ITEM 1. CONDENSED FINANCIAL STATEMENTS.
CHESS SUPERSITE CORPORATION
CONDENSED
FINANCIAL STATEMENTS
INDEX
CHESS SUPERSITE CORPORATION
CONDENSED BALANCE SHEETS
|
|
June 30,
|
|
|
December 31,
|
|
|
|
2016
|
|
|
2015
|
|
|
|
(Unaudited)
|
|
|
(Audited)
|
|
|
|
$
|
|
|
$
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
Cash
|
|
|
85,413
|
|
|
|
838
|
|
Total current assets
|
|
|
85,413
|
|
|
|
838
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
|
85,413
|
|
|
|
838
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
|
244,971
|
|
|
|
480,919
|
|
Payable to related parties
[Note 3]
|
|
|
519,197
|
|
|
|
400,000
|
|
Shareholder advances
[Note 4]
|
|
|
139,098
|
|
|
|
195,436
|
|
Shares to be issued
|
|
|
—
|
|
|
|
12,500
|
|
Convertible promissory notes
[Note 5]
|
|
|
375,000
|
|
|
|
—
|
|
Total current liabilities
|
|
|
1,278,266
|
|
|
|
1,088,855
|
|
|
|
|
|
|
|
|
—
|
|
Total liabilities
|
|
|
1,278,266
|
|
|
|
1,088,855
|
|
|
|
|
|
|
|
|
|
|
Stockholders' deficit
|
|
|
|
|
|
|
|
|
Preferred stock, $0.0001 par value, 20,000,000 shares authorized; none issued and outstanding
|
|
|
—
|
|
|
|
—
|
|
Common stock, $0.0001 par value, 100,000,000 shares authorized, 21,870,000 common shares outstanding as at June 30, 2016 (20,650,000 common shares outstanding as at December 31, 2015)
[Note 6]
|
|
|
2,187
|
|
|
|
2,065
|
|
Additional paid-in capital
|
|
|
2,627,059
|
|
|
|
2,017,181
|
|
Accumulated deficit
|
|
|
(3,822,099
|
)
|
|
|
(3,107,263
|
)
|
Total stockholders' deficit
|
|
|
(1,192,853
|
)
|
|
|
(1,088,017
|
)
|
Total liabilities and stockholders' deficit
|
|
|
85,413
|
|
|
|
838
|
|
The accompanying notes are an integral part of these unaudited
condensed financial statements.
CHESS SUPERSITE CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
|
|
For the
|
|
|
For the
|
|
|
|
Three months ended
|
|
|
Six months ended
|
|
|
|
June 30, 2016
|
|
|
June 30, 2015
|
|
|
June 30, 2016
|
|
|
June 30, 2015
|
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUE
|
|
|
4,500
|
|
|
|
—
|
|
|
|
4,500
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Advisory and consultancy fee
|
|
|
7,773
|
|
|
|
—
|
|
|
|
253,091
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management services fee to related parties
|
|
|
75,000
|
|
|
|
75,000
|
|
|
|
150,000
|
|
|
|
150,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Donation
|
|
|
—
|
|
|
|
—
|
|
|
|
45,000
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Legal and professional fees
|
|
|
33,404
|
|
|
|
9,650
|
|
|
|
52,184
|
|
|
|
29,391
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Software development expense
|
|
|
103,990
|
|
|
|
10,000
|
|
|
|
124,990
|
|
|
|
20,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Website development and marketing expenses
|
|
|
38,769
|
|
|
|
13,650
|
|
|
|
41,667
|
|
|
|
13,650
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rent and utilities
|
|
|
4,028
|
|
|
|
3,000
|
|
|
|
7,530
|
|
|
|
6,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Office and general
|
|
|
6,770
|
|
|
|
2,507
|
|
|
|
11,137
|
|
|
|
4,342
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
269,734
|
|
|
|
113,807
|
|
|
|
685,599
|
|
|
|
223,383
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER INCOME AND EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and bank charges
|
|
|
19,016
|
|
|
|
312
|
|
|
|
25,311
|
|
|
|
433
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange loss
|
|
|
2,564
|
|
|
|
323
|
|
|
|
8,426
|
|
|
|
412
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss before income taxes
|
|
|
(286,814
|
)
|
|
|
(114,442
|
)
|
|
|
(714,836
|
)
|
|
|
(224,228
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Net loss
|
|
|
(286,814
|
)
|
|
|
(114,442
|
)
|
|
|
(714,836
|
)
|
|
|
(224,228
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per share, basic and diluted
|
|
|
(0.01
|
)
|
|
|
(0.02
|
)
|
|
|
(0.03
|
)
|
|
|
(0.03
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares - basic and diluted
|
|
|
21,870,000
|
|
|
|
6,900,000
|
|
|
|
21,583,674
|
|
|
|
6,900,000
|
|
The accompanying notes are an integral part of these unaudited
condensed financial statements.
