Item 1. Description of Business
FORWARD-LOOKING STATEMENTS
This annual report contains forward-looking statements. These statements relate to future events or our future financial performance. These statements often can be identified by the use of terms such as "may," "will," "expect," "believe," "anticipate," "estimate," "approximate" or "continue," or the negative thereof. We intend that such forward-looking statements be subject to the safe harbors for such statements. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statements represent management's best judgment as to what may occur in the future. However, forward-looking statements are subject to risks, uncertainties and important factors beyond our control that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events.
GENERAL
Arma Services, Inc. was incorporated by our director in the State of Nevada on September 2, 2014. Our primary business will be destination management and event management services initially in the Russian Federation, but with plans at a later stage to spread our business to America and China. We will aim to provide a full range of services in the field of Meeting, Incentive, Conference, and Exhibition tourism in Russia for corporate customers from United States, China and Russia. We plan to create a variety of events for domestic and foreign companies, including; industry conferences and business meetings, dealer conferences for producers, motivational and incentive arrangements for key employees, and to organize participation in exhibitions and forums.
We have entered into a contract with Proekta LLC. This company has Mr. Sergey Gandin on board as its company director. Proekta LLC is in the hostel business, providing inexpensive, supervised lodging places.
The purpose of the contracts is for Proekta LLC to provide accommodation at a cost of $25 per double room, per night for the subcontractor personnel contracted with Arma Services Inc.
The main terms of this agreement are:
1.0 Proekta LLC is a Related party.
1.1. Proekta LLC shall provide Arma Services Inc.’s subcontractors double rooms for a fee of $25 a night at a Moscow address, Zvonarsky lane 5, Apt.6, Russian Federation 107031.
1.2. Double rooms are available for temporary accommodation for Arma Inc.’s sub-contractors.
Furthermore, Arma Services Inc. has an agreement with Gazetny LLC. This company is contracted to provide banquet space for events of Arma Services for a fee.
The purpose of the contract is for Arma Services to have a secured location to accommodate some of the Company’s planned business.
The main terms of the agreement are:
1. Gazetny LLC shall provide Arma Services Inc. with banquet halls space for a fee of $150 per person, at an address 27 Gazetny Lane, Rostov-on-Don, Russian Federation.
2. Gazetny LLC is to provide the Banquet Halls upon request to Arma Services Inc. Halls are subject to availability.
We are still in the development stage and we have generated minimal revenues. Our independent registered public accounting firm has issued an audit opinion for our Company which includes an explanatory paragraph expressing substantial doubt as to our ability to continue as a going concern.
BUSINESS PLAN
Arma Services Inc. is formed with a purpose to be in the business of Destination Management Company (“DMC”), and will aim to provide a full range of services in the field of Meeting, Incentive, Conference, and Exhibition (“MICE”) tourism in Russia for corporate customers from the United States, China and Russia. We plan to create a variety of events for domestic and foreign companies, including; industry conferences and business meetings, dealer conferences for producers, motivational and incentive arrangements for key employees, and to organize participation in exhibitions and forums.
Acting as receiving party, we will aim to provide full support for our customers with all necessary services for the implementation of activities; rent of hotels, conference rooms, organization catering, hiring of personnel and equipment for sound, lighting, and video, booking of performers, promotion and press availability, transportation and more. Arma Services Inc. plans not to provide these services directly, but intends to be an intermediary (agent) between a customer and the end provider (hotel, transport company, restaurant, subcontractor). Our managers will try to ascertain from the customer the complete list of required services, find sub-contractors, check the quality of their services and sell the service to the customer. For the customer, we aim to act as the guarantor of this service quality and its compliance with the customer's expectations.
MARKETING
Our marketing strategy may include several components:
1.
Participation in international exhibitions - IMEX Frankfurt, IMEX America, IEBTM World Barcelona,
CIBTM China, MITT Moscow.
2.
Website development and its further promotion on the Internet by means of SEO,
as well as active use of context advertising of Google Adwords, Yandex Direct, Baidu PPC.
