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Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such a shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the last 90 days. [X ] NO [ ]
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). [X ] NO [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer, "accelerated filer," "non-accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
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| 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 is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES
Applicable Only to Issuer Involved in Bankruptcy Proceedings During the Preceding Five Years.
N/A
Applicable Only to Corporate Registrants
Securities registered pursuant to Section 12(b) of the Act:
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| FFLO |
| OTC Pink |
State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date:
TABLE OF CONTENTS
PART I | |||
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ITEM 1 |
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ITEM 1A |
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ITEM 1B |
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ITEM 2 |
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ITEM 3 |
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ITEM 4 |
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PART II | |||
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ITEM 5 |
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ITEM 6 |
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ITEM 7 | Management's Discussion and Analysis of Financial Condition and Results of Operations |
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ITEM 7A |
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ITEM 8 |
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ITEM 9 | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure |
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ITEM 9A |
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ITEM 9B |
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PART III | |||
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ITEM 10 |
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ITEM 11 |
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ITEM 12 | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
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ITEM 13 | Certain Relationships and Related Transactions, and Director Independence |
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ITEM 14 |
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PART IV | |||
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ITEM 15 |
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FORWARD LOOKING STATEMENTS
THIS DOCUMENT INCLUDES FORWARD-LOOKING STATEMENTS, INCLUDING, WITHOUT LIMITATION, STATEMENTS RELATING TO FREE FLOW USA, INC. ("FREE FLOW") PLANS, STRATEGIES, OBJECTIVES, EXPECTATIONS, INTENTIONS AND ADEQUACY OF RESOURCES. THESE FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES, AND OTHER FACTORS THAT MAY CAUSE FREE FLOW'S ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY THE FORWARD-LOOKING STATEMENTS. THESE FACTORS INCLUDE, AMONG OTHERS, THE FOLLOWING: FREE FLOW'S ABILITY TO IMPLEMENT ITS BUSINESS STRATEGY; ABILITY TO OBTAIN ADDITIONAL FINANCING; FREE FLOW'S LIMITED OPERATING HISTORY; UNKNOWN LIABILITIES ASSOCIATED WITH FUTURE ACQUISITIONS; ABILITY TO MANAGE GROWTH; SIGNIFICANT COMPETITION; ABILITY TO ATTRACT AND RETAIN TALENTED EMPLOYEES; AND FUTURE GOVERNMENT REGULATIONS; AND OTHER FACTORS DESCRIBED IN THIS DOCUMENT OR IN OTHER OF FREE FLOW'S FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION. FREE FLOW IS UNDER NO OBLIGATION, TO PUBLICLY UPDATE OR REVISE ANY FORWARD-LOOKING STATEMENTS, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE.
For further information about these and other risks, uncertainties and factors, please review the disclosure included in this report under Item 1A "Risk Factors."
PART I
ITEM 1. BUSINESS
HISTORY
Free Flow USA, Inc. (the "Company" or "Free Flow") was incorporated as Free Flow, Inc. on October 28, 2011 under the laws of State of Delaware to enter the green energy industry. The Company began with the idea of developing swimming pool solar pump system to create a blend of green energy harvesting while maintaining the present system. Having received firm enquiries from overseas farmers, Free Flow began with focus on the sale of solar panels to the agriculture sector, providing alternate means of electricity to operate pumps for water wells in India and Pakistan. In August 2014 the Company contracted to acquire as its subsidiary a special purpose entity in India but the contract was not effectuated due to the Sellers’ inability to comply with the terms of the contract, viz-a-viz to provide Audited Financial statements of the entity being acquired.
In February 2015, the company incorporated a subsidiary, Promedaff, Inc. and purchased a skin care product line and formulations for $2,000,000 against a promissory note. An e commerce platform was set up for sales and marketing. The efforts did not bear any success and the entire inventory was sold through the Seller and the Promissory Note was cancelled and marked “VOID”.
In October 2015, the company entered into a Sales Contract (the “Sales Contract”) pursuant to which the Company contracted to sell to Salim's Paper Private Limited, Jaipur, India (the “Purchaser”), with a principal place of business at SP-6 SKS Industrial Area, Reengus Sikar, Rajasthan, India 330 404; Tissue
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Paper comprising 30,000 Metric Tons (MT), to be shipped in five (5) years at the rate of 6,000 MT per annum. Shipments to commence within twelve (12) months from the date of signing of the Contract at a price to be determined on a quarterly basis based on the current index price for wood pulp as quoted on the Chicago Indes by FOEX Indexes, Ltd. In accordance with the terms of the Sales Contract the Purchaser had caused a pre-advice from their commercial bankers for a revolving commercial letter of credit in favor of the Registrant.
In connection with effectuation of the Sales Contract, the Company worked to set up a paper manufacturing facility in the South East Asia or Middle East. The efforts to set up the manufacturing did not succeed and hence the sales contract expired and was declared cancelled with mutual consent of the Buyers and the Company.