CHESS SUPERSITE CORPORATION
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
|
|
For the
|
|
|
For the
|
|
|
|
Six months ended
|
|
|
Six months ended
|
|
|
|
June 30, 2016
|
|
|
June 30, 2015
|
|
|
|
$
|
|
|
$
|
|
OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for the period
|
|
|
(714,836
|
)
|
|
|
(224,228
|
)
|
|
|
|
|
|
|
|
|
|
Shares issued for advisory and other services
|
|
|
577,500
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in accounts payable and accrued liabilities
|
|
|
(116,751
|
)
|
|
|
125,562
|
|
|
|
|
|
|
|
|
|
|
Net cash used in operating activities
|
|
|
(254,087
|
)
|
|
|
(98,666
|
)
|
|
|
|
|
|
|
|
|
|
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Repayment of shareholder advances
|
|
|
(115,055
|
)
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Advances received from shareholder
|
|
|
58,717
|
|
|
|
100,012
|
|
|
|
|
|
|
|
|
|
|
Proceeds from issuance of Promissory notes
|
|
|
375,000
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Proceeds from issuance of common stock
|
|
|
20,000
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by financing activities
|
|
|
338,662
|
|
|
|
100,012
|
|
|
|
|
|
|
|
|
|
|
Net increase in cash during the period
|
|
|
84,575
|
|
|
|
1,346
|
|
|
|
|
|
|
|
|
|
|
Cash, beginning of period
|
|
|
838
|
|
|
|
1,084
|
|
|
|
|
|
|
|
|
|
|
Cash, end of period
|
|
|
85,413
|
|
|
|
2,430
|
|
|
|
|
|
|
|
|
|
|
Cash paid for interest
|
|
|
nil
|
|
|
|
nil
|
|
|
|
|
|
|
|
|
|
|
Cash paid for taxes
|
|
|
nil
|
|
|
|
nil
|
|
The accompanying notes are an integral part of these unaudited
condensed financial statements.
CHESS SUPERSITE CORPORATION
NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS
|
1.
|
Organization, Nature
of Business, Going Concern and Management Plans
|
Organization and Nature of Business
Chess Supersite Corporation ("Chess Supersite"
or "the Company") was incorporated on July 2, 2013 under the laws of the state of Delaware to engage in any lawful corporate
undertaking, including, but not limited to, selected mergers and acquisitions. The Company has been in the developmental stage
since inception and its operations to date have been limited.
In May, 2014, the Company effected a change
in control by the redemption of the stock held by its original shareholders, the issuance of shares of its common stock to new
shareholders, the resignation of its original officers and directors and the appointment of new officers and directors.
On July 6, 2015, the Company filed its form
S-1/A, to amend its form S-1 previously filed on January 26, 2015 and December 11, 2014. The prospectus relates to the offer and
sale of 1,500,000 shares of common stock (the “Shares”) of the Company, $0.0001 par value per share, offered by the
holders thereof (the “Selling Shareholder Shares”), who are deemed to be statutory underwriters. The selling shareholders
will offer their shares at a price of $0.50 per share for the duration of the offering.