3.
Active sales - “cold calls” to potential customers.
4.
E-mail distribution.
5.
Participation in professional associations - GBTA Russian Federation, ADME International
Association of Destination Management Executives, ICCA-the International Congress and
Convention Association.
STRATEGY
Our strategy is to drive attention through multiple marketing facets which will enable us to attract the sufficient quantity of customers possible upon commencement of operations.
Our strategy is to create unique events for each customer and ensure the process of working with us is efficient, comfortable, and operationally seamless.
EMPLOYEES AND EMPLOYMENT AGREEMENTS
At present, we have no employees other than our officer and director. We presently do not have pension, health, annuity, insurance, stock options, profit sharing or similar benefit plans; however, we may adopt such plans in the future. There are presently no personal benefits available to any officers, directors or employees.
Item 1A.
Item 1A. Risk Factors
Not applicable to smaller reporting companies.
Item 2.
Item 2. Description of Property
We do not own any real estate or other properties.
Item 3.
Item 3. Legal Proceedings
We know of no legal proceedings to which we are a party or to which any of our property is the subject which are pending, threatened or contemplated or any unsatisfied judgments against us.
Item 4.
Item 4. Submission of Matters to a Vote of Security Holders
None.
PART II
Item 5.
Item 5. Market for Common Equity and Related Stockholder Matters
Market Information
There is a limited public market for our common shares. Our common shares are not quoted on the OTC Bulletin Board at this time. Trading in stocks quoted on the OTC Bulletin Board is often thin and is characterized by wide fluctuations in trading prices due to many factors that may be unrelated to a company’s operations or business prospects. We cannot assure you that there will be a market in the future for our common stock.
OTC Bulletin Board securities are not listed or traded on the floor of an organized national or regional stock exchange. Instead, OTC Bulletin Board securities transactions are conducted through a telephone and computer network connecting dealers in stocks. OTC Bulletin Board issuers are traditionally smaller companies that do not meet the financial and other listing requirements of a regional or national stock exchange.
As of October 31, 2018, no shares of our common stock have traded.
Number of Holders
As of October 31, 2018, the 6,240,000 issued and outstanding shares of common stock were held by our majority shareholder Ruslan Mishin and the rest of our minority shareholders.
Dividends
No cash dividends were paid on our shares of common stock during the fiscal years ended October 31, 2018 and 2017. We have not paid any cash dividends since our inception and do not foresee declaring any cash dividends on our common stock in the foreseeable future.
Recent Sales of Unregistered Securities
None.
Purchase of our Equity Securities by Officers and Directors
None.
Other Stockholder Matters
None.
Item 6.
Item 6. Selected Financial Data
Not applicable.
Item 7.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with our financial statements, including the notes thereto, appearing elsewhere in this annual report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Our audited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.
RESULTS OF OPERATIONS
We have incurred recurring losses to date. Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to
the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation.
We expect we will require additional capital to meet our long term operating requirements. We expect to raise additional capital through, among other things, the sale of equity or debt securities.
FISCAL YEAR ENDED OCTOBER 31, 2018 COMPARED TO FISCAL YEAR ENDED OCTOBER 31, 2017.
Our net loss for the fiscal year ended October 31, 2018 is $10,215 compared to a net loss of $15,363 during the fiscal year ended October 31, 2017. During fiscal year ended October 31, 2018, the Company has generated $0 in revenue, compare to $9,900 in the year ended October 31, 2017.
During the fiscal year ended October 31, 2018, we incurred professional fees of $5,000 and bank service charges of $185 compared to professional fees of $25,170 and service charge of $93 incurred during fiscal year ended October 31, 2017.
The weighted average number of shares outstanding was 6,240,000 for the fiscal year ended October 31, 2018 and 6,131,397 for October 31, 2017.
