UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 FORM 10-K 

 

☒

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

 

For the fiscal year ended December 31, 2020

 

☐

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

 

CARNEGIE DEVELOPMENT, INC.

(Exact Name of Registrant as Specified in its Charter)

 

Nevada

 

90-0712976

(State or other jurisdiction of

Incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

 

 

3495 Lakeside Drive, #1087

Reno, Nevada

 

89509

(Address of principal executive offices)

 

(Zip Code)

 

Registrant’s telephone number, including area code: 800-345-8561

 

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

 

Securities registered pursuant to Section 12(g) of the Act: Common Stock, $0.00001 par value

 

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☐ Yes    ☒ No

 

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ☐ Yes    ☒ No

 

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

 

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

 

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☒

 

 

Emerging growth company

☐

 

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 Act). ☐ Yes    ☒ No

 

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

 

Held by Non-affiliates at Market Price as on March 31, 2021

 

Voting

Common Stock

6,203,716 Shares

$2.80 per Share

$17,370,405

 

DOCUMENTS INCORPORATED BY REFERENCE

 

None

 

 

 

   

TABLE OF CONTENTS

 

Page

 

PART I

 

 

 

FORWARD LOOKING STATEMENTS

3

 

Item 1.

BUSINESS

5

 

Item 1A.

RISK FACTORS

7

 

Item 1B.

UNRESOLVED STAFF COMMENTS

7

 

Item 2.

DESCRIPTION OF PROPERTY

7

 

Item 3.

LEGAL PROCEEDINGS

7

 

Item 4.

MINE SAFETY DISCLOSURES

7

 

 

 

PART II 

 

 

 

Item 5.

MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITY

8

 

Item 6.

SELECTED FINANCIAL DATA

9

 

Item 7.

MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

9

 

Item 7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

13

 

Item 8.

FINANCIAL STATEMENTS

14

 

Item 9.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

23

 

Item 9A.

CONTROLS AND PROCEDURES

23

 

Item 9B.

OTHER INFORMATION

24

 

 

PART III

 

 

 

 

 

 

Item 10.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

25

 

Item 11.

EXECUTIVE COMPENSATION

26

 

Item 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

27

 

Item13.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

28

 

Item 14.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

 

 28

 

Item 15.

EXHIBITS.

29

Item 16.

SUMMARY.

 

 29

 

  

 

2

 

   

PART I

 

As used in this Annual Report on Form 10-K, the terms “we”, “us”, “our”, the “Company”, “Carnegie Development, Inc.” and “Carnegie Development” mean “Carnegie Development, Inc”, and its consolidated subsidiaries, unless otherwise indicated.

 

FORWARD-LOOKING STATEMENTS

 

This Annual Report on Form 10-K and other written and oral statements made from time to time by us may contain so-called “forward-looking statements,” all of which are subject to risks and uncertainties.

 

Forward-looking statement are intended to help in understanding our historical results of operations during the periods presented and our financial condition. They should be read in conjunction with our consolidated financial statements and the accompanying notes to consolidated financial statements and contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements. All forward-looking statements speak only as of the date on which they are made. We undertake no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they are made.

 

Forward-looking statements can be identified by the use of words such as “expects,” “anticipates,” “plans,” “will,” “should,” “could,” “forecasts,” “projects,” “intends,” “estimates,” and other words of similar meaning. One can identify them by the fact that they do not relate strictly to historical or current facts. These statements are likely to address our growth strategy, financial results and product and development programs. One must carefully consider any such statement and should understand that many factors could cause actual results to differ from our forward-looking statements. These factors may include inaccurate assumptions and a broad variety of other risks and uncertainties, including some that are known and some that are not. No forward-looking statement can be guaranteed, and actual future results may vary materially.

   

 
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These statements are only predictions and involve known and unknown risks, uncertainties, and other factors, including the risks in the section entitled “Risk Factors” and the risks set out below, any of which may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. These risks include, by way of example and not in limitation:

 

 

•

The uncertainty of profitability;

 

 

•

High volatility in the value attributable to our business model and assets;

 

 

•

Rapid change in the regulatory and legal environment in which we operate with many unknown future challenges to operating our business in a lawful manner or which will require our business or the businesses in which we invest to be subjected to added costs and/or uncertainty regarding the ability to operate;

 

 

•

Risks related to failure to obtain adequate financing on a timely basis and on acceptable terms; and

 

 

•

Other risks and uncertainties related to our business plan and business strategy.

 

This list is not an exhaustive list of the factors that may affect any of our forward-looking statements. These and other factors should be considered carefully, and readers should not place undue reliance on our forward-looking statements. Forward looking statements are made based on management’s beliefs, estimates and opinions on the date the statements are made, and we undertake no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change, except as may be required under applicable law. We cannot guarantee future results, levels of activity, performance, or achievements.

     

 
4

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ITEM 1. BUSINESS

 

OVERVIEW

 

