichment of rocks, minerals and processing of technogenic accumulations under the code name "TOR-technology"; exploitation of specialized mineral processing "Tornado" utility models and the subsequent recipience of the products by the disintegration of mineral raw materials, mechanical activation, mechano chemical activation and mechano synthesis to receive a large range of finished products, blends, composites and solutions; commercialization of licensor's technological solutions and projects in the mining industry and in the processing of mineral raw materials and technogenic accumulations to with:

●methods,techniques and technologies of disintegration of materials, minerals and rocks,mining;
●industrial waste with subsequent enrichment and/or with the recipience of the product;
●methods and technologies of mechanical activation,mechano chemical activation,and;
●mechano synthesis of mineral raw materials,obtaining materials with new properties and new;
●materials, composites, mixtures,solutions;
●methods and technologies of deep processing and decontamination of contaminated materials, waste,and water reclamation;
●methods and technologies of restoration of the fertility of the land, obtaining new classes of mineral and biomineral fertilizers and mixtures and mineral protection of soil and plants;
●all or some know-how’s, trademarks,design development and technical knowledge.

 

The Company paid the total amount of two (2) payments totaling 354,600 Euros or $425,510 plus an additional payment of 30,000 Euros or $35,947 for the one-time License fee above. The Company received the Tornado M machine in the second fiscal quarter of the fiscal year ended March 31, 2019.

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On April 11, 2019 TORtec Group entered into a general, exclusive, unlimited, irrevocable and perpetual license to use the technology, know-how, development and technical knowledge with TORtec Forschungsinstitut GmbH

for industrial and commercial applications of the complex “TOR-technology” and utility model “Tornado” in the project Titan+ materials science and production of micro- and nano-structured micropowders for laser (3d-printing, am-technology), powder and plasma metallurgy for the following applications:

●Field of disintegration (micronization) of various non-mineral material
●Production of non-mineral micro- and nano-structured micro powders of metal ceramics, carbides, metal oxides and their mixtures for powder, laser and plasma metallurgy
●Related documentation, development and production of unique installations of resonant gas-dynamic grinding of different types of non-mineral materials, united under a common understanding "tornado"
●The technologies for grinding non-mineral materials, including multi-component and various-phase materials, their functionalization and modification, their mechanical, mechano chemical activation and mechano synthesis
●The production of dispersed new non-mineral materials and non-mineral materials with new properties.
●All know-how’s, trademarks, design development and technical knowledge relating to the applications above

 

Initial Problems with the Tornado M Machine

 

Our wholly-owned subsidiary, TORtec Group (Wyoming), purchased the Tornado “M” (the “unit”) from MTM Center GmbH (“MTM”) in 2017.  MTM was owned and controlled by two persons who then served on our Board of Directors, Franc Smidt (“Smidt”) and Maksim Goncharenko (“Goncharenko”).  Goncharenko subsequently resigned from our board of directors. The unit was initially manufactured by Shostak (“Shostak”) and sold to MTM which then sold the unit to our subsidiary.

 

After the unit arrived in the USA in the summer of 2018, a representative of Shostak arrived with Smidt to commission the start-up of the unit. During this visit, we learned more air was needed for the unit to work properly. The original Kaiser compressor was returned, and a Curtis compressor was purchased to replace the original Kaiser compressor and another Curtis compressor was added to give more air according to the instructions of Shostak.  These compressors arrived in January 2019.

 

Also during the initial visit in 2018 by the Shostak representative and Smidt, we learned through independent material handling and filter industry technicians and personnel that the unit was not ready for production for other reasons as well.  These reasons included the following: (a) the material feed did not work properly; (b) two sets of bearings for the unit's rotary feeder were worn out within hours of operation; and (c) significant material “blow-back” occurred from the inlet to the unit. The cyclone system for the unit did not properly capture or separate the material as represented by MTM/Smidt or Shostak. The Donaldson filter provided with the unit did not work due to the pulse jet controller being inoperable and milled material could not be captured properly.

 

We waited for the Shostak representative and Smidt’s return in January 2019 after the Curtis compressors arrived with the hope that they could get the unit to work properly.  Over time the team learned that it was necessary to replace the feeding system, the cyclone system and the filter system.

 

When we appealed to Smidt for help, Smidt would direct us to Shostak.  Shostak would comment that its only obligation was to MTM. By the spring of 2019, our management determined that we would have to get the unit working properly without the sellers help.

 

With the consent of the directors of TORtec, in May of 2019 we contacted two of the original shareholders of TORtec, Rock and Frances Rice, and others to invest more money in the Company which would form a joint venture to develop the proper equipment to get the unit in a working condition.  As a result, TORtec Nanosynthesis Corp (“Nano”) was formed for that purpose.  The agreement with investors called for a transfer of rights to the technology for specific mineral applications in North America to go to Nano.  This agreement has not yet been prepared and executed by the Company and Nano. The Company then raised additional funds for ongoing operations for legal, accounting and auditing in addition to funds needed to get the unit working for the Nano joint venture.

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For a detailed description of the formation of TORtec Nanosynthesis Corp. and the sale of a 49.9% interest in that company, see the Company’s Current Report on Form 8-K for March 31, 2020 which was filed on April 8, 2020, and is incorporated herein by this reference.

 

From May, 2019, it took about a year to get the unit working properly.  The only original piece of the unit after this development was the vortex mill (the “mill”).  All other components of the unit were replaced.  Thus, as of April 30, 2020, due to the replacement parts and indicators that other potential parts were non-operational for the intended purposes the Company recorded an impairment of $389,000. In May 2020, several tons of material consisting of minerals from both Hungary and Nevada together with zeolite from Preston, Idaho were successfully processed through the unit.  Unfortunately, it was determined that the resonant frequency rings in the mill and the mill housing itself was not made of Boron Carbide as contracted with MTM - but mild steel and the mill wore out after about 7 tons being processed.  The team immediately went to work to get a new mill produced . 

 

Transfer Of All Company Assets and Cessation of Operations

 

As explained above, the Company continued to operate the TORtec business until March 2021. On March 22, 2021 pursuant to shareholder approval at our Annual Shareholders Meeting of March 20, 2021, the Company entered into a debt conversion agreement with Capital Vario CR S.A. (“Capital Vario”) to transfer 100% of TORtec Group and all other assets of the Company to Capital Varioin complete and final settlement of the Company’s debts owed to Capital Vario. The Company presently has no assets or operations and is conducting a search for an attractive business opportunity and acquisition.

 

Business

 

As described above, the Company has no assets or active business operations at this time. The officers and members of the Board of Directors are in search of an appropriate new business opportunity.

 

Principal Products or Services and their Markets

 

The Company has no present contracts to provide any products or services.

 

Distribution Methods of the Products or Services

 

We have no active operations. We do not advertise our services in any publications.

 

Status of any Publicly Announced New Product or Service

 

We have not announced any new product of service..

 

Competitive Business Conditions and Smaller Reporting

Company’s Competitive Position in the Industry and Methods of Competition

 

We have no active business operations at this time.

 

Estimate of the Amount Spent during each of the last two Fiscal Years (or since Inception if shorter)

 

Until January 2019, we had not spent any funds on research and development since TORtec Group’s inception. During the last two fiscal years ended March 31, 2022, we have spent approximately $0 and $47,000, respectively.

 

Costs and Effects of Compliance with Environmental Laws

 

At this time, we do not anticipate having to spend funds on compliance with environmental laws in the industries that we intend to operate.

 

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Number of Total Employees and Number of Full-Time Employees

 

At this time, we do not have any employees. Our officers and directors intend to provide services on an as needed basis until such time as the Company hires employees.

 

Our Former Environmental Remediation Business

 

As described above, the Company operated this business until February 2018 when Mr. Lachmar died. The Company has no plans to continue this business following Mr. Lachmar’s death.

 

Our former environmental remediation business was primarily comprised of services related to identifying any recognized environmental condition (“REC”) or the lack thereof as provided by the federal, state or local governmental agencies in any real property of any owner, potential owner or lender, governmental agency or other person that may have a concern or may have or be seeking an interest in the subject property.  Once our services were engaged, we contracted with a drilling company to drill into the ground locations selected by us to collect a physical soil sample; if the project was small and could be handled by our smaller drilling equipment, this service is not contracted out.  During the fiscal year ended March 31, 2015, the field technician that was trained by Mr. Lachmar and who was subcontracted to be onsite during our drilling operations, left the Company, and Mr. Lachmar was required to resume those duties, which he had been responsible for in earlier fiscal years.  During the first part of fiscal 2017, Mr. Lachmar determined to move the Company from conducting the physical operations that had been previously conducted by it to a company focused strictly on the professional management the REC services and the leasing of environmental equipment for REC services rather than a contracting company for these services.  The Company acquired and obtained access to some limited drilling and environmental remediation equipment as part of this change in course and pursued this new course of business through February 2018. This change in the scope of our business operations limited the services available for bid by the Company.  Mr. Lachmar would review the “Scope of Work” for particular proposals that came within the Company’s business focus, and if a particular proposal was one that required the physical efforts of Mr. Lachmar onsite, he would not bid on the project, but would refer the proposed project to another party for contracting, with the understanding that such party would lease the equipment of the Company for any such project to the extent that the Company had the equipment necessary to perform the required field work on the project.  Once the soil sample was obtained, it was submitted to a State of California certified laboratory for analysis of the existence of hazardous materials.  Based upon the laboratory’s analysis, William C. Lachmar prepared a written report that was sanctioned by the particular laboratory that conducted the analysis.  Mr. Lachmar’s licensing as a “Professional Geologist” was a requirement to prepare any such report.  If an REC was identified to exist, then we would provide project management and engineering conclusions and recommendations necessary to remediate the property and bring it back into regulatory compliance based upon the California tables of acceptable levels of product contamination.  Acceptable levels were further qualified based upon residential, commercial and industrial zoned properties, with the residential levels being the most stringent.  Examples of contaminations that result in concern included those that were inadvertently or otherwise inoculated into the shallow subsurface soils or groundwater, like gasoline, diesel fuel, dry cleaning fluid, rocket fuel, arsenic, mercury, lead and other toxic substances.  These services were basically the same in each project: examine the property; drill or have it drilled for soil samples; submit the soil samples to a State of California certified laboratory; prepare a report on the soil samples; and if an REC was found to exist, provide the described services, directly or through subcontractors, by or under the supervision of Mr. Lachmar.  Sometimes, we merely assessed the environmental impact of any hazardous materials found and prepared the requested report.  

 

We also provided consulting and compliance services for new utility installation and general site erosion control for housing tracts and updating service station underground storage tanks and fuel dispensing systems to comply with continually changing California Air Resources Board (“CARB”) regulations.  

 

Principal Products or Services and their Markets

 

Our environmental remediation services generally included:

 

●Construction and Emergency Response;
●Demolition, Remediation and Restoration;
●Subsurface Investigation;

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●Water and Wastewater Treatment;
●Engineering and Environmental Consulting;
●Environmental Permitting and Compliance; and
●Litigation Support.

 

Distribution Methods of the Products or Services

 

We did not advertise our services in any publications, and we relied primarily on past customers for repeat business, including large property management companies, wholesale fuel distributors and automobile dealers, among others, for referrals.   Most of our referrals came from two long standing clients; or three major commercial real estate management companies in California; or two health specialists to whom we paid commissions for referrals.