LIQUIDITY AND CAPITAL RESOURCES
FISCAL YEAR ENDED OCTOBER 31, 2018 AND 2017
As of October 31, 2018, our total assets were $(13) comprised of cash and cash equivalents; our total liabilities were $15,993 comprised of loan from our director $9,343, Accounts payables $5,000 and accrued expenses $1,650.
As of October 31, 2017, our total assets were $5,201 and our total liabilities were $10,992 comprised of loan from our director $5,992 and accounts payable $5,000. Stockholders’ equity (deficit) decreased from $(5,791) as of October 31, 2017 to $(16,006) as of October 31, 2018.
Cash Flows from Operating Activities
For the fiscal year ended October 31, 2018, net cash flows used in operating activities were $(3,565) consisting of net loss of $(10,215), accumulated amortization of $5,000 and accrued expenses of $1,650. For the fiscal year ended October 31, 2017, net cash flows used in operating activities were $(17,294) consisting of net loss of $(15,363), accounts payable of $5,000 and accrued expenses of $(6,931).
Cash Flows Provided by Investing Activities
For the fiscal year ended October 31, 2018, net cash flows used in investing activities were $0 invested in developing a website for the Company. For the fiscal year ended October 31, 2017, net cash flows used in investing activities were $(5,000) invested in developing a website for the Company.
Cash Flows from Financing Activities
For the fiscal year ended October 31, 2018, net cash from financing activities was $3,350 consisting of director’s loan. For the fiscal year ended October 31, 2017, net cash from financing activities was $18,200 consisting of proceeds received from issuance of shares.
PLAN OF OPERATION AND FUNDING
We expect that working capital requirements will continue to be funded through a combination of our existing funds and further issuances of securities. Our working capital requirements are expected to increase in line with the growth of our business.
Existing working capital, further advances and debt instruments, and anticipated cash flow are expected to be adequate to fund our operations over the next six months. We have no lines of credit or other bank financing arrangements. Generally, we have financed operations to date through the proceeds of the private placement of equity and debt instruments. In connection with our business plan, management anticipates additional increases in operating expenses and capital expenditures relating to: (i) acquisition of software; (ii) developmental expenses associated with a start-up business; and (iii) marketing expenses. We intend to finance these expenses with further issuances of securities, and debt issuances. Thereafter, we expect we will need to raise additional capital and generate revenues to meet long-term operating requirements. Additional issuances of equity or convertible debt securities will result in dilution to our current shareholders. Further, such securities might have rights, preferences or privileges senior to our common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, we may not be able to take advantage of prospective new business endeavors or opportunities, which could significantly and materially restrict our business operations.
MATERIAL COMMITMENTS
As of the date of this Annual Report, we do not have any material commitments.
PURCHASE OF SIGNIFICANT EQUIPMENT
We do not intend to purchase any significant equipment during the next twelve months.
OFF-BALANCE SHEET ARRANGEMENTS
As of the date of this Annual Report, we do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
GOING CONCERN
The independent auditors' reports accompanying our October 31, 2018 and October 31, 2017 financial statements contains an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. The financial statements have been prepared "assuming
that we will continue as a going concern," which contemplates that we will realize our assets and satisfy our liabilities and commitments in the ordinary course of business.
Item 7A.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
Not applicable to smaller reporting companies.
Item 8.
Item 8. Financial Statements and Supplementary Data
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and the Board of Directors of Arma Services Inc.
Opinion on the Financial Statements
We have audited the accompanying balance sheet of Arma Services Inc. ("the Company") as of October 31, 2018, and the related statement of operations, stockholders' equity, and cash flows, and the related notes (collectively referred to as the "financial statements"). In our opinion, the 2018 financial statements present fairly, in all material respects, the financial position of the Company as of October 31, 2018, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.
The financial statements of the Company as of October 31, 2017, were audited by other auditors whose report dated August 07, 2018, expressed an unqualified opinion on those statements.
Material Uncertainty Relating to Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 4 to the financial statements, the Company has suffered recurring losses and has not yet established a reliable, consistent and proven source of revenue to meet its operating costs on an ongoing basis and currently does not have sufficient available funding to fully implement its business plan. These factors raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 4. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Our opinion is not modified with respect to this matter.