This Company was originally incorporated in the State of Delaware in February 1988 under the name Technicraft Financial, Ltd. In October 1991, the Company changed its name to LBM-US, Inc. (“LBM”). Pursuant to an agreement effective August 1994, LBM acquired all the assets and liabilities of GK Intelligent Systems, Inc., a Texas corporation, in exchange for 6,758,920 shares of LBM common stock which were issued to Gary F. Kimmons and his family partnership. The remaining 963,275 shares of LBM common stock then outstanding were retained by the former shareholders of LBM in transaction treated for accounting purposes as a reverse merger. On April 3, 2002, the Company effectuated a 1-for-10 reverse split of its common stock. On May 18, 2005, the Company changed its name to M Power Entertainment, Inc. and effectuated a 1-for-200 reverse split of its common stock and changed the names as GK Intelligent Systems, Inc. On September 4, 2007, the Company changed its name to eDoorways Corporation and effectuated a 1-for-2,000 reverse split of its common stock. In May 2010, the Company changed its name to eDoorways International Corporation. On October 27, 2011, the Company effectuated a 1-for-1,000 reverse split of its common stock. On May 6, 2013, the Company converted from a Delaware corporation to a Nevada corporation. In April 2015, Sohail Quraeshi, the then CEO, was issued 1,000 shares of the Company’s Series A Preferred Stock which had previously been issued to our former Acting CEO, Arne Ray, who served from August 13, 2013 until April 1, 2015. Those shares were returned as Treasury stock by Mr. Ray, without consideration, and then issued to Sohail Quraeshi as compensation valued at fair market value, or $4.00 per share so as comply with FASB ASC Topic 718 column (e). This transaction constituted a change of control of the Company as the Series A Preferred Shares, collectively, votes an equivalent of 75% of all eligible voting shares. The owner of such shares prior to being held by Mr. Ray was our former CEO, Gary Kimmons, who held such shares from issuance until August 15, 2013. The issuances of the shares of Series A Preferred Stock were also treated as compensation to Messrs. Kimmons and Ray, respectively, and valued a fair market value of $0.01 per share pursuant to FASB ASC Topic 718 (e). On June 23, 2015, a Certificate of Amendment to Articles of Incorporation of the Company, which was filed with the Nevada Secretary of State on June 1, 2015, was declared effective by FINRA – Corporate Actions, whereby the Company effectuated (i) A reduction in the number of authorized shares of common stock from 2,500,370,900 to 250,000,000; (ii) a Change of name from eDoorways International Corporation to Escue Energy, Inc.; and (iii) a 1-for-2,000 reverse split of the Company’s common stock, $0.00001 par value per share. Effective July 1st, 2019 the Articles of Incorporation has been amended and the new name is Carnegie Development, Inc. On Tuesday 3rd September 2019, this company completed the online application (Filing ID: 4128722) for name change and symbol change. On Friday 3rd April 2020 FINRA required the company to resubmit the application (OTC Corporate Actions CAS – 68178).

 

Since 2021, the company is engaged in land acquisitions for Real Estate Development.   

 

INDUSTRY AND MARKET DATA

 

Information regarding market and industry statistics contained in this Annual Report on Form 10-K has been obtained from industry and other publications that we believe to be reliable, but that are not produced for purposes of securities filings. We have not independently verified any market, industry or similar data presented in this Annual Report and cannot assure you of its accuracy or completeness. Further, we have not reviewed or included data from all sources. Forecasts and other forward-looking information obtained from third-party sources are subject to the same qualifications and the additional uncertainties accompanying any estimates of future market size, revenue and market acceptance of products and services. As a result, investors should not place undue reliance on any such forecasts and other forward-looking information.

 

PRODUCTS AND SERVICES

  

Real Estate Development: Since 2021, the company is engaged in land acquisitions for Real Estate Development.

 

 
5

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COMPETITION

 

There exist five basic competitive forces, which are the threat of new market entrants, the threat of substitute products, the bargaining power of buyers, the bargaining power of suppliers, the competition within existing rivals

 

 

National Multi-family Housing Council1 ranked Alliance Residential in Phoenix, AZ as the top-ranking developer2 in 2020

 

The company’s name is an acronym of “Innovation, and Excellence”.

 

DEPENDENCE ON ONE OR A FEW MAJOR CUSTOMERS

 

We presently do not have any customers for our services as we are collaborating with various the Single Purpose Entities.

 

PATENTS, TRADEMARKS, LICENSES, FRANCHISES, CONCESSIONS, ROYALTY AGREEMENTS OR LABOR CONTRACTS, INCLUDING DURATION:

 

The company had no PATENTS, TRADEMARKS, LICENSES, FRANCHISES, CONCESSIONS, ROYALTY AGREEMENTS OR LABOR CONTRACTS.

_________

1 NMHC | 2020 Top Developers List

 

2 A Developer is the firm responsible for the entire process related to the development of a new multifamily (defined as five or more units) rental community (including independent living and age-restricted housing). The developer controls everything from preliminary planning to obtaining financing to preparing the community for delivery to the market, and typically is responsible for selection of the builder. Units are started for the developer's own account, and upon completion of units, the developer will be the owner of the units. This includes developers who may sell their property after the units have been leased.

 

 
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NEED FOR ANY GOVERNMENT APPROVAL OF PRINCIPAL PRODUCTS OR SERVICES

 

Not applicable.

 

RESEARCH AND DEVELOPMENT ACTIVITIES AND COSTS

 

All our research and development activities are presently borne by the Company. As on the reporting date, we have spent $0 on research and development activities.

 

COSTS AND EFFECTS OF COMPLIANCE WITH ENVIRONMENTAL LAWS

 

We do not expect any environmental laws to give rise to additional costs to our business.

 

EMPLOYEES

 

As on the reporting date and thereafter, we had no employee, except the three corporate officers. During 2019, to lower operating costs, we relied on the independent consultants rather than through employment contracts.

 

ITEM 1A. RISK FACTORS

 

Smaller reporting companies are not required to provide the information required by this item.

 

ITEM 1B. UNRESOLVED STAFF COMMENTS

 

None.

 

ITEM 2. DESCRIPTION OF PROPERTY

 

The Company does not own1 any real estate or other properties.

 

ITEM 3. LEGAL PROCEEDINGS

 

Silverland Finance Ltd, Platinum Investment Corporation, Lin Zhou, Jin Wang, and Li Jun (collectively known as plaintiffs) have filed a lawsuit on (i) Wall007, LLC, (ii) Wall009, LLC, (iii) Timothy Barton, (iv) Sada Cumber, and (v) Carnegie Development, Inc. (collectively known as defendants) on November 15, 2019 in the 44th Judicial District of Texas in Dallas County, Texas, Case No DC-19-18361 and on 25th November 2019, this company was served with the notice of the court case. As on 31st December 2020, this case was dismissed.

  

There are no other pending legal proceedings to which the Company is a party or in which any director, officer or affiliate of the Company, or any owner of record or beneficially of more than 5% of any class of voting securities of the Company, is a party.

 

ITEM 4. MINE SAFETY DISCLOSURES

  

Not applicable.

_________

1 https://www.sec.gov/ixdoc=/Archives/edgar/data/1024095/000147793220006701/cdi_10q.htm In page 18 of the 10Q-3 report, acquisition of 99% membership interest was mentioned. However, the same are rescinded ab initio. More details in ITEM 9B. OTHER Information, in Part II of this report.

 

 
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Table of Contents

   

PART II

 

ITEM 5. MARKET FOR REGISTRANTS’ COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

 

Our common stock is presently traded in the over-the-counter market and quoted on the National Association of Securities Dealers’ OTC Bulletin Board System under the ticker symbol “CDJM.PK.”

