01—Abstract
Summary
Summary of the 10-K filed July 21, 2020. Cited figures are marked; the original filing is the authoritative source.
Quture International, Inc. (BRRN) presents a complex picture in its July 21, 2020, 10-K filing, highlighting a company that has been dormant for an extended period and is now under new management with a stated intention to pursue synergistic acquisitions or joint ventures.
As a smaller reporting company and a shell company, its primary focus appears to be on strategic re-engagement rather than existing operations, as it generated no revenue and has no employees. The company is heavily reliant on its sole director and officer, David Lazar, who also serves as its custodian, for funding and operational direction. Significant events include the appointment of Mr. Lazar as custodian and subsequently as the sole director and officer.
A substantial issuance of preferred shares to Mr. Lazar with super-voting rights significantly alters the capital structure. Investors should note the substantial going concern doubt expressed by the auditors due to significant operating losses and a working capital deficit, underscoring the need for additional capital.
The company's stock is traded on the OTC Pink Sheets, characterized by low liquidity and volatile pricing, and is subject to penny stock regulations, making it difficult for investors to sell shares. The independent auditors issued a disclaimer of opinion on the financial statements due to insufficient records and inability to obtain sufficient audit evidence.
02—Key points
Key Highlights
- The company has been dormant for a significant period (March 2013 to December 2019) and is now under new management, led by David Lazar, who serves as the sole director and officer.
- Quture International, Inc. is classified as a shell company and a smaller reporting company, with no employees and no revenue generated.
- The company intends to pursue acquisitions or joint ventures as its primary strategy, seeking to enhance its business plan.
- A significant event was the granting of 10,000,000 preferred shares to David Lazar with super-voting rights equivalent to 21,000,000,000 common shares, resulting in a non-cash charge of $21,000,000.
- Auditors expressed substantial doubt about the company's ability to continue as a going concern due to significant operating losses and a lack of profitability.
- The company's stock trades on the OTC Pink Sheets, with low liquidity and potential for wide price fluctuations, subject to penny stock rules.
- The independent auditors issued a disclaimer of opinion on the financial statements due to insufficient and lost audit evidence, preventing them from forming an opinion on the financial position.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2020filed July 21, 2020Financial Statements
FY2020 against FY2019
| Line item | FY2020FY2019 | Change |
|---|---|---|
| Operating Expenses | $2.30M$10K | +22659.9% |
| Operating Income | -$2.30M-$10K | −22659.9% |
| Net Income | -$2.30M$1.48M | −255.3% |
| EPS (Basic) | $0.98$0.60 | +63.3% |
| EPS (Diluted) | $-0.93$0.60 | −255.0% |
| Shares Outstanding (Basic) | 2.49M2.49M | 0.0% |
05—Questions
Frequently Asked Questions
What is the company's current business strategy given its dormant history?
The company has been dormant and is now under new management. Its stated plan of operation is to engage in what it believes to be synergistic acquisitions or joint ventures to enhance its business plan. It has generated no revenue and has no employees.
What is the financial health and outlook for Quture International, Inc.?
The company faces significant financial challenges. The auditors have expressed substantial doubt about its ability to continue as a going concern due to significant operating losses and a working capital deficit. It has a history of no revenue and relies on new funding, primarily through interest-free demand loans from its sole director, David Lazar.
What are the implications of the company being a shell company and trading on the OTC Pink Sheets?
As a shell company, Quture International, Inc. has minimal operations and assets, and its future hinges on strategic acquisitions. Trading on the OTC Pink Sheets means its stock is not listed on a major exchange, leading to low liquidity, wide price fluctuations, and strict 'penny stock' regulations which can make it difficult for investors to buy or sell shares.
What is the significance of the preferred stock issuance to David Lazar?
On April 5, 2020, 10,000,000 preferred shares were granted to David Lazar with super-voting rights equivalent to 21,000,000,000 common shares. This significantly concentrates voting power and resulted in a large non-cash charge of $21,000,000 recorded as stock-based compensation.
06—Continue