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 Plot 1-H, First Floor, Alkher Arcade, Abu Bakar Market G - 11/1, Islamabad - Pakistan T: +92 (51) 2308271-2 F: +92 (51) 2700908 E: info@thezmk.com W: thezmk.com
ZMK/ARIC/Audi/20/1539
Zia Masood Kiani & Co.
CHARTERED ACCOUNTANTS
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/Zia Masood Kiani & Co.
Zia Masood Kiani & Co. (Chartered Accountants)
We have served as the Company's auditor since 2020. Islamabad, Pakistan Date: August 13, 2020
ARMA SERVICES, INC.
Balance Sheets as of October 31, 2018 and 2017 (Audited)
ASSETS
October 31, 2018
October 31, 2017
Current Assets
Cash and cash equivalents
$ (13)
$ 201
Total Current Assets
(13)
Other Assets
Website development
-
5,000
Total Assets
$ (13)
$ 5,201
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Liabilities
Current Liabilities
Accounts payable
$ 5,000
$ 5,000
Accrued expenses
1,650
-
Loan from director
9,343
5,992
Total Liabilities
$ 15,993
$ 10,992
Commitments and Contingencies
Stockholders’ Deficit
Common stock, par value $0.001; 75,000,000 shares authorized, Issued and outstanding for both periods 6,240,000.
6,240
6,240
Additional paid in capital
20,160
20,160
Accumulated deficit
(42,406)
(32,191)
Total Stockholders’ Deficit
(16,006)
(5,791)
Total Liabilities and Stockholders’ Deficit
$ (13)
$ 5,201
See accompanying notes to financial statements.
ARMA SERVICES, INC.
Statements of Operations for the years ended
October 31, 2018 and 2017 (Audited)
Year ended October 31, 2018
Year ended October 31, 2017
REVENUES
$ -
$ 9,900
OPERATING EXPENSES
Professional Fees
5,000
25,170
Bank Service Charges
Accumulated Amortization
5,000
-
Computer and Internet Expenses
-
TOTAL OPERATING EXPENSES
10,215
25,263
NET LOSS FROM OPERATIONS
(10,215)
(15,363)
PROVISION FOR INCOME TAXES
-
-
NET LOSS
$ (10,215)
$ (15,363)
NET LOSS PER SHARE: BASIC AND DILUTED
$ (0.00)
$ (0.00)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: BASIC AND DILUTED
6,240,000
6,131,397
See accompanying notes to financial statements.
ARMA SERVICES, INC.
Statement of Stockhder’s Deficit
For the Years Ended October 31, 2018 and 2017 (Audited)
See accompanying notes to financial statements.
ARMA SERVICES, INC.
Statement of Cash Flows for the Years Ended
October 31, 2018 and 2017 (Audited)
Year ended October 31, 2018
Year ended October 31, 2017
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for the period
$ (10,215)
$ (15,363)
Adjustment for non- cash item;
Accumulated Amortization
5,000
Changes in assets and liabilities:
Accounts Payable
-
5,000
Increase (decrease) in accrued expenses
1,650
(6,931)
CASH FLOWS PROVIDED (USED) IN OPERATING ACTIVITIES
(3,565)
(17,294)
CASH FLOWS FROM INVESTING ACTIVITIES
Website Development
-
(5,000)
CASH USED IN INVESTING ACTIVITIES
-
(5,000)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sale of common stock
-
18,200
Loan from director
3,350
-
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES
3,350
18,200
NET INCREASE (DECREASE) IN CASH
(214)
(4,094)
Cash, beginning of period
4,295
Cash, end of period
$ (13)
$ 201
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid
$ -
$ -
Income taxes paid
$ -
$ -
See accompanying notes to financial statements.
ARMA SERVICES, INC.
