UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

FOR THE QUARTERLY PERIOD ENDED MAY 31, 2021

OR

 

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

 

For the transition period from to

COMMISSION FILE NUMBER: 000-55806

  

Photozou Holdings, Inc.

(Exact name of registrant as specified in its charter)

 

  Delaware 90-1260322  
 

(State or other jurisdiction

of incorporation or organization)

(I.R.S. Employer Identification No.)  
       
 

4-30-4F, Yotsuya Shinjuku-ku,

Tokyo, Japan

160-0004  
   (Address of Principal Executive Offices) (Zip Code)   

 

  Issuer's telephone number: +81-3-6369-1589

Fax number: +81-3-6369-3727 

Email: info@photozou.co.jp

 

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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. [X] Yes [ ] 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 (Section 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] Yes [ ] 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” and “smaller reporting 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 is a shell company (as defined in Rule 12b-2 of the Exchange Act).

 

 [  ] Yes [X] No

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

 

As of July 20, 2021, there were 8,000,000 shares of common stock and no shares of preferred stock issued and outstanding.

 

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INDEX

 

      Page 
PART I - FINANCIAL INFORMATION    
     
ITEM 1 FINANCIAL STATEMENTS - UNAUDITED   F1
Consolidated Balance Sheets - UNAUDITED   F2
CONSOLIDATED Statements of Operations AND COMPREHENSIVE LOSS- UNAUDITED    F3
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT - UNAUDITED    F4
CONSOLIDATED Statements of Cash Flows - unaudited   F5
Notes to CONSOLIDATED Financial Statements - unaudited   F6
     
ITEM 2 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS   3
ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK   3
ITEM 4 CONTROLS AND PROCEDURES   4
 
PART II - OTHER INFORMATION    
 
ITEM 1 LEGAL PROCEEDINGS   5
ITEM 1A RISK FACTORS    
ITEM 2 UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS   5
ITEM 3 DEFAULTS UPON SENIOR SECURITIES   5
ITEM 4 MINE SAFETY DISCLOSURES   5
ITEM 5 OTHER INFORMATION   5
ITEM 6 EXHIBITS   5
   
SIGNATURES   6

 

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Table of Contents

PART I - FINANCIAL INFORMATION

  

ITEM 1 FINANCIAL STATEMENTS

  

PHOTOZOU HOLDINGS, Inc.

FINANCIAL STATEMENTS

(UNAUDITED) 

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

 

    Pages
     
Consolidated Balance Sheets - Unaudited   F2
     
Consolidated Statements of Operations and Comprehensive Loss - Unaudited   F3
     
Consolidated Statement of Change in Stockholders’ Deficit – Unaudited   F4
     
Consolidated Statements of Cash Flows - Unaudited   F5
     
Consolidated Notes to Financial Statements - Unaudited   F6 

 

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Table of Contents

 

PHOTOZOU HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
           
      May 31, 2021   November 30, 2020
           
ASSETS 　 　 　 　
CURRENT ASSETS        
　 Cash and cash equivalents $ 95,722 $ 244,704
  Accounts receivable   17,883   2,592
　 Prepaid and other current assets 　 13,624 　 2,675
  Inventories   128,492   35,484
　 　 　 　 　 　
TOTAL CURRENT ASSETS   255,721   285,455
　 　 　 　 　 　
NON-CURRENT ASSETS        
　 Software, net   7,190 　 7,672
  Advance payments    5,466    1,918
　 　 　 　 　 　
TOTAL ASSETS   268,377   295,045
　 　 　 　 　 　
LIABILITIES AND STOCKHOLDERS’ DEFICIT        
CURRENT LIABILITIES 　 　 　 　
  Accrued expense $ 5,522 $ 9,022
  Due to related party   560,492   503,404
  Deferred revenue 　 2,187 　 2,302
  Long-term loans payable, current portion   12,901   13,580
           
TOTAL CURRENT LIABILITIES 　 581,102 　 528,308
           
NON-CURRENT LIABILITIES: 　 　 　 　
  Long-term loans payable, non-current portion $ 40,853 $ 49,794
　 　 　 　 　 　
TOTAL LIABILITIES   619,955   578,102
　 　 　 　 　 　
STOCKHOLDERS’ DEFICIT        
　 Preferred stock ($.0001 par value, 20,000,000 shares authorized; 　 　 　 　
　 none issued and outstanding as of May 31, 2021 and November 30, 2020) 　 - 　 -
  Common stock ($.0001 par value, 500,000,000 shares authorized,        
  8,000,000 shares issued and outstanding        
  as of May 31, 2021 and November 30, 2020)   800   800
　 Additional paid in capital 　 50,030 　 50,030
  Accumulated deficit    (405,539)    (320,279)
　 Accumulated other comprehensive income (loss) 　  1,131 　  (13,608)
           