The maximum number of Shares that can be sold
pursuant to the terms of this offering by the selling shareholders is (in aggregate) 1,500,000 Shares. Funds received by the selling
shareholders will be immediately available to such selling shareholders for use by them. The Company will not receive any proceeds
from the sale of the Selling Shareholder Shares.
On July 13, 2015, the Company received a notice
of effectiveness from the SEC for the registration of its shares.
On September 22, 2015, the Company was able
to secure an OTC Bulletin Board symbol
CHZP
from Financial Industry Regulatory Authority (FINRA).
Going Concern and Management Plans
The Company has not yet generated significant
revenue since inception to date and has sustained operating losses during the six months ended June 30, 2016. The Company had working
capital deficit of $1,192,853 and an accumulated deficit of $3,822,099 as of June 30, 2016. The Company's continuation as a going
concern is dependent on its ability to generate sufficient cash flows from operations to meet its obligations and/or obtaining
additional financing from its members or other sources, as may be required.
The unaudited condensed interim financial statements
have been prepared assuming that the Company will continue as a going concern; however, the above condition raises substantial
doubt about the Company's ability to do so. The condensed unaudited financial statements do not include any adjustments to reflect
the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities
that may result should the Company be unable to continue as a going concern.
In order to maintain its current level of operations,
the Company will require additional working capital from either cash flow from operations or from the sale of its equity. However,
the Company currently has no commitments from any third parties for the purchase of its equity. If the Company is unable to acquire
additional working capital, it will be required to significantly reduce its current level of operations.
|
2.
|
Summary of Significant
Accounting Policies
|
Basis of Presentation
The unaudited condensed interim financial statements
have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”)
for interim financial information and the rules and regulations of the SEC and are expressed in US dollars. Accordingly, the unaudited
condensed interim financial statements do not include all information and footnotes required by US GAAP for complete annual financial
statements. The unaudited condensed interim financial statements reflect all adjustments, consisting of only normal recurring adjustments,
considered necessary for a fair presentation. Interim operating results are not necessarily indicative of results that may be expected
for the year ending December 31, 2016 or for any other interim period. The unaudited condensed interim financial statements should
be read in conjunction with the audited financial statements of the Company and the notes thereto as of and for the year ended
December 31, 2015.
CHESS SUPERSITE CORPORATION
NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS
Reclassification of comparative figures
Certain of the prior period figures have been
reclassified to align with Management’s current view of the Company’s operations.
Use of Estimates
The preparation of the unaudited condensed
interim financial statements in conformity with US GAAP 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 unaudited condensed financial
statements and the reported amounts of revenues and expenses during the reporting periods. Estimates may include those pertaining
to accruals. Actual results could materially differ from those estimates.
Revenue recognition
In accordance with ASC 605, revenue is recognized
when persuasive evidence of an arrangement exists, services have been performed, the amount is fixed and determinable, and collection
is reasonably assured.
Recently Issued Accounting Standards
The Company evaluated all recent accounting
pronouncements issued and determined that the adoption of these pronouncements would not have a material effect on the financial
position, results of operations or cash flows of the Company.
CHESS SUPERSITE CORPORATION
NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS
|
3.
|
Related Party Transactions
and Balances
|
During the six months ended June 30, 2016,
$150,000 (June 30, 2015: $150,000) was recorded as management services fee payable to Rubin Schindermann and Alexander Starr, who
are shareholders in the Company. The amount is included in the related party balance as at June 30, 2016.