 

All chemicals required for our services were supplied by subcontractors and were readily available. We did not store any regulated chemicals or waste at our facilities; nor did we manufacture any such products.

 

We had no real suppliers of products other than some environmental hand held equipment that was competitively marketed by numerous distributors, and there was little chance that any equipment that was necessary to conduct our environmental services would not be available to rent or purchase.

 

Status of any Publicly Announced New Product or Service

 

We have not had any recent public announcement of any new product or service.

 

Competitive Business Conditions and Smaller Reporting

Company’s Competitive Position in the Industry and Methods of Competition

 

Our competitors in the environmental remediation business included mostly large and well-funded entities whose businesses and subsidiaries focused solely on the industries in which we operated.  In this respect, we were at a distinct disadvantage to those competitors.  Our services were limited to smaller projects by reason of our limited financial resources and staff.  We believe our competitive position in this industry as a whole was not significant.

 

Our principal competitors included AECOM Technology Corporation, URS, Kleinfelter, Levine Fricke, CH2M Hill Companies, Ltd., The Reynolds Group and Geosyntec, most all of which were larger, well financed multinational publicly-held companies or divisions or subsidiaries of large, well financed multinational companies.

 

Seasonal Nature of Our Business

 

The second quarter of our fiscal year (July 1 to September 30) was typically our strongest quarter in the environmental remediation business. The U.S. federal government has historically authorized more work during the period preceding the end of its fiscal year, September 30. In addition, many U.S. state governments with fiscal years ending on June 30 have historically accelerated spending during the fiscal first quarter when new funding budgets become available.  

 

Dependence on One or a Few Major Customers

 

During the last two fiscal years we haven’t had any major customers.

 

Patents, Trademarks, Licenses, Franchises, Concessions,

Royalty Agreements or Labor Contracts, including Duration

 

We do not hold any patents; however, we have proprietary technology applications related to our hydrocarbon- indicating methods and technology (the “HI Technology”), which was developed and licensed by Mr. Lachmar to our predecessor parent, Geo Point Utah, and assigned to us on our formation on June 13, 2012.

 

The material terms of the License Agreement are as follows:

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Mr. Lachmar granted to us an exclusive, world-wide license to use the HI Technology for commercial exploitation, including subleasing the HI Technology to other parties.  

 

The intellectual property associated with the HI Technology, as well as any additional related intellectual property developed by Mr. Lachmar, is included within the scope of the license.  Currently, the intellectual property is maintained as trade secrets and protected by the confidentiality provisions of the License Agreement; however, any patents, trademarks or copyrights or applications therefore, related to the HI Technology, will also be included within the scope of the License Agreement.  

 

Upon execution of the License Agreement, Geo Point Utah, the original licensee under the License Agreement, paid Mr. Lachmar a one-time license fee of $125,000.  Except as otherwise provided therein and as discussed below, the License Agreement is irrevocable.

 

Mr. Lachmar retained the right to exploit the Hi Technology and processes.  

 

The License Agreement may be terminated by either party, subject to a 60-day notice period, upon a breach of the License Agreement that remains uncured during the notice period.  

 

The License Agreement may be terminated by the assignees of Mr. Lachmar’s estate in the event we become insolvent or unable to pay our debts as they come due, become the subject of a bankruptcy proceeding (voluntary or involuntary), other than a reorganization, or enter into a general assignment for the benefit of our creditors.  

 

The HI Technology underlying the License Agreement, which is related to petroleum geology, has not been promoted to customers and requires substantial research and development of hydrocarbon-indicating methods and technology.  No funds were expended for research and development of the HI Technology during the fiscal years ended March 31, 2022, and 2021.  

 

Need for any Governmental Approval of Principal Products or Services

 

We have the necessary licenses and qualifications, singly or through our subcontractors, to conduct our business operations, without government approval, except to the extent of compliance with applicable governmental regulations related to our business, which are summarized below under the heading “Effect of Existing or Probable Governmental Regulations on Our Business,” below.

 

Effect of Existing or Probable Governmental Regulations on the Business

 

Federal and State Law

 

We are regulated in a number of fields in which we operate.  In the United States, we deal with numerous U.S. and California state governmental agencies and entities, including the U.S. Environmental Protection Agency, the Carpenter-Presley-Tanner Hazardous Substance Account Act (the “California Superfund Act”), the Porter-Cologne Water Quality Control Act (the “California Water Control Act”) and CARB.  When working with these governmental agencies and entities, we must comply with laws and regulations relating to the formation, administration and performance of our contracts.

 

Risk assessment practices under these acts include the most current sound scientific methods for data evaluation, exposure assessment, toxicity assessment and risk characterization, documentation of all assumptions, methods, models and calculations used in the assessment including any health risk assessment.  These assessments generally include:

 

●Evaluation of risks posed by acutely toxic hazardous substances based on levels at which no known or anticipated adverse effects on health will occur, with an adequate margin of safety.
●Evaluation of risks posed by carcinogens or other hazardous substances that may cause chronic disease based on a level that does not pose any significant risk to health.

10 

 

●Consideration of possible synergistic effects resulting from exposure to, or interaction with, two or more hazardous substances.
●Consideration of the effect of hazardous substances upon subgroups that comprise a meaningful portion of the general population, including, but not limited to, infants, children, pregnant women, the elderly, individuals with a history of serious illness, or other subpopulations, that are identifiable as being at greater risk of adverse health effects due to exposure to hazardous substances than the general population.
●Consideration of exposure and body burden level that alter physiological function or structure in a manner that may significantly increase the risk of illness and of exposure to hazardous substances in all media, including, but not limited to, exposures in drinking water, food, ambient and indoor air, and soil.
●If currently available scientific data is insufficient to determine the level of a hazardous substance at which no known or anticipated adverse effects on health will occur, with an adequate margin of safety, or the level that poses no significant risk to public health, the risk assessment prepared in conjunction with a response action taken or approved shall be based on the level that is protective of public health, with an adequate margin of safety.  This level shall be based exclusively on public health considerations; shall, to the extent scientific data are available, take into account the factors set forth; and shall be based on the most current principles, practices and methods used by public health professionals who are experienced practitioners in the fields of epidemiology, risk assessment, fate and transport analysis, and toxicology.

 

Compliance with federal, state and local laws enacted for the protection of the environment has to date had no significant effect on our capital expenditures, earnings or competitive position.  These costs are an integral part of the services that we provide.  In the future, compliance with environmental laws could materially adversely affect us. We will continue to monitor the impact of such laws on our business and will develop appropriate compliance programs.

 

Emerging Growth Company

 

We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, or “JOBS Act.”  As long as we remain an “emerging growth company,” we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not an “emerging growth company,” like those applicable to a “smaller reporting company,” including, but not limited to, a scaled down description of our business in SEC filings; no requirements to include risk factors in the Exchange Act filings; no requirement to include certain selected financial data and supplementary financial information in SEC filings; not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act; reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements that we file under the Exchange Act; no requirement for Sarbanes-Oxley Act Section 404(b) auditor attestations of internal control over financial reporting; and exemptions from the requirements of holding an annual nonbinding advisory vote on executive compensation and seeking nonbinding shareholder approval of any golden parachute payments not previously approved.  We are also only required to file audited financial statements for the previous two fiscal years when filing registration statements, together with reviewed financial statements of any applicable subsequent quarter.

 

We may take advantage of these reporting exemptions until we are no longer an “emerging growth company.”  We can remain an “emerging growth company” for up to five years.  We would cease to be an “emerging growth company” prior to such time if we have total annual gross revenues of $1 billion or more and when we become a “larger accelerated filer,” have a public float of $700 million or more or we issue more than $1 billion of non-convertible debt over a three-year period.

 

Under the JOBS Act, emerging growth companies can also delay adopting new or revised accounting standards until such time as those standards apply to private companies. We have irrevocably elected not to avail ourselves of this exemption from new or revised accounting standards and, therefore, will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.

 

11 

 

Smaller Reporting Company

 

We became subject to the reporting requirements of Section 15(d) of the Exchange Act, subject to the disclosure requirements of Regulation S-K of the SEC, as a “smaller reporting company,” on the effective date of our Registration Statement.  The designation of being a “smaller reporting company” relieves us of some of the more detailed informational requirements of Regulation S-K.  See the heading “Emerging Growth Company” directly above for a brief summary of some of the principal reduced requirements available to a “smaller reporting company.”

 

Sarbanes/Oxley Act

 

We are subject to the Sarbanes-Oxley Act of 2002.  The Sarbanes/Oxley Act created a strong and independent accounting oversight board to oversee the conduct of auditors of public companies and strengthens auditor independence.  It also requires steps to enhance the direct responsibility of senior members of management for financial reporting and for the quality of financial disclosures made by public companies; establishes clear statutory rules to limit, and to expose to public view, possible conflicts of interest affecting securities analysts; creates guidelines for audit committee members’ appointment, compensation and oversight of the work of public companies’ auditors; management assessment of our internal controls; prohibits certain insider trading during pension fund blackout periods; requires companies and auditors to evaluate internal controls and procedures; and establishes a federal crime of securities fraud, among other provisions. Compliance with the requirements of the Sarbanes/Oxley Act will substantially increase our legal and accounting costs.

 

Exchange Act Reporting Requirements

 

Section 15(d) of the Exchange Act requires all companies that have filed a registration statement under the Securities Act to file annual reports on Form 10-K and quarterly reports on Form 10-Q with the SEC for a period of one year from the effective date of the Registration Statement, and we will be required to timely disclose certain material events (e.g., changes in corporate control; acquisitions or dispositions of a significant amount of assets other than in the ordinary course of business; and bankruptcy) in a Current Report on Form 8-K.  

 

Research and Development Costs during the Last Two Fiscal Years

 

During our fiscal year ended March 31, 2022 we did not incur any research and development costs. During our fiscal year ended March 31, 2021, we incurred cost related to the improvement of our Tornado M.

 

Cost and Effects of Compliance with Environmental Laws

 

We do not maintain any hazardous chemicals on-site, and those chemicals we utilized in our remediation services were shipped directly to the impacted site from the supplier of chemicals, with all the proper manifests by a certified Hazardous Materials transporter.  These chemicals are available from a wide array of suppliers.

 

We neither store nor manufacture any materials that require us to maintain any federal, state or local permits. Accordingly, the cost and effects of compliance with environmental laws on our business is negligible.

 

Additional Information

 

You may read and copy any materials that we file with the SEC at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549.  You may also find all of the reports or registration statements that we have filed electronically with the SEC at its Internet site at www.sec.gov.  Please call the SEC at 1-202-551-8090 for further information on this or other Public Reference Rooms.  Our SEC reports and registration statements are also available from commercial document retrieval services, such as CCH Washington Service Bureau, whose telephone number is 1-800-344-3734.

 

ITEM 1A. RISK FACTORS

 

As a smaller reporting company, we are not required to provide risk factors.

12 

 

 

ITEM 2:  PROPERTIES

 

We have no properties at this time.  Our CEO, Stephen H. Smoot, maintains an office in his home in Ammon, Idaho.

