For purposes of this report, unless otherwise indicated or the context otherwise
requires, all references herein to "Concrete Leveling Systems", "CLEV", "the
Company, "we", "us", and "our", refer to Concrete Leveling Systems, Inc., a
Nevada corporation.
Cautionary Statement Concerning Forward-Looking Statements
This report contains "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. These statements are subject
to risks and uncertainties and are based on the beliefs and assumptions of
management and information currently available to management. The use of words
such as "believes", "expects", "anticipates", "intends", "plans", "estimates",
"should", "likely" or similar expressions, indicates a forward-looking
statement.
The identification in this report of factors that may affect our future
performance and the accuracy of forward-looking statements is meant to be
illustrative and by no means exhaustive. All forward-looking statements should
be evaluated with the understanding of their inherent uncertainty.
Management has concluded that the COVID-19 outbreak in 2020 may have a
significant impact on business in general, but the potential impact on the
Company is not currently measurable. Due to the level of risk this virus may
have on the global economy, it is at least reasonably possible that it could
have an impact on the operations of the Company in the near term that could
materially impact the Company's financials. Management has not been able to
measure the potential financial impact on the Company but will review commercial
and federal financing options should the need arise.
Factors that could cause our actual results to differ materially from those
expressed or implied by forward-looking statements include, but are not limited
to:
· Trends affecting the Company's financial condition, results of operations,
or future prospects;
· The Company's business and growth strategies;
· The Company's financing plans and forecasts;
· The factors that we expect to contribute to our success and the Company's
ability to be successful in the future;
· The Company's business model and strategy for realizing positive results
as sales increase;
· Competition, including the Company's ability to respond to such
competition and its expectations regarding continued competition in the
market in which the Company competes;
· Expenses;
· The Company's ability to meet its projected operating expenditures and the
costs associated with development of new projects;
· The Company's ability to pay dividends or to pay any specific rate of
dividends, if declared;
· The impact of new accounting pronouncements on its financial statements;
· That the Company's cash flows from operating activities will be sufficient
to meet its projected operating expenditures for the next twelve months;
· The Company's market risk exposure and efforts to minimize risk;
· Development opportunities and its ability to successfully take advantage
of such opportunities;
· Regulations, including anticipated taxes, tax credits or tax refunds
expected;
· The outcome of various tax audits and assessments, including appeals
thereof, timing of resolution of such audits, the Company's estimates as
to the amount of taxes that will ultimately be owed and the impact of
these audits on the Company's financial statements;
· The Company's overall outlook including all statements under Management's
Discussion and Analysis or Plan of Operation;
· That estimates and assumptions made in the preparation of financial
statements in conformity with US GAAP may differ from actual results; and
· Expectations, plans, beliefs, hopes or intentions regarding the future.
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The following discussion and analysis was prepared to supplement information
contained in the accompanying financial statements and is intended to provide
certain details regarding the Company's financial condition as of April 30,
2021, and the results of operations for the three and nine months ended April
30, 2021. It should be read in conjunction with the unaudited financial
statements and notes thereto contained in this report as well as the audited
financial statements included in the Company's Annual Report on Form 10-K for
the fiscal years ended July 31, 2020 and 2019.
Overview
Concrete Leveling Services, Inc. ("we", "us", "our" or the "Company") was
incorporated on August 28, 2007 in the State of Nevada. The Company's principal
offices are located at 5046 East Boulevard Northwest, Canton, Ohio 44718. In
Ohio, the Company does business under the trade name of CLS Fabricating, Inc.
CLS has never declared bankruptcy, it has never been in receivership, and it has
never been involved in any legal action or proceedings.
On March 24, 2017, the Company entered into an agreement with Jericho
Associates, Inc. ("Jericho"), a start-up company which plans to operate in the
gaming, hospitality and entertainment industries. The Company issued Jericho
7,151,416 shares of the Company's common stock, subject to a performance
requirement, which provides that by March 1, 2018, if the management of Jericho
does not identify at least one entity or business opportunity for acquisition,
in order to supplement the Company's current business operations, the shares
issued as part of the agreement shall be returned to the Company. In July 2017,
an additional 481,000 shares were issued to shareholders of Jericho under the
same contingencies as the original shares.
On February 25, 2018, Jericho identified the acquisition of 50% interests in two
LLCs (the "LLCs"). The LLCs have a Term Sheet agreement to develop a casino and
hotel resort, and provide certain gaming equipment on a shared profit basis. The
project is in the process of regulatory review, finalization of closing
documents, and completion of financing. Notwithstanding the identification of
the business opportunity, the shares issued to Jericho remain contingent upon
the regulatory review, the finalization of closing documentation, and the
completion of financing arrangements for the project. On September 22, 2017, the
Company and Jericho mutually agreed to extend the performance requirement until
December 24, 2017. On November 9, 2017, the Company and Jericho mutually agreed
to extend the performance requirement to March 1, 2018.