TOTAL STOCKHOLDERS’ DEFICIT 　  (353,578) 　  (283,057)
           
TOTAL LIABILITIES & STOCKHOLDERS’ DEFICIT $ 268,377 $ 295,045
           
The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

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PHOTOZOU HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(UNAUDITED)
                   
      Three Months Ended   Three Months Ended   Six Months Ended   Six Month Ended
      May 31, 2021   May 31, 2020   May 31, 2021   May 31, 2020
      　   　        
Revenues 　 　 　 　 　      
  Revenue from cameras sold $ 51,059 $ 61,999 $ 51,409 $  120,342
　 Service revenue 　 9,854 　 3,952 　 17,923   6,563
                   
Total revenues 　 60,913 　 65,951 　  69,332    126,905
                   
Cost of revenues 　 27,848 　 48,595 　  28,362    101,602
                   
Gross profit 　 30,065 　 17,356 　  40,970    25,303
                   
OPERATING EXPENSES 　 　 　 　 　      
  General and Administrative Expenses $ 109,768 $ 35,944 $  127,534 $  73,154
　 　 　 　 　 　 　      
TOTAL OPERATING EXPENSES $ 109,768 $ 35,944 $  127,534 $  73,154
　 　 　 　 　 　        
OTHER INCOME $ 1,440 $ - $  1,440 $  67
　 　 　 　 　 　        -
OTHER EXPENSES $ 66 $ - $  136 $ -
　 　 　 　 　 　        
NET LOSS $  (75,329) $  (18,588) $  (85,260) $  (47,784)
　 　 　 　 　 　        
OTHER COMPREHENSIVE INCOME (LOSS)                
　 Foreign currency translation adjustment $  9,387 $  (518) $  14,739 $  (3,586)
                   
TOTAL COMPREHENSIVE LOSS $  (65,942) $  (19,106) $  (70,521) $  (51,370)
                   
BASIC AND DILUTED NET LOSS PER COMMON STOCK $  (0.01) $  (0.00) $  (0.01) $  (0.01)
                   
WEIGHTED AVERAGE NUMBER OF COMMON STOCK OUTSTANDING, BASIC AND DILUTED 　 8,000,000 　 8,000,000 　 8,000,000 　 8,000,000
                   

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

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PHOTOZOU HOLDINGS, INC.
STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT
(UNAUDITED)
                  ACCUMULATED    
          ADDITIONAL       OTHER    
  COMMON STOCK   PAID IN   ACCUMULATED   COMPREHENSIVE    
  NUMBER 　 AMOUNT 　 CAPITAL 　 DEFICIT 　 INCOME (LOSS) 　 TOTALS
　 　 　 　 　 　 　 　 　 　 　 　
Balance November 30, 2019 8,000,000 $ 800 $ 50,030 $  (248,489) $ (1,534) $  (199,193)
                       
Net loss - 　 - 　 - 　  (29,196) 　 - 　  (29,196)
Foreign currency translation -   -   -   -    (3,068)    (3,068)
　 　 　 　 　 　 　 　 　 　 　 　
Balance February 29, 2020 8,000,000   800   50,030    (277,685)   (4,602)    (231,457)
                       
Net loss -   -   -   (18,588)   -   (18,588)
Foreign currency translation -   -   -   -   (518)   (518)
                       
Balance May 31, 2020 8,000,000 $ 800 $ 50,030 $ (296,273) $ (5,120) $ (250,563)
　 　 　 　 　 　 　 　 　 　 　 　
Balance November 30, 2020 8,000,000 $ 800 $ 50,030 $  (320,279) $  (13,608) $  (283,057)
Net loss - 　 - 　 - 　  (9,931) 　 - 　  (9,931)
Foreign currency translation -   -   -   -   5,352   5,352
　 　 　 　 　 　 　 　 　 　 　 　
Balance February 28, 2021 8,000,000   800   50,030    (330,210)   (8,256)    (287,636)
                       