 

ITEM 3:  LEGAL PROCEEDINGS

 

We are not a party to any pending legal proceeding.  To the knowledge of management, no federal, state or local governmental agency is presently contemplating any proceeding against us.  No director, executive officer or “affiliate” of ours or owner of record or beneficially of more than 5% of our common stock is a party adverse to us or has a material interest adverse to us in any proceeding.

 

ITEM 4:  MINE SAFETY DISCLOSURES

 

Not applicable.

 

PART II

 

ITEM 5:  MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

 

Market Information

 

Commencing on or about April 8, 2013, our shares of common stock began being quoted on the OTC Bulletin Board of the Financial Industry Regulatory Authority, Inc. (“FINRA”); our current trading symbol is “TRTK,” which was effective on November 30, 2018.  No assurance can be given that any market for our common stock will develop or be maintained. If an “established trading market” ever develops in the future, the sale of shares of our common stock that are deemed to be “restricted securities”  or “control securities” pursuant to Rule 144 of the SEC by members of management or others may have a substantial adverse impact on any such market.  Since shares issued to our stockholders in the Spin-Off from Geo Point Utah were registered with the SEC, they are not considered to be “restricted securities” under SEC Rule 144; therefore, all of our shares of common stock may be publicly traded under Rule 144, subject to the resale limitations outlined below under the heading “Rule 144” respecting “affiliates.”

 

Set forth below are the high and low closing bid prices for our common stock for each quarter of fiscal years ended March 31, 2022, and 2021.  These bid prices were obtained from OTC Markets.  All prices listed herein reflect inter-dealer prices, without retail mark-up, mark-down or commissions and may not represent actual transactions.

 

    Closing Bid
Fiscal Year Ended   High   Low
March 31, 2022        
April 1 through June 30, 2021   .60   .60
July 1 through September 30, 2021   .60   .60
October 1 through December 31, 2021   .60   .60
January 1 through March 31, 2022   .60   .60
March 31, 2021        
April 1 through June 30, 2020   .60   .60
July 1 through September 30, 2020   .60   .60
October 1 through December 31, 2020   .60   .60
January 1 through March 31, 2021   .60   .60

 

13 

 

Rule 144

 

The following is a summary of the current requirements of Rule 144:

  Affiliate or Person Selling on Behalf of an Affiliate Non-Affiliate (and has not been an Affiliate During the Prior Three Months)
Restricted Securities of Reporting Issuers

During six-month holding period – no resales under Rule 144 Permitted.  

 

After Six-month holding period – may resell in accordance with all Rule 144 requirements including:

Current public information,

Volume limitations,

Manner of sale requirements for equity securities, and

Filing of Form 144.

During six- month holding period – no resales under Rule 144 permitted.

 

After six-month holding period but before one year – unlimited public resales under Rule 144 except that the current public information requirement still applies.

 

After one-year holding period – unlimited public resales under Rule 144; need not comply with any other Rule 144 requirements.

Restricted Securities of Non-Reporting Issuers

During one-year holding period – no resales under Rule 144 permitted.

 

After one-year holding period – may resell in accordance with all Rule 144 requirements including:

Current public information,

Volume limitations,

Manner of sale requirements for equity securities, and

Filing of Form 144.

During one-year holding period – no resales under Rule 144 permitted.

 

After one-year holding period – unlimited public resales under Rule 144; need not comply with any other Rule 144 requirements.

 

Holders

 

 

We currently have approximately 96 shareholders, not including an indeterminate number of shareholders who may hold shares in “street name.”

 

Dividends

 

We have not declared any cash dividends with respect to our common stock, and do not intend to declare dividends in the foreseeable future.  Our dividend policy cannot be ascertained with any certainty at this time because of our potential lack of any profitable operations.  There are no material restrictions limiting, or that are likely to limit, our ability to pay dividends.  

 

Securities Authorized for Issuance under Equity Compensation Plans

 

We have no equity, incentive, pension or other compensatory plans that have or are presently contemplated to be adopted by our Board of Directors; however, we may adopt one or more of these plans in the future to maintain or attract key personnel.

 

14 

 

Recent Sales of Unregistered Securities

 

There were no sales during the years ended March 31, 2022 and 2021.

 

During the year ended March 31, 2020, the Company sold 74,854 shares of its unregistered common stock at $10.00 per share. 15,000 of the shares were sold on May 31, 2019 together with a 10.0% interest in the Company’s subsidiary, TORtec Nanosynthesis Corp. On March 31, 2020, the Company sold an additional 59,854 shares of its common stock for total consideration of $598,535, consisting of cash proceeds of $275,000, the conversion of an existing $100,000 loan, $200,000 value in services and in kind contributions consisting of use of heavy equipment, transportation, fuel, electrical expertise and installation, parts, labor and know how and consulting services, $16,035 in services rendered in arranging purchases of raw material and potential future financing and $7,500 value of accounting services.  The shares were sold to a total of 10 purchasers.  Included in the March 31, 2020 stock purchase agreements was the aggregate sale of a 39.9% interest in TORtec Nanosynthesis Corp., which was incorporated in May 2019.  There were no underwriting discounts or commissions paid in connection with the sale of any of these securities.

 

The Company sold some of the shares of common stock and the ownership interests in its partially owned subsidiary, TORtec Nanosynthesis Corp., to related parties. The related party transactions include the following: (a) Stephen H. Smoot paid $50,000 for 5,000 shares of the Company’s common stock and a 3.333% ownership interest in TORtec Nanosynthesis Corp.; (b) the Sorenson Family Trust, dated December 3, 1994, a principal shareholder of the Company, paid $50,000 for 5,000 shares of the Company’s common stock and a 3.333% ownership interest in TORtec Nanosynthesis Corp. Asael T. Sorenson, Jr., a trustee of the trust, became a director of the Company on June 6, 2020; (c) $100,000 of the debt owed to Capital Vario was converted to 10,000 shares of the Company’s common stock and a 6.666% ownership interest in TORtec Nanosynthesis Corp. and issued to Simmons Benefit Group; and (d) Sherm Smoot (a brother to Stephen H. Smoot) and his wife, Sherri, paid $15,000 for 1,500 shares of the Company’s common stock and a 1.000% ownership interest in TORtec Nanosynthesis Corp. The other purchasers were not related parties at the time of the sales.

 

All of these securities were sold in reliance on Section 4(2) of the Securities Act of 1933 for transactions not involving any public offering.  Each investor represented that the investor was acquiring the shares for the investor’s own account, for investment purposes only, and not with a view to, or for sale in connection with, a distribution.  The certificates representing the shares will bear an appropriate restricted legend indicating the shares may only be resold pursuant to a registration statement or pursuant to an applicable exemption from registration.

 

The Company now owns 50.1% of TORtec Nanosynthesis Corp. and the investors, as a group, own the remaining 49.9%.  TORtec Nanosynthesis Corp. recently commenced research and development operations.  TORtec Nanosynthesis Corp. intends to manufacture an organic soil fertilizer using zeolite and alginate.

 

For a description of any other sales of unregistered shares by the Company made in the last three fiscal years, please refer to the Company’s Annual Reports on Form 10-K and the Company’s Quarterly Reports on Form 10-Q filed since March 31, 2017.

 

Use of Proceeds of Registered Securities

 

There were no proceeds received by us during the fiscal years ended March 31, 2022, or 2021, from the sale of registered securities.

 

Purchases of Equity Securities by Us and Affiliated Purchasers

 

There were no purchases of our equity securities by us during the fiscal years ended March 31, 2022, or 2021.

 

ITEM 6:  SELECTED FINANCIAL DATA

 

Not required for smaller reporting companies.

 

15 

 

ITEM 7:  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

 

When used in this Annual Report, the words “may,” “will,” “expect,” “anticipate,” “continue,” “estimate,” “project,” “intend,” and similar expressions are intended to identify forward-looking statements regarding events, conditions, and financial trends that may affect our future plans of operations, business strategy, operating results, and financial position.  Persons reviewing this Annual Report are cautioned that any forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties and actual results may differ materially from those included within the forward-looking statements as a result of various factors.  

 

Our future results and shareholder values may differ materially from those expressed in these forward-looking statements.  Many of the factors that will determine these results and values are beyond our ability to control or predict.  We may be required to update these forward-looking statements from time to time as circumstances change; however, we undertake no duty to do so.  

 

Plan of Operation

 

We discontinued our business operations comprising the TOR-technology in March 2021, when the Company’s subsidiary which held substantially was transferred to Capital Vario pursuant to shareholder approval, in complete satisfaction of all indebtedness of the Company, and have no current business activities plan of operation.

 

We now intend to focus our efforts on finding a new business opportunity for the benefit of our shareholders.

 

Results of Operations

 

Year Ended March 31, 2022, Compared to Year Ended March 31, 2021

 

General and administrative expenses during the fiscal year ended March 31, 2022, were $49,793, compared to $74,841 during the fiscal year ended March 31, 2021, a decrease of $25,048.  The decrease in general and administrative expenses was related to an overall increase professional fees related to filing requirements in connection with the ongoing financial reporting obligations as well additional profession fees incurred related to the sale of our subsidiaries and assets during the fiscal year ended March 31, 2021.

 

During the fiscal year ended March 31, 2021, we sold the operations related to our TOR-technology resulting in a loss on the sale. As a result we reclassed these operations to discontinued operations. During the year ended March 31, 2021, we had a loss of $291,820 from discontinued operations due to the loss on the sale of the subsidiaries, significant research and development expenditures related to the development the Tornado M, increased general and administrative expenses related to the expanded operations which included the leasing of a facility, etc. There were no such losses during the fiscal year ended March 31, 2022.

 

Liquidity and Capital Resources

 

Current assets at March 31, 2022, included $422 in cash, a decrease of $10,453 from total current assets of $10,875 at March 31, 2021 which included cash of $10,875.

 

At March 31, 2022, we had a negative working capital of $58,418, as compared to negative working capital of $8,625, at March 31, 2021.

 

16 

 

Capital Resources

 

During the fiscal year ended March 31, 2022, operating activities used cash of $49,454, as compared to $201,730 in net cash used for the fiscal year ended March 31, 2021.  The reduction was due to decrease in operations.

 

During the fiscal year ended March 31, 2022, investing activities used cash of $0, as compared to $114,748 cash used in investing activities during the fiscal year ended March 31, 2021.  In 2021, the majority of the amount used related to additional capital assets purchased for the development of our Tornado M.

 

During the fiscal year ended March 31, 2022, financing activities provided cash of $39,000, as compared to $326,310 in cash provided for the fiscal year ended March 31, 2021.  In fiscal year 2021, we received proceeds from a subscription receivable of $165,000 in connection with sales of our common stock and the common stock of our subsidiary which were sold in fiscal 2020. In addition, we received short-term advances from related parties of $39,000 and $181,310 related to fiscal 2021 and 2020, respectively. The proceeds were used to further the development of our Tornado M and to fund operations.

 

We intend to fund future operations for the next 12 months through cash flows generated from operations, current cash on hand and the proceeds from advances from a related entity.  If these cash flows are not sufficient to fund operations, we may be required to raise capital through either a debt or equity financing. These contributions are expected to satisfy amounts in accounts payable and potentially be used for operations. Currently, we cannot provide assurance that such financing will be available to us on favorable terms, or at all.  If, after utilizing the existing sources of capital available to us, further capital needs are identified and if we are not successful in obtaining the required financing, we may be forced to curtail our existing or planned future operations.  These factors raise substantial doubts about the Company’s ability to continue as a going concern. We believe our plans will enable us to continue our current operations for a period in excess of one year from the date of our most recent balance sheet.