In February 2016 the Company incorporated a subsidiary named JK Sales Corp. (the name was changed on December 7, 2017 to Accurate Auto Parts, Inc.) and began operating business of selling used auto parts from a recycling facility in King George, Virginia. The company thus begun realizing revenues from its operations. The Company's fiscal year end is December 31.
Around July 2017 the Company learnt that the landlord filed a bankruptcy hence the long-term lease was automatically terminated and the Company went into a pause mode. In April, 2018 the Company entered into a contract with the bank (who took over the ownership of the property) to purchase the property for $700,000.00.
In October 2018 the Company, singly and jointly with its CEO, Mr. Sabir Saleem, executed, as co-signers, a guarantee on behalf of its subsidiary, namely Accurate Auto Parts, Inc. against a term loan to Accurate Auto Parts, Inc. by River Valley Bank, (name has been changed to Incredible Bank) Minnesota in the amount of $900,100.00. The 19+ acre property in King George, VA from where the Company operated its auto parts business, was purchased.
In December 2020 the Company acquired over $2,000,000 worth of Assets of a second recycling facility named Inside Auto Parts, Inc. incorporated in 1993, which was centrally located between Richmond, Charlottesville, and Fredericksburg, Virginia with easy access to main transport routs. The salvage dealership, specializing in used foreign car and truck parts had been acquired by Free Flow USA, Inc.’s subsidiary named “FFLO - Inside Auto Parts, Inc.” and had 21,953.9 square feet fully enclosed and another 17,392.35 square feet under roof enclosed on 3 sides, all located on 16 acres of land in Mineral, Virginia. The facility was sold back to the original sellers in early January 2022.
The Company's capitalization is 100,000,000 common shares with a par value of $0.0001 per share and 20,000,000 preferred shares with a par value of $0.0001 per share.
Of the 20,000,000 authorized preferred shares, the Company has designated:
10,000 shares as "Preferred Shares - Series A". Each share of "Preferred Shares - Series A" carries voting rights equal to ten thousand (10,000) votes. In other words, the 10,000 "Preferred Shares - Series A" collectively have a voting right equal to one hundred million (100,000,000) common shares of the Corporation.
500,000 shares as “Preferred Shares – Series B”. These preferred shares - Series "B" was assigned the following preferences:
a) Each share to carry one vote.
b) Each share will be redeemable with a 365-day written notice to the company.
c) Each share will be junior to any debt incurred by the Company.
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d) The redemption value will be the par value at which such "preferred shares - series B" are bought by the subscriber.
e) Each share will carry a dividend right at par with the common shares.
500,000 shared as “Preferred Shares – Series C”. These preferred shares – Series, “C” was assigned the following preferences:
a) Each share to carry one vote.
b) Each share will be redeemable upon repayment of Loan(s) made by River Valley Bank to Accurate Auto Parts, Inc.
c) Each share will be junior to any debt incurred by the Company.
d) The redemption value will be the par value at which such "preferred shares - series C" are bought by the subscriber.
e) Each share will carry a dividend right at par with the common shares.
On December 31, 2014 the Company had a Note outstanding in the principal amount of $330,000 plus interest payable to GS Pharmaceuticals, Inc. On March 31, 2015, by mutual consent this note, and accrued interest was converted to 330,000 preferred shares - Series "B".
On March 31, 2015 an amount of $58,000 was subscribed by Redfield Holdings, Ltd. by cancellation of a Note against the issuance of 9,700 shares of preferred shares - Series "A". These shares were issued to Redfield Holding, Ltd. thus making a total of entire designated preferred shares - Series "A" shares to Redfield Holdings, Ltd. Each share of preferred shares - Series "A" carries voting right equal to 10,000 common shares.
On November 22, 2011, the Company issued a total of 25,000,000 shares of common stock to one director for cash in the amount of $0.0008 per share for a total of $20,000.
On December 6, 2011, the Company issued a total of 1,200,000 shares of common stock to Garden Bay International for cash in the amount of $0.000833 per share for a total of $1,000.
On August 1, 2014, the Company issued 300 Preferred Shares--Series A stock issued to Redfield Holdings, Ltd. for $1 each for a total of $300.
On March 31, 2015, the Company issued 9,700 Preferred Shares—Series A issued to Redfield Holdings, Ltd. for a total sum of $58,000.00.
On June 30, 2019, the Company issued 21,000 common shares – under rule 144 for a sum of $14,490.00 to an existing shareholder.
On January 1, 2019, at the request of the lending bank, namely, River Valley Bank, by mutual consent of Redfield Holdings, Ltd. (owned by Mr. Sabir Saleem) the debt in the amount of $470,935 was booked as capital in the subsidiary entity, namely Accurate Auto Parts, Inc. and 470,935 Preferred shares Series “C” were issued thereagainst. Series “C” Preferred shares are redeemable anytime with the concurrence (approval) of the lending bank. This action was taken to provide comfort to the lending bank that the subsidiary company was adequately capitalized.
As of February 28, 2022, the Company had 24,841,900 shares of common stock issued and outstanding and 10,000 Preferred Shares - Series A, 330,000 Series B, and 470,935 Series C shares issued and outstanding.