NOTES TO THE FINANCIAL STATEMENTS
October 31, 2018 and 2017 (Audited)
NOTE 1 - ORGANIZATION AND NATURE OF BUSINESS
Arma Services Inc. (the “Company”, “we”, “us” or “our”) was incorporated under the laws of the State of Nevada on September 2, 2014. Arma Services Inc. is a Destination Management Company (“DMC”), which aims to provide a full range of services in the field of Meeting, Incentive, Conference, and Exhibition (“MICE”) tourism in Russia for corporate customers from United States, China and internal Russian clients. We plan to create a variety of events for domestic and foreign companies, including; industry conferences and business meetings, dealer conferences for producers, motivational and incentive arrangements for key employees, and to organize participation in exhibitions and forums.
NOTE 2 - SUMMARY OF SIGNIFCANT ACCOUNTING POLICIES
Basis of Presentation
The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars.
Accounting Basis
The Company uses the accrual basis of accounting and accounting principles generally accepted in the United States of America (“GAAP” accounting). The Company has adopted an October 31 fiscal year end.
Cash and Cash Equivalents
The Company considers all highly liquid investments with the original maturities of three months or less to be cash equivalents. The Company had $(13) of cash as of October 31, 2018 and $201 of cash as of October 31, 2017.
Fair Value of Financial Instruments
ASC topic 820 "Fair Value Measurements and Disclosures" establishes a three-tier fair value hierarchy, which prioritizes the inputs in measuring fair value. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market.
These tiers include:
Level 1: defined as observable inputs such as quoted prices in active markets;
Level 2: defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and
Level 3: defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.
The carrying value of cash and the Company’s loan from shareholder approximates its fair value due to their short-term maturity.
Income Taxes
Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Revenue Recognition
The purpose of our business is to provide a full range of services in the field of Meeting, Incentive, Conference, and Exhibition (“MICE”) tourism in Russia for corporate customers from the United States, China and internal Russian clients.
Services are provided through industry conferences and business meetings, dealer conferences for producers, motivational and incentive arrangements for key employees, and to organize participation in exhibitions and forums.
The Company will recognize revenue in accordance with ASC topic 606 “Revenue from Contracts with Customers”. The core principle of ASC 606 is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. An entity recognizes revenue in accordance with that core principle by applying the following steps:
Step 1: Identify the contract(s) with a customer
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligations in the contract
Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.
Specifically, Section 606-10-50 requires an entity to provide information about: a. Revenue recognized from contracts with customers, including the disaggregation of revenue into appropriate categories; b. Contract balances, including the opening and closing balances of receivables, contract assets, and contract liabilities; c. Performance obligations, including when the entity typically satisfies its performance obligations and the transaction price that is allocated to the remaining performance obligations in a contract; d. Significant judgments, and changes in judgments, made in applying the requirements to those contracts.
Stock-Based Compensation
Stock-based compensation is accounted for at fair value in accordance with ASC Topic 718. To date, the Company has not adopted a stock option plan and has not granted any stock options.
Basic Income (Loss) Per Share
Basic income (loss) per share is calculated by dividing the Company’s net income (loss) applicable to common shareholders by the weighted average number of common shares during the period. Diluted income (loss) per share is calculated by dividing the Company’s net income (loss) available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. There are no such common stock equivalents outstanding as of October 31, 2019 and 2018. In loss years common stock equivalents would not be included as they would be anti-dilutive.
Comprehensive Income
The Company has established standards for reporting of comprehensive income, its components and accumulated balances. When applicable, the Company would disclose this information on its Statement of Stockholders’ Equity. Comprehensive income comprises equity except those resulting from investments by owners and distributions to owners. The Company has not had any significant transactions that are required to be reported in other comprehensive income.
NOTE 3 - LOANS FROM DIRECTOR
In support of the Company’s efforts and cash requirements, it may rely on advances from related parties until such time that the Company can support its operations or attains adequate financing through sales of its equity or traditional debt financing. There is no formal written commitment for continued support by shareholders. Amounts represent advances or amounts paid in satisfaction of liabilities. The advances are considered temporary in nature and have not been formalized by a promissory note.
