Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
Forward-Looking Statements
Except for historical information, this report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements involve risks and uncertainties, including, among other things, statements regarding our business strategy, future revenues and anticipated costs and expenses. Such forward-looking statements include, among others, those statements including the words "expects," "anticipates," "intends," "believes" and similar language. Our actual results may differ significantly from those projected in the forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, those discussed herein as well as in the "Description of Business – Risk Factors" section in our Prospectus on Form 424B(8), as filed on February 4, 2015. You should carefully review the risks described in our Prospectus and in other documents we file from time to time with the Securities and Exchange Commission. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this report. We undertake no obligation to publicly release any revisions to the forward-looking statements or reflect events or circumstances after the date of this document.
Although we believe that the expectations reflected in these forward-looking statements are based on reasonable assumptions, there are a number of risks and uncertainties that could cause actual results to differ materially from such forward-looking statements.
All references in this Form 10-Q to the "we," "us," "our", "Axiom Holdings, Inc.", "Axiom", and "Company" are to Axiom Holdings Inc., Inc. and our wholly owned subsidiary Quality Resort Hotels, Inc..
Our unaudited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.
Description of Business
Axiom Holdings, Inc. (the "Company") is a Nevada corporation incorporated on August 7, 2013, as At Play Vacations, Inc. It is based in Orlando, FL, USA. The Company incorporated wholly-owned subsidiaries, Quality Resort Hotels, Inc. (“QRH”) in Florida on August 8, 2013 and Horizon Resources Co. Ltd (“Horizon”) in the Cayman Islands on September 7, 2015. The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America, and The Company’s fiscal year end is December 31. The company's administrative address is, 11637 Orpington St., Orlando, FL 32817. The telephone number is 407-412-6432.
Effective September 16, 2015, the Company changed its name from "At Play Vacations, Inc.," to "Axiom Holdings, Inc." Based on management’s analysis of the current operations, expected growth, and opportunities in the sector, in April, 2016, the Company has determined to discontinue operations related to on-line travel booking which was performed under the Company’s subsidiary Quality Resort Hotels, Inc.
The Company, through QRH, had been operating as a vacations company that booked on-line travel. As of March 31, 2016, QRH has been classified as a discontinued operation.
Axiom has never declared bankruptcy, been in receivership, or involved in any kind of legal proceeding. Axiom, its directors, officers, affiliates and promoters, have not entered into negotiations or discussions with representatives or owners of any other businesses or companies regarding the possibility of an acquisition or merger.
Results of Operations
Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation. We expect we will require additional capital to meet our long term operating requirements. We expect to raise additional capital through, among other things, the sale of equity or debt securities.
The following table provides selected financial data about our company as of March 31, 2016, and December 31, 2015
.
Balance Sheet Date
|
|
March 31, 2016
|
|
|
December 31, 2015
|
|
Cash
|
|
$
|
-
|
|
|
$
|
-
|
|
Total Assets
|
|
$
|
2,500
|
|
|
$
|
5,000
|
|
Total Liabilities
|
|
$
|
62,480
|
|
|
$
|
54,403
|
|
Stockholders' Deficit
|
|
$
|
(59,980
|
)
|
|
$
|
(49,403
|
)
|
The Company did not have a cash balance at either March 31, 2016 or December 31, 2015. Total assets decreased by 50%, $2,500, due to usage of prepaid expenses. Our total liabilities increased $8,077 or 15% due to an increase in amounts due to a related party of $10,000, offset by a decrease in accounts payable and accrued liabilities of $1,923.
The following table provides the results of operations for the Three months Ended March 31, 2016 and 2015:
|
|
Three Months Ended March 31,
|
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
-
|
|
|
$
|
-
|
|
Cost of revenue
|
|
|
-
|
|
|
|
-
|
|
Gross profit
|
|
|
-
|
|
|
|
-
|
|
Selling, general and administrative
|
|
|
2,500
|
|
|
|
244
|
|
Professional fees
|
|
|
8,077
|
|
|
|
7,417
|
|
Net operating loss from continuing operations
|
|
$
|
(10,577
|
)
|
|
$
|
(7,661
|
)
|
Income from Discontinued Operation
|
|
|
-
|
|
|
|
1,171
|
|
Net Loss
|
|
$
|
(10,577
|
)
|
|
$
|
(6,490
|
)
|
The Company had no revenue and gross profits for the three months ended March 31, 2016 and 2015.