 

Off-Balance Sheet Arrangements

 

We had no off-balance sheet arrangements for the two fiscal years ended March 31, 2022, and 2021.

 

ITEM 7A:  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

Not required for smaller reporting companies.

 

17 

 

ITEM 8:  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

 

 

TORTEC GROUP CORPORATION

 

CONSOLIDATED FINANCIAL STATEMENTS

 

 

18 

 

TORTEC GROUP CORPORATION

 

INDEX TO FINANCIAL STATEMENTS
     
Consolidated Financial Statements of TORtec Group Corporation  
     
  Report of Independent Registered Public Accounting Firm 20
     
  Consolidated Balance Sheets as of March 31, 2022, and 2021 21
     
  Consolidated Statements of Operations for the Years Ended March 31, 2022, and 2021 22
     
  Consolidated Statements of Shareholders’ Equity for the Years Ended March 31, 2022, and 2021 23
     
  Consolidated Statements of Cash Flows for the Years Ended March 31, 2022, and 2021 24
     
  Notes to the Consolidated Financial Statements 25

 

19 

 

Report of Independent Registered Public Accounting Firm (PCAOB ID 5041)

 

To the shareholders and the board of directors of TORtec Group Corporation

 

Opinion on the Financial Statements

 

We have audited the accompanying consolidated balance sheets of TORtec Group Corporation (the “Company”) as of March 31, 2022 and 2021, the related statements of operations, shareholders' equity (deficit), and cash flows for each of the two years in the period ended March 31, 2022, 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 the Company as of March 31, 2022 and 2021, and the results of its operations and its cash flows for each of the two years in the period ended March 31, 2022, in conformity with accounting principles generally accepted in the United States.

 

Substantial Doubt about the Company’s Ability to Continue as a Going Concern

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has suffered recurring losses from operations and has a significant accumulated deficit. In addition, the Company continues to experience negative cash flows from operations. These factors raise substantial doubt about the Company's 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 Company's management. Our responsibility is to express an opinion on the Company's 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 the Company 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. The Company 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 Company’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.

 

/S/ BF Borgers CPA PC

BF Borgers CPA PC

 

We have served as the Company's auditor since 2014.

Lakewood, CO

August 11, 2022

 

20 

 

TORTEC GROUP CORPORATION

CONSOLIDATED BALANCE SHEETS

 

    March 31,   March 31,
    2022   2021
         
ASSETS        
Current Assets        
Cash    $               422    $          10,875
Total Current Assets                    422                10,875
         
Total Assets    $               422    $          10,875
         
LIABILITIES AND SHAREHOLDERS' DEFICIT        
Current Liabilities        
Accounts payable and accrued liabilities    $          19,840    $          19,500
Short term advances - related parties                39,000                      -
Total Current Liabilities and Total Liabilities                58,840                19,500
         
Commitments and contingencies (Note 3)  
 
  
 
         
Shareholders' Deficit        
Preferred Stock - $0.001 par value; 10,000,000 shares authorized;        
none outstanding                      -                      -
Common stock - $0.001 par value; 200,000,000 shares authorized;        
100,074,854, shares issued and outstanding
at March 31, 2022 and 2021		         100,075   100,075
Additional paid-in capital       6,881,516   6,881,516
Accumulated deficit      (7,040,009)   (6,990,216)
Total Shareholders' Deficit       (58,418)         (8,625)
Total Liabilities and Shareholders' Deficit    $               422    $          10,875

 

 

 

 

 

See accompanying notes to the consolidated financial statements.

21 

 

 

TORTEC GROUP CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

 

  For the Year Ended
  March 31,
  2022   2021
       
Sales   $                    -       $                      -   
       
Operating Expenses       
Research and development                  -                      -   
General and administrative         49,793          74,841
Total Operating Expenses 49,793      74,841
Operating Loss    (49,793)     (74,841)
Gain on extinguishment of liabilities            -                       -   
Gain on disposition of assets            -                       -   
Impairment of assets              -                      -   
Loss before provision for income taxes and discontinued operations       (49,793)        (74,841)
Provision for income taxes              -                     -   
Loss before loss from discontinued operations        (49,793)          (74,841)
Discontinued operations              -           (291,820)
Net loss  $        (49,793)    $       (366,661)
Non-controlling loss                 -            (118,245)
Net loss attributable to TORtec Group Corporation   $        (49,793)    $       (484,906)
       
Basic and Diluted Loss per Share - Continuing Operations  $            (0.00)    $             (0.00)
Basic and Diluted Loss per Share - Discontinued Operations  $            (0.00)    $             (0.00)
Basic and Diluted Loss per Share - Net Loss   $            (0.00)    $             (0.00)
Basic and Diluted Weighted-Average       
Common Shares Outstanding   100,074,854     100,074,854

 

 

 

 

 

 

 

 

 

See accompanying notes to the consolidated financial statements.

 

22 

 

TORTEC GROUP CORPORATION

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (DEFICIT)

FOR THE YEARS ENDED MARCH 31, 2022 AND 2021

 

 

 

  Common Stock   Additional Paid-in   Non-Controlling    Accumulated       
  Shares   Amount   Capital   Interest   Deficit   Total  
 
                         
Balance at March 31, 2020 100,074,854    $     100,075    $  6,881,516    $  (155,979)    $  (6,623,555)    $     202,057  
                         
                         
Disposal of business          -              -            -        274,224         -           274,224  
Net loss  -    -    -      (118,245)      (366,661)      (484,906)  
                         
Balance at March 31, 2021 100,074,854     100,075     6,881,516           -       (6,990,216)      (8,625)  
                         
Net loss                  -       -    -                    -                (49,793)        (49,793)  
                         
Balance at March 31, 2022 100,074,854    $    100,075    $ 6,881,516    $               -       $ (7,040,009)    $    (58,418)  
                         

 

 

 

See accompanying notes to the consolidated financial statements.

23 

 

TORTEC GROUP CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

  For the Year Ended
  March 31,
  2022   2021
       
Cash Flows from Operating Activities:      
Net loss  $             (49,793)    $           (366,661)
Adjustments to reconcile net loss to net cash      
  from operating activities:      
 Impairment of property and equipment            -              45,000
Loss on disposal of business, net of non-controlling interest                -           105,124
Changes in assets and liabilities:      
 Accounts payable and accrued liabilities            340            14,807
Net Cash Used in Operating Activities  (49,453)        (201,730)
Cash Flows from Investing Activities:      
 Purchase of property and equipment              -          (114,748)
Net Cash Used in Investing Activities              -        (114,748)
Cash Flows from Financing Activities:      
Proceeds from short term advances - related parties      39,000        181,310
Repayments of short term advances - related parties              -        (20,000)
Collection of subscriptions receivable             -         165,000
Cash Flows Provided by Financing Activities:         39,000          326,310
       
Net Change in Cash     (10,453)           9,832
Cash at Beginning of Year       10,875            1,043
Cash at End of Year  $                   422    $               10,875
       
       
Supplement Disclosure of Cash Flow Information:      
 Cash paid for interest  $                         -    $                         -
 Cash paid for income taxes  $                         -    $                         -
       
Non-Cash Investing and Financing Activities:      
 Exchange of short term advances - related party for assets  $                         -       $              450,000
       

 

 

 

 

 

See accompanying notes to the consolidated financial statements.

24 

 

TORTEC GROUP CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2022 and 2021

NOTE 1 – ORGANIZATION AND BUSINESS

 

On June 13, 2012, the Board of Directors of Geo Point Technologies, Inc., a Utah corporation (“Geo Point Utah”), approved a stock dividend that resulted in a spin-off (“Spin-Off”) of TORtec Group Corporation (formerly Geo Point Resources, Inc.) (the "Company") common stock to the Geo Point Utah stockholders, pro rata, on the record date (the “Record Date”). Prior to the Spin-Off, the Company was a wholly-owned subsidiary of Geo Point Utah. The Company was incorporated on June 13, 2012, comprising all of Geo Point Utah’s Environmental and Engineering Divisions’ assets, business, operations, rights or otherwise, along with its “Hydrocarbon Identification Technology” License Agreement with William C. Lachmar dated January 31, 2008. The Spin-Off had a “Record Date” of January 17, 2013; an ex-dividend date of January 15, 2013; and a Spin-Off payment date of April 22, 2013.

 

On November 22, 2017, the Company entered into a Share Exchange Agreement (the “Agreement”). The transaction closed on December 4, 2017, with TORtec Group, Inc., a Wyoming corporation (“TORtec”) and all of the shareholders of TORtec, pursuant to which the Company acquired 100% of the issued and outstanding shares of common stock of TORtec. Under the terms of the Agreement, a total of 90,000,000 shares of the Company’s common stock were issued to the TORtec shareholders as consideration in exchange for all 10,000,000 issued and outstanding shares of TORtec common stock being transferred to the Company, making TORtec a wholly-owned subsidiary of the Company. As a result, the TORtec shareholders collectively own ninety percent (90.0%) of our issued and outstanding shares of our common stock immediately following the acquisition. Effective November 16, 2018, the Company changed its name from Geo Point Resources, Inc. to TORtec Group Corporation.

 

TORtec Group, Inc.

 

On September 9, 2017, TORtec entered into General Agreement No. US-17 on cooperation and joint activities on commercialization of TOR-technologies, introduction of new productions, products and services in the markets of North, Central and South America (the “Exclusive License Agreement”) with the parties that invented the TOR-technology.  The Exclusive License Agreement grants to TORtec an exclusive license to utilize the technology for certain purposes throughout North, Central and South America.

 

The TOR-technology equipment is best described as a cascaded adiabatic resonance vortex mill utilizing compressed air as the energy in the system.  This proprietary technology includes the ability to size and classify material processed by elemental composition and specific gravity. 

 

In some cases, the quality and composition of the materials and liquids processed are new.  This TOR-technology has the potential to influence the efficiency and quality of the micro-pulverization industry for re-mineralizing soil, conserve energy, cleanup and extract value from mining waste piles and to create new bio-products and metal-ceramic composites.

 

Transfer of Subsidiaries and Assets to Capital Vario

 

In March 2021, in satisfaction of amounts due to Capital Vario, the Company transferred the ownership of TORtec Group, Inc and its 50.1% owned subsidiary, TORtec Nanosynthesis Corp, which held substantially all of the Company’s assets, including the Tornado M and related licenses, building lease to Capital Vario. The completion of the transaction required shareholder approval for which voting commenced in February 2021 and was completed at the Company’s stockholders meeting in March 2021. As of the date of these financial statements, the Company does not have any potential operations which could result in future cash flows. See discontinued operations and Note 4 for additional information regarding disposal of subsidiaries.