 

Because we are quoted on the OTC Pink market, our securities may be less liquid, receive less coverage by security analysts and news media, and generate lower prices than might otherwise be obtained if they were listed on a national securities exchange.

 

The following table describes, for the respective periods indicated, the price of our common stock in the over-the-counter market, based on inter-dealer bid prices, without retail mark-up, mark-down or commissions. The figures below may not necessarily represent actual transactions. The share price is from CDJM - CARNEGIE DEVELOPMENT INC. | Overview | OTC Markets

 

Fiscal 2020

 

High

 

 

Low

 

First Quarter

 

$ 2.05

 

 

$ 1.00

 

Second Quarter

 

$ 3.04

 

 

$ 0.55

 

Third Quarter

 

$ 3.81

 

 

$ 1.12

 

Fourth Quarter

 

$ 2.30

 

 

$ 1.37

 

 

 

 

 

 

 

 

 

 

Fiscal 2019

 

High

 

 

Low

 

First Quarter

 

$ 0.15

 

 

$ 0.15

 

Second Quarter

 

$ 1.27

 

 

$ 0.15

 

Third Quarter

 

$ 5.50

 

 

$ 0.52

 

Fourth Quarter

 

$ 5.30

 

 

$ 2.02

 

  

 
8

Table of Contents

   

Holders

 

There were 226 holders of record of our Common Stock as of 31st March 2021.

 

Transfer Agent

 

Our registrar and transfer agent for the common stock, is Pacific Stock Transfer, 6725 Via Austi Parkway, Suite 300 Las Vegas, NV 89119

 

Dividends

 

We have not declared any cash dividends with respect to our common stock, and we do not intend to declare dividends in the foreseeable future. We anticipate that any earnings generated from our operations will be used to finance our ongoing operations and growth.

 

ITEM 6. SELECTED FINANCIAL DATA

 

Smaller reporting companies are not required to provide the information required by this item

 

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

 

This Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to provide a reader of our financial statements with a narrative from the perspective of our management on our financial condition, results of operations, liquidity, and certain other factors that may affect our future results. The following discussion and analysis should be read in conjunction with our audited consolidated financial statements and the accompanying notes thereto included in “Item 8. Financial Statements and Supplementary Data.” In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties, and assumptions. See “Forward-Looking Statements.” Our results and the timing of selected events may differ materially from those anticipated in these forward-looking statements because of many factors.

 

 
9

Table of Contents

 

Much of the discussion in this Item is “forward-looking” as that term is used in Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended. Actual operations and results may materially differ from present plans and projections due to changes in economic conditions, new business opportunities, changed business conditions, and other developments. Other factors that could cause results to differ materially are described in our filings with the Securities and Exchange Commission. There are several factors that could cause actual results or events to differ materially from those anticipated, and include, but are not limited to general economic, financial and business conditions, changes in and compliance with governmental laws and regulations, including various state and federal environmental regulations, our ability to obtain additional financing from outside investors and/or bank and mezzanine lenders and our ability to generate sufficient revenues to cover operating losses and position us to achieve positive cash flow. Readers are cautioned not to place undue reliance on the forward-looking statements contained herein, which speak only as of a certain date. We undertake no obligation to update any forward-looking statements.

 

Going Concern

 

While the auditor has been questioning our ability to continue as a going concern due to our recurring losses from operations, deficit in equity, and the need to raise additional capital to fund operations, the company re-aligned itself to engage in land acquisition for Real Estate Development. A “going concern” opinion could impair our ability to raise the required finance for our proposed operations through the sale of debt or equity securities. However, the financial statements have been prepared assuming that the Company continues as a going concern

 

Results of Operations for the current reporting period, as compared to previous reporting period

 

There was no revenue during this period

 

Expenses during the current reporting period are $73,609 which is lower than $322,426 for the previous year.

 

The net loss for the current year is $73,609 which is also lower than $322,426 for the previous year.

 

Liquidity and Capital Resources

 

During the current reporting period, the company’s liquidity was very impacted by the Pandemic caused by the Covid-19. Consequently, this company was not able to access any capital resources during the current reporting period.

 

 
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Cash Flow from Operating Activities

 

The Company used $65,687 in cash for the current reporting period as against $90,327 in the previous year.

 

Cash Flow from Investing Activities

 

The Company neither used nor received any from the investing activities for the current reporting period and it is the same in the previous year.

 

Cash Flow from Financing Activities

 

The Company received $66,510 as a repayable loan from as a related party transaction, in the current reporting period whereas it was $90,411 in the previous year

 

Off-Balance Sheet Arrangements

 

The company has no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect or change on the company’s financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

 

The term “off-balance sheet arrangement” generally means any transaction, agreement, or other contractual arrangement to which an entity unconsolidated with the company is a party, under which the company has (i) any obligation arising under a guarantee contract, derivative instrument, or variable interest; or (ii) a retained or contingent interest in assets transferred to such entity or similar arrangement that serves as credit, liquidity, or market risk support for such assets.

 

Critical Accounting Policies

 

A critical accounting policy is defined as one that is both material to the presentation of our financial statements and requires management to make difficult, subjective, or complex judgments that could have a material effect on our financial condition and results of operations. Specifically, critical accounting estimates have the following attributes: 1) we are required to make assumptions about matters that are highly uncertain at the time of the estimate; and 2) different estimates we could reasonably have used, or changes in the estimate that are reasonably likely to occur, would have a material effect on our financial condition or results of operations.

 

 
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Estimates and assumptions about future events and their effects cannot be determined with certainty. We base our estimates on historical experience and on various other assumptions believed to be applicable and reasonable under the circumstances. These estimates may change as new events occur, as additional information is obtained and as our operating environment changes. These changes have historically been minor and have been included in the financial statements as soon as they became known. Based on a critical assessment of our accounting policies and the underlying judgments and uncertainties affecting the application of those policies, management believes that our financial statements are fairly stated in accordance with accounting principles generally accepted in the United States and present a meaningful presentation of our financial condition and results of operations. We believe the following critical accounting policies reflect our more significant estimates and assumptions used in the preparation of our financial statements:

 

Use of Estimates—These financial statements have been prepared in accordance with accounting principles generally accepted in the United States and, accordingly, require management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Specifically, our management has estimated variables used to calculate the Black Scholes and binomial lattice model calculations used to value derivative instruments discussed below under “Valuation of Derivative Instruments”. In addition, management has estimated the expected economic life and value of our licensed technology, our net operating loss for tax purposes, share-based payments for compensation to employees, directors, consultants and investment banks, and the useful lives of our fixed assets. Actual results could differ from those estimates.

