NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS (UNAUDITED)
January 31, 2023, and October 31, 2022
NOTE 1 – ORGANIZATION AND NATURE OF BUSINESS
Arma Services Inc. (the “Company”,
“we”, “us” or “our”) was incorporated under the laws of the State of Nevada on September 2, 2014.
Arma Services Inc. is a Destination Management Company (“DMC”), which aims to provide a full range of services in the field
of Meeting, Incentive, Conference, and Exhibition (“MICE”) tourism in Russia for corporate customers from United States, China
and internal Russian clients. We plan to create a variety of events for domestic and foreign companies, including industry conferences
and business meetings, dealer conferences for producers, motivational and incentive arrangements for key employees, and to organize participation
in exhibitions and forums.
On February 20, 2023, Arma Services Inc. (“ARMV,”
or the “Company”) entered into a share exchange agreement with Wenflor International Inc. and to acquire Bret International
Holding Corp., owner of 100% of Bret Consultores, SAPI de CV: (“Bret”), a Mexican corporation, specializing in Forestry Management
and creating Carbon Offsets and Ecapfin Sapi de Cv. a Mexican corporation specialized in developing methodologies of carbon capture in
agricultural crop applications.
We plan to develop and manage forestry properties
belonging to Indigenous communities in five states in Mexico with over 156,000 hectares of forest land creating carbon offsets and agricultural
carbon offsets to be sold to Fortune 5000 Companies to offset their carbon liabilities. The company plans to expand this program on a
global scale working with Governments, the UNFCC, NGO’S, the UNDP, FAO, the Green Climate Fund (GCF) and the Global Environment
Facility (GEF).
| · | Bret Consultores, SAPI de CV: (“Bret”), was acquired by Arma
Services Inc, and the transaction was accounted for as a reverse merger. Under the agreement ARMV will own 10,000 common shares of BIHC,
representing all of the issued and outstanding equity of BIHC; |
| · | The shareholders will be issued 6,000,000 shares of ARMV, $0.001 per value
per shares(the common stock) representing 49% of the outstanding shares of common stock (the common stock) |
| · | BIHC will hold no common shares of ARMV, as the wholly owned subsidiary of
ARMV |
As of October 31, 2022 the 6,000,000 shares of ARMV is yet to be issued
as the deal was signed on February 27, 2023 to be closed on or before March 1st 2023.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The financial statements of the Company have been
prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars.
Basis of Consolidation
The consolidated financial statements include
the accounts of Arma Services Inc and its subsidiaries Bret Consultores and Ecapfin. All significant inter-company balances and transactions
within the Company have been eliminated upon consolidation.
Accounting Basis
The Company uses the accrual basis of accounting
and accounting principles generally accepted in the United States of America (“GAAP” accounting). The Company has
adopted an October 31 fiscal year end.
Cash and Cash Equivalents
The Company considers all highly liquid
investments with the original maturities of three months or less to be cash equivalents. The Company had $43,903 cash as of January
31, 2023 and $0 as of October 31, 2022.
Fair Value of Financial Instruments
ASC topic 820 “Fair Value Measurements and
Disclosures” establishes a three-tier fair value hierarchy, which prioritizes the inputs in measuring fair value. The hierarchy
prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market.
These tiers include:
Level 1: defined as observable inputs such as
quoted prices in active markets.
Level 2: defined as inputs other than quoted prices
in active markets that are either directly or indirectly observable; and
Level 3: defined as unobservable inputs in which
little or no market data exists, therefore requiring an entity to develop its own assumptions.
The carrying value of accounts payable and the
Company’s loan from shareholder approximates its fair value due to their short-term maturity.
Income Taxes
Income taxes are computed using the asset and
liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences
between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws.
A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.
Use of Estimates
The preparation 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 disclosure of contingent assets and liabilities at the date the financial statements and the reported amount
of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Revenue Recognition
The purpose of our business is to provide a full
range of services in the field of Meeting, Incentive, Conference, and Exhibition (“MICE”) tourism in Russia for corporate
customers from the United States, China and internal Russian clients.
Services are provided through industry conferences
and business meetings, dealer conferences for producers, motivational and incentive arrangements for key employees, and to organize participation
in exhibitions and forums.
The Company will recognize revenue in accordance
with ASC topic 606 “Revenue from Contracts with Customers”. The core principle of ASC 606 is that an entity recognizes revenue
to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects
to be entitled in exchange for those goods or services. An entity recognizes revenue in accordance with that core principle by applying
the following steps:
Step 1: Identify the contract(s) with a customer
Step 2: Identify the performance obligations in
the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the
performance obligations in the contract
Step 5: Recognize revenue when (or as) the entity
satisfies a performance obligation.
Specifically, Section 606-10-50 requires an entity
to provide information about: a. Revenue recognized from contracts with customers, including the disaggregation of revenue into appropriate
categories; b. Contract balances, including the opening and closing balances of receivables, contract assets, and contract liabilities;
c. Performance obligations, including when the entity typically satisfies its performance obligations and the transaction price that is
allocated to the remaining performance obligations in a contract; d. Significant judgments, and changes in judgments, made in applying
the requirements to those contracts.
Stock-Based Compensation
Stock-based compensation is accounted for at fair
value in accordance with ASC Topic 718. To date, the Company has not adopted a stock option plan and has not granted any stock options.