Shareholder advances represent expenses
paid by the owners from personal funds. The amount is non-interest bearing, unsecured and due on demand. The amount of advance
as at June 30, 2016 and December 31, 2015 was $139,098 and $195,436, respectively. The amounts repaid during the six months ended
June 30, 2016 and 2015 were $115,055 and $nil, respectively.
|
5.
|
Convertible Promissory
Notes
|
During the six months ended June
30, 2016, the Company issued convertible promissory notes, details of which are as follows:
Convertible promissory notes issued
amounting to $150,000 each to two investors.
The key terms/features of the convertible notes
are as follows:
|
1.
|
The Holders have the right from and six months after the date of issuance, and until any time until the Notes are fully paid, to convert any outstanding and unpaid principal portion of the Notes, into fully paid and non–assessable shares of Common Stock (par value $.0001).
|
|
2.
|
The Notes are convertible at a fixed conversion price of 45% of the lowest trading price
of the Common Stock as reported on the OTC Pink maintained by the OTC Markets Group, Inc. upon which the Company’s shares are currently quoted, for the four (4) prior trading days including the day upon which a Notice of Conversion is received by the Company.
|
|
3.
|
Interest on the unpaid principal balance of this Note shall accrue at the rate of twenty-four (24 %) per annum.
|
|
4.
|
Beneficial ownership is limited to 4.99%.
|
|
5.
|
The Notes may be prepaid in whole or in part, at any time during the period beginning on the issue date and ending on the maturity date September 1, 2016, beginning at 100% of the outstanding principal, accrued interest and certain other amounts that may be due and owing under the Notes.
|
Convertible Redeemable note issued
amounting to $75,000.
The key terms/features of the convertible note
are as follows:
|
1.
|
The maturity date of the Note is May 19, 2017
|
|
2.
|
Interest on the unpaid principal balance of this Note shall accrue at the rate of 8 % per annum.
|
|
3.
|
In the event the Note holder exercises the right of conversion, the conversion price will be equal to 52% of the lowest closing bid price of the Company’s common stock for the twenty (20) trading days prior to the date of conversion.
|
|
4.
|
Conversion is limited to the holder beneficially holding not more than 4.99% of the Company’s then issued and outstanding common stock after the conversion
|
No conversions occurred and no notes
were redeemed in the six months ended June 30, 2016. Interest amounting to $24,673 was accrued for the six months ended June 30,
2016.
The Company’s authorized capital stock
consists of 100,000,000 shares of common stock and 20,000,000 shares of preferred stock. At June 30, 2016, there were 21,870,000
shares of common stock issued and outstanding (at December 31, 2015: 20,650,000 shares of common stock issued and outstanding).
Capitalization
The Company is authorized to issue 100,000,000
shares of common stock, par value $0.0001, of which 21,870,000 shares are outstanding as of the date of this report. The Company
is also authorized to issue 20,000,000 shares of preferred stock, par value $0.0001, of which no shares were outstanding as of
the date of filing of this report.
CHESS SUPERSITE CORPORATION
NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS
Common Stock
Holders of shares of common stock are entitled
to one vote for each share on all matters to be voted on by the stockholders. Holders of common stock do not have cumulative voting
rights.
Subject to preferences that may be applicable
to any outstanding shares of preferred stock, the holders of common stock are entitled to share ratably in dividends, if any, as
may be declared from time to time by the board of directors in its discretion from funds legally available therefor.
Holders of common stock have no pre-emptive
rights to purchase the Company’s common stock. There are no conversion or redemption rights or sinking fund provisions with
respect to the common stock. The Company may issue additional shares of common stock which could dilute its current shareholder's
share value.
On March 17, 2016, the Company issued 65,000
shares of common stock at a price of $0.50 per share for an aggregate price of $32,500 in cash. Proceeds of $12,500 were received
during the year ended December 31, 2015 and proceeds of $20,000 were received during the six months ended June 30, 2016.
On November 25, 2015, the Company filed a registration
statement on Form S-8 for 10,000,000 shares of common stock to be issued as compensation to officers, directors, employees, advisers
and consultants. During the six months ended June 30, 2016, the Company issued 1,155,000 shares of common stock to individuals
as consideration for advisory and consultancy services amounting to $577,500 which were recorded at fair value. All services have
been performed as of June 30, 2016.