 

Deferred Financing Costs—Payments, either in cash or share-based payments, made in connection with the sale of debentures are recorded as deferred debt issuance costs and amortized using the effective interest method over the lives of the related debentures.

 

Fair Value of Financial Instruments—For certain of our financial instruments, including accounts receivable, accounts payable, accrued expenses, interest payable, bank overdraft, advances payable and notes payable, the carrying amounts approximate fair value due to their relatively short maturities.

 

 
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Valuation of Derivative Instruments—FAS 133, “Accounting for Derivative Instruments and Hedging Activities” requires bifurcation of embedded derivative instruments and measurement of fair value for accounting purposes. In addition, FAS 155, “Accounting for Certain Hybrid Financial Instruments” requires measurement of fair values of hybrid financial instruments for accounting purposes. In determining the appropriate fair value, the Company uses a variety of valuation techniques including Black Scholes models, Binomial Option Pricing models, Standard Put Option Binomial models and the net present value of certain penalty amounts. Derivative liabilities are adjusted to reflect fair value at each period end, with any increase or decrease in the fair value being recorded in results of operations as Adjustments to Fair Value of Derivatives. The effects of interactions between embedded derivatives are calculated and accounted for in arriving at the overall fair value of the financial instruments. In addition, the fair values of freestanding derivative instruments such as warrant derivatives are valued using the Black Scholes model.

 

Stock Based Compensation—The Company follows the fair value recognition provisions of FAS 123(R). Stock-based compensation expense is recognized in the financial statements for granted, modified, or settled stock options based on estimated fair values.

 

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

 

Not applicable to a “smaller reporting company” as defined in Rule 12b-2 of the Exchange Act.

 

 
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ITEM 8. FINANCIAL STATEMENTS

 

The Audit for the current year is not yet completed and the delay in audit is attributable to the “Stay Home” order in force due to COVID–19 pandemic impact.

 

CARNEGIE DEVELOPMENT INC

FINANCIAL STATEMENTS

 

BALANCE SHEET

 

 

 

 

 

 

As of December 31, 2020 (Un-audited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2020

 

 

2019

 

ASSET

 

Notes

 

 

USD

 

 

USD

 

 

 

 

 

 

 

 

 

 

 

Current asset

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

 

 

 

907

 

 

 

84

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL ASSET

 

 

 

 

 

907

 

 

 

84

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

 

 

 

Accounts payable

 

 

 

 

 

239,352

 

 

 

230,375

 

Loan from related party

 

3

 

 

 

156,921

 

 

 

90,411

 

Credit card payable

 

 

 

 

 

 

669

 

 

 

1,724

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities

 

 

 

 

 

 

396,942

 

 

 

322,510

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholders’ equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Series A preferred stock: 1,000 shares authorized, par value $0.001 per share; 1,000 shares issued and outstanding on December 31, 2020 and 1,000 shares issued and outstanding on December 31, 2019

 

4

 

 

 

1

 

 

 

1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock: 250,000,000 shares authorized, par value $0.00001 per share, 46,203,716 shares issued and outstanding on December 31, 2020 and 46,2053,716 shares issued and outstanding on December 31, 2019

 

4

 

 

 

3,532,757

 

 

 

3,532,757

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional paid in capital

 

4

 

 

 

3,999

 

 

 

3,999

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated loss

 

 

 

 

 

 

(3,932,792 )

 

 

(3,859,183 )

Total shareholders’ equity

 

 

 

 

 

 

(396,035 )

 

 

(322,426 )

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

907

 

 

 

84

 

 

See accompanying notes to financial statements.

 

 
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CARNEGIE DEVELOPMENT INC

FINANCIAL STATEMENTS

 

STATEMENT OF OPERATIONS

 

 

 

 

Year ended December 31, 2020 (Un-audited)

 

 

 

 

 

 

2020

 

 

2019

 

 

 

USD

 

 

USD

 

 

 

 

 

 

 

 

Revenues

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Cost of revenues

 

 

-

 

 

 

-

 

GROSS LOSS

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

General and Administrative expense

 

 

 

 

 

 

 

 

Taxes and licenses

 

 

1,275

 

 

 

223,356

 

Legal and professional expense

 

 

63,554

 

 

 

88,526

 

Administrative expenses

 

 

4,433

 

 

 

6,922

 

Dues and subscription

 

 

3,872

 

 

 

3,271

 

Bank charges

 

 

172

 

 

 

182

 

Office expenses

 

 

303

 

 

 

169

 

Managerial remuneration

 

 

-

 

 

 

-

 

Total General and Administrative Expense

 

 

73,609

 

 

 

322,426

 

 

 

 

 

 

 

 

 

 

LOSS FOR THE YEAR

 

 

(73,609 )

 

 

(322,426 )

 

 

 

 

 

 

 

 

 

Net loss per share of common stock attributable to common stockholder

 

 

 

 

 

 

 

 

Basic

 

 

(0.0017 )

 

 

(0.0076 )

Diluted

 

 

(0.0017 )

 

 

(0.0076 )

 

 

 

 

 

 

 

 

 

Weighted average shares used in computing net loss per share of common stock

 

 

 

 

 

 

 

 

Basic

 

 

42,626,236

 

 

 

42,626,236

 

Diluted

 

 

42,626,236

 

 

 

42,626,236

 

 

See accompanying notes to financial statements.