As of October 31, 2018, the Company had a loan outstanding with the Company’s sole director Mr. Sergey Gandin in the amount of $9,343. As of October 31, 2017, the Company had a loan outstanding with the Company’s sole director Mr. Sergey Gandin in the amount of $5,992. The loan is non-interest bearing, due upon demand and unsecured.
NOTE 4 - GOING CONCERN
The accompanying financial statements have been prepared in conformity with generally accepted accounting principle, which contemplate continuation of the Company as a going concern. However, the Company had limited revenues as of October 31, 2018. The Company currently has a working capital deficit, and has not completed its efforts to establish a stabilized source of revenues sufficient to cover operating costs over an extended period of time. This raises substantial doubt about its ability to continue as a going concern.
Management anticipates that the Company will be dependent, for the near future, on additional investment capital to fund operating expenses. The Company intends to position itself so that it may be able to raise additional funds through the capital markets. In light of management’s efforts, there are no assurances that the Company will be successful in this or any of its endeavors
or become financially viable and continue as a going concern.
NOTE 5 - COMMON STOCK
The Company has 75,000,000, $0.001 par value shares of common stock authorized. As of October 31, 2018 and 2017, the Company had 6,240,000 shares issued and outstanding.
NOTE 6 - RELATED PARTY TRANSACTIONS
As of October 31, 2018 the Company had a non-interest bearing loan payable to its sole director in the amount of $9,343. As of October 31, 2017, the Company had a non-interest bearing loan payable to its sole director in the amount of $5,992.
The Company’s officers and director provide services and office space to the Company without compensation.
The Company has entered into vendor agreements with Proekta LLC and Gazetny LLC, which are entities related to officers of the Company.
NOTE 7 - COMMITMENTS AND CONTINGENCIES
The Company neither owns nor leases any real or personal property. An officer has provided office services without charge. There is no obligation for the officer to continue this arrangement. Such costs are immaterial to the financial statements and accordingly are not reflected herein. The officers and directors are involved in other business activities and most likely will become involved in other business activities in the future.
NOTE 8 - INCOME TAXES
As of October 31, 2018, the Company had net operating loss carry forwards of approximately $42,406 that may be available to reduce future years’ taxable income in varying amounts through 2037. Future tax benefits which may arise as a result of these losses have not been recognized in these financial statements, as their realization is determined not likely to occur and accordingly, the Company has recorded a valuation allowance for the deferred tax asset relating to these tax loss carry-forwards.
The provision for Federal income tax consists of the following:
October 31, 2018
October 31,
Federal income tax benefit attributable to:
Current Operations
$ 2,145
$ 3,226
Less: valuation allowance
(2,145)
(3,226)
Net provision for Federal income taxes
$ -
$ -
The cumulative tax effect at the expected rate of 21% of significant items comprising our net deferred tax amount is as follows:
October 31, 2018
October 31,
Deferred tax asset attributable to:
Net operating loss carryover
$ 8,905
$ 6,760
Less: valuation allowance
(8,905)
(6,760)
Net deferred tax asset
$ -
$ -
Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards of approximately $42,406 for Federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur net operating loss carry forwards may be limited as to use in future years.
NOTE 9 - SUBSEQUENT EVENTS
In accordance with ASC 855-10 the Company has analyzed its operations subsequent to October 31, 2018 and to the date these financial statements were issued, and has determined that it does not have any material subsequent events to disclose in these financial statements.
In December 2019, a novel strain of coronavirus (COVID-19) emerged in Wuhan, Hubei Province, China. While initially the outbreak was largely concentrated in China and caused significant disruptions to its economy, it has now spread to several other countries and infections have been reported globally. Director and management stay informed about COVID-19 developments generally and ensure it has access to information related to a company’s response to the crisis and how the specific impact on the company is developing as the crisis extends.
Item 9.
Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A(T).