Net loss -   -   -   (75,329)   -   (75,329)
Foreign currency translation -   -   -   -   9,387   9,387
                       
Balance May 31, 2021 8,000,000 $ 800 $ 50,030 $ (405,539) $ 1,131 $ (353,578)
　 　 　 　 　 　 　 　 　 　 　

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

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PHOTOZOU HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
           
      Six Months Ended   Six Months Ended
      May 31, 2021   May 31, 2020
           
CASH FLOWS FROM OPERATING ACTIVITIES 　 　 　 　
  Net loss $  (85,260) $  (47,784)
　 Adjustments to reconcile net loss to net cash: 　 　 　 　
  Depreciation and amortization expenses   101   232
　 Changes in operating assets and liabilities: 　 　 　 　
  Accounts receivable   (15,868)   9,706
　 Prepaid and other current assets 　  (11,386) 　  (15,557)
  Inventories   (97,528)    (23,452)
　 Accrued expense 　 60,157 　 46,222
  Net cash used in operating activities    (149,784)    (30,633)
　 　 　 　 　 　
CASH FLOWS FROM INVESTING ACTIVITIES        
    Acquisition of intangible assets $ (3,750) $ -
    Net cash used in investing activities   (3,750)   -
         
CASH FLOWS FROM FINANCING ACTIVITIES        
　 Proceeds from due to related party $ 19,467 $ 82,947
　 Repayments of long-term loan 　 (6,637) 　 -
  Net cash provided by financing activities   12,830   82,947
　 　 　 　 　 　
Net effect of exchange rate changes on cash $ (8,278) $  774
　 　 　 　 　 　
Net Change in Cash and Cash equivalents $ (148,982) $ 53,088
Cash and cash equivalents - beginning of period 　 244,704 　 28,398
Cash and cash equivalents - end of period   95,722   81,486
　 　 　 　 　 　
NON-CASH TRANSACTIONS        
  Expense paid by related party on behalf of the Company　 $ 63,294 $ 46,305
　 　 　 　 　 　
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION        
Interest paid $ 136 $ -
Income taxes paid $ - $ -
           
The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

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PHOTOZOU HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MAY 31, 2021

(UNAUDITED) 

 

NOTE 1 - ORGANIZATION, DESCRIPTION OF BUSINESS

 

Photozou Holdings, Inc., (the “Company”) was incorporated under the laws of the State of Delaware on September 29, 2014.

 

On May 31, 2018, the Company entered into and consummated a Stock Purchase Agreement (the “Stock Purchase Agreement”) with Koichi Ishizuka, our President, CEO, and Director. At the closing of the Stock Purchase Agreement, Koichi Ishizuka transferred to the Company, 10,000 shares of common stock of Photozou Koukoku Co., Ltd., a Japan corporation (“Photozou Koukoku”), which represented all of its issued and outstanding shares, in consideration of 1,000,000 JPY ($9,190 USD as of the exchange rate August 31, 2018). The Company has since gained a 100% interest in the issued and outstanding shares of Photozou Koukoku’s common stock and Photozou Koukoku is now a wholly owned subsidiary of the Company. The Company and Photozou Koukoku were under common control at the time of the acquisition.

 

Photozou Koukoku was incorporated under the laws of Japan on March 14, 2017. Currently, Photozou Koukoku is headquartered in Tokyo, Japan. The Company offers advertising services and sells used cameras.

 

Our principal executive offices are located at 4-30-4F, Yotsuya, Shinjuku-ku, Tokyo, 160-0004, Japan.

 

The Company has elected November 30th as its fiscal year end.

 

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

 

PRINCIPLES OF CONSOLIDATION 

 

The consolidated financial statements include the financial statements of its wholly-owned subsidiary, Photozou Koukoku. Intercompany transactions are eliminated.

 

BASIS OF PRESENTATION

 

The accompanying unaudited consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission, or the SEC, including the instructions to Form 10-Q and Regulation S-X. In the opinion of the management of the Company, all adjustments, which are of a normal recurring nature, necessary for a fair statement of the results for the nine months period, have been made. Results for the interim periods presented are not necessarily indicative of the results that might be expected for the entire fiscal year. When used in these notes, the terms “Company”, “we”, “us” or “our” mean the Company. Certain information and note disclosure normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America has been omitted from these statements pursuant to such accounting principles and, accordingly, they do not include all the information and notes necessary for comprehensive financial statements and should be read in conjunction with our consolidated financial statements for the year ended November 30, 2020, included in our Form 10-K.