  

 
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Table of Contents

 

CARNEGIE DEVELOPMENT INC

FINANCIAL STATEMENTS

 

STATEMENT OF CASH FLOWS

 

 

 

 

 

Year ended December 31, 2020 (Un-audited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2020

 

 

2019

 

 

 

Notes

 

USD

 

 

USD

 

 

 

 

 

 

 

 

 

 

OPERATING ACTIVITIES

 

 

 

 

 

 

 

 

Loss for the year

 

 

 

 

(73,609 )

 

 

(322,426 )

Adjustments for:

 

 

 

 

 

 

 

 

 

 

Working capital change:

 

 

 

 

 

 

 

 

 

 

Change in accounts payables and accruals

 

 

 

 

8,977

 

 

 

230,375

 

Change in Credit card payable

 

 

 

 

(1,055 )

 

 

1,724

 

 

 

 

 

 

 

 

 

 

 

 

Net cash used in operating activities

 

 

 

 

(65,687 )

 

 

(90,327 )

 

 

 

 

 

 

 

 

 

 

 

FINANCING ACTIVITY

 

 

 

 

 

 

 

 

 

 

Loan from related party

 

 

 

 

66,510

 

 

 

90,411

 

 

 

 

 

 

 

 

 

 

 

 

Net cash from financing activity

 

 

 

 

66,510

 

 

 

90,411

 

 

 

 

 

 

 

 

 

 

 

 

Net increase in cash and cash equivalents

 

 

 

 

823

 

 

 

84

 

Cash and cash equivalents at beginning of period

 

 

 

 

84

 

 

 

-

 

Cash and cash equivalents at end of period

 

 

 

 

907

 

 

 

84

 

 

 

 

 

 

 

 

 

 

 

 

SUPPLEMENTAL DISCLOSURE:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non cash financing activity

 

 

 

 

 

 

 

 

 

 

Conversion of Additional paid in capital into equity share capital

 

 

 

 

-

 

 

 

1,146,639

 

 

 

 

 

 

 

 

 

 

 

 

Conversion of Accounts payable into equity share capital

 

 

 

 

-

 

 

 

120,000

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying notes to financial statements.

 

 

 

 

 

 

 

 

 

 

 

 
16

Table of Contents

 

CARNEGIE DEVELOPMENT INC

FINANCIAL STATEMENTS

    

STATEMENT OF SHAREHOLDER'S EQUITY

 

 

 

 

 

 

 

 

 

As of December 31, 2020 (Un-audited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Series A
Preferred Stock

 

 

Common Stock

 

 

Accumulated

 

 

Additional

paid

 

 

Total Shareholders'

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

loss

 

 

in capital

 

 

Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as on January 1, 2019

 

 

1,000

 

 

 

1

 

 

 

41,153,156

 

 

 

2,270,117

 

 

 

(3,536,757 )

 

 

1,146,639

 

 

 

(120,000 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares issued

 

 

-

 

 

 

-

 

 

 

5,050,560

 

 

 

1,262,640

 

 

 

-

 

 

 

-

 

 

 

1,262,640

 

Converted to equity shares

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(1,142,640 )

 

 

(1,142,640 )

Net loss during the year

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(322,426 )

 

 

-

 

 

 

(322,426 )

Balance as on December 31, 2019

 

 

1,000

 

 

 

1

 

 

 

46,203,716

 

 

 

3,532,757

 

 

 

(3,859,183 )

 

 

3,999

 

 

 

(322,426 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss during the year

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(73,609 )

 

 

-

 

 

 

(73,609 )

Balance as on December 31, 2020

 

 

1,000

 

 

 

1

 

 

 

46,203,716

 

 

 

3,532,757

 

 

 

(3,932,792 )

 

 

3,999

 

 

 

(396,035 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying notes to financial statements.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
17

Table of Contents

 

CARNEGIE DEVELOPMENT INC

NOTES TO FINANCIAL STATEMENTS

December 31, 2020

 

1. NATURE OF OPERATIONS AND BASIS OFPRESENTATION

   

Carnegie Development Inc., is a publicly trading company under the symbol, “CDJM”

 

The Company Website is

 

http://carnegiedevelopment.net/ This Company was previously known as:

 

 

·

Escue Energy Inc until July 1, 2019

 

 

o            State of incorporation changed from Delaware to Nevada in 2015

 

·

eDoorways Corporation, Inc. until 2015

 

·

M Power Entertainment, Inc. until 2007

 

·

GK Intelligent Systems, Inc. until 2005

 

·

Technicraft Financial, Ltd. until 1994

 

·

Incorporated in Delaware in February 1988

   

Effective July 1st, 2019 the Articles of Incorporation has been amended and the new name is Carnegie Development, Inc.

 

On 5th June 2020, FINRA approved the name change as well as the symbol change. The new CUSSIP is 14350V108

 

Going concern

   

The Company has an accumulated deficit of $3,932,792 as on the reporting date and there was no revenue since inception. Since this company is not a fully reporting company and is filing the reports voluntarily, the Company is currently filing the unaudited financial statements and wait for the audited financial statements

 

The Company is also seeking debt or equity financing to fund its development plan although no financing arrangements are currently in place and the Company can provide no assurance that financing will be available on acceptable terms. However, the management believes that the actions for (a) obtaining the additional funds and (b) implementing its strategic plans, provide the opportunity for the Company to continue as a going concern.

 

Basis of Presentation

   

This Company uses the enterprise reporting under the provisions of Statement of Financial Accounting Standards ("SFAS”) no. 7. The accompanying financial statements are prepared in accordance with Generally accepted accounting principles (“US GAAP”) in the United States of America.

 

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Use of Estimates and Assumptions

 

The preparation of financial statements requires the 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 of the financial statements and the reporting amounts of revenues and expenses for the reported period. Actual results will differ from those estimates.

 

Included in these estimates are legal risks and exposures, valuation of stock-based compensation, the potential outcome of future tax consequences of events that have been recognized in the financial statement or tax returns.

 

 
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CARNEGIE DEVELOPMENT INC

NOTES TO FINANCIAL STATEMENTS

December 31, 2020

 

Cash and Cash Equivalents

   

For purposes of the statement of cash flows, the Company considers highly liquid financial instruments purchased with a maturity of three months or less to be cash equivalents.

 

Concentration of Credit Risks

   

The Company is engaged in land acquisitions for real estate development.

 

The Company's cash and cash equivalents accounts are held at financial institutions and are insured by the Federal Deposit Insurance Corporation, or the FDIC, up to $250,000. As on the reporting date, there were no cash balances in excess of federally insured limits.

 

Product Concentration 

 

As part of real estate development, this company can sell the well laid-out paper lots (a parcel with ann approved tract map which is essentially a level of entitlements) as approved by the city and/or use the paper lots for building (a) single family homes; (b) multi-family homes; and/or (c) Rent-To-Build Homes.