25 

 

Discontinued Operations

 

In March 2021, due to the transfer of subsidiaries and assets discussed above to Capital Vario in satisfaction of amounts due to them, the Company has ceased operations relate to the Tortec Tornado unit. The Company has reflected these operations as discontinued operations in the accompanying consolidated financial statements. The following is a summary of discontinued operations included within the consolidated financial statements for the fiscal years ended March 31, 2022 and 2021:

 

    For the Year Ended
    March 31,
    2022   2021
         
Operating Expenses        
Research and development    $                      -       $                47,146
General and administrative                  -                92,064
Impairment of property and equipment               -                45,000
Loss on disposal of subsidiary                -            225,855
Total Operating Expenses            -          410,065
Non-controlling interest          (118,245)
Operating Loss - Discontinued Operations    $                      -       $           (291,820)
         

 

There are no discontinued operations included within the consolidated balance sheets as of March 31, 2022 and 2021. Discontinued operations related to the cash flows from investing activities primarily related to purchases of equipment, license and other assets of $0 and $114,748 and equipment and cash flows from financing activities are borrowings from Capital Vario and other related parties of $0 and $161,310 during the years ended March 31, 2022 and 2021, respectively. Operating activities were insignificant and consistent of minor amounts of accounts payable.

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Going Concern

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As reflected in the financial statements, the Company has incurred significant current period losses, negative cash flows from operating activities, has negative working capital and an accumulated deficit. The Company has relied upon advances from related parties and other loans to fund its operations. These conditions, among others, raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans regarding these matters, if needed, include raising additional debt or equity financing. The terms of which might not be acceptable to the Company. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Risks and Uncertainties

 

The Company has a limited operating history and has not generated revenues from our planned principal operations. See Note 1 for discussion related to the transfer of the Company’s subsidiaries which held substantially all of the Company’s assets. The Company is currently exploring other operating and revenue generating opportunities.

 

Principles of Consolidation

 

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries TORtec, TORtec Titan+, and its 50.1% owned subsidiary, TORtec Nanosynthesis Corp through the date of their sale in March 2021. All significant intercompany transactions have been eliminated in the consolidation. TORtec's operations have been included from its date of acquisition, see Note 1 for additional information. TORtec Titan+

26 

 

does not have any operations. TORtec Nanosynthesis Corp. (“Nanosynthesis”) commenced operations during the October 2019 which consisted primarily of research and development expenditures. See Note 1 for discussion of sale of subsidiaries and Note 6, for discussion regarding non-controlling interest.

 

Use of Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the accompanying notes to financial statements.  Actual results could differ from those estimates. Significant estimates made by management include allowance for doubtful accounts, the useful life of property and equipment and impairment of long-lived assets.

 

Fair Value of Financial Instruments

 

The Company complies with the accounting guidance under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820-10, Fair Value Measurements, as well as certain related FASB staff positions.  This guidance defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  When determining the fair value measurements for assets and liabilities required to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact business and considers assumptions that marketplace participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance.

 

The guidance also establishes a fair value hierarchy for measurements of fair value as follows:

●Level 1 - quoted market prices in active markets for identical assets or liabilities

 

●Level 2 - inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

 

●Level 3 - unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

 

As of March 31, 2022 and 2021, the Company did not have Level 1, 2, or 3 financial assets or liabilities.  Financial instruments consisted of cash, subscription receivable, and payables.  The fair value of financial instruments approximated their carrying values as of March 31, 2022 and 2021, due to the short-term nature of these items.

 

Cash and Cash Equivalents

 

Cash and short-term investments with an original maturity of three months or less are considered to be cash and cash equivalents. At March 31, 2022 and 2021, the Company did not have any cash deposits in excess of FDIC limits.

 

Allowances for Doubtful Accounts

 

The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of the Company’s customers to make required payments. The Company considers the following factors when determining if collection of a fee is reasonably assured: customer creditworthiness and past transaction history with the customer. If the Company has no previous experience with the customer, the Company typically requests retainers or obtains financial information sufficient to extend the credit. If these factors do not indicate collection is reasonably assured, revenue is deferred until collection becomes reasonably assured, which is generally upon receipt of cash. If the financial condition of the Company’s customers deteriorates, additional allowances are made.

 

27 

 

Property and Equipment

 

Property and equipment are stated at cost, less accumulated depreciation and amortization. Major additions and improvements are capitalized, while minor equipment as well as repairs and maintenance costs are expensed when incurred. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the related assets. Computers, other office equipment, and furniture are depreciated over a period of three years. Vehicles are depreciated over five years. Construction in progress represents amounts capitalized in connection with internally constructed assets. The amounts are transferred to property and equipment at the point in which the asset is available for use.

 

On retirement or disposition of property and equipment, the cost and related accumulated depreciation and amortization are removed from the accounts and any resulting gain or loss is recognized in the statement of operations.

 

Impairment of Long Lived Assets

 

The Company evaluates the recoverability of the carrying amount of long-lived assets whenever events or changes in circumstances indicate that the carrying amount of any asset may not be fully recoverable.  If circumstances require that a long-lived asset be tested for possible impairment, the Company compares the carrying amount of an asset to future undiscounted cash flows expected to be generated by the asset.  If the carrying amount of the long-lived asset is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying amount exceeds its fair value based on a discounted cash flow analysis. During the years ended March 31, 2022 and 2021, the Company determined that certain costs capitalized in connection with the Tornado M were impaired, see Notes 1 and 3 for additional information.

 

Research and Development

 

Research and development is primarily related to developing and improving the Company’s Tornado C product. Research and development expenses are expensed when incurred.

 

Income Taxes

 

The asset and liability approach is used to recognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities.  Tax law and rate changes are reflected in income in the period such changes are enacted.  The Company records a valuation allowance to reduce the deferred tax assets to the amount that is more likely than not to be realized.  The Company includes interest and penalties related to income taxes, including unrecognized tax benefits, within the provision for income taxes.  The Company believes it has appropriate support for the income tax positions taken and to be taken on future income tax returns.

 

Basic and Diluted (Income) Loss per Common Share

 

Basic income (loss) per common share is calculated by dividing net loss by the weighted average common shares outstanding during the period.  Diluted income (loss) per common share reflects the potential dilution to basic earnings per share that could occur upon conversion or exercise of securities, options, or other such items to common shares using the treasury stock method, based upon the weighted average fair value of the Company’s common shares during the period.  As of March 31, 2022 and 2021, the Company did not have any dilutive securities.

 

Recent Accounting Pronouncements

 

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 840), to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The amendments in this standard are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, for a public entity. Early adoption of the amendments in this standard is permitted for all entities and the Company must recognize and measure leases at

28 

 

the beginning of the earliest period presented using a modified retrospective approach. As the Company is an emerging growth company, the Company expects to adopt this standard during its fiscal year ended March 31, 2022. The Company does not expect the adoption of this new standard to have a material impact on its financial statements and related disclosures due to no qualifying leases being present.

 

The Financial Accounting Standards Board issued Accounting Standard Updates (“ASUs”) to amend the authoritative literature in Accounting Standards Codification (“ASC”). There have been a number of ASUs to date that amend the original text of ASC. The Company believes those issued to date either (i) provide supplemental guidance, (ii) are technical corrections, (iii) are not applicable to the Company or (iv) are not expected to have a significant impact on the Company's operations.

 

NOTE 3 – FINANCIAL STATEMENT ELEMENTS

 

Loans Receivable – Construction Project

 

In July 2015, the Company loaned $75,000 to an unrelated third party, of which as of March 31, 2021 a balance of $55,000 remains of which is fully reserved. The loan does not incur interest and is due on demand. The loan is intended to be a short term loan used for a construction project by the borrower. At March 31, 2021, the receivable was written off.

 

On November 9, 2015, the Company loaned $100,000 to an unrelated third party.  The loan incurs interest at 2% per annum and is due upon the earlier of October 31, 2018, or completion by the borrower of one or more projects having an aggregate value of not less than $40 million. The loan was intended to be a short term bridge loan used for working capital for the third party. As of March 31, 2021, this receivable is 100% reserved. At March 31, 2021, the receivable was written off.

 

Property and Equipment

 

Property and equipment are stated at cost, net of accumulated depreciation. As of March 31, 2022, the Company does not have any property and equipment.

 

During the year ended March 31, 2021, based upon management’s determination that certain parts needed replacement an impairment loss of $45,000 was recognized.

 

See Notes 1 and 4 for discussion regarding the transfer of this asset to Capital Vario.

 

License

 

On April 12, 2019, the Company, through TORtec Titan+, entered into a perpetual license for the use of certain technologies with an entity controlled by the Franc Smidt when he served as Chairman of the Board of Directors. Under the terms of the agreement, the Company paid $35,051 for the rights and will provide future royalties of 10% of the subsidiaries' net income. The Company expected to use the technology in connection with its Tornado M.

 

See Notes 1 and 4 for discussion regarding the transfer of this asset to Capital Vario.

 

NOTE 4 – SHORT TERM ADVANCES AND DISPOSAL OF SUBSIDIARIES

 

From time to time, Capital Vario, a shareholder of the Company, advances monies for operations. The advances do not incur interest and are due on demand.  During the years ended March 31, 2022 and 2021, Capital Vario advanced the Company an additional $39,000 and $162,880, respectively, for operations. As of March 31, 2022, amounts due to Capital Vario were $39,000.

 

As discussed in Note 1, in March 2021, the Company’s subsidiaries which held various assets were transferred to Capital Vario in satisfaction of $451,570 owed to them. The Company recorded a loss of $225,855 which represented the difference between the Company’s investment in the subsidiaries and net asset transferred to Capital Vario and the amounts owed to them.

29 

 

 

In August 2020, a director advanced the Company $20,000 to be used for operations for which was repaid in November 2020. The advance did not incur interest and was due on demand.

 

NOTE 5 – COMMITMENTS AND CONTINGENCIES

 

Legal

 

The Company does not have any pending or threatened litigation.

 

Lease

 

The Company had an operating lease for which requires minimum monthly payments of $2,500 plus utilities expiring on October 31, 2021..Rent expense for the year ended March 31, 2021 was $64,539, and included within discontinued operations.

 

See Notes 1 and 4 for discussion regarding the transfer of this lease to Capital Vario.

 

NOTE 6 - SHAREHOLDERS’ EQUITY

 

Preferred Stock

 

Under the Company’s articles of incorporation, the board of directors is authorized, without stockholder action, to issue up to 10,000,000 shares of preferred stock in one or more series and to fix the number of shares and rights, preferences, and limitations of each series. Among the specific matters that may be determined by the board of directors are the dividend rate, the redemption price, if any, conversion rights, if any, the amount payable in the event of any voluntary liquidation or dissolution, and voting rights, if any. If the Company offers preferred stock, the specific designations and rights will be described in amended articles of incorporation.

 

Common Stock

 

Effective November 14, 2018, the Company increased its authorized common shares to 200,000,000.

 

Common Stock – Subsidiary

 

On March 31, 2020, the Company issued 748,500 of Nanosynthesis common stock to various investors, related parties and third parties. The issuance represented 49.9% of the Nanosynthesis common stock. In connection with the issuance the Company issued the following:

●$315,000 in proceeds from third parties for the issuance of 315,000 shares;
●$110,000 in proceeds from related parties for the issuance of 110,000 shares;
●Relief of $100,000 or related party advances for the issuance of 100,000 shares;
●Relief of $7,500 in accounts payable for the issuance of 7,500 shares;
●Recorded stock-based compensation of $216,035 related to the issuance of 216,035 shares for research and development services performed. The amounts were expensed upon issuance as the performance criteria was complete.