 

USE OF ESTIMATES

 

The presentation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. The most significant estimates and assumptions made by management include going concern, allowance for doubtful accounts, valuation allowance on deferred income tax, inventory obsolescence and sales allowance. Since early 2020, the global outbreak of the coronavirus disease 2019 (“COVID-19”) has significantly affected economy in Japan, where the Company mainly operates its business. The extent to which the COVID-19 pandemic may directly or indirectly impact our business, financial condition, and results of operations is highly uncertain and subject to change. We considered the potential impact of the COVID-19 pandemic on our estimates and assumptions and there was not a material impact to our consolidated financial statements as of May 31, 2021 and for the three months then ended. Actual results in the future could vary from the amounts derived from management's estimates and assumptions.

 

RELATED PARTY TRANSACTION

 

Transactions involving related parties cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations can be substantiated.

 

FOREIGN CURRENCY TRANSLATION

 

The Company maintains its books and record in its local currency, Japanese YEN (“JPY”), which is a functional currency as being the primary currency of the economic environment in which its operation is conducted. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the statements of operations. 

 

The reporting currency of the Company is the United States Dollars (“US$”) and the accompanying consolidated financial statements have been expressed in US$. In accordance with ASC Topic 830-30, “Translation of Financial Statement”, assets and liabilities of the Company whose functional currency is not US$ are translated into US$, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. Shareholders’ equity is translated at historical exchange rate at the time of transaction.  The gains and losses resulting from translation of financial statements are recorded as a separate component of accumulated other comprehensive income within the statements of shareholders’ equity.

 

Translation of amounts from the local currency of the Company into US$1 has been made at the following exchange rates:

 

  May 31, 2021   May 31, 2020
Current JPY: US$1 exchange rate 109.76   107.77
Average JPY: US$1 exchange rate 106.67   108.50

 

 

COMPREHENSIVE INCOME OR LOSS

 

ASC Topic 220, “Comprehensive Income”, establishes standards for reporting and display of comprehensive income or loss, its components and accumulated balances. Comprehensive income or loss as defined includes all changes in equity during a period from non-owner sources. Accumulated comprehensive income, as presented in the accompanying consolidated statements of shareholders’ equity consists of changes in unrealized gains and losses on foreign currency translation.

 

REVENUE RECOGNITION AND DEFERRED REVENUE  

 

Starting December 1, 2018, the Company adopted ASC 606 - Revenue from contracts with Customers. To determine revenue recognition for agreements within the scope of ASC 606, the Company performs the following five steps: (1) identify the contract with a customer; (2) identify the performance obligations 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.

 

Revenue for used cameras is recognized when the cameras are delivered to the customer. Service revenue is recognized over time when the services are provided to the customers.

 

Deferred revenue is recorded when consideration is received from a customer prior to the goods or services were delivered. There was $2,187 and $2,302 of deferred revenue as of May 31, 2021 and November 30, 2020, respectively. During the six months ended May 31, 2021 the Company recognized all of deferred revenue in the opening balance.

 

Disaggregated revenue of the Company is as follows:

 

    For the six months Percentage of For the six months Percentage of
    ended total revenues Ended total revenues
  　 May 31, 2021 　 May 31, 2020 　
Revenue from cameras sold $  51,409 74.0%  120,342 94.8%
Service revenue    17,923 26.0%  6,563 5.2%
Total   69,332 100% 126,905 100%

  

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NOTE 3 - GOING CONCERN

 

The accompanying consolidated financial statements are prepared on a basis of accounting assuming that the Company is a going concern that contemplates realization of assets and satisfaction of liabilities in the normal course of business. The Company is in the early stage of operations and has recurring net losses and negative cash flows from operating activities. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The Company will offer noncash consideration and seek equity lines as a means of financing its operations. If the Company is unable to obtain revenue-producing contracts or financing or if the revenue or financing it does obtain is insufficient to cover any operating losses it may incur, it may substantially curtail or terminate its operations or seek other business opportunities through strategic alliances, acquisitions or other arrangements that may dilute the interests of existing stockholders. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

NOTE 4 - RELATED-PARTY TRANSACTIONS

 

For the six months ended May 31, 2021, Photozou Co., Ltd., a company controlled by Koichi Ishizuka, CEO, advanced to the Company $19,467 and paid expense on behalf of the Company in an amount of $63,294. The total due to related party as of May 31, 2021 and November 30, 2020 were $560,492 and $503,404 respectively, and are unsecured, due on demand and non-interest bearing.