 

Fair Value of Financial Instruments

   

The Company accounts, for the assets and liabilities measured at fair value on a recurring basis, in accordance with ASC Topic 820, Fair Value Measurements and Disclosures, ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements, establishes a framework for measuring fair value, and expands disclosure about such fair value measurements

 

ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:

 

Level 1 : Observable inputs such as quoted market prices in active markets for identical assets or liabilities.

Level 2 : Observable market-based inputs or unobservable inputs that are corroborated by market data.

Level 3 : Unobservable inputs for which there is little or no market data, which require the use of the reporting

entities own assumptions.

 

The Company did not have any Level 2 or Level 3 assets or liabilities on the reporting date.

 

The Company did not identify any non-recurring assets and liabilities that are required to be presented in the balance sheets at fair value in accordance with ASC 815

 

ASC 825-10 "Financial Instruments." permits entities to choose to measure many financial assets and financial liabilities at fair value. Unrealized gains and losses on items for which the fair value option has been elected are reported in earnings. The Company chose not to elect the option to measure the fair value of eligible financial assets and liabilities.

 

Additional Disclosures Regarding Fair Value Measurements

   

The carrying value of cash and cash equivalents, credit card payable, accounts payable and loan from related party approximate their fair value due to the short maturity of these items.

 

Revenue Recognition

   

The Company recognizes revenue on arrangements in accordance with ASC 606 — Revenue from Contracts with Customers. Revenue is recognized only when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service is performed, and collectability of the resulting receivable is reasonably assured. Since inception and until now, this company has not earned any revenue.

   

 
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CARNEGIE DEVELOPMENT INC

NOTES TO FINANCIAL STATEMENTS

December 31, 2020

 

Advertising

 

The Company expenses advertising costs as incurred. The Company did not spend any money for the advertising, during the reporting period.

 

Share-Based Payment

  

The Company accounts for stock-based compensation in accordance with ASC Topic 718, Compensation- Stock Compensation, Under the fair value recognition provisions of this topic, stock based compensation cost is measured at the grant date based on the fair value of the award and is recognized as an expense on a straight-line basis over the requisite service period, which is the vesting period.

 

Basic and Diluted Earnings per Share

   

Basic earnings per share are calculated by dividing the income available to stockholders by the weighted- average number of shares of Common Stock outstanding during each period. Diluted earnings per share are computed using the weighted average number of shares of Common Stock and dilutive Common Stock share equivalents outstanding during the period. Dilutive Common Stock share equivalents consist of shares issuable upon the exercise of stock options and warrants (calculated using the modified-treasury stock method). Earnings per share calculations are provided as part of the income statement.

 

Provisions

   

Provisions are recognized when the Company has a present legal or constructive obligation as a result of past events, and it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount can be made.

  

Net Income per Share

 

The Company computes net income (loss) per share in accordance with ASC 260-10, "Earnings per Share." The basic net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding. Diluted net loss per share gives effect to all dilutive potential common shares outstanding during the period using the "as if converted” basis.

 

LOAN FROM RELATED PARTY

   

A short-term loan was extended by a related party to finance working capital requirements of the Company. The loan is unsecured, and non- interest bearing, with no set terms of repayment.

 

3. COMMON STOCK AND PREFERRED

 

STOCK Common Stock

 

There is currently only one class of common stock. Each share common stock is entitled to one vote.

 

The authorized number of shares of common stock of the Company on the reporting date was 250,000,000 shares with a par value per share of $0.00001. Authorized shares that have been issued and outstanding are 46,203,716 as on the reporting date. Past dues were settled by share issuance as reflected in Statement of Shareholders equity.

 

Preferred Stock

 

Series A - [1] Designation: A series of preferred stock is hereby designated as Series A Preferred Stock. [2] Liquidation Preference: The holders of the Series A Preferred Stock has no liquidation preference. [3] Dividends: The holders of the Series A Preferred Stock shall not receive dividend. [4] Number: The number of shares is fixed at 1,000. As on the reporting date, 1,000 shares are authorized, issued and outstanding. [5] Conversion: The Series A Preferred Stock is not convertible into shares of common stock. [7] Voting Rights: The Series A Preferred Stock, collectively, are entitled to that number of votes which shall equal Seventy-five percent (75%) of all eligible votes. There is currently 1 shareholder of record of the company's Series A Preferred Stock.

 

 
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CARNEGIE DEVELOPMENT INC

NOTES TO FINANCIAL STATEMENTS

December 31, 2020

 

Additional paid in capital

  

Additional paid in capital is attributable to Series A preferred stock.

   

4. RELATED PARTY TRANSACTIONS

  

Related parties comprise the shareholders, directors, key management personnel of the Company, and entities controlled, jointly controlled, or significantly influenced by such parties.

 

The company enters transaction with related parties which arise in the normal course of business from the commercial transactions and same are approved the board.

 

Since 2019, this company is receiving short loan from a private business entity to pay the bills. The Chairman & the CEO of this company is also managing the private business entity which is providing the short-term loan to this company.

 

No remuneration was paid to any directors or members of key management during the current reporting year

 

 

 

Q4 2020

 

 

Q3 2020

 

 

Q2 2020

 

 

Q1 2020

 

Compensation.

 

$ 0

 

 

$ 0

 

 

$ 0

 

 

$ 0

 

  

5. INCOME TAXES

 

Deferred income taxes are provided using the liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of the changes in tax laws and rates of the date of enactment.

 

When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination.

 

Applicable interest and penalties associated with unrecognized tax benefits are classified as additional income taxes in the statements of operations.

 

A reconciliation of the Company's effective tax rate to the statutory federal rate is as follows:

     

 
21

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CARNEGIE DEVELOPMENT INC

NOTES TO FINANCIAL STATEMENTS

December 31, 2020

 

 

 

2020

 

 

2019

 

Deferred tax assets

 

USD

 

 

USD

 

Net operating loss carryovers

 

 

3,932,792

 

 

 

3,859,183

 

Stock-based compensation

 

 

-

 

 

 

-

 

Other temporary differences

 

 

-

 

 

 

-

 

Total deferred tax assets

 

 

3,932,792

 

 

 

3,859,183

 

Valuation allowance

 

 

(3,932,792 )

 

 

(3,859,183 )

Net deferred tax asset

 

 

-

 

 

 

-

 

 

As on the reporting date, the Company had net operating loss carryovers of $3,932,792 that may be applied against future taxable income and expires at various dates between 2026 and 2031, subject to certain limitations. The Company has a deferred tax asset arising substantially from the benefits of such net operating loss deduction and has recorded a valuation allowance for the full amount of this deferred tax asset since it is more likely than not that some or all the deferred tax asset may not be realized.