On May 1, 2023, the Company issued 35,000 common shares – under rule 144 for a sum of $10,000 to a third party.
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On December 30, 2023, in a private transaction, the Company accepted a sum of $10,000 against the issuance of 50,000 restricted Common shares of the Company.
On July 29, 2024, in a private transaction, the Company accepted a subscription agreement against issuance of 1,000,000 for a sum of $200,000.
On September 28, 2024, in a private transaction, the Company accepted a subscription agreement against the issuance of 3,073,100 Restricted Common shares for a sum of $307.00
On May 24, 2024 a resolution was adopted by majority shareholders whereby the common and preferred shares and debt, if any, held in the name of Redfield Holdings, Ltd. were transferred to the order of Mr. Sabir Saleem, individually. The reason for this action as stated by Mr. Saleem was that Redfield Holdings, Ltd. is 100% owned by Mr. Sabir Saleem and Mr. Saleem did not find any reason to have an extra layer in the ownership structure. The original reason for having such structure was in anticipation that there might be additional investors who may want to invest in Redfield Holdings, Ltd. for FFLO or any other projects.
COMPANY OVERVIEW
Since the new management took over the company’s control on March 13, 2014, from S. Douglas Henderson, former CEO, it has remained focused in developing the solar energy business along with pharmaceutical (skin care product line), neither one of which had produced any revenues. However, the management continued its efforts to deploy “Solar Well” operation in India and Pakistan, due to economic instability no contract could be concluded.
Concurrent to the above efforts, a few prospects had shown keen interest in promotion of HYGIENiQ to the automotive industry. Approx.35% of the inventory was sold and paid for during the first quarter of 2016.
Upon taking over, the Company appointed Ferdinando (Fred) Ferrara as a Director and Sabir Saleem as CEO. There was no family relationship or other relationship between the Seller and the Purchaser.
On November 25, 2020, Mr. Shah Wali Khan was appointed to serve as a director of the Company. In addition to his management and oversight role on the Board of Directors, Mr. Khan will use his business management skills to assist with the planned global expansion of Free Flow’s subsidiary operations.
On December 22, 2020 upon acquiring the assets of the Mineral, VA facility, the Company appointed Dr. Melody Jackson as a director of the Company.
On December 27, 2021, for personal reasons, Dr. Melody Jackson resigned as a member of the Board of Directors of Free Flow USA, Inc.
On August 26, 2024, the Board of Directors of the Company approved the addition of Mr. Ravinder Tikoo, M.D., as a member of the Company's Board of Directors and was appointed him as Chairman of the Board of Directors.
PURCHASE OF SHARES OF SKY ENERGY (PVT) LTD., INDIA.
On August 7, 2014, the Company entered into a stock purchase contract with Riyazuddin Kazi and Ahteshamuddin Kagzi to purchase 225,000 shares for a sum of $4,005,000 of Sky Energy (Pvt) Ltd. being 90% of the issued and outstanding shares. As consideration thereof, Bills of Exchange are lodged with the
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Escrow Agent. The effectuation of the contract (the effective date of the closing of the transaction) was subject to the Sellers delivering the audited financial statements to the Company; which has since been cancelled due to Seller’s failure in providing the audited financial statements.
INCORPORATION OF SUBSIDIARIES
On January 24, 2015, Free Flow, Inc. incorporated Promedaff, Inc. in the Commonwealth of Virginia as its wholly-owned subsidiary. This subsidiary purchased a skin care product line and set up an e-commerce platform for sale. The marketing efforts did not succeed; thus, the entire inventory was sold back to the Sellers. Promedaff, Inc. was looking into developing other businesses. In October 2016, the name of Promedaff, Inc. was changed to Motors & Metals, Inc. with the objective of developing an export business. A contract was signed with a United Emirates company. A trial shipment of approximately $12,000 was made from Germany but the business could not be continued due to poor management of the Agent that resulted from the severe illness of the principal agent However, in March 2019, Motors & Metals, Inc. received a letter of intent from an overseas customer indicating their willingness to buy 36,000 tons of processed scrap metal at market price.
Progress is discussed below under “Plan of Operations”, see Item 7, Part II.
On September 11, 2019, a subsidiary was incorporated for the purpose of acquiring intellectual property related to rotary engines but the transaction did not materialize. This subsidiary remained in good standing. On November 24, 2020, the name of this subsidiary was changed to “FFLO – Inside Auto Parts, Inc.” and was thus used to facilitate the acquisition of assets of Inside Auto Parts, Inc., as described in the foregoing paragraphs.
OFF BALANCE SHEET ARRANGEMENTS
We do not have any off-balance sheet arrangements.
BACKLOG OF ORDERS
We currently have no orders for sales at this time.
GOVERNMENT CONTRACTS
We have no government contracts.
NUMBER OF PERSONS EMPLOYED
As of December 31, 2024, there were three full-time employees. The CEO works full-time. Management of the Company expects to use consultants, attorneys, and accountants as necessary, and it is not expected that the company will have any full-time or other employees, except as may be the result of completing a transaction.