Item 9A(T). Controls and Procedures
Management’s Report on Disclosure Controls and Procedures
Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f)). The Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may deteriorate. Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, the Company conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting as of October 31, 2018 using the criteria established in “Internal Control - Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO").
A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. In its assessment of the effectiveness of internal control over financial reporting as of October 31, 2018, the Company determined that there were control deficiencies that constituted material weaknesses, as described below.
1.We do not have an Audit Committee - While not being legally obligated to have an audit committee, it is the management’s view that such a committee, including a financial expert member, is an utmost important entity level control over the Company’s financial statement. Currently the Board of Directors acts in the capacity of the Audit Committee, and does not include a member that is considered to be independent of management to provide the necessary oversight over management’s activities.
2.We did not maintain appropriate segregation of duties and cash controls - As of October 31, 2018, the Company has not maintained sufficient internal controls over financial reporting for the cash process, including failure to segregate cash handling and accounting functions, and did not require dual signature on the Company’s bank accounts. Alternatively, the effects of poor cash controls were mitigated by the fact that the Company had limited transactions in their bank accounts.
3.We did not implement appropriate information technology controls - As at October 31, 2018, the Company retains copies of all financial data and material agreements; however, there is no formal procedure or evidence of normal backup of the Company’s data or off-site storage of data in the event of theft, misplacement, or loss due to unmitigated factors.
Accordingly, the Company concluded that these control deficiencies resulted in a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis by the company’s internal controls.
As a result of the material weaknesses described above, management has concluded that the Company did not maintain effective internal control over financial reporting as of October 31, 2018 based on criteria established in Internal Control-Integrated Framework issued by COSO.
Changes in Internal Control over Financial Reporting
There has been no change in our internal control over financial reporting identified in connection with our evaluation we conducted of the effectiveness of our internal control over financial reporting as of October 31, 2018, that occurred during our fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the SEC that permit the Company to provide only management’s report in this annual report.
PART III
Item 10.
Item 10. Directors, Executive Officers, Promoters and Control Persons of the Company
DIRECTORS AND EXECUTIVE OFFICERS
The name, address and position of our present officers and directors are set forth below:
Name and Address of Executive
Officers and Director
Age
Position
SERGEY GANDIN
Tashkentskaya 14/4, Unit 98
Moskow
Russian Federation 109444
President, Treasurer and Director
Biographical Information and Background of our officer and director
Sergey Gandin, Director, President, CEO and CFO
Schooling, experience and qualifications of our director Sergey Gandin in a position of manager or supervisor, in the past ten years, and organizing business in number of companies, brought us to conclusion that he is qualified for the position for a director of our company.
2000-2002 - Higher Education at Rostov Economical University - Tourism and Hospitality.
2012-to date - LLC “Proekta”, General Manager- Company management, recruitment, sales development and personal control over key clients handling, participation in industry events. Control and presence at major projects. Control over accounting, payments and debt. Interaction with all departments of the company.
2010-2012 - LLC “Jtb”, Business Development manager - development of company, attraction of new customers and development of relationship with existing ones. Optimization of internal processes in the company, the introduction of project management systems. Control over the sales department. Presentation of the company at public events. Maintenance and implementation of large projects. Participation in tenders, preparation of documentation and commercial proposals.
2008-2010 - LLC “Coral Travel”, MICE manager - organization of corporate events in Turkey, Egypt, Thailand, Tunisia, Morocco, Vietnam. Preparation of business proposals, contracts, accounting records, control over payments from customers. Assistance in organization of events.
2003-2008 - LLC “City of events”, Event manager- cooperation with private and corporate clients. Development of individual concepts of events, preparation of cost estimates of the project and contract documentation. Meetings with clients and presentation of proposals. Search for contractors, platforms and artists. Monitoring of the implementation of the project. Control over all contractors, coordination among all participants of the event, the presence during on-site activities.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Our common stock is not registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Accordingly, our officers, directors, and principal stockholders are not subject to the beneficial ownership reporting requirements of Section 16(a) of the Exchange Act.