 

6. CONTINGENCIES AND COMMITMENTS

   

Contingencies

 

Silverland Finance Ltd, Platinum Investment Corporation, Lin Zhou, Jin Wang, and Li Jun (collectively known as plaintiffs) have filed a lawsuit on (i) Wal1007, LLC, (ü) Wal1009, LLC, (iii) Timothy Barton, (iv) Sada Cumber, and (v) Carnegie Development, Inc. (collectively known as defendants) on November 15, 2019 in the 44th Judicial District of Texas in Dallas County, Texas, Case No DC-19-18361 and on 25th November 2019, this company was served with the notice of the court case. As on the date of the current reporting period, the court dismissed the case.

  

Capital commitments

 

For the current reporting year, the Company had no capital commitments which is the same for the previous reporting year.

 

The management reviewed with the legal team and concluded that there are no disputes remaining unresolved and hence there are no contingent liabilities as on the reporting date. The company is trying to settle the claims by share issuance as and when received and processed.

 

7. SUBSEQUENT EVENTS

   

On 11 March 2020, the World Health Organization made an assessment that the outbreak of a coronavirus (COVID-19) can be characterized as a pandemic. As a result, the economic and risk environment in which the company operates has been impacted. This situation arising and any possible impact to these financial statements is considered a subsequent, non-adjusting event

 

The situation, including the government and public response to the challenges, continue to progress and rapidly evolve. Therefore, the extent and duration of the impact of these conditions remain uncertain and depend on future developments that cannot be accurately predicted at this stage, and a reliable estimate of such an impact cannot be made at the date of authorization of these financial statements.

 

8. RESTATEMENT OF PRIOR YEAR COMPARATIVES

  

Certain figures for the previous year were regrouped/reclassified, wherever necessary, to conform to current year's presentation. However, such reclassifications do not have any impact on the Company's previously reported financial results.

 

9. MANAGEMENT ASSERTIONS ON CRITICAL AUDIT MATTERS

  

Manuals and handbooks: Absence of written manuals and handbooks is the concern for the audit. Since the Company is involving experienced professionals for the day-to-day operations, the need for specialized training was not felt. So also, the need for the written manuals and handbooks. However, the Management is aware of the need for standard operating procedures to educate and train its growing general staff. Preparation of manuals and handbooks has begun.

 

 
22

Table of Contents

 

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.

 

With the change in the management, this Company is contracting to receive the administrative support and is planning to provide adequate controls and procedures in place in due course.

 

For the current year, the Company has few transactions. The book-keeping and the financial statement preparations were handled by qualified professionals and hence this management believes that there are adequate controls and procedures for the current period covered by this report which are effective to ensure that the information required to be disclosed by us in reports filed under the Securities Exchange Act of 1934 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, as appropriate to allow timely decisions regarding disclosure. It has been determined by our management that the Company has adequate segregation of duties consistent with control objectives and has also adapted various accounting policies in accounting and financial reporting with respect to the requirements and application of GAAP and SEC requirements. The Company has effective controls over the financial disclosure and reporting processes.

 

Management’s Annual Report on Internal Control over Financial Reporting

 

The management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act. The internal control system is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes, in accordance with generally accepted accounting principles. The system of internal control over financial reporting prevents or detect misstatements. All projections such as evaluation of effectiveness to future periods, are provided by well experienced professionals, while the same can be subject to inherent risks such as changing conditions, or that the degree of compliance with the policies or procedures may deteriorate.

 

The management conducts quarterly evaluation of the effectiveness of internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework. Based on its evaluation, the Company is constantly requiring the experts to improve the system to remove any material weakness in our internal control over financial reporting. A material weakness is a deficiency, or a combination of control 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.

 

 
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Table of Contents

 

The material weakness is eliminated by segregation of duties in financial reporting, as our financial reporting and all accounting functions are performed by experts with adequate oversight by a professional with accounting expertise.

 

In general, there have been no changes in our system of internal controls over financial reporting during the current period of reporting, while the management has been constantly reviewing and eliminating any area of material weakness. The management assertion is adequate internal control over financial reporting.

 

However, this company being not a fully reporting company is not required to adhere to detailed and exhaustive procedures.

 

ITEM 9B. OTHER INFORMATION

 

On September 30, 2020, the Company acquired 99% of the membership interest in each of the following entities from five other entities in exchange for 21,786 Shares of Series I Cumulative Convertible Preferred Stock and Promissory Notes in the original Stated Principal Amount of $9,755,888:

 

·

126 Villita, LLC, which is developing St. Mary’s Tower in San Antonio, Bexar County, Texas, a 24-story building with steel frame, stucco and glass exterior, with a flat roof; the building, when completed, will have 186,500 net rentable square feet with level 1 for office space, levels 2-6 for parking, level 7 for a pool and social deck, and levels 8-24 including 250 residential units. The building is located on a 0.492-acre tract of land in the city of San Antonio. The budget for the development is $62,100,000.

 

 

·

D4AVEG, LLC is developing 280 housing units consisting of 238,968 square feet on 21.68 acres located in Winter Haven, Polk County, Florida. The development budget is $40,770,000 as a non-HUD, multifamily project.

 

 

·

D4KL, LLC is developing 226 housing units on 16.17 acres of land located in Killeen, Texas. The development budget is $46,900,000.

 

 

·

Mansions Apartments at Marine Creek LLC is developing 638 housing units on a 54.166-acre tract of land located in Tarrant County, Texas. Construction is in three separate phases, and in each phase, the development budget is approximately $42,000,000.

 

 

·

Ridgeview Additions LLC is a land development project on a 15.004-acre tract of land located in Venus, Johnson County, Texas, which ultimately will create 54 lots, with an average lot size of 56 feet by 108 feet, for an expected sale price of $955 per front foot ($53,480 per lot).

 

 

·

Villita Towers LLC is developing 226 multifamily housing units on a 0.35-acre tract of land in San Antonio, Bexar County, Texas, with an estimated loan component of $66,000,000.