In July 2016, the Company issued 730,000 shares
of common stock to individuals as consideration for advisory and consultancy services, which were recorded at fair value.
Preferred Stock
Shares of preferred stock may be issued from
time to time in one or more series as may be determined by the board of directors. The board of directors may fix the designation,
powers, preferences and rights of the shares of each such series and the qualifications, limitations or restrictions thereof without
any further vote or action by the stockholders of the Company, except that no holder of preferred stock shall have pre-emptive
rights. Any shares of preferred stock so issued would typically have priority over the common stock with respect to dividend or
liquidation rights. The board of directors does not at present intend to seek stockholder approval prior to any issuance of currently
authorized stock, unless otherwise required by law or otherwise.
FASB ASC 260, Earnings Per Share provides for
calculations of “basic” and “diluted” earnings per share. Basic earnings per share includes no dilution
and is computed by dividing net income (loss) available to common stockholders by the weighted average common shares outstanding
for the period. Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of an
entity similar to fully diluted earnings per share. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive.
In July 2016, the Company issued 730,000 shares of common stock
to individuals as consideration for advisory and consultancy services, which were recorded at fair value.
ITEM 2: MANAGEMENT’S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The information and financial data discussed
below is derived from the unaudited condensed interim financial statements of the Chess Supersite Corporation (“we,”
“us” or the “Company”) for the six months ended June 30, 2016 and were prepared and presented in accordance
with generally accepted accounting principles in the United States.
Forward Looking Statements
Some of the statements contained in this Quarterly
Report on Form 10-Q that are not historical facts are “forward -looking statements” which can be identified by the
use of the terminology such as “estimates,” “projects,” “plans,” “believes,” “expects,”
“anticipates,” “intends,” or the negative or other variations, or by discussions of strategy that involve
risks and uncertainties. We urge you to be cautious of the forward-looking statements, that such statements, which are contained
in this Quarterly Report, reflect our current beliefs with respect to future events and involve known and unknown risks, uncertainties
and other factors affecting our operations, market growth, services, products and licenses. No assurances can be given regarding
the achievement of future results, as actual results may differ materially as a result of the risks we face, and actual events
may differ from the assumptions underlying the statements that have been made regarding anticipated events. Factors that may cause
actual results, our performance or achievements to differ materially from those contemplated by such forward-looking statements
include without limitation:
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Our ability to raise capital when needed and on acceptable
terms and conditions;
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Our ability to attract and retain management;
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Our ability to enter in to long-term supply agreements
for the mineralized material;
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General economic conditions; and
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Other factors discussed in Risk Factors.
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All forward looking statements
made in connection with this Quarterly Report that are attributable to us or persons acting on our behalf are expressly qualified
in their entirety by these cautionary statements. Given the uncertainties that surround such statements you are cautioned not
to place undue reliance on such forward looking statements.
Overview
Chess Supersite Corporation ("Chess Supersite"
or "the Company") was incorporated on July 2, 2013 under the laws of the state of Delaware to engage in any lawful corporate
undertaking, including, but not limited to, selected mergers and acquisitions. The Company has limited operations to date. The
company was formed to provide a method for a foreign or domestic private company to become a reporting company with a class of
securities registered under the Securities Exchange Act of 1934.
The Company registered its common stock on
a Form 10 registration statement filed pursuant to the Securities Exchange Act of 1934 (the "Exchange Act") and Rule
12(g) thereof. The Company files with the Securities and Exchange Commission periodic and current reports under Rule 13(a) of the
Exchange Act, including quarterly reports on Form 10-Q and annual reports Form 10-K.
In May, 2014, the Company effected a change
in control by the redemption of the stock held by its original shareholders, the issuance of shares of its common stock to new
shareholders, the resignation of its original officers and directors and the appointment of new officers and directors.
