Item 2: - Management's Discussion and Analysis of Financial Condition and Results of Operations. Forward-Looking Statements
This quarterly report on Form 10-Q contains forward-looking statements. Forward-looking statements are projections of events, revenues, income, future economic performance or management's plans and objectives for future operations. In some cases, you can identify forward-looking statements by the use of terminology such as "may", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. Examples of forward-looking statements made in this quarterly report on Form 10-Q includes statements about:
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our plans to hire industry experts and expand our management team;
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our beliefs regarding the future of our competitors;
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our anticipated development schedule;
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the anticipated benefits of our product;
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our expectation that the demand for our products will eventually increase; and
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our expectation that we will be able to raise capital when we need it.
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These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including:
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general economic and business conditions;
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we may have product liability claims;
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we may not be successful in commercialization of our products;
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regulatory changes may hurt the market for our products;
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we may not be able to protect our intellectual property rights;
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our auditors have issued a going concern opinion regarding our company;
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competition for, among other things, capital, products and skilled personnel; and
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other factors discussed under the section entitled "Risk Factors",
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any of which may cause our company's or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.
While these forward-looking statements and any assumptions upon which they are based are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
As used in this report, the terms "we", "us" and "our" mean Star Ally Inc., a Nevada corporation. In this report, unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to "common shares" refer to the common shares in our capital stock.
The following discussion and analysis of our financial condition and plan of operations should be read in conjunction with our unaudited interim financial statements and related notes appearing elsewhere in this Quarterly Report.
History and Overview
Star Ally Inc. was incorporated on October 2, 2013 under the laws of the State of Nevada.
Plan of Operations
We were in the business of developing software including gaming products (poker games)and after the appointment of Mr. Andy Kim as CEO of the Company on July 8, 2016, he inclined to terminate the development and distribution of poker game and will shift focus to develop the binary option software, a financial software for the trading of binary option. A binary option, or asset-or-nothing option, is type of option in which the payoff is structured to be either a fixed amount of compensation if the option expires in the money, or nothing at all if the option expires out of the money. The success of a binary option is thus based on a yes or no proposition, hence
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binary”. Our detailed plan of operation consists of developing the software, applying for patents and trademarks, apply for international patents and trademarks and market the software to the binary option industry.
Results of Operations
The following is an analysis of our revenues, and analysis of components of expenses, and variances comparing the nine months ended September 30, 2016 to the nine months ended September 30, 2015.
We are in our infancy stage and have not generated any revenue from our core business model. Our total operating expenses during those periods were general and administrative expense of $25,765 for the nine months ended September 30, 2016 compared to $73,558 for the nine months ended September 30, 2015. Interest expense for the nine months ended September 30, 2016 was $500 compared to $631 for the nine months ended September 30, 2015. General and administrative expense for the nine months ended September 30, 2016 was $25,765 compared to $33,158 for the same period in 2015.
The decrease in operating expenses, for the nine months ended September 30, 2016, compared to the nine months ended September 30, 2015, excluding the stock based compensation paid in 2015, is due, primarily, to reduced professional fees.
Liquidity and Capital Resources
During the nine months ended September 30, 2016, we utilized cash in the amount of $20,861 to pay for operating activities compared to $46,208 for the nine months ended September 30, 2015. Cash used in operating activities during the nine months ended September 30, 2016 included a net loss of $26,265 compared to a net loss of $74,189 for the nine months ended September 30, 2015. The net loss for the nine months ended September 30, 2016 included amortization of intangible asset in the amount of $1,600 and a non-cash written back of loan and other payables, compared to amortization of $1,600 and a non-cash stock based compensation expense of $27,500, for the same nine months in 2015. Accounts and other payable increased and provided cash of $
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for the nine months ended September 30, 2016 compared to cash utilized of $1,119 for the nine months ended September 30, 2015.
Investing Activities
We did not use any cash resources for investing activities during the nine month periods ended September 30, 2016 and 2015
Financing Activities
We generate $9,210 from financing activities during the nine month period ended September 30, 2016 compared to cash generated from a related party loan and sale of common stock of $50,000 during the nine month period ended September 30, 2015.
Working Capital Needs
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As of September 30, 2016, we had a working capital deficit of $7,306. Over the next 12 months, we will require approximately $75,000 to sustain our working capital needs as a public reporting company and to further develop our web and bricks and mortar products.
Sources of Capital:
We expect to obtain financing through the sale of restricted common shares, shareholder loans, and a potential line of credit. The sale of common shares will be priced based on current market activity. Shareholder loans, depending on circumstances, may be without stated terms of repayment or interest. Because a line of credit is not currently being investigated, its terms will depend on the lender at the time of commitment. We have no formal agreement that ensures that we will receive such loans. We may exhaust this source of funding at any time.
Plan of Operations:
We are in the infancy stage of developing our products. The Company was incorporated in the State of Nevada on October 2, 2013, to engage in the development and distribution of poker games. We have generated no revenues from business operations. Our independent registered public accounting firm has issued a going concern opinion. This means there is substantial doubt that we can continue as an on-going business unless we obtain additional capital to pay our ongoing operational costs. Accordingly, we must locate sources of capital to pay our operational costs.
Our former director Mr. Ron Camacho resigned as President and Chief Executive Officer, Secretary and Treasurer of our Company
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n July 8, 2016 and Mr. Andy Kim was appointed as President and Chief Executive Officer, Secretary and Treasurer on the same date. Mr. Kim expressed that he will end the development and distribution of poker game and will shift focus to develop the binary option software, a financial software for the trading of binary option. A binary option, or asset-or-nothing option, is type of option in which the payoff is structured to be either a fixed amount of compensation if the option expires in the money, or nothing at all if the option expires out of the money. The success of a binary option is thus based on a yes or no proposition, hence “binary”. Our detailed plan of operation consists of developing the software, applying for patents and trademarks, apply for international patents and trademarks and market the software to the binary option industry.
On August 15, 2016, the Board of Directors appointed Mr. Jung Choung Hun to a vacant position on the Company’s Board of Directors. Jun Choung Hun was also appointed to the position of President, Chief Executive Officer (CEO), Secretary, Treasurer and Executive Director, replacing Andy Kim, who resigned as President, CEO, Secretary and Treasurer. There was no disagreement between the Company and Andy Kim, and Mr. Kim retains his position as Director of the Company.
Material Commitments
We do not have any material commitments for capital expenditures.
Seasonal Aspects
Management is not currently aware of any seasonal aspects which would affect the results of our operations during any particular time of year.
Off Balance Sheet Arrangements
We have no off balance sheet arrangements.
Going Concern
We anticipate that additional funding will be required in the form of equity financing from the sale of our common stock. At this time, we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock or through a loan from our directors to meet our obligations over the next twelve months. We do not have any arrangements in place for any future debt or equity financing.