  

All of the foregoing items are in varying stages of development from initial plans to near completion.  Subsequently, as other considerations occurred, the Company and the different transferring entities entered into separate Rescission Agreements, effective December 30, 2020, which rescinded each transaction ab initio

 

 
24

Table of Contents

  

PART III

 

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

 

The following table sets forth the names of our current directors and executive officers. Also, the principal officers and positions with us held by each person and the date such person became our director, executive officer. Our executive officers are appointed by our Board of Directors. Our directors serve until the earlier occurrence of the election of his or her successor at the next meeting of stockholders, death, resignation, or removal by the Board of Directors.

 

Timothy Barton

President and CEO*

1st October, 2019

Robert W Bueker

CFO

1st October, 2019

Saskya Bedoya

Treasurer*

1st October, 2019

Murugan Venkat

Secretary*

22nd January 2019

__________

* Member of Board of Directors

 

Section 16(a) Beneficial Ownership Compliance.

 

Section 16(a) of the Securities Exchange Act of 1934 requires our executive officers, directors and persons who own more than ten percent of our shares of common stock, to file initial reports of beneficial ownership on Form 3, changes in beneficial ownership on Form 4 and an annual statement of beneficial ownership on Form 5, with the SEC. Such executive officers, directors and greater than ten percent shareholders are required by SEC rules to furnish us with copies of all such forms that they have filed.

 

 
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Table of Contents

 

Based solely on our review of the copies of such forms filed with the SEC electronically, received by us and representations from certain reporting persons, for the fiscal year ended December 31, 2019, none of the officers, directors and more than 10% beneficial owners have filed Form 5 with the SEC.

 

Broadview Holdings LLC is the majority shareholder but does not involve in the day-to-day activities of the Company and hence is a passive ownership.

 

Code of Ethics

 

We have adopted a code of ethics for our principal executive officers.

 

Director Independence

 

Our determination of independence of directors is made using the definition of “independent director” contained in Rule 4200(a)(15) of the Marketplace Rules of the NASDAQ Stock Market (“NASDAQ”), even though such definitions do not currently apply to us because we are not listed on NASDAQ. We have determined that none of the members of our Board of Directors as of December 31, 2019 were “independent” within the meaning of such rules.

 

ITEM 11. EXECUTIVE COMPENSATION

 

There was no executive compensation for the current year.

 

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

  

As of the reporting date, the Company had 46,203,716 common shares outstanding.  The following table sets forth certain information regarding our shares of common stock beneficially owned as of the reporting date, for (i) each stockholder known to be the beneficial owner of five percent (5%) or more of our outstanding shares of common stock, (ii) each named executive officer and director, and (iii) all executive officers and directors as a group. A person is considered to beneficially own any shares: (i) over which such person, directly or indirectly, exercises sole or shared voting or investment power, or (ii) of which such person has the right to acquire beneficial ownership at any time within sixty (60) days through an exercise of stock options or warrants or otherwise. Unless otherwise indicated, voting and investment power relating to the shares shown in the table for our directors and executive officers is exercised solely by the beneficial owner or shared by the owner and the owner’s spouse or children.

 

For purposes of this table, a person or group of persons is deemed to have “beneficial ownership” of any shares of common stock that such person has the right to acquire within sixty (60) days from the reporting date. For purposes of computing the percentage of outstanding shares of our common stock held by each person or group of persons named above, any shares that such person or persons has the right to acquire within sixty (60) days of the Closing Date is deemed to be outstanding but is not deemed to be outstanding for the purpose of computing the percentage ownership of any other person. The inclusion herein of any shares listed as beneficially owned does not constitute an admission of beneficial ownership.

 

Name of Officer/Director or Control Person

 

Affiliation with

Company

(e.g., Officer

Title /Director/

Owner of

more than 5%)

 

Residential

Address

(City /

State Only)

 

Number

of shares

owned

 

 

 Share

type/class

 

Ownership

Percentage

of Class

Outstanding

Timothy Barton

 

Director, President and CEO

 

Dallas, TX

 

 

0

 

 

Common

 

 

0

 

Robert W Bueker

 

Officer - CFO

 

Dallas, TX

 

 

0

 

 

Common

 

 

0

 

Saskya Bedoya

 

Director and Treasurer

 

Dallas, TX

 

 

0

 

 

Common

 

 

0

 

Murugan Venkat

 

Director and Secretary

 

Hollywood, FL

 

 

0

 

 

Common

 

 

0

 

Broadview Holdings, LLC

 

Owner of more than 5%

 

Dallas, TX

 

 

40000000

 

 

Common

 

 

86.57 %

Broadview Holdings, LLC

 

Owner of more than 5%

 

Dallas, TX

 

1000

 

 

Series A Preferred Stock

 

 

100

Cynergy Development Advisers, LLC

 

Owner of more than 5%

 

Dallas, TX

 

 

4948854

 

 

Common

 

 

10.71 %

 

 
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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

 

During the accounting year 2019, $66,281 is owed for the related party transactions.

 

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

 

Independent Public Accountants

 

Our independent accountants for the fiscal year ended December 31, 2020 is Yusufali & Associates LLC. Below is a summary of the fees billed to us by our independent accountants for professional services rendered for 2020 and 2019:

 

Fee Category

 

2019

 

 

2018

 

Audit Fees

 

 

10,000

 

 

 

17,500

 

Audit-Related Fees

 

 

-

 

 

 

 

 

Tax Fees

 

 

-

 

 

 

 

 

All Other Fees

 

 

-

 

 

 

 

 

Total Fees

 

 

10,000

 

 

 

17,500

 

 

 
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Table of Contents

 

ITEM 15. EXHIBITS.

 

Exhibit No.

Description

31.1

RULE 13A-14(A)/15D-14(A) CERTIFICATIONS

31.2

RULE 13A-14(A)/15D-14(A) CERTIFICATIONS

32.1

Certification of Principal Executive Officer Pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2

 

Certification of Principal Financial Officer Pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

_________

Filed Herewith

 

ITEM 16. SUMMARY.

 

Optional and not included.

 

 
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Table of Contents

   

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

  

Carnegie Development, Inc.

       

 

 

 

 

 

 

 

 

By:

/s/ Timothy Barton   By:

/s/ Saksya Bedoya

 

Date: March 31, 2021

 

Timothy Barton

   

Saskya Bedoya

 

 

 

President & Director

   

Treasurer & Director

 

 

   

 
30

 

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