Code of Ethics
We have not yet adopted a code of ethics that applies to our sole officer and director, or persons performing similar functions because we are in the start-up phase and are in the process of establishing our operations. We plan to adopt a code of ethics as and when our company grows to a sufficient size to warrant such adoption.
Audit Committee
As we have only a sole director, we have not established an audit committee as at the date of this registration statement, nor do we have plans to establish an audit committee until such time as we have established our full operations, and retained sufficient independent directors as members of our board of directors willing to be appointed to the audit committee and carry out the customary functions of an audit committee.
Director Nominees
We do not have a nominating committee. Our sole director will in the future select individuals to stand for election as members of our board of directors. The company does not have a policy with regards to the consideration of any director candidates recommended by our security holders. Our board has determined that it is in the best position to evaluate our company’s requirements as well as the qualifications of each candidate when it considers a nominee for a position on our board. If security holders wish to recommend candidates directly to our board, they may do so by communicating directly with our sole officer and director at the address specified on the cover of this registration statement.
Audit Committee and Audit Committee Financial Expert
We do not currently have an audit committee or a committee performing similar functions. The board of directors as a whole participates in the review of financial statements and disclosure.
Our board of directors has determined that it does not have a member of its audit committee that qualifies as an “audit committee financial expert” as defined in Item 407(d)(5)(ii) of Regulation S-K, and is “independent” as the term is used in Item 7(d)(3)(iv) of Schedule 14A under the Securities Exchange Act of 1934, as amended.
SIGNIFICANT EMPLOYEES
We have no employees. Our President, Sergey Gandin, who currently devotes approximately thirty hours per week to company matters.
Item 11.
Item 11. EXECUTIVE COMPENSATION
MANAGEMENT COMPENSATION
The following tables set forth certain information about compensation paid, earned or accrued for services by our President from inception on September 2, 2014 until October 31, 2018:
Summary Compensation Table
There are no current employment agreements between the company and its officers. The compensation discussed herein addresses all compensation awarded to, earned by, or paid to our named executive officer. There are no other stock option plans, retirement, pension, or profit sharing plans for the benefit of our officers and directors other than as described herein.
CHANGE OF CONTROL
As of October 31, 2018, we had no pension plans or compensatory plans or other arrangements that provide compensation in the event of a termination of employment or a change in our control.
Item 12.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The following table provides certain information regarding the ownership of our common stock, as of October 31, 2018 and as of the date of the filing of this annual report by:
•
each of our executive officers;
•
each director;
•
each person known to us to own more than 5% of our outstanding common stock; and
•
all of our executive officers and directors and as a group.
The percent of class is based on 6,240,000 shares of common stock issued and outstanding as of the date of this annual report.
Item 13.
Item 13. Certain Relationships and Related Transactions
During the year ended October 31, 2018, we had not entered into any transactions with our sole officer or director, or persons nominated for these positions, beneficial owners of 5% or more of our common stock, or family members of these persons wherein the amount involved in the transaction or a series of similar transactions exceeded the lesser of $120,000 or 1% of the average of our total assets for the last three fiscal years.
Item 14.
Item 14. Principal Accountant Fees and Services
The aggregate fees billed for the most recently completed fiscal year ended October 31, 2018 and for the fiscal year ended October 31, 2017 for professional services rendered by the principal accountants Haynie & Company and Pritchett, Siter & Hardy P.C for the audits of our annual financial statements and review of the financial statements included in our quarterly reports on Form 10-Q and services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for these fiscal periods were as follows:
Our board of directors pre-approves all services provided by our independent auditors. All of the above services and fees were reviewed and approved by the board of directors either before or after the respective services were rendered.
Our board of directors has considered the nature and amount of fees billed by our independent auditors and believes that the provision of services for activities unrelated to the audit is compatible with maintaining our independent auditors’ independence.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
ARMA SERVICES, INC.
Dated: August 18, 2020
By: /s/ Sergey Gandin
Sergey Gandin, President and Chief Executive Officer and Chief Financial Officer