The Company issued 1,000,000 shares of its
common stock pursuant to Section 4(2) of the Securities Act of 1933 at par representing 66.7% of the total outstanding 1,500,000
shares of common stock as follows:
500,000
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Rubin Schinderman
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500,000
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Alexander Starr
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With the issuance of the 1,000,000 shares of
stock and the redemption of 20,000,000 shares of stock, the Company effected a change in its control and the shareholder(s) elected
new management of the Company. The Company changed its name as part of the change in control.
ITEM 2: MANAGEMENT’S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
Business and Plan of Operations
The Company is designed to become an online
chess site featuring sophisticated playing zone, game broadcasts with software analyses and top analysts' commentaries, education
and other chess oriented resources. With the availability of global high speed Internet access, the Company anticipates that it
will be able to deliver a high quality product featuring broadcasts of top worldwide games, education, interactivity, playing and
other services.
The Company believes that chess players have
two major needs: (1) to play against each other and (2) to watch games of top players including Grandmasters. The viewing of chess
games is particularly adaptable to the Internet to allow for real time or archived viewing while enjoying the comments, announcements
and analyses of top experts. The Company anticipates that the playing zone will utilize two-level architecture allowing thousands
of users to watch and play as individuals and/or as teams. Web-based services designed for browsers and table computers will be
the project's centerpiece and main point of focus. The Company anticipates that such an Internet site will have a great appeal
to the vast worldwide chess playing population.
The Company, acquired certain assets (the “Acquisition”)
of Chess Supersite, Inc., a corporation existing under the laws of Ontario, Canada. The Acquisition was consummated pursuant to
the terms of the Asset Purchase Agreement (the “Agreement”) dated July 23, 2014 and in exchange for the issuance of
5,000,000 shares of common stock to Chess Supersite, Inc. The purpose of the Acquisition was to develop the Company’s business
and build substantive operations from this initial base of assets, as well as to facilitate and prepare the Company for a registration
statement and/or public offering of securities. On December 11, 2014 the Company filed a form 8-K, changing the status of the company
from shell to operating.
The Company had not generated revenues and
had no income or cash flows from operations since inception. The Company's independent auditors have substantial doubt about the
Company's ability to continue as a going concern. At present, the Company has no revenues and the continuation of the Company as
a going concern is dependent upon financial support from its stockholders and its ability to obtain necessary equity financing
to continue its operations.
Currently, the Company is in the process of
completing its comprehensive user friendly web site and has secured the domain name Chesscoliseum.com which is ready for its Beta
release. The portal is going through extensive testing by our professionals and public-at-large. The website is currently operating
in Beta mode and is expected to be fully tested and operational by the third quarter of 2016, including the program for the opening
date (matches, tournaments, chess skilled contests), incentives for the public (such as 1 year free Platinum Membership to those
registered under their real names) etc. The Company has also involved World’s top Grandmasters as members of the advisory
board, commentators, and as event programming managers, etc.
On July 6, 2015, the Company filed its form
S-1/A, to amend its form S-1 previously filed on January 26, 2015 and December 11, 2014. This prospectus relates to the offer and
sale of 1,500,000 shares of common stock (the “Shares”) of Chess Supersite Corporation. (the “Company”),
$0.0001 par value per share, offered by the holders thereof (the “Selling Shareholder Shares”), who are deemed to be
statutory underwriters. The selling shareholders will sell the shares offered herein at the fixed price of $0.50 per share for
the duration of the offering.
The maximum number of Shares that can be sold
pursuant to the terms of this offering by the selling shareholders is (in aggregate) 1,500,000 Shares. Funds received by the selling
shareholders will be immediately available to such selling shareholders for use by them. The Company will not receive any proceeds
from the sale of the Selling Shareholder Shares.
On July 13, 2015, the Company received a notice
of effectiveness from the SEC for the registration of its shares.