 

For the six months ended May 31, 2020, Photozou Co., Ltd., a company controlled by Koichi Ishizuka, CEO, advanced to the Company $82,947 and paid expense on behalf of the Company in an amount of $46,305.

 

For the six months ended May 31, 2021 and May 31, 2020, the Company rented office space and storage space from the Company’s officer free of charge.

 

NOTE 5 - SHAREHOLDER EQUITY

 

Preferred Stock 

The authorized preferred stock of the Company consists of 20,000,000 shares with a par value of $0.0001. The Company has not issued any shares for the six months ended May 31, 2021 and May 31, 2020.

 

Common Stock

 

The authorized common stock of the Company consists of 500,000,000 shares with a par value of $0.0001. There were 8,000,000 shares of common stock issued and outstanding as of May 31, 2021 and November 30, 2020.

 

Pertinent Rights and Privileges

Holders of shares of common stock are entitled to one vote for each share held to be used at all stockholders’ meetings and for all purposes including the election of directors. Common stock does not have cumulative voting rights. Nor does it have preemptive or preferential rights to acquire or subscribe for any unissued shares of any class of stock.

 

NOTE 6 - CONCENTRATION  

 

Financial instruments, which potentially subject the Company to concentrations of credit risk, consist primarily of purchases of inventory, accounts receivable and revenue.

 

Concentration of Purchases

 

Net purchases from suppliers accounting for 10% or more of total purchases are as follows:

 

For the six months ended May 31, 2021, 88% of inventories of cameras were purchased from one supplier whose name was e-Sakura Market. For the six months ended May 31, 2020, 100% of the inventories of cameras were purchased from one supplier whose name was Digital Reuse. For the six months ended May 31, 2021 and May 31, 2020, 100% of the purchase of inventory was handled by Mr. Takaharu Ogami whom the Company has a service agreement with to sell and buy used cameras on behalf of the Company.

 

Concentration of Revenues

 

Net revenues from customers accounting for 10% or more of total revenues are as follows:

 

For the six months ended May 31, 2021, 83% and 15% of the revenue from the sale of cameras was generated through Amazon USA and Yahoo respecitvely. For the six months ended May 31, 2020, 48.2% of the revenue from the sale of cameras was generated through Amazon.

 

For the six months ended May 31, 2021 and May 31, 2020, 100% of the revenue from the sale of cameras was handled by Takaharu Ogami who the Company has a service agreement with to sell and buy used cameras on behalf of the Company.

 

For the six months ended May 31, 2021, 100% of the service revenue was generated from five customers. For the six months ended May 31, 2020, 100% of the service revenue was generated four customers.

 

NOTE 7 – COMMITMENTS  

 

On May 1, 2017, the Company entered into an agreement with Mr. Takahara Ogami, whereas he is to act as an independent contractor to Photozou Koukoku. The services he is to provide include, but are not limited to, handling the operations of Photozou Koukoku's used camera retail business through purchasing, selling and delivery of cameras by Mr. Ogami. He is compensated JPY 400,000 (approximately $3,600) a month. Unless either party expresses, in writing, their intention to terminate the agreement then it shall run another three months automatically.

 

Mr. Ogami is responsible for the sale and shipping of the cameras at the expense of Photozou Koukoku. Photozou Koukoku is the legal owner of the camera(s) until the point of sale to the purchaser(s).

 

NOTE 8 – LONG-TERM LOAN

 

On July 2, 2020, the Company borrowed JPY7,000,000 ($65,286) from Japan Finance Corporation ("JFC"), a wholly owned public entity by the Japanese government as the COVID-19 subsidy. The loan is unsecured, repaid monthly, due in five years, and with an annual interest rate of 0.46% within three years and 1.36% thereafter. Ishizuka Koichi is the guarantor of the loan.

 

For the six months ended May 31, 2021, the Company repaid $6,637 to JFC. As of May 31, 2021, the Company had the current portion of $12,901 and non-current portion of $40,853.

 

NOTE 9 - SUBSEQUENT EVENTS

 

From June 1, 2021 through the current date, the Company borrowed $1,490 from Photozou Co., Ltd., a Company controlled by Koichi Ishizuka, CEO. This debt is non-interest bearing, unsecured, and due on demand. 