PROPERTIES
As of the date of this report, we do not own any property, patents, trademarks, or any other intellectual property contracts.
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AVAILABLE INFORMATION
Our Periodic Reports, including Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and other reports, and Amendments to those reports and other forms that we file with or furnish to the Securities and Exchange Commission (SEC) are available for review on the SEC’s EDGAR website.
CORPORATE GOVERNANCE
In accordance with and pursuant to relevant related rules and regulations of the SEC, the Board of Directors of the Company has established and periodically updated our corporate governance guide, which is applicable to all directors, Officers, and employees of the Company. We have not yet established an audit committee of our Board of Directors.
ITEM 1A. RISK FACTORS
The following risk factors and other information included in this Annual Report on Form 10-K should be carefully considered. The occurrence of any of the following risks or unknown risks and uncertainties may adversely affect our business, operating results, and financial condition.
RISKS RELATING TO OUR BUSINESS
DUE TO FACTORS BEYOND HUMAN CONTROL, OUR BUSINESS IS A NOT STABLISED AND THERE ARE STILL “THING TO HAPPEN” AND THEREFORE RISKY.
The assets of the operating company were sold in March of 2024. All long-term secured debts were paid-off. The company did focus on trading activities and did a very small revenue generation. The management continued to make efforts to acquire operating business(ess) and signed a few memorandums of understandings. Upon conducting the due-diligences, none of the prospects passed the due-diligence. While the efforts still continue, the potential investors should be aware of the risk associated with the company that does not have significant revenues. Although, the existing available cash resources are expected to facilitate a smooth existence for two or more years even if the revenues do not increase, but there could always be a risk of falling short in cash resources.
WE HAVE HISTORICALLY INCURRED LOSSES AND CANNOT ASSURE INVESTORS AS TO FUTURE PROFITABILITY.
Like most businesses that are dependent on a number of factors including but not limited to market conditions, and acts of God, like COVID-19, and political turmoil in the buyers’ country there can be no assurance to investors for future profitability.
WE HAVE A LACK OF LONG REVENUE HISTORY AND INVESTORS CANNOT VIEW OUR PAST PERFORMANCE SINCE WE HAVE A LIMITED HISTORY.
We were formed on October 28, 2011, to engage in any lawful business and any new enterprise. We have had moderate revenues in the last thirteen years. We have only had operational activities
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during the last five to six years; during which period there has been more than one interruption including Covid19 pandemic. We are cash surplus only to a limited extent and hence can be classified as marginal cash surplus, and the business effort continues as if in an early development stage. It should be assumed that any or all of these events could occur, and could prevent the proposed business from being successful, and potential investors could lose all their investment.
BASED ON OUR CURRENT CASH RESERVES, WE WILL HAVE A RELATIVELY SMALL OPERATIONAL BUDGET FOR THE OPERATIONS WHICH WE CANNOT EXPAND WITHOUT ADDITIONAL RAISING OF CAPITAL.
If we are unable to continue to generate enough revenue to cover our operational costs, we will need to seek additional sources of funds. Currently, we have no committed source for any additional funds as of date hereof. No representation is made that any funds will be available when needed. In the event funds cannot be raised when needed, we may not be able to carry out our business plan and could fail in business because of these uncertainties.
WE CANNOT GIVE ANY ASSURANCES THAT WE WILL BE ABLE TO RAISE ENOUGH CAPITAL TO FUND ACQUISITIONS AND PRODUCT DEVELOPMENT.
We will need to raise additional funds to support not only our budget but our expansion operations. We cannot make any assurances that we will be able to raise such funds or whether we would be able to raise such funds with terms that are favorable to us. We may seek to borrow money from lenders at commercial rates, but such lenders will probably be at higher than bank rates, which higher rates could, depending on the amount borrowed, make the net operating income insufficient to cover the interest.
WE MAY IN THE FUTURE ISSUE MORE SHARES WHICH COULD DILUTE THE PERCENTAGE OF OWNERSHIP OF STOCKHOLDERS.
We may issue further shares as consideration for the cash or assets or services out of our authorized but unissued common stock that would, upon issuance dilute the percentage of shares holding of shareholders.
ONE OF OUR OFFICERS AND DIRECTORS IS A MAJORITY SHAREHOLDER OF THE COMPANY. AS SUCH THERE IS A POSSIBILITY OF HIM CONTROLLING THE COMPANY TO THE DETRIMENT OF OUTSIDERS.
Mr. Saleem, President, CEO and Director, through direct and indirect ownership, is sole owner of the super voting shares of the Company. As such, he will be able to control the operations and the direction of the Company with very little outside influence.
WE WILL DEPEND UPON MANAGEMENT, BUT WE WILL HAVE LIMITED PARTICIPATION OF MANAGEMENT.
We currently have three individuals who are serving as our officers and directors for the Company, one of them on a full-time basis and the other two are independent directors who are not on full time basis. The full-time director is also acting as our officers. None of the officers have an employment agreement with the Company. We will be heavily dependent upon their skills, talents, and abilities, as well as several consultants to us, to implement our business plan, and may, from
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time to time, find that the inability of the officers and directors to devote their full-time attention to our business that could result in a delay in progress toward implementing our business plan. Because investors will not be able to manage our business, they should critically assess all the information concerning our officers and directors.