 

As of March 31, 2020, subscriptions receivable were $165,000, for which $5,000 was from a related party. The proceeds from the subscriptions were received immediately after year end on April 2, 2020.

 

Non-controlling interest disclosed within the consolidated statement of operations represents the ownership 49.9% share of net losses of TORtec Nanosynthesis Corp. incurred prior to the disposal during the year ended March 31, 2021.

 

In connection with the Nanosynthesis common stock transactions above, the participates were to also receive shares of the Company’s common stock. As of March 31, 2020, the Company issued 74,854 shares of common stock. The Company determined that none of the consideration, other than par value, will be allocated to the Company’s shares

30 

 

of common stock This determination was based upon a variety of factors including, the limited amount of shares being issued in comparison to the total issued and outstanding common stock of the Company, no market for the Company’s common stock, the investor receiving a significant ownership percentage in Nanosynthesis for which future operations are expected, etc.

 

Other

 

See Note 1 for disclosure of additional shares and Note 4 for an additional equity transaction.

 

NOTE 7 - INCOME TAXES

 

For the years ended March 31, 2022 and 2021, the Company incurred net losses, therefore, has no tax liability. The net deferred tax asset generated by the loss carry-forward has been fully reserved. The cumulative net operating loss carry-forward is approximately $837,000 and $787,000 at March 31, 2022 and 2021, respectively. Approximately $515,000 in net operating losses begin to expire beginning in the year 2034, the remaining do not expire. The primary difference between the Company’s statutory and effective tax rate relates to non-deductible stock based compensation charges and a full valuation allowance being recorded.

 

Deferred tax assets as of March 31, 2022 and 2021 consisted of tax effected net operating losses of $249,751 and $234,893, respectively. During the years ended March 31, 2022 and 2021, the valuation allowance increased (decreased) by $14,858 and ($158,948), respectively.

 

The Company has identified the United States Federal tax returns as its “major” tax jurisdiction. The United States Federal return years 2015 through 2021 are still subject to tax examination by the United States Internal Revenue Service; however, we do not currently have any ongoing tax examinations. The Company is subject to examination by the State Franchise Tax Board for the years ended 2016 through 2021 and currently does not have any ongoing tax examinations.

 

NOTE 8 - RELATED PARTY TRANSACTIONS

 

See Note 1 for sale of subsidiaries, Note 3 for purchase of equipment and a license, Note 4 for short-term advances and Note 6 for issuances of common stock, for related party transactions.

 

NOTE 9 - SUBSEQUENT EVENTS

 

The Company has evaluated subsequent events after March 31, 2022, through the date of this filing, noting no additional items which need to be disclosed within the accompanying notes to the financial statements other than those disclosed above.

31 

 

 

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 management, with the participation of our principal executive and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Annual Report. Based on that evaluation, our CEO and our CFO, concluded that our disclosure controls and procedures as of the end of the period covered by the Annual Report were not effective and that the information required to be disclosed by us in reports filed under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management, including our CEO and our CFO, as appropriate to allow timely decisions regarding disclosure.  A controls system cannot provide absolute assurance, however, that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

 

 

Management’s Annual Report on Internal Control over Financial Reporting

 

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act).  Our 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.

 

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives.

 

Our management, with the participation of our CEO and our CFO, evaluated the effectiveness of our internal controls over financial reporting as of March 31, 2022.  In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control – Integrated Framework.  Based on this evaluation, our management, with the participation of the CEO and CFO, concluded that, as of March 31, 2022, our internal controls over financial reporting were not effective.

 

During the year ended March 31, 2022, the CEO determined that Management's assessment of the effectiveness of the registrant's internal control over financial reporting is as of the year ended March 31, 2022. The Company believes that internal control over financial reporting is not effective. We have identified the following current material weakness, which was first identified at March 31, 2019, considering the nature and extent of our current operations and any risks or errors in financial reporting under current operations:

●Lack of Management review as the Company has one employee that enters into, reviews, and controls all transactions. The individual is also responsible for financial and regulatory reporting.

 

We cannot remedy the weakness until additional employee(s) and/or consultants can be retained to adequately segregate duties. Until such time, Management is maintaining adequate records to substantiate transactions.

 

This Annual Report does not include an attestation report of our registered public accounting firm regarding our internal controls over financial reporting.  Management’s report was not subject to attestation by our registered public accounting firm pursuant to rules of the SEC that permit us to provide only management’s report in this Annual Report.

32 

 

 

No Attestation Report by Independent Registered Accountant

 

The effectiveness of our internal control over financial reporting as of March 31, 2022 has not been audited by our independent registered public accounting firm by virtue of our exemption from such requirement as a smaller reporting company.

 

Changes in Internal Control Over Financial Reporting

 

There have been no changes in internal control over financial reporting except as noted.

 

ITEM 9B: OTHER INFORMATION

 

None.

 

33 

 

PART III

 

ITEM 10:  DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

 

Identification of Directors and Executive Officers

 

Our executive officers and directors and their respective ages, positions and biographical information are set forth below.

 

Name Positions Held Date of Election or Designation Date of Termination or Resignation
       
Franc Smidt Former Director December 4, 2017 October 18, 2020
       
Stephen H. Smoot President, CEO and Director December 4, 2017 *
       
Alex Schmidt Former Vice President and Director December 4, 2017 March 20, 2021
       
Irina Kochetkova Vice President, Treasurer and Director December 4, 2017 *
       
Jeffrey R. Brimhall Director December 4, 2017 *
       
Asael T. Sorensen, Jr. Vice President, Secretary and Director June 6, 2020 *

 

MayrbekArtsuev

 

Former Director

 

May 23, 2019

 

May 22, 2020

 

MerdanAtayev

 

Former Vice President

 

May 23, 2019

 

November 5, 2020

 

*  Presently serve in the capacities indicated. Each director of the Company serves as a director for a term until the next annual meeting of the shareholders of the Company and until his/her successor is elected and qualifies.  Each officer of the Company serves as an officer of the Company for a term until the next annual meeting of the Board of Directors and until his/her respective successor is elected and qualifies.

 

Background and Business Experience

 

Director, President & CEO

 

Stephen H. Smoot, age 69, has served as a director and as the President and CEO of the Company since December 4, 2017. Smoot has been self-employed since 1983 as a consultant in the area of foreign technology development and transfer.  From 1994 till 1999, Smoot funded and directed research in boundary-air laminar-flow technology resulting in U.S. patents and successful commercial applications.   Smoot assisted in forming, and was president of, Caspian Service Group Limited, a wholly-owned subsidiary of Caspian Services, Inc., formerly EMPS Corporation, in December 1999, and served as President of Caspian Services Inc. from inception until February 2002.  Smoot served as the Interim President of EMPS Corporation from June 2004 until December 2004 and for several years directed and funded research in high-frequency eddy-current particle separation technology.  From 2005 to 2009, Smoot served as director of BMB Munai, Inc. an oil and gas company in Kazakhstan. All companies cited above have been SEC reporting issuers.  Smoot is not a director or nominee of any other SEC reporting issuer.  

 

34 

 

Director, Vice President and Treasurer

 

Irina Kochetkova, age 69, has served as a director and as Secretary and Treasurer of the Company since December 4, 2017.  Dr. Kochetkova received a B.S. Degree at Moscow Oil & Gas Institute “Academy Gupkin” in 1974 and received a PhD in organic chemistry in 1988.  From 1988 to 1991 she was managing researcher in Moscow Research Institute of Organic Synthesis; from 1991 to present she has been an owner and general director of  Scientific Technical Production Center “EON”, a Russian private limited company;  from 1993 to 2010 she was a shareholder and member of the Board of Directors of  Specinvestbank; for the past twenty-five years acted as a consultant to several foreign companies using Russian know-how and equipment installations in the petro-chemical industries.  The results of this consulting work concluded with installations in Kazakhstan, Russia and Uzbekistan refineries.  Over the same period of time, Kochetkova was also involved in trading petro-chemical products internationally.

 

Director

 

Jeffrey R. Brimhall, age 40, served as the Secretary of the Company from June 13, 2012 until December 4, 2017. On December 4, 2017, he resigned as Secretary and was appointed to the Board of Directors of the Company.Mr. Brimhall is currently employed as Controller of Raisa Energy LLC, a private energy company that invests in domestic oil and natural gas mineral and non-operated working interest. Brimhall was employed as Controller of Inflection Energy LLC from January 2015 until June 2016. Brimhall served as the Financial Reporting Manager for Resolute Energy Corp., an NYSE listed company based in Denver, Colorado from January 2010 to December 2015. During that time, he prepared and managed Resolute Energy`s periodic reports to the U.S. Securities and Exchange Commission. From June 2007 to December 2009, Brimhall was employed with Hein & Associates, LLP, a certified public accounting firm in Denver, Colorado. From August 2005 to June 2007, Brimhall was an Audit Associate with Grant Thornton LLP in Phoenix, Arizona. During the past five years, Mr. Brimhall also served as a director for Caspian Services, Inc. and RTS Oil Holdings, Inc., which are no longer SEC registrants, but were at the time Mr. Brimhall served as director. Mr. Brimhall earned a Bachelors of Science degree in Accounting from Brigham Young University in 2005. Mr. Brimhall received licensure as a Certified Public Accountant in 2008.  

 

Director, Vice President and Secretary

 

Asael (“Ace”) T. Sorensen Jr., age 67, is a licensed attorney who holds degrees in economics, law and business administration (BA, JD/MBA) from Brigham Young University. He has over 30 years of entrepreneurial and business management experience. He has negotiated and managed multimillion dollar national and international supply and service contracts for clients. He has also lectured throughout the country on the subject of contract law for the American Management Association. In 1995, Mr. Sorensen joined Covol Technologies Inc. (now known as Headwaters, Inc.), an environmental remediation and alternative fuel company. In his role as Vice President, General Counsel and Secretary, he helped manage the negotiation of construction and operating contracts for the production of alternative fuels for use in electrical power plants. He assisted with taking Covol Technologies Inc. public on the NASDAQ national market system. He also served as Covol Technologies Inc.’s chief lobbyist to the U.S. House and Senate in Washington DC securing broad bipartisan support for alternative fuels legislation. From 1999 to the present, Ace has had his own financial consulting firm in Salt Lake City, Utah, helping companies secure funding and comply with SEC and FINRA requirements for public listing on NASDAQ.

 

Agreements Concerning Appointment of Officers and Directors

 

The Share Exchange Agreement dated November 22, 2017, pursuant to which TORtec Group was acquired by the Company contained the following provision as a condition to closing the acquisition: The directors of the Company immediately prior to the Closing Date shall appoint Mr. Franc Schmidt, Chairman; and up to three other representatives chosen by Mr. Schmidt; Stephen Smoot, Irina Kochetkova & Jeffery R. Brimhall to the Company’s Board of Directors, and thereafter, the current directors of the Company, shall resign, in seriatim, effective as of the Closing Date, and the officers shall be appointed as officers of the Company by the present or new directors, who shall be Stephen H Smoot, CEO & President; Alex Schmidt, Vice President; Irina Kochetkova, Secretary and Treasurer.