 

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ITEM 2 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

Forward-Looking Statements

 

Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements.”

 

These forward-looking statements generally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions.

 

Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on our operations and future prospects on a consolidated basis include, but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements.

 

Company Overview

 

Corporate History

 

Photozou Holdings, Inc., ("Photozou Holdings," or the "Company"), was incorporated in the State of Delaware on September 29, 2014, with the purposes to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware (the "DGCL").

 

The Company was formed by Thomas DeNunzio, our former sole officer and director, for the purpose of creating a corporation which could be used to consummate a merger or acquisition.

 

On January 13, 2017, Thomas DeNunzio sold 8,000,000 shares of our restricted common stock, which represented all of our issued and outstanding shares at the time, to Photozou Co., Ltd., a Japan corporation.

 

The shares were sold for an aggregate purchase price of $100,000. Photozou Co., Ltd. is controlled by Koichi Ishizuka, a Japanese citizen. The aforementioned shares were sold pursuant to Regulation S of the Securities Act of 1933, as amended ("Regulation S"). No directed selling efforts were made in the United States.

 

On January 13, 2017, Mr. Thomas DeNunzio resigned as our Chief Executive Officer, Chief Financial Officer, President, Director, Secretary, and Treasurer. 

 

On January 13, 2017, Mr. Koichi Ishizuka was appointed as Chief Executive Officer, Chief Financial Officer, President, Director, Secretary, and Treasurer.

 

On January 18, 2017, we changed our name from Exquisite Acquisition, Inc. to Photozou Holdings, Inc. 

 

Pursuant to our Registration Statement deemed effective on June 20, 2017, the Company sold a total of 3,037,300 shares of our common stock. The proceeds totaled $75,933. These shares were sold pursuant to Rule 419.

 

On May 8, 2018, the Company conducted a stock cancellation of the above 3,037,300 shares and the total funds of $75,933 were returned to investors. The cancellation of the shares and return of funds was due to the fact that we did not make an acquisition in the allotted time granted by Rule 419.

 

On May 31, 2018, the Company entered into and consummated a Stock Purchase Agreement with Koichi Ishizuka, our President, CEO, and Director. At the closing of the Stock Purchase Agreement, Koichi Ishizuka transferred to the Company, 10,000 shares of common stock of Photozou Koukoku Co., Ltd., a Japan corporation (“Photozou Koukoku”), which represented all of its issued and outstanding shares, in consideration of 1,000,000 JPY ($9,190 USD as of the exchange rate May 31, 2018). The Company has since gained a 100% interest in the issued and outstanding shares of Photozou Koukoku’s common stock and Photozou Koukoku is now a wholly owned subsidiary of the Company. The Company and Photozou Koukoku were under common control at the time of the acquisition.

 

Photozou Koukoku Co., Ltd. was incorporated under the laws of Japan on March 14, 2017. Currently, Photozou Koukoku is headquartered in Tokyo, Japan. The Company’s primary business is focused on online advertising and the sale of used cameras.

 

On September 21, 2020 Photozou Co., Ltd our principal controlling shareholder, entered into a Stock Purchase Agreement with Koichi Ishizuka, our Sole Officer and Director. Pursuant to the closing of the Agreement on September 21, 2020, Photozou Co., Ltd. transferred to Koichi Ishizuka 4,553,200 shares of our common stock, which represents approximately 56.9% of our issued and outstanding common stock, in consideration of JPY 6,657,917 (approximately $60,500). Following the closing of the share purchase transaction, Koichi Ishizuka owns approximately 66.7% interest in the issued and outstanding shares of our common stock. Photozou Co., Ltd. was and remains owned and controlled entirely by Koichi Ishizuka, we do not believe that this transaction is deemed to be a change in control of the Company.

 

Liquidity and Capital Resources 

 

Our cash balance is $95,722 as of May 31, 2021. Our cash balance is not sufficient to fund our limited levels of operations for any period of time. We have been utilizing and may utilize funds from Koichi Ishizuka, our sole Officer and Director who has informally agreed to advance funds to allow us to pay for filing fees, and professional fees. Koichi Ishizuka, however, has no formal commitment, arrangement or legal obligation to advance or loan funds to the company. 