OUR OFFICERS AND DIRECTORS ARE NOT EMPLOYED BY US AND MAY CAUSE CONFLICTS OF INTEREST AS TO CORPORATE OPPORTUNITIES IN WHICH WE MAY NOT BE ABLE OR ALLOWED TO PARTICIPATE.
In the future, they may become, in their individual capacities, officers, directors, controlling shareholders and/or partners of other entities engaged in a variety of businesses. Thus, our officers and directors may have potential conflicts including their time and efforts involved in participation with other business entities. In some circumstances this conflict may arise between their fiduciary duties to us and their fiduciary duties to their other businesses. It is possible that in this situation their judgment may be more consistent with their fiduciary duties to these ventures and may be detrimental to our interests.
Presently there is no requirement contained in our Articles of Incorporation, Bylaws, or minutes which requires officers and directors of our business to disclose to us business opportunities that come to their attention. Excluded from this duty would be opportunities that the person learns about through his involvement as an officer and director of another company. We have no intention of merging with or acquiring business opportunities from any affiliate officer or director.
We do not know of any reason other than outside business interests that would prevent them from devoting full-time to our Company when the business may demand such full-time participation.
WE MAY DEPEND UPON OUTSIDE ADVISORS, WHO MAY NOT BE AVAILABLE ON REASONABLE TERMS AND AS NEEDED.
To supplement the business experience of our officers and directors, we may be required to employ accountants, technical experts, appraisers, attorneys, or other consultants or advisors. Our Board, without any input from stockholders, will make the selection of any such advisors. Furthermore, we anticipate that such persons will be engaged on an "as needed" basis without a continuing fiduciary or other obligation to us. In the event we consider it necessary to hire outside advisors, we may elect to hire persons who are affiliates if they are able to provide the required services.
WE HAVE AGREED TO INDEMNIFICATION OF OFFICERS AND DIRECTORS AS IS PROVIDED BY DELAWARE STATUTE.
Delaware Statutes provide for the indemnification of our directors, officers, employees, and agents, under certain circumstances, against attorney's fees and other expenses incurred by them in any litigation to which they become a party arising from their association with or activities on our behalf. We will also bear the expenses of such litigation for any of our directors, officers, employees, or agents, upon such person's promise to repay us therefore if it is ultimately determined that any such person shall not have been entitled to indemnification. This indemnification policy could result in substantial expenditures by us that we will be unable to recoup.
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RISK FACTORS RELATED TO OUR STOCK
OUR STOCK IS THINLY TRADED AND, AS A RESULT, YOU MAY BE UNABLE TO SELL AT OR NEAR ASK PRICES OR AT ALL IF YOU NEED TO LIQUIDATE YOUR SHARES.
The shares of Free Flow common stock were approved for trading on the OTC Bulletin Board on April 3, 2013, the Company up-listed to QB in April 2021 and decided to revert back to Pink Sheets to save the OTC QB fees. The Company is thinly traded, meaning that the number of persons interested in purchasing the Company's common shares at or near ask prices at any given time may be relatively small or non-existent. This situation is attributable to a number of factors, including the fact that the Company is a small company that is relatively unknown to stock analysts, stock brokers, institutional investors, and others in the investment community that generate or influence sales volume and that even if it came to the attention of such persons, they tend to be risk-averse and would be reluctant to follow an unproven, early stage company such as Free Flow or purchase or recommend the purchase of any of the Company's Securities until such time as the Company became more seasoned and viable. As a consequence, there may be periods of several days or more when trading activity in the Company's Securities is minimal or non-existent, as compared to a seasoned issuer which has a large and steady volume of trading activity that will generally support continuous sales without an adverse effect on Securities price. We cannot give you any assurance that a broader or more active public trading market for the Company's common securities will develop or be sustained, or that any trading levels will be sustained. Due to these conditions, the Company can give investors no assurance that they will be able to sell their shares at or near ask prices or at all if they need money or otherwise desire to liquidate their securities of the Company.
THE REGULATION OF PENNY STOCKS BY SEC AND FINRA MAY DISCOURAGE THE TRADABILITY OF OUR SECURITIES.
We are a "penny stock" company. Our securities currently trade in the OTC Pink market and are subject to a Securities and Exchange Commission rule that imposes special sales practice requirements upon broker-dealers who sell such securities to persons other than established customers or accredited investors. For purposes of the rule, the phrase “accredited investors” means, in general terms, institutions with assets more than $5,000,000, or individuals having a net worth of more than $1,000,000 or having an annual income that exceeds $200,000 (or that, when combined with a spouse’s income, exceeds $300,000). For transactions covered by the rule, the broker-dealer must make a special suitability determination for the purchaser and receive the purchaser’s written agreement to the transaction prior to the sale. Effectively, this discourages broker-dealers from executing trades in penny stocks. Consequently, the rule will affect the ability of purchasers in this offering to sell their securities in any market that might develop therefore because it imposes additional regulatory burdens on penny stock transactions.