35 

 

 

On May 22, 2019, the Company entered into a Share Exchange Agreement with TORtec Central Asia, a Wyoming corporation, and the sole shareholder of TORtec Central Asia pursuant to which the Company has agreed to acquire 100% ownership of the outstanding shares of TORtec Central Asia stock in exchange for issuing 2,000,000 shares of the Company’s common stock to Merdan Atayev who is the sole shareholder of TORtec Central Asia. The Share Exchange Agreement was subject to certain terms and conditions some of which were never completed.  The Share Exchange Agreement provided that the Company would elect Merdan Atayev as a Vice President of the Company as a condition to the Closing of the proposed acquisition of TORtec Central Asia. The parties have mutually agreed to terminate the Agreement.

 

Significant Employees

 

We have no significant employees at the present time. Our business affairs are handled by our officers and directors for the present time.

 

Family Relationships.

 

There are no family relationships between any of our directors and executive officers, except that Jeffrey R. Brimhall is the son-in-law of Stephen H. Smoot.

 

Directorships Held in Other Reporting Companies

 

Jeffrey R. Brimhall has served as a director of Geo Point Utah since March 29, 2010; and has served on the Board of Directors of Caspian Services, Inc., a “reporting issuer” under the Exchange Act, since 2010. Mr. Brimhall resigned from Caspian Services, Inc.'s Board of Directors on April 4, 2016.

 

There are no other directorships in a company with a class of securities registered pursuant to Section 12 of the Exchange Act or subject to the requirements of section 15(d) of such Act or any company registered as an investment company under the Investment Company Act of 1940 which are currently held, or have been held during the past five years, by any of the Company’s officers or directors.

 

Involvement in Certain Legal Proceedings

 

During the past 10 years, no director, person nominated to become a director or executive officer:

 

●has filed a petition under federal bankruptcy laws or any state insolvency laws, nor had a receiver, fiscal agent or similar officer appointed by a court for the business or property of such person, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer at or within two years before the time of such filing;

 

●was convicted in a criminal proceeding or named subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

 

●was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him or her from or otherwise limiting the following activities:

 

Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity;

 

Engaging in any type of business practice; or

36 

 

 

Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal commodities laws;

 

●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 of such person to engage in any activity described in the preceding bullet point, or to be associated with persons engaged in any such activity;

 

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

 

●was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not bee subsequently reverse, suspended or vacated;

 

●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:

 

any Federal or State securities or commodities law or regulation; or

 

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

 

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

 

●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), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act, or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

 

Section 16(a) Beneficial Ownership Compliance

 

Our shares of common stock are registered under the Exchange Act, and therefore, the officers, directors and holders of more than 10% of our outstanding shares are subject to the provisions of Section 16(a), which requires them to file with the SEC initial reports of beneficial ownership and reports of changes in beneficial ownership of common stock and our other equity securities. Officers, directors and greater than 10% beneficial owners are required by SEC regulations to furnish us with copies of all Section 16(a) reports they file.  Based solely upon our review during the fiscal year ended March 31, 2021, there was one ownership report filed late. Merdan Atayev was elected as a Vice President of the Company on May 23, 2019. He filed his initial stock ownership report on Form 3 on July 12, 2019 more than 10 days after he became an officer.

 

Code of Ethics

 

We have adopted a Code of Ethics, and it was attached as Exhibit 14 to our Annual Report on Form 10-K for the fiscal year ended March 31, 2014.  See Part IV, Item 15.

 

37 

 

Corporate Governance

 

Nominating Committee.  We have not yet established a Nominating Committee, and we believe that we are able to effectively manage the issues normally considered by a Nominating Committee.

 

If we do establish a Nominating Committee, we will disclose this change to our procedures in recommending nominees to our board of directors.

 

Audit Committee.  We have not yet established an audit committee. As of the present time, the entire Board of Directors serves as our audit committee.

 

Compensation Committee. We have not established a Compensation Committee or committee performing similar functions.  At the present time, Compensation Committee matters are being handles by our entire Board of Directors.

 

Independence of Directors.  None of our directors are deemed to be independent directors.

 

ITEM 11:  EXECUTIVE COMPENSATION

 

All Compensation

 

The following Summary Compensation Table reflects the aggregate executive compensation paid by us during the last two fiscal years ended March 31, 2021, and 2020, and the position for which such compensation was paid:

 

Summary Compensation Table

 

Name and Principal Position

 

(a)

Year or

Period

 

 

(b)

Salary*

($)

 

 

(c)

Bonus

($)

 

(d)

Stock Awards

($)

 

(e)

Option Awards

($)

 

(f)

Non-Equity Incentive Plan Compensation

($)

(g)

Nonqualified  Deferred Compensation

($)

(h)

All Other* Compensation

($)

 

(i)

Total*

Earnings

($)

 

(j)

Stephen H. Smoot, CEO since 12/2017

3/31/22

3/31/21

0

0

  0

  0

  0

  0

  0

  0

  0  

  0

  0

  0

 0

 0

 0

 0

Irina Kochetkova, CFO since 12/2017

3/31/22

3/31/21

0

0

  0

  0

  0

  0

  0

  0

  0  

  0

  0

  0

 0

 0

 0

 0

Alex Schmidt, Vice President since 12/2017

3/31/22

3/31/21

0

0

  0

  0

  0

  0

  0

  0

  0  

  0

  0

  0

 0

 0

 0

 0

 

MerdanAtayev, Vice President since 5/2019

 

3/31/22

3/31/21

 

0

0

 

0

0

 

0

0

 

0

0

 

0

0

 

0

0

 

 0

0

 

 0

0

 

Stock Issued in Connection with the TORtec Group Acquisition

 

In connection with the transaction, the Company valued the 90,000,000 shares of common stock provided to the TORTec shareholders at $5,203,643. This value was based upon the conversion rate of $0.0578 which was used to convert the Capital Vario line of credit into shares of the Company's common stock. Many of these shares were received by persons (or their affiliates) who became officers or directors of the Company at the time of the closing of the acquisition. See Item 12 for a description of the number of shares issued to persons (or their affiliates) who became officers and/or directors of the Company in connection with the TORtec Group acquisition.

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Outstanding Equity Awards

 

We have no equity compensation or similar plans.  We may be required to adopt an equity compensation plan or similar incentive plan to attract and maintain our present management and such additional employees as our business operations may require.  We have no present plans or arrangements to do so.

 

Compensation of Directors

 

No director received any compensation for service as a director during the fiscal years ended March 31, 2022, and 2021.

 

ITEM 12:  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

 

Security Ownership of Certain Beneficial Owners

 

The following tables set forth the shareholdings of those persons who were principal shareholders owning 5% of more of our common stock as of the date of this Annual Report.

 

Ownership of Principal Stockholders

 

Title Of Class Name and Address of Beneficial Owner Amount and Nature of Beneficial Owner Percent of Class*
Common Stock

Franc Smidt

Papur 25, b. 33

Bistritsa/Malinova dolina

1756, Sofia, Bulgaria

 18,000,000 shares 18.0%
Common Stock

TOR Biologos GmbH (1)

Rothausstrasse 61

4132 Muttenz, Switzerland

 13,500,000 shares 13.5%
Common Stock

Mikhail Lvov

Russian Federation, Moscow 125057, Leningradskiyprospekt 75, Bld. 1B, Fl. 452

 9,900,000 shares 9.9%
Common Stock

PlatinoAventurasInternacionales S.A.

Aves. 2 & 6, Calle 17, N. 233

San Jose, Costa Rica

 7,042,500 shares 7.04%
Common Stock

Sorensen Family Trust dated 12/3/1994 (1)

708 Cherapple Circle

Orem, Utah 84097

 7,042,500 shares 7.04%
Common Stock

MayrbekArtsuev (2)

Russian Federation, Moscow, 121609

Osenniy Boulevard 5, Building 3, Ap. 882

 13,500,000 shares 13.5%
Common Stock

Irina Kochetkova (3)

Nikolaeva Str. 4, Fl. 13

Russian Federation, Moscow 123100

 10,333,334 shares 10.33
Common Stock

Alex Schmidt (2)

Flat 108 Leonidou 10

Livadia (Larnaca) G4 7060

 13,500,000 shares 13.5%

 

Note 1: Asael T. Sorenson, Jr., a Trustee of the Sorensen Family Trust dated 12/3/1994, also directly owns 37,500 shares of the Company’s common stock.

 

Note 2: Mayrbek Artsuev directly owns 6,750,000 shares and he also indirectly owns 6,750,000 shares of the 13,500,000 shares held of record by TOR Biologos GmbH. Mr. Artsuev disclaims ownership of the remaining shares held by TOR Biologos GmbH. Alex Schmidt directly owns 6,750,000 shares and he also

39 

 

indirectly owns 6,750,000 shares of the 13,500,000 shares held of record by TOR Biologos GmbH. Mr. Schmidt disclaims ownership of the remaining shares held by TOR Biologos GmbH.

 

Note 3: Irina Kochetkova directly owns 9,900,000 shares and she also indirectly owns 333,334 shares held of record by Petroleum Group Services Limited, a Trust.

 

Security Ownership of Management

 

The following table sets forth the shareholdings of our directors and executive officers as of the date of this Annual Report:

 

Ownership of Officers and Directors

 

Title Of Class Name of Beneficial Owner Amount and Nature of Beneficial Owner Percent of Class*
Common Stock Stephen H. Smoot 0 0%
Common Stock Irina Kochetkova 10,333,334(2) 10.33%
Common Stock Jeffrey R. Brimhall 0 0%
Common Stock Asael T. Sorenson, Jr. 7,085,000(3) 7.09
Common Stock All officers and directors as a group 17,418,334 17.42%

 

Note 1: Irina Kochetkova directly owns 9,900,000 shares. She indirectly holds 333,334 shares through Petroleum Group Services Limited, a Trust.

 

Note 3: Asael T. Sorenson, Jr. owns 37,500 shares directly and 7,047,500 shares indirectly through the Sorensen Family Trust dated 12/3/1994, of which he serves as a Trustee, and is a beneficiary. Mr. Sorenson did not become a director of the Company until June 6, 2020.

 

* Percentages are based on 100,074,854 shares of common stock being outstanding on the date of this Annual Report.

 

SEC Rule 13d-3 generally provides that beneficial owners of securities include any person who, directly or indirectly, has or shares voting power and/or investment power with respect to such securities, and any person who has the right to acquire beneficial ownership of such security within 60 days.  Any securities not outstanding which are subject to such options, warrants or conversion privileges exercisable within 60 days are treated as outstanding for the purpose of computing the percentage of outstanding securities owned by that person.  Such securities are not treated as outstanding for the purpose of computing the percentage of the class owned by any other person.  At the present time there are no outstanding options or warrants.

 

Changes in Control

 

There are no arrangements, known to the Company, including any pledge by any person of securities of the Company, the operation of which may add a subsequent date result in a change in control of the Company.

 

Securities Authorized for Issuance under Equity Compensation Plans

 

None.  We have no equity, incentive, pension or other compensatory plans that have or are presently contemplated to be adopted by our Board of Directors; however, we may adopt one or more of these plans in the future to maintain or attract key personnel.