Basic Income (Loss) Per Share
Basic income (loss) per share is calculated by
dividing the Company’s net income (loss) applicable to common shareholders by the weighted average number of common shares during
the period. Diluted income (loss) per share is calculated by dividing the Company’s net income (loss) available to common shareholders
by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding
is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. There are no such common stock equivalents
outstanding as of January 31, 2023, and October 31, 2022. In loss years common stock equivalents would not be included as they would be
anti-dilutive.
Comprehensive Income
The Company has established standards for reporting
of comprehensive income, its components and accumulated balances. When applicable, the Company would disclose this information on its
Statement of Stockholders’ Equity. Comprehensive income comprises equity except those resulting from investments by owners and distributions
to owners. The Company has not had any significant transactions that are required to be reported in other comprehensive income.
NOTE 3 – LOANS FROM RELATED PARTY
In support of the Company’s efforts and
cash requirements, it may rely on advances from related parties until such time that the Company can support its operations or attains
adequate financing through sales of its equity or traditional debt financing. There is no formal written commitment for continued support
by shareholders. Amounts represent advances or amounts paid in satisfaction of liabilities. The advances are considered temporary in nature
and have not been formalized by a promissory note.
As of January 31, 2023, and October 31, 2022,
the Company had a loan outstanding with the Company’s related party in the amount of $143,186 and $27,248. As of January 31, 2022,
and October 31, 2022, the loan is non-interest bearing, due upon demand and unsecured.
NOTE 4 – COMMON STOCK
The Company has 75,000,000, $0.001 par value shares
of common stock authorized. As of January 31, 2023, and October 31, 2022, the Company had 6,240,000 shares issued and outstanding.
NOTE 5 – RELATED PARTY TRANSACTIONS
As of January 31, 2023, the Company had a non-interest-bearing
loan payable to its sole director in the amount of $20,650.
The Company’s officers and director provide
services and office space to the Company without compensation. The Company has entered into vendor agreements with Proekta LLC and Gazetny
LLC, which are entities related to officers of the Company. During the year, company had not transacted any business with the related
entities.
NOTE 6 – COMMITMENTS AND CONTINGENCIES
The Company neither owns nor leases any real or
personal property. An officer has provided office services without charge. There is no obligation for the officer to continue this arrangement.
Such costs are immaterial to the financial statements and accordingly are not reflected herein. The officers and directors are involved
in other business activities and most likely will become involved in other business activities in the future.
NOTE 7– INCOME TAXES
As of October 31, 2022, the Company had net operating
loss carry forwards of approximately $68,204 that may be available to reduce future years’ taxable income in varying amounts through
2037. Future tax benefits which may arise as a result of these losses have not been recognized in these financial statements, as their
realization is determined not likely to occur and accordingly, the Company has recorded a valuation allowance for the deferred tax assets
relating to these tax loss carryforwards. The provision for Federal income tax consists of the following:
| Schedule of tax provision | |
October 31, 2022 | | |
October 31, 2021 | |
| Federal income tax benefit attributable to: | |
| | | |
| | |
| Current Operations | |
$ | 2,028 | | |
$ | 880 | |
| Less: valuation allowance | |
| (2,028 | ) | |
| (880 | ) |
| Net provision for Federal income taxes | |
$ | – | | |
$ | – | |
The cumulative tax effect at the expected rate of 21% of significant
items comprising our net deferred tax amount is as follows:
| Schedule of deferred tax assets | |
October 31, 2022 | | |
October 31, 2021 | |
| Deferred tax asset attributable to: | |
| | | |
| | |
| Net operating loss carryover | |
$ | 14,322 | | |
$ | 12,294 | |
| Less: valuation allowance | |
| (14,322 | ) | |
| (12,294 | ) |
| Net deferred tax asset | |
$ | – | | |
$ | – | |
Due to the change in ownership provisions of the
Tax Reform Act of 1986, net operating loss carry forwards of approximately $68,204 for Federal income tax reporting purposes are subject
to annual limitations. Should a change in ownership occur net operating loss carry forwards may be limited as to use in future years.
NOTE 8 – SUBSEQUENT EVENTS
In accordance with ASC 855-10 the Company has
analyzed its operations subsequent to January 31, 2023, and to the date these financial statements were issued, and has determined to
disclose the below event.
On March 6th, 2023, the company closing
on the acquisition of Bret International Holding Corp was completed with the issuance of 6,000,000 common shares of Arma Services Inc.
FORWARD LOOKING STATEMENTS
Statements made in this Form 10-Q that are not
historical or current facts are "forward-looking statements" made pursuant to the safe harbor provisions of Section 27A of the
Securities Act of 1933 (the "Act") and Section 21E of the Securities Exchange Act of 1934. These statements often can be identified
by the use of terms such as "may," "will," "expect," "believe," "anticipate," "estimate,"
"approximate" or "continue," or the negative thereof. We intend that such forward-looking statements be subject to
the safe harbors for such statements. We wish to caution readers not to place undue reliance on any such forward-looking statements, which
speak only as of the date made. Any forward-looking statements represent management's best judgment as to what may occur in the future.
However, forward-looking statements are subject to risks, uncertainties and important factors beyond our control that could cause actual
results and events to differ materially from historical results of operations and events and those presently anticipated or projected.
We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of
such statement or to reflect the occurrence of anticipated or unanticipated events.