Selling, general, and administrative fees of $2,500 for the three months ended March 31, 2016 relate to quarterly regulatory OTC fees. For the period ending March 31, 2015, selling, general and administrative fees included banking charges, office supplies, and postage fees.
Professional fees increased by $660, or 9%, from March 31, 2016 compared to 2015. Professional fees include accounting, legal, and consulting fees.
The Company had no profit or operating expenses related to the Discontinued Operation for the three month period ending March 31, 2016. The discontinued operation, for the three months ended March 31, 2015 generated $14,581 of revenues, $6,061 Cost of Goods Sold, resulting in Gross Profits of $8,520. Selling, general, and administrative expenses related to the discontinued operation for the three months ended March 31, 2015, was $6,449, while professional fees for the same period were $900, resulting in total operating expense from discontinued operations of $7,349. Total income from the Discontinued Operations was $0 and $1,171 for the three months ended March 31, 2016 and 2015, respectively.
Liquidity and Financial Condition
Working Capital
The following table provides selected financial data about our company as of March 31, 2016 and December 31, 2015.
|
March 31, 2016
|
|
December 31, 2015
|
|
|
Change
|
|
|
|
|
|
|
|
|
|
Current Assets
|
|
$
|
2,500
|
|
|
$
|
5,000
|
|
|
$
|
(2,500
|
)
|
Current Liabilities
|
|
$
|
62,480
|
|
|
$
|
54,403
|
|
|
$
|
8,077
|
|
Working Capital (Deficiency)
|
|
$
|
(59,980
|
)
|
|
$
|
(49,403)
|
|
|
$
|
(10,577
|
)
|
Our working capital decreased as of March 31, 2016 as compared to December 31, 2015, due to usage of prepaid expenses of $2,500, an increase of Due to related party of $10,000, offset by a decrease in accounts payable of $1,923.
Cash Flows
|
For the Three
Months Ended March 31,
|
|
|
2016
|
|
2015
|
|
|
|
|
|
|
Cash Flows Used in Operating Activities
|
|
$
|
-
|
|
|
$
|
(289
|
)
|
Cash Flows Provided by (Used in) Investing Activities
|
|
|
-
|
|
|
|
-
|
|
Cash Flows Provided by Financing Activities
|
|
|
-
|
|
|
|
-
|
|
Net Increase (decrease) in Cash During Period
|
|
$
|
-
|
|
|
$
|
(289
|
)
|
Cash Flows from Operating Activities
We have not generated positive cash flow from operating activities. For the three month period ended March 31, 2016, cash used in operating activities was $0, consisting of a net loss of $10,577 which was increased through expenses paid by a related party of $10,000; $2,500 increase due to changes in
p
repaid expenses; less $1,923 from a decrease in
a
ccounts payable.
For the three month period ending March 31, 2015, cash used in operating activities was $289; consisting of a net loss of $7,661, offset by $3,049 generated from the change in
a
ccounts payable, and $4,323 cash provided by operating activities from discontinued operations.
Cash Flows from Investing Activities
For the periods ended March 31, 2016, and 2015, we did not use any cash for investing activities.
Cash Flows from Financing Activities
For the three month periods ending March 31, 2016, and 2015, we did not generate any cash from financing activities.
Going Concern
Our auditors have issued a going concern opinion on our year-end financial statements ended March 31, 2016. This means that there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay for our expenses. This is because we have generated limited revenues and have limited operating history. There are no assurances that we will be able to obtain additional financing through either private placements, bank financing or other loans necessary to support our working capital requirements. To the extent that funds generated from operations and any private placements, public offerings and/or bank financing are insufficient, we will have to raise additional working capital. No assurance can be given that additional financing will be available, or if available, will be on terms acceptable to us.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures as defined in Rule 13a-15(e) under the Exchange Act as of the end of the period covered by this Quarterly Report on Form 10-Q. In designing and evaluating the disclosure controls and procedures, our management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
Based on that evaluation, our chief executive officer and chief financial officer concluded that, as of March 31, 2016, due to our limited number of officers and members of the Board of Directors, our disclosure controls and procedures were not effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules, regulations and forms, and (ii) that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.
Changes in Internal Controls Over Financial Reporting
There were no changes in the Company's internal controls over financial reporting that occurred during the period covered by this Report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.