 

40 

 

ITEM 13:  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTORS INDEPENDENCE

 

Transactions with Related Persons

 

Except as described below, there were no material transactions, or series of similar transactions, during our last two fiscal years, or any currently proposed transactions, or series of similar transactions, to which we or any of our subsidiaries was or is to be a party, in which the amount involved exceeded the lesser of $120,000 or 1% of the average of our total assets at year end for the last two completed fiscal years and in which any director, executive officer or any security holder who is known to us to own of record or beneficially more than 5% of any class of our common stock, or any member of the immediate family of any of the foregoing persons, had an interest.

 

On April 12, 2019, the Company, through TORtec Titan+, entered into a perpetual license for the use of certain technologies with an entity controlled by Franc Smidt who was then the Chairman of the Board of Directors, Mr. Franc Smidt. Under the terms of the agreement, the Company paid $35,051 for the rights and will provide future royalties of 10% of the subsidiaries' net income. The Company expects to use the technology in connection with its Tornado M

 

On May 22, 2019, the Company entered into a Share Exchange Agreement with TORtec Central Asia, a Wyoming corporation, and the sole shareholder of TORtec Central Asia pursuant to which the Company agreed to acquire 100% ownership of the outstanding shares of TORtec Central Asia stock in exchange for issuing 2,000,000 shares of the Company’s common stock to the sole shareholder of TORtec Central Asia, Mr. Merdan Atayev. Mr. Atayev is the President, sole director and sole shareholder of TORtec Central Asia, a newly formed Wyoming corporation. The Share Exchange Agreement was subject to certain terms and conditions, including the transfer of: (a) a 99 year Lease Agreement to a new office and warehouse facility in Ashgabat, Turkmenistan (“Target Land”); and (b) any furniture, tools, machinery and equipment for maintenance and lifting located at the facility (“Target Assets”). TORtec Central Asia must first have acquired leasehold ownership to the Target Land based on a ninety-nine year lease from the government of Turkmenistan, free and clear from all mortgages, trust deeds, liens or other encumbrances, and TORtec Central Asia shall have acquired undisputed ownership of the Target Assets free and clear from all security interests, liens or other encumbrances. Although the Share Exchange Agreement was not a related party transaction at the time it was entered into, Merdan Atayev has since been appointed as a Vice President of the Company which is a condition to the Closing of the proposed acquisition. Some of the conditions described in the agreement were never satisfied, and the parties have mutually agreed to cancel the agreement.

 

From time to time, Capital Vario, a shareholder of the Company, advanced monies for operations. The advances did not incur interest and were due on demand.  During the year ended March 31, 2020, Capital Vario advanced the Company an additional $63,700 for operations. At March 31, 2020, Capital Vario agreed to convert $100,000 of the advances into 100,000 shares of the Company’s subsidiary, Nanosynthesis. The per share rate used in the conversion was the same price to which third party investors were purchasing shares. As of March 31, 2020 and 2019, amounts due to Capital Vario were $288,690 and $324,990, respectively. The advances were reflected as "short term advances - related parties" on the consolidated balance sheets attached to the Company’s 10K for the fiscal year ending March 31, 2020.  As of March 22, 2021, amounts due to Capital Vario were $451,570. On March 22, 2021, pursuant to shareholder approval, the Company transferred the Company subsidiaries which held substantially all the Company’s assets to Capital Vario in complete satisfaction of all indebtedness. Mr. Stephen H. Smoot was an officer and former consultant to Capital Vario, but he resigned those positions in August 2017.

 

Effective March 31, 2020, the Company sold some shares of its common stock together with ownership interests in its partially owned subsidiary, TORtec Nanosynthesis Corp., to various investors, some of which are related parties. The related party transactions include the following: (a) Stephen H. Smoot paid $50,000 for 5,000 shares of the Company’s common stock and a 3.333% ownership interest in TORtec Nanosynthesis Corp.; (b) the Sorenson Family Trust, dated December 3, 1994, a principal shareholder of the Company, paid $50,000 for 5,000 shares of the Company’s common stock and a 3.333% ownership interest in TORtec Nanosynthesis Corp. Asael T. Sorenson, Jr., a trustee of the trust, became a director of the Company on June 6, 2020; (c) $100,000 of the debt owed to Capital Vario was converted to 10,000 shares of the Company’s common stock and a 6.666% ownership interest in TORtec Nanosynthesis Corp. and issued to Simmons Benefit Group; and (d) Sherm Smoot (a brother to Stephen H.

41 

 

Smoot) and his wife, Sherri, paid $15,000 for 1,500 shares of the Company’s common stock and a 1.000% ownership interest in TORtec Nanosynthesis Corp .

 

Promoters and Certain Control Persons

 

See the heading “Transactions with Related Persons” above.

 

Parents of the Smaller Reporting Company

 

We have no parents.

 

Director Independence

 

We do not have any independent directors serving on our Board of Directors.

 

ITEM 14: PRINCIPAL ACCOUNTING FEES AND SERVICES

 

The following is a summary of the fees billed to us by our principal accountants during fiscal years ended March 31, 2022, and 2021:

 

Fee Category   2022   2021
Audit Fees $ 29,700   $ 29,700
Audit-related Fees   0     0
Tax Fees   0     0
All Other Fees   0     0
Total Fees $ 29,700   $ 29,700

 

Audit Fees - Consists of fees for professional services rendered by our principal accountants for the audit of our annual financial statements and review of the financial statements included in our Forms 10-Q or services that are normally provided by our principal accountants in connection with statutory and regulatory filings or engagements.

 

Audit-related Fees - Consists of fees for assurance and related services by our principal accountants that are reasonably related to the performance of the audit or review of our financial statements and are not reported under “Audit fees.”

 

Tax Fees - Consists of fees for professional services rendered by our principal accountants for tax compliance, tax advice and tax planning.

 

All Other Fees - Consists of fees for products and services provided by our principal accountants, other than the services reported under “Audit fees,” “Audit-related fees,” and “Tax fees” above.

 

Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditors

 

We have not adopted an Audit Committee; therefore, there is no Audit Committee policy in this regard. However, we do require approval in advance of the performance of professional services to be provided to us by our principal accountant. Additionally, all services rendered by our principal accountant are performed pursuant to a written engagement letter between us and the principal accountant.

 

PART IV

 

ITEM 15:  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

 

(a)(1)(2)    Financial Statements.  See the audited financial statements for the years ended March 31, 2022, and 2021, contained in Part II, Item 8, which are incorporated herein by this reference.

42 

 

 

(a)(3)(i)     Exhibits.  The following Exhibits are filed as part of this Annual Report:

 

Exhibit Number

3.1*

Description

Articles of Incorporation of the Company (incorporated by reference from the Form S-1 Registration Statement filed with the Commission on October 12, 2012)

 

3.2*

By-laws of the Company (incorporated by reference from the Form S-1 Registration Statement filed with the Commission on October 12, 2012).

 

3.3*

Amended and Restated Articles of Incorporation of the Company (incorporated by reference from the Company’s Form 10-K Annual Report for the year ended March 31, 2019 filed with the Commission on July 16, 2019)

 

10.1*

License Agreement No. W-1/18 by and between TORtecForschungsinstitut GmbH (TRI, Switzerland), Licensor, and TORtec Group, Licensee, dated June 18, 2018(incorporated by reference from the Company’s Form 10-K Annual Report for the year ended March 31, 2018 filed with the Commission on July 12, 2018)

 

10.2*

Stock Purchase Agreement between TORtec Group Corporation and IKR BABOLNA FZE dated May 20, 2019 (incorporated by reference from the Company’s Form 8-K/A-1 Current Report for the earliest event dated May 20, 2019 filed with the Commission on May 31, 2019)

 

10.3*

A License Agreement dated February 19, 2019 between TORtec Group Corporation and TORtecForschungsinstitut GmbH, the successor-in-interest to Scientific Research Institute of Technological Progress, a Cyprus entity (incorporated by reference from the Company’s Quarterly Report on Form 10-Q for the period ended December 31, 2019 filed with the Commission on February 14, 2020)

 

10.4*

A License Agreement dated April 12, 2019 between TORtec Group Corporation and TORtecForschungsinstitut GmbH(incorporated by reference from the Company’s Quarterly Report on Form 10-Q for the period ended December 31, 2019 filed with the Commission on February 14, 2020)

 

10.5*

A General Agreement for Execution of Works and Services No. US19 dated February 19, 2019 between Vortex Technologies GmbH and TORtec Group Corporation (incorporated by reference from the Company’s 10K Annual Report for the year ended March 31, 2020 filed with the Commission on July 13, 2020)

 

14*

Code of Ethics (incorporated by reference from the Company’s Form 10-K Annual Report for the year ended March 31, 2013 filed with the Commission on July 16, 2013)

 

 

43 

 

 

Exhibit Number

 

Description

 

31.1

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act provided by Stephen H. Smoot, President, CEOand Director.

 

31.2

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act provided by Irina Kochetkova, Secretary, Treasurer, CFO, and Director.

 

32.1

Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 provided by Stephen H. Smoot, President, CEO and Director.

 

32.2 Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 provided by Irina Kochetkova, Secretary, Treasurer, CFO and Director

 

* - Previously filed

 

Exhibit Number Description
101.PRE. Inline XBRL Taxonomy Extension Presentation Linkbase
101.LAB Inline XBRL Taxonomy Extension Label Linkbase
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase
101.SCH Inline XBRL Taxonomy Extension Schema

Exhibit 104

 

 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101

 

Documents Incorporated by Reference Where Incorporated in this Annual Report
Prospectus dated January 7, 2013, and filed with the SEC on January 8, 2013 (Spin-Off) Part I, Item 1
   
8-K Current Report dated April 22, 2013, and filed with the SEC on April 22, 2013 (Spin-Off Payment Date) Part I, Item 1

 

8-K Current Report dated November 22, 2017, and filed with the SEC on November 29, 2017

2.1 Share Exchange Agreement by and among Geo Point Resources, Inc., TORtec Group, and the Shareholders of TORtec Group dated November 22, 2017

 Part I, Item 1

 

8-K Current Report December 4, 2017 and filed with the SEC on December 8, 2017, as amended in a Form 8-K/ Amendment dated June 22, 2018 and filed with the SEC on June 22, 2018 Part I, Item 1

 

(1)  Summaries of all Exhibits are modified in their entirety by reference to the actual Exhibit.

 

(2)  These documents and related Exhibits have previously been filed with the SEC and are referenced for additional information.

 

44 

 

SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Annual Report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

TORTEC GROUP CORPORATION

 

         
Date: August 11, 2022   By: /s/ Stephen H. Smoot
        Stephen H. Smoot, President, CEO and Director

 

 

         
Date: August 11, 2022   By: /s/ Irina Kochetkova
        Irina Kochetkova, Secretary, Treasurer, CFO and Director

 

Pursuant to the requirements of the Securities Exchange Act of 1934 this Annual Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

 

TORTEC GROUP CORPORATION

 

         
Date: August 11, 2022   By: /s/ Stephen H. Smoot
        Stephen H. Smoot, President, CEO and Director

 

 

         
Date: August 11, 2022   By: /s/ Irina Kochetkova
        Irina Kochetkova,, Vice President, Treasurer and Director

 

 

         
Date: August 11, 2022   By: /s/ Jeffrey R. Brimhall
        Jeffrey R. Brimhall, Director

 

 

         
Date: August 11, 2022   By: /s/ Asael T. Sorensen, Jr.
        Asael T. Sorensen, Jr., Vice President, Secretary and Director

 

45 

 

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