In addition, the Securities and Exchange Commission has adopted several rules to regulate “penny stocks”. Such rules include Rules 3a51-1, 15g-1, 15g-2, 15g-3, 15g-4, 15g-5, 15g-6, 15g-7, and 15g-9 under the Securities and Exchange Act of 1934, as amended. Because our securities constitute “penny stocks” within the meaning of the rules, the rules would apply to us and to our securities. The rules will further affect the ability of owners of shares to sell our securities in any market that might develop for them because it imposes additional regulatory burdens on penny stock transactions.
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Shareholders should be aware that, according to Securities and Exchange Commission, the market for penny stocks has suffered in recent years from patterns of fraud and abuse. Such patterns include (i) control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer; (ii) manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases; (iii) “boiler room” practices involving high-pressure sales tactics and unrealistic price projections by inexperienced salespersons; (iv) excessive and undisclosed bid-ask differentials and markups by selling broker-dealers; and (v) the wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired consequent investor losses. Our management is aware of the abuses that have occurred historically in the penny stock market. Although we do not expect to be able to dictate the behavior of the market or of broker-dealers who participate in the market, management will strive within the confines of practical limitations to prevent the described patterns from being established with respect to our securities. Inventory in penny stocks have limited remedies in the event of violations of penny stock rules. While the courts are always available to seek remedies for fraud against the Company, most, if not all, brokerages require their customers to sign mandatory arbitration agreements in conjunctions with opening trading accounts. Such arbitration may be through an independent arbiter. Investors may file a complaint with FINRA against the broker allegedly at fault, and FINRA may be the arbiter, under FINRA rules. Arbitration rules generally limit discovery and provide more expedient adjudication, but also provide limited remedies in damages usually only the actual economic loss in the account. Investors should understand that if a fraud case is filed against a company in the courts, it may be vigorously defended and may take years and great legal expenses and costs to pursue, which may not be economically feasible for small investors.
The fact that we are a penny stock company will cause many brokers to refuse to handle transactions in the stocks, and may discourage trading activity and volume, or result in wide disparities between bid and ask prices. These may cause investors significant illiquidity of the stock at a price at which they may wish to sell or in the opportunity to complete a sale. Investors will have no effective legal remedies for these liquidity issues.
WE WILL PAY NO FORESEEABLE DIVIDENDS IN THE FUTURE.
We have not paid dividends on our common stock and do not ever anticipate paying such dividends in the foreseeable future. Investors whose investment criteria is dependent on dividends should not invest in our common stock.
ITEM 1B. UNRESOLVED STAFF COMMENTS
Not Applicable.
ITEM 1C. CYBERSECURITY
Risk management and strategy
We have limited exposure to cybersecurity threats. We have established policies and processes, identifying and managing material risk from cyber security threats, and have integrated these processes into our overall risk management systems and processes. We routinely assess material risks from cybersecurity threats, including any potential unauthorized occurrence on or conducted
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through our information systems that may result in adverse effects on the confidentiality, integrity, or availability of our information systems or any information residing therein.
We conduct periodic risk assessments to identify cybersecurity threats, as well as assessments in the event of a material change in our business practices that may affect information systems that are vulnerable to such cybersecurity threats. These risk assessments include the identification of reasonably foreseeable internal and external risks, the likelihood and potential damage that could result from such risks, and the sufficiency of existing policies, procedures, systems, and safeguards in place to manage such risks.
Following these risk assessments, we re-design, implement, and maintain reasonable safeguards to minimize identified risks; reasonably Address any identified gaps in existing safeguards, and regularly monitor the effectiveness of our safeguards. The primary responsibility for assessing, monitoring, and managing our cybersecurity risks rests with our Chief Executive Officer will employ the expertise of an IT consultant in the event that risk management assessment warrants.
As part of our overall risk management system, our CEO will monitor and test our safeguards in collaboration with outside IT consultants.
We will engage consultants or other third parties in connection with our risk assessment processes. These service providers will assist us in designing and implementing our cybersecurity policies and procedures, as well as to monitor and test our safeguards. We require each third-party service provider to certify that it has the ability to implement and maintain appropriate security measures consistent with all applicable laws, to implement and maintain reasonable security measures in connection with their work with us, and to promptly report any suspected breach of its security measures that may affect our company.
We have not encountered cybersecurity challenges that have materially impaired our operations or financial standing. For additional information regarding risks from cybersecurity threats, please refer to IA, “Risk Factors”, in the annual report on Form 10–K.
Governance
We maintain informed oversight of our risk management process, including risks from cybersecurity threats. Our board of directors and chief executive officer are responsible for monitoring and assessing strategic risk exposure, the day-to-day management of the material risks we face. Our board of directors and executive officer administer our cybersecurity risk oversight regarding third-party providers.
ITEM 2. PROPERTIES
FACILITIES
We do not own any property or rent office space.