 

Revenues

 

For the six months ended May 31, 2021 we generated total revenues in the amount of $69,332 as opposed to $126,905 for the six months ended May 31, 2020. From September 2020 to February 2021, fewer used cameras were sold in the Japanese market in order to prepare for Amazon USA. This is the main reason for the decline in revenue.

 

Net Loss

 

We recorded a net loss of $85,260 and $47,784 for the six months ended May 31, 2021 and May 31, 2020, respectively. The increase in net loss is attributed to the increase of operating expenses.

 

Impact of COVID-19

 

Globally, the COVID-19 pandemic has negatively affected businesses of all kinds. It is possible that the pandemic may hinder our own operations, resulting in lesser or no future revenues. It might also affect our means to purchase used cameras, as many businesses are closed, or operations are limited.

 

Going Concern

 

The accompanying consolidated financial statements are prepared on a basis of accounting assuming that the Company is a going concern that contemplates realization of assets and satisfaction of liabilities in the normal course of business. The Company is in the early stage of operations and has net loss from inception and negative cash flows. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The Company will offer noncash consideration and seek equity lines as a means of financing its operations. If the Company is unable to obtain revenue-producing contracts or financing or if the revenue or financing it does obtain is insufficient to cover any operating losses it may incur, it may substantially curtail or terminate its operations or seek other business opportunities through strategic alliances, acquisitions or other arrangements that may dilute the interests of existing stockholders. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

As a smaller reporting company, as defined in Rule 12b-2 of the Exchange Act, we are not required to provide the information called for by this Item.

 

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ITEM 4 CONTROLS AND PROCEDURES

 

Management’s Report on Disclosure Controls and Procedures

 

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and our chief financial officer (who is acting as our principal executive officer, principal financial officer and principle accounting officer) to allow for timely decisions regarding required disclosure.

 

As of May 31, 2021, we carried out an evaluation, under the supervision of our chief executive officer, with the participation of our chief financial officer, of the effectiveness of the design and the operation of our disclosure controls and procedures. The officers concluded that the disclosure controls and procedures were not effective as of the end of the period covered by this report due to material weaknesses identified below. 

 

The matters involving internal controls and procedures that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: domination of management by a single individual without adequate compensating controls, lack of a majority of outside directors on board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; inadequate segregation of duties consistent with control objectives, and lack of an audit committee. These material weaknesses were identified by our Chief Executive Officer who also serves as our Chief Financial Officer in connection with the above evaluation.

 

Inherent limitations on effectiveness of controls

 

Internal control over financial reporting has inherent limitations which include but is not limited to the use of independent professionals for advice and guidance, interpretation of existing and/or changing rules and principles, segregation of management duties, scale of organization, and personnel factors. Internal control over financial reporting is a process which involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. Internal control over financial reporting also can be circumvented by collusion or improper management override. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements on a timely basis, however these inherent limitations are known features of the financial reporting process and it is possible to design into the process safeguards to reduce, though not eliminate, this risk. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

 

Changes in Internal Control over Financial Reporting

 

There have been no changes in our internal controls over financial reporting that have occurred for the fiscal quarter ended May 31, 2021, that have materially or are reasonably likely to materially affect, our internal controls over financial reporting.

 

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PART II-OTHER INFORMATION

 

ITEM 1 LEGAL PROCEEDINGS

 

There are no legal proceedings against the Company and the Company is unaware of such proceedings contemplated against it.

 

ITEM 1A RISK FACTORS

 

As a smaller reporting company, as defined in Rule 12b-2 of the Exchange Act, we are not required to provide the information called for by this Item.

 

ITEM 2 UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

On June 5, 2018, Photozou Co., Ltd., our controlling shareholder, entered into stock purchase agreements with 69 Japanese shareholders. Pursuant to these agreements, Photozou Co., Ltd. sold a total of 3,028,900 shares of common stock to these individuals and received $75,723 as aggregate consideration. Each shareholder paid $0.025 USD per share.

 

On July 17, 2018, Photozou Co., Ltd., our controlling shareholder, entered into stock purchase agreements with 1 Japanese shareholder. Pursuant to these agreements, Photozou Co., Ltd. sold a total of 7,000 shares of common stock to this individual and received $175 as aggregate consideration. Each shareholder paid $0.025 USD per share.

