Filing summary
Entity mismatch: The request identifies Loop Industries, Inc., but the supplied 10-K is for First American Group Inc. This summary reflects the supplied filing, not Loop Industries. The report covers the fiscal year ended September 30, 2013; it is not a quarterly report.
Business context and reporting period
First American Group described itself as a development-stage company planning an advertising-supported VoIP calling service, with potential revenue from advertising, paid calls, and software licensing or sales. It had not launched the service or generated revenue. Management said product and website development depended on additional funding.
Financial results and position
| Metric | FY 2013 / September 30, 2013 | Comparable period |
|---|---|---|
| Revenue | $0 | $0 in FY 2012 |
| Operating expenses and net loss | $16,466 | $29,775 in FY 2012 |
| Professional fees | $9,925 | $13,413 in FY 2012 |
| General and administrative expenses | $6,541 | $16,362 in FY 2012 |
| Cash from operating activities | $(19,716) | $(24,543) in FY 2012 |
| Cash | $2,022 | $21,738 at September 30, 2012 |
| Total assets | $2,135 | $23,117 at September 30, 2012 |
| Total liabilities | $7,742 | $12,258 at September 30, 2012 |
| Stockholders’ equity (deficit) | $(5,607) | $10,859 at September 30, 2012 |
There was no reported revenue, so revenue margins are not applicable. Current liabilities comprised $7,417 in accounts payable and a $325 related-party payable. The director’s $325 advance was unsecured, non-interest-bearing, and due on demand. The company reported no interest or income taxes paid. No material off-balance-sheet arrangements were reported.
Since inception, accumulated net losses were $73,424. The auditor’s report included a going-concern warning, citing recurring losses and substantial doubt about the company’s ability to continue operating.
Changes versus the prior period
Operating expenses and the annual net loss declined from $29,775 to $16,466, while operating cash use decreased from $24,543 to $19,716. Cash fell by $19,716 during FY 2013, and year-end equity moved from a surplus to a deficit. No shares were sold in FY 2013; the company reported no revenue in either year.
Outlook, risks, and unusual items
Management expected no sales revenue during the next 12 months and estimated revenue might begin 18–24 months after the filing. Its projections—$153,750 revenue in year two and $460,000 in year three, with a projected year-three profit of $105,884—were management estimates based on assumptions about customer activity, advertising rates, and call volumes; the filing cautioned that the assumptions and third-party data were uncertain.
Management said it planned to seek equity financing and might pursue debt if that failed; it warned that funding might not be available and that the company could have to cease operations. It reported a subsequent director loan of approximately $10,000, unsecured, non-interest-bearing, and due on demand. The auditor stated that the financial statements did not include adjustments that might result from the going-concern uncertainty.
The filing identified material weaknesses in internal control over financial reporting: no functioning audit committee or independent board oversight, inadequate segregation of duties, and ineffective period-end reporting controls. Management separately concluded disclosure controls were effective. The company reported no employees, no legal proceedings, and no dividends. Its common stock was quoted on the OTCQB/OTC Bulletin Board; reported FY 2013 high and low bid prices were both $0.00.
Important facts for investors to verify
- Confirm the intended issuer: the supplied filing is for First American Group Inc., not Loop Industries, Inc.
- Review the going-concern opinion, near-term cash needs, and the terms and status of the approximately $10,000 subsequent director loan.
- Verify whether the company raised financing, developed or launched its VoIP product, and generated revenue after the filing date; the stated projections were not actual results.
- Assess the disclosed internal-control weaknesses and the reported $0.00 OTC bid quotations against current market and trading information.