The company uses an office space in premises owned by the Chairman of the Company addressed as 9243 John F. Kennedy Blvd., Suite 104, North Bergen, NJ 07047. The premises are rent-free.
During the pandemic, the CEO moved his personal office to his home and works from a finished basement. The Company makes occasional contributions towards the internet and utility expenses.
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ITEM 3. LEGAL PROCEEDINGS
We are not currently involved in any legal proceedings nor do we have any knowledge of any threatened litigation.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES MARKET INFORMATION
On April 3, 2013, the Company’s common stock was accepted for trading by FINRA on the OTCBB and the Over-the-Counter Markets OTCBB and was assigned the symbol is “FFLO”.
HOLDERS There are 256 shareholders of record of our common stock as of December 31, 2024.
DIVIDEND POLICY
Holders of our common stock are entitled to receive such dividends as may be declared by our board of directors. We have not declared or paid any dividends on our common shares and it does not plan on declaring any dividends soon. The Company currently intends to use all available funds to finance the operation and expansion of its business.
SALES OF UNREGISTERED SECURITIES
Preferred Shares
On March 30, 2015, the Company issued 9,700 shares of Preferred Shares – Series A stock to Redfield Holdings, Ltd. for $1 each for a total of $58,000. On December 31, 2014, the Company had a Note outstanding in the principal amount of $330,000 plus interest payable to GS Pharmaceuticals, Inc. On March 30, 2015, by mutual consent, this note, and accrued interest were converted to 330,000 preferred shares – Series “B”. On November 1, 2018, the Company designated 500,000 preferred shares – Series “C” as mezzanine capital for its wholly owned subsidiary namely Accurate Auto Parts, Inc. to be redeemed upon repayment of a loan made by River Valley Bank to Accurate Auto Parts, Inc. for purchase of property and working capital. The loan from Redfield Holdings, Ltd., with the consent of Redfield Holdings, Ltd. was transferred in the corporate books to show the transfer of the loan amount of $470,935 against the issuance of 470,935 preferred shares – Series “C”. All of the above Preferred Shares were issued to Redfield Holdings Ltd., which is100% owned by Mr. Sabir Saleem, the CEO of the Company. On September 28, 2024, as per the request of Mr. Sabir Saleem, all of the above-preferred shares were transferred from Redfield Holdings Ltd. to Mr. Sabir Saleem, being the sole beneficial owner from day one, such transfer has no material effect due to the change of name of the shareholder.
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Common Shares
On April 2, 2019, the Company received a sum of $14,490 against the issuance of 21,000 restricted common shares. On May 1, 2023, the Company received a sum of $10,000 against the issuance of 35,000 restricted common shares. On May 11, 2023, in a private transaction, the Company accepted a sum of $1,000 against the issuance of 1,000,000 restricted Common shares of the Company. On December 30, 2023, in a private transaction, the Company accepted a sum of $10,000 against the issuance of 50,000 restricted Common shares of the Company. On July 29, 2024, in a private transaction, the Company accepted a subscription agreement against the issuance of 1,000,000 for a sum of $200,000. On September 28, 2024, in a private transaction, the Company accepted a subscription agreement against the issuance of 3,073,100 Restricted Common shares for $307.00. The price of all common shares issued has been arbitrarily fixed.
ISSUER PURCHASES OF EQUITY SECURITIES
The Company did not repurchase any shares of its common stock during the years ended December 31, 2024 and 2023
ITEM 6. SELECTED FINANCIAL DATA
Not applicable.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
MANAGEMENT DISCUSSION AND ANALYSIS
THE FOLLOWING DISCUSSION SHOULD BE READ IN CONJUNCTION WITH OUR AUDITED
CONSOLIDATED FINANCIAL STATEMENTS AND NOTES THERETO INCLUDED HEREIN.
THIS DISCUSSION CONTAINS FORWARD-LOOKING STATEMENTS, SUCH AS STATEMENTS RELATING TO OUR FINANCIAL CONDITION, RESULTS OF OPERATIONS, PLANS, OBJECTIVES, FUTURE PERFORMANCE AND BUSINESS OPERATIONS. THESE STATEMENTS RELATE TO EXPECTATIONS CONCERNING MATTERS THAT ARE NOT HISTORICAL FACTS. THESE FORWARD-LOOKING STATEMENTS REFLECT OUR CURRENT VIEWS AND EXPECTATIONS BASED LARGELY UPON THE INFORMATION CURRENTLY AVAILABLE TO US AND ARE SUBJECT TO INHERENT RISKS AND UNCERTAINTIES. ALTHOUGH WE BELIEVE OUR EXPECTATIONS ARE BASED ON REASONABLE ASSUMPTIONS, THEY ARE NOT GUARANTEES OF FUTURE PERFORMANCE AND THERE ARE A NUMBER OF IMPORTANT FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. BY MAKING THESE FORWARD-LOOKING STATEMENTS, WE DO NOT UNDERTAKE TO UPDATE THEM IN ANY MANNER EXCEPT AS MAY BE REQUIRED BY OUR DISCLOSURE OBLIGATIONS IN FILINGS WE MAKE WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE FEDERAL SECURITIES
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LAWS. OUR ACTUAL RESULTS MAY DIFFER MATERIALLY FROM OUR FORWARD-LOOKING STATEMENTS.