 

The aforementioned sale of shares was exempt from registration in accordance with Regulation S of the Securities Act of 1933, as amended ("Regulation S") because the above sales of the stock were made to non-U.S. persons (as defined under Rule 902 section (k)(2)(i) of Regulation S), pursuant to offshore transactions, and no directed selling efforts were made in the United States by the issuer, a distributor, any of their respective affiliates, or any person acting on behalf of any of the foregoing.

 

On September 10, 2018, Photozou Co., Ltd., our controlling shareholder, entered into stock purchase agreements with 4 Japanese shareholders. Pursuant to these agreements, Photozou Co., Ltd. sold a total of 21,700 shares of common stock to these individuals and received $543 as aggregate consideration. Each shareholder paid $0.025 USD per share.

 

The aforementioned sale of shares was exempt from registration in accordance with Regulation S of the Securities Act of 1933, as amended ("Regulation S") because the above sales of the stock were made to non-U.S. persons (as defined under Rule 902 section (k)(2)(i) of Regulation S), pursuant to offshore transactions, and no directed selling efforts were made in the United States by the issuer, a distributor, any of their respective affiliates, or any person acting on behalf of any of the foregoing.

 

On April 23, 2020, Photozou Co., Ltd., our controlling shareholder, entered into stock purchase agreements with 36 Japanese shareholders. Pursuant to these agreements, Photozou Co., Ltd. sold a total of 308,000 shares of common stock to these individuals and received $61,600 as aggregate consideration. Each shareholder paid $0.2 USD per share.

 

The aforementioned sale of shares was exempt from registration in accordance with Regulation S of the Securities Act of 1933, as amended ("Regulation S") because the above sales of the stock were made to non-U.S. persons (as defined under Rule 902 section (k)(2)(i) of Regulation S), pursuant to offshore transactions, and no directed selling efforts were made in the United States by the issuer, a distributor, any of their respective affiliates, or any person acting on behalf of any of the foregoing.

 

On September 21, 2020, Photozou Co., Ltd., our principal shareholder, entered into a Stock Purchase Agreement with Koichi Ishizuka, our CEO, President and Director. Pursuant to closing of the agreement on September 21, 2020, Photozou Co., Ltd. transferred to Koichi Ishizuka, 4,553,200 shares of our common stock which represents 56.9% of our issued and outstanding shares in consideration of JPY6,657,917 (approximately $60,500). Following the closing of the share purchase transaction, Koichi Ishizuka owns a 66.7% interest in the issued and outstanding shares of our common stock.

 

The aforementioned sale of shares was exempt from registration in accordance with Regulation S of the Securities Act of 1933, as amended ("Regulation S") because the above sales of the stock were made to non-U.S. persons (as defined under Rule 902 section (k)(2)(i) of Regulation S), pursuant to offshore transactions, and no directed selling efforts were made in the United States by the issuer, a distributor, any of their respective affiliates, or any person acting on behalf of any of the foregoing.

 

ITEM 3   DEFAULTS UPON SENIOR SECURITIES

 

None

 

ITEM 4 MINE SAFETY DISCLOSURES

 

Not applicable.

 

ITEM 5 OTHER INFORMATION

 

None

 

ITEM 6 EXHIBITS

 

Exhibit No.

 

Description

3.1   Certificate of Incorporation (1)
     
3.2   By-laws (1)
     
31   Certification of the Company’s Principal Executive and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with respect to the registrant’s report on Form 10-Q for the period ended May 31, 2021   (2)
   
32   Certification of the Company’s Principal Executive and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (2)
     
101.INS   XBRL Instance Document (3)
     
101.SCH   XBRL Taxonomy Extension Schema (3)
     
101.CAL   XBRL Taxonomy Extension Calculation Linkbase (3)
     
101.DEF   XBRL Taxonomy Extension Definition Linkbase (3)
     
101.LAB   XBRL Taxonomy Extension Label Linkbase (3)
     
101.PRE   XBRL Taxonomy Extension Presentation Linkbase (3)

 

(1) Filed as an exhibit to the Company's Registration Statement on Form S-1, as filed with the SEC on January 26, 2015, and incorporated herein by this reference.
(2) Filed herewith.
(3) Users of this data are advised that, pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or Annual Report for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Exchange Act of 1934 and otherwise are not subject to liability.

 

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SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, there unto duly authorized.

 

Photozou Holdings, Inc.

(Registrant)

 

By: /s/ Koichi Ishizuka 

Name: Koichi Ishizuka

CEO, President, Director

Dated: July 20, 2021   

 

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