Also, upon the regulatory review, the finalization of closing documentation, and
the completion of financing arrangements for the project, the Company's
President will cancel all shares of common stock held (879,167 shares as of
January 31, 2021), the Company's Chief Executive Officer will cancel all but
550,000 shares of common stock held (2,951,667 shares as of January 31, 2021),
subject to an 18-month non-dilution right in order to maintain an ownership
percentage of 4.99%, and the Company's Secretary will cancel all but 45,000
shares of common stock held (185,000 shares as of January 31, 2021). Prior to
the August 13, 2018 amendment to the agreement with Jericho, the Chief Executive
Officer would cancel all but 523,000 shares of her common stock, subject to an
18-month non-dilution right in order to maintain an ownership percentage of
4.99%. The amendment provided that the Chief Executive Officer would retain an
additional 27,000 shares of common stock and the non-dilution right was
eliminated.
On August 21, 2018, Jericho announced that it had entered into an agreement to
acquire all of the issued and outstanding shares of VegasWinners, Inc. a newly
formed Nevada corporation (the "Jericho/VegasWinners Transaction"). Vegas
Winners, Inc. was incorporated in the State of Nevada to engage in the business
of providing sports gaming information, analysis, advice and predictions. The
acquisition by Jericho is contingent on several factors, including obtaining a
minimum of $1,100,000 in funding by Jericho to provide to VegasWinners, Inc. and
certain VegasWinners, Inc. performance criteria. On October 18, 2018, Jericho
advanced $232,500 of the $300,000 interim loan to VegasWinners, Inc. There was
no Closing of the Jericho/Vegas Winners Transaction as certain conditions to the
Closing were not met.
On December 6, 2019, Jericho and Vegas Winners terminated the
Jericho/VegasWinners Transaction. On October 31, 2020, Jericho, VegasWinners,
and a creditor of Jericho agreed that: (i) VegasWinners' indebtedness to Jericho
would be canceled; (ii) Jericho's indebtedness to the Jericho creditor would be
canceled; and (iii) Jericho would cause 10,000 shares of issued and outstanding
Company shares to be transferred to the creditor. In addition, Jericho exchanged
General Releases with VegasWinners and the Jericho creditor. Jericho has
arranged to assign 10,000 shares of the Company to transfer to the Jericho
creditor.
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Principal Services
If a transaction with Jericho finalizes, the Company will operate two business
divisions, which will be operated simultaneously and consist of the following:
The concrete leveling division of the business will fabricate and market a
concrete leveling service unit utilized in the concrete leveling industry. This
unit secures to the back of a truck and consists of a mixing device to mix lime
with water and a pumping device capable of pumping the mixture under pressure
into pre-drilled holes in order to raise the level of any flat concrete surface.
The gaming and hospitality division of the business will focus on casino gaming,
hospitality, entertainment and leisure time industries, and will pursue
opportunities in the tribal and commercial casino gaming industries, both in
California and Nevada. The Company will also operate in the casino gaming
technology industry, and is seeking opportunities to partner, joint venture, or
acquire companies developing casino games that combine traditional casino games
with the challenge of video games and the playability of social games, meaning
games that pit the player's skill against the skill of another player as opposed
to the casino itself.
For the Three and Nine months Ended April 30, 2021 Compared to the Three and
Nine months Ended April 30, 2020
The Company generated $1,790 in revenue for the three months ended April 30,
2021, which compares to revenue of $300 for the three months ended April 30,
2020. Our revenues increased during the three months ended April 30, 2021, due
to additional parts sales.
The Company generated $2,265 in revenue for the nine months ended April 30,
2021, which compares to revenue of $575 for the nine months ended April 30,
2020. Our revenues increased during the nine months ended April 30, 2021 due to
additional parts sales.
Cost of sales for the three months ended April 30, 2021 was $995, which compares
to cost of sales of $71 for the three months ended April 30, 2020. Our costs of
sales increased during the three months ended April 30, 2021 due to additional
parts sales.
Cost of sales for the nine months ended April 30, 2021 was $1,169, which
compares to cost of sales of $171 for the nine months ended April 30, 2020. Our
revenues increased during the nine months ended April 30, 2021, which resulted
in a similar increase in our cost of sales during the period.