PLAN OF OPERATIONS
Auto Parts Division:
There has been nominal business activity. The company is in good standing as there are Notes Receivable and Payables which until these are redeemed, the company has to stay in existence.
Motors & Metal, Inc. – Progress discussed as under:
Motors & Metals, Inc. is active in the scrap metal trading and processing business, but no transaction has materialized as yet.
Accurate Investments, Inc.:
This entity is also in good standing and continues to pursue investment opportunities. No significant transaction has concluded yet.
City Autos, Corp.:
The department of motor vehicles has been advised that the company will stay dormant until further notice.
RESULTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2024, COMPARED TO THE YEAR ENDED DECEMBER 31, 2023
During the year ending December 31, 2024, the Company recognized revenue of $9,148 from sales. During the year ending December 31, 2023, the Company recognized revenue of $4,032 from its operational activities. Thus, having attained an increase of nearly 126 % from the previous year.
During the year ending December 31, 2024, the Company incurred a total of operational expenses of $555,800, with no depreciation allowance. During the year ending December 31, 2023, the Company incurred operational expenses of $253,919, including a depreciation allowance of $42,503. The increase of $304,381 was primarily a result of an increase in legal expenses related to sale of Assets and winding up of the used auto parts business from the King George facility.
During the year ending December 31, 2024, the Company recognized a total gain of $1,199,622 from the sale of assets and upon appropriating an operational loss of $553,720, as compared to a loss of $266,451 in the year ending December 31, 2023, there has been a net income of $633,208 for the year ending December 31,2024.
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LIQUIDITY
On December 31, 2024, the Company had a total current asset of $458,381, consisting of $91,349 in cash, $34,303 in accounts receivable, and $ zero in inventories. On December 31, 2024, total current liabilities were $241,795, consisting of $241,795 in accounts payable, $ zero from related parties, and notes payable $ zero.
On December 31, 2023, the Company had total current assets of $172,489, consisting of $39,521 in cash, $95,440 in accounts receivable, and $4,800 in inventories at cost. On December 31, 2023, total current liabilities were $150,803, consisting of $138,669 in accounts payable and $9,634 from related party notes payable of $2,500.
SHORT TERM
On a short-term basis, the Company did not generate revenues sufficient to cover operations. For long-term needs, the Company will be dependent on receipt, if any, from the growth in sales.
CAPITAL RESOURCES
The Company's capitalization is 100,000,000 common shares with a par value of $0.0001 per share and 20,000,000 preferred stocks, with a par value of $0.0001 per share.
NEED FOR ADDITIONAL FINANCING
The Company does not have capital sufficient to meet its expansion Capital needs. The Company will have to seek loans or equity placements to cover such cash needs. However, the current assets are sufficient to keep the Company afloat to meet its nominal recurring expenses.
No commitments to provide additional funds have been made by the Company's management or other stockholders. Accordingly, there can be no assurance that any additional funds will be available to the Company to allow it to cover the Company's expansion budget.
SIGNIFICANT ACCOUNTING POLICIES
REVENUE RECOGNITION
The Company has adopted ASC 606 – Revenue from Contracts with Customers. Under ASC 606, the Company recognizes revenue from service-related agreements and contracts by applying the following steps: (1) identify the contract with a customer; (2) identify the performance obligation in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract; and (5) recognize revenue when each performance obligation is satisfied.
EARNINGS PER SHARE
The Company has adopted ASC 260-10-50, EARNINGS PER SHARE, which provides for the calculation of "basic" and "diluted" earnings per share. Basic earnings per share includes no dilution and is computed by dividing net income or loss available to common shareholders by the weighted average common shares outstanding for the period. Diluted earnings per share reflect the
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potential dilution of securities that could share in the earnings of an entity. Basic and diluted losses/profits per share were the same at the reporting dates as there were no common stock equivalents outstanding on December 31, 2024, or December 31, 2023.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a "smaller reporting company" as defined by Item 10 of Regulation S-K, we are not required to provide the information required by this Item.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and the board of directors of Free Flow USA Inc & Subsidiaries
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheet of Free Flow USA Inc & Subsidiaries (the "Company") as of December 31, 2024 and 2023, the related consolidated statements of operations and comprehensive income (loss), shareholders’ equity, and cash flow for the year ended December 31, 2024 and 2023, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flow for the year ended December 31, 2024 and 2023, in conformity with accounting principles generally accepted in the United States.
Substantial Doubt about the Company’s Ability to Continue as a Going Concern
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company’s significant operating losses raise substantial doubt about its ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit. 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 consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated 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 consolidated 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 consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
Critical audit matters are matters arising from the current period audit of the consolidated financial statements that were communicated or are required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved especially challenging, subjective, or complex judgments.
We determined that there are no critical audit matters.
/s/ BCRG Group
We have served as the Company’s auditor since 2024.
April 14, 2025
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