On September 22, 2015, the Company was able
to secure a OTC Bulletin Board symbol
CHZP
from Financial Industry Regulatory Authority (FINRA).
ITEM 2: MANAGEMENT’S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
Results of Operations
We have not generated significant revenue to
date and consequently our operations are subject to all of the risks inherent in the establishment of a new business enterprise.
Our analysis on the performance of the Company is as follows:
Balance sheet – As at June 30,
2016 and December 31, 2015
Cash
At June 30, 2016 we had cash of $85,413 compared
to $838 as at December 31, 2015. The increase is due to funds contributed by investors and shareholders offset by payment of software
development and consulting expenses and professional and legal expenses during the period.
Accounts payable and accrued liabilities
At June 30, 2016 we had $244,971 of accounts
payable and accrued liabilities as compared to $480,919 as at December 31, 2015. The balance primarily represents software development
charges amounting to $164,000, marketing services cost amounting to $28,500, rent amounting to $15,000, legal fee amounting to
$5,000 and interest on promissory notes amounting to $18,673.
Payable to related parties
At June 30, 2016 we had $519,197 of amount
payable to related parties as compared to $400,000 as at December 31, 2015. The balance represents management services fee outstanding
to the two shareholder/managers of the Company.
Shareholder advances
At June 30, 2016 we had $139,098 of shareholder
advances as compared to $195,436 as at December 31, 2015. The balance represents Company expenses personally paid by shareholders.
Convertible promissory notes payable
In March, 2016, we entered into agreements
with two investors and issued them convertible promissory notes amounting to $150,000 each. The outstanding amounts under these
notes are due on or before September 1, 2016. In May, 2016, we entered into an agreement with an investor and issued them a convertible
promissory note amounting to $75,000. The outstanding amount under the note is due on or before May 19, 2017. Interest accrued
on these notes during the six months ended June 30, 2016 amounted to $24,673.
Statement of Operations – For the
six months June 30, 2016 and 2015:
Revenue
During the period, we invoiced and received
$4,500 as consideration for the supply of equipment and personnel to setup and produce a live streaming internet chess show from
Marshall Chess Club.
Expenses
Our expenses are classified primarily into
salaries and wages, legal and professional fees, software development expense and website development and marketing expense. The
significant increase in overall expenses for the six months ended June 30, 2016 compared to 2015 is due to the company’s
limited operations in the comparative period.
Expenses for the six months ended June 30,
2016 primarily represented Advisory and consultancy fee amounting to $253,091, salary for two employees amounting in total to $150,000,
donation of $45,000, legal and professional charges of $52,184 comprising audit, accounting and Edgar agent fee, software development
expense of $124,990 for the development of the online chess gaming system, website development and marketing expense amounting
to $41,667 for the development of the Company’s website Chesscoliseum.com and its marketing and publicity, rent amounting
to $7,530, office and general expenses amounting to $11,137 and interest and bank charges amounting to $25,311.
ITEM 2: MANAGEMENT’S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
Liquidity and Capital Resources
At June 30, 2016, we had a working capital
deficit of $1,192,853. We are is actively seeking various financing operations to meet the working capital requirements.
To date we have relied on third parties to
provide financing for our operations by way of private placements. The proceeds may not be sufficient to effectively develop our
business to the fullest extent to allow us to maximize our revenue potential, in which case, we will need additional capital.
Off-Balance Sheet Arrangements
We have no 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 are material to stockholders.
Critical Accounting Policies
Revenue is recognized when persuasive evidence
of an arrangement exists, services have been performed, the amount is fixed and determinable, and collection is reasonably assured.
Other critical accounting policies are described
in the Company’s Form 10-K for the year ended December 31, 2015.
Subsequent Events
In July 2016, we issued 730,000 shares of common stock to individuals
as consideration for advisory and consultancy services, which were recorded at fair value.
Description of Property
Our principal executive office is located at
1131A Leslie Street, Suite 101, Toronto, Ontario, Canada, M3C 3L8.