Operating expenses, which consisted of selling, general, administrative
expenses, and legal and professional fees for the three months ended April 30,
2021, were $5,870. This compares with operating expenses for the three months
ended April 30, 2020 of $8,327. Our operating expenses decreased during the
three months ended April 30, 2021 primarily due to an decrease in our
administrative expenses.
Operating expenses, which consisted of selling, general, administrative
expenses, and legal and professional fees for the nine months ended April 30,
2021, were $34,846. This compares with operating expenses for the nine months
ended April 30, 2020 of $33,693. Our operating expenses increased during the
nine months ended April 30, 2021 primarily due to an increase in our legal and
professional fees.
As a result of the foregoing, we had a net loss of $7,545 for the three months
ended April 30, 2021. This compares with a net loss of $8,353 for the three
months ended April 30, 2020.
As a result of the foregoing, we had a net loss of $37,431 for the nine months
ended April 30, 2021. This compares with a net loss of $34,080 for the nine
months ended April 30, 2020.
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In its audited financial statements as of July 31, 2020, the Company was issued
an opinion by its auditors that raised substantial doubt about the ability to
continue as a going concern based on the Company's current financial position.
Our ability to achieve and maintain profitability and positive cash flow is
dependent upon our ability to successfully develop and market our products and
our ability to generate revenues.
Liquidity and Capital Resources
As of April 30, 2021, we had cash of $691. As of July 31, 2020, we had cash of
$1,049.
We believe that with our existing cash flows, we do not have sufficient cash to
meet our operating requirements for the next twelve months. We believe that with
the addition of our gaming and hospitality business, we will begin to generate
increased revenue over the 2022 fiscal year. However, if our revenue is not
sufficient to allow us to meet our cash requirements during the next twelve
months, the Company may need to raise additional funds through the sale of debt
or equity securities. We cannot guarantee that we will be successful in
generating sufficient revenues or other funds in the future to cover these
operating costs. Failure to generate sufficient revenues or additional financing
when needed could cause us to go out of business.
Net cash used in operating activities for the nine months ended April 30, 2021
was $35,316. This compares to net cash used in operating activities of $33,961
for the nine months ended April 30, 2020. We experienced a larger operating loss
during the nine months ended April 30, 2021.
Cash flows provided by financing activities were $34,958 for the nine months
ended April 30, 2021 which compares to cash flows provided by financing
activities of $34,298 for the nine months ended April 30, 2020. The change in
cash flows provided by financing activities is due to proceeds from notes
payable to stockholders in conjunction with a decrease in advances from
stockholders during the nine months ended April 30, 2021. We anticipate
significant increases in cash flows provided by financing activities during the
next 12 months, as we intend to raise capital through either debt or equity
securities to fund our business.
As of April 30, 2021, our total assets were $26,795 and our total liabilities
were $409,988. As of July 31, 2020, our total assets were $26,937 and our total
liabilities were $372,699.
Critical Accounting Policies and Estimates
We believe that the following critical policies affect our more significant
judgments and estimates used in preparation of our financial statements.
We disclose those accounting policies that we consider to be significant in
determining the amounts to be utilized for communicating our financial position,
results of operations and cash flows in the first note to our financial
statements included elsewhere herein. Our discussion and analysis of our
financial condition and results of operations are based on our financial
statements, which have been prepared in accordance with accounting principles
generally accepted in the United States. The preparation of financial statements
in conformity with these principles requires management to make estimates and
assumptions that affect amounts reported in the financial statements and
accompanying notes. Actual results are likely to differ from these estimates,
but management does not believe such differences will materially affect our
financial position or results of operations.
We believe that the following accounting policies are the most critical because
they have the greatest impact on the presentation of our financial condition and
results of operations.
Use of Estimates
The preparation of the financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the period. Actual results could differ from those estimates.
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Going Concern
The Company was formed on August 28, 2007 and was in the development stage
through July 31, 2009. The year ended July 31, 2010 was the first year during
which it was considered an operating company. The Company has sustained
substantial operating losses since its inception. In addition, the Company has
used substantial amounts of working capital in its operations. Further, at April
30, 2021, our liabilities exceed our assets by $383,193.
Success will be dependent upon management's ability to obtain future financing
and liquidity, and success of its future operations. These factors raise
substantial doubt about the Company's ability to continue as a going concern.
These financial statements do not include any adjustments that might result from
the outcome of this uncertainty.
Off-Balance Sheet Arrangements
The Company does not have any off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on its financial condition,
changes in financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources that is material to
investors.
Foreign Currency Transactions
None.
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CONCRETE LEVELING SYSTEMS, INC. 
