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1.
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NATURE OF BUSINESS, ORGANIZATION AND BASIS OF PRESENTATION
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TGI Solar Power Group,
Inc. (“TGI” or the “Company”) is a publicly held corporation formed under the laws of the State of Delaware
as Liberty Leasing Co. Inc. in 1967. The Company changed its name to LIBCO Corporation on June 29, 1973, RDIS Corporation on Jan
11, 1993 and TenthGate International, Inc. on February 20, 2007 before adopting its current name in June 2008. Tenth Gate International,
Inc. acquired TenthGate Incorporated, a Delaware corporation, by merger of TGI’s subsidiary, TenthGate Merger Sub, Inc.,
a Utah corporation, with and into TenthGate Incorporated in April 2007. Thereafter, TenthGate International, Inc. became a development
stage company which owned various subsidiaries with licenses and patents held by those subsidiaries. On July 25, 2008, Tenth Gate
International, Inc., acquired from Solar 18 Corporation, a Florida corporation, (“Solar 18”), Solar 18’s patented
technology which the Company believed to be viable in commercial and residential applications, especially in the field of green
energy. Thereafter, the Company changed its name to TGI Solar Power Group, Inc. TGI Solar Power Group, Inc. discontinued operations
of its other subsidiaries (of the former TenthGate International, Inc.) to pursue energy technology products and services. The
Company's fiscal year end is July 31st.
TGI Solar Power Group,
Inc. is primarily engaged in the business of providing potential alternative energy solutions to residential and business customers.
The Company markets alternative solutions on its website and directly to potential customers and creates a Present Value (PV) solution
that details price, tax benefits or cost support and the potential energy savings that might be realized from customers.
Accordingly, TGI intends
to launch new business initiatives intended to provide clients with management, tools and resources to deliver interactive, real-time,
on demand staffing for full time and project based personnel. The Company is exploring the possibility of entering into a
business to provide staffing for contract projects in solar energy, as well as potentially in other businesses. We hope these business
initiatives will result in infrastructure which supports qualifying, investigating and on boarding of viable project management
candidates, a process that includes automated reporting of hours, benefits and insurance and obtaining
insurance and building expertise that may drive continued support of this model which may include the three offerings to companies;
permanent, temporary and contract based and the five established vertical markets, information technology, engineering, light industrial
and blue collar, financial services and medical.
The accompanying unaudited
financial statements have been prepared on the basis the Company will continue as going concern, which contemplates the realization
of assets and the satisfaction of liabilities in the normal course of business. The Company has a history of operating losses and
the Company continues to rely on financing and the issuance of Preferred and Common shares to raise capital. The Company's significant
losses from operations and the Company's dependence on equity and debt financing raise substantial doubt about the Company's ability
to continue as a going concern. The financial statements of the Company do not include any adjustments relating to the recoverability
and classification of recorded assets, or the amounts and classifications of liabilities that might be necessary should the Company
be unable to continue as a going concern
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3.
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BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete consolidated financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the six-month period ended January 31, 2017 are not necessarily indicative of the results that may be expected for the year ended July 31, 2017. The unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended July 31, 2016 as filed on November 14, 2016.
These financial statements
have been prepared by the Company in accordance with generally accepted accounting principles in the United States of America ("
GAAP").
Use of Estimates
The preparation of
financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts
of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported
amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates
Income Taxes
Estimates of
taxable income of the legal entity and jurisdiction are used in the tax rate calculation. Management uses judgment
in estimating what the Company's income tax will be for the year. Since judgment is involved, there is a risk that the tax
rate may increase or decrease in any period. In determining income/(loss) for financial statement purposes, management must
make certain estimates and judgments. These estimates and judgments occur in the calculation of certain tax liabilities and
in the determination of the recoverability of certain deferred tax assets, which arise from temporary differences between the
tax and financial statement recognition of revenue and expense. FASB issued authoritative guidance concerning accounting for
income taxes also requires that the deferred tax assets be reduced by a valuation allowance if, based on the available
evidence, it is more likely than not that all or some portion of the recorded deferred tax assets will not be realized in
future periods. In evaluating the Company's ability to recover the Company's deferred tax assets, management considers all
available positive and negative
evidence including the Company's past operating results, the existence of management is using
to manage the underlying businesses.
Through January 31,
2017, the Company has recorded a valuation allowance against the Company's deferred tax assets arising from net operating losses
due to uncertainty of their realization as a result of the Company's earnings history, the number of years the Company's net operating
losses and tax credits can be carried forward, the existence of taxable temporary differences and near-term earnings expectations.
The amount of the valuation allowance could decrease if facts and circumstances change that materially increase
taxable income prior to the expiration of the loss carry forwards. Any reduction in the valuation allowance would result in an
income tax benefit in the period such determination is made by the Company.
Due to the Company
experiencing several events that qualify as a change in control since its inception, The Company may be limited by section 382
of the Internal Revenue Code as to the amount of net operating losses that may be used in future years.
NET (LOSS) EARNINGS PER SHARE
Basic earnings per
share are calculated on the basis of the weighted-average number of common shares outstanding during the year. Basic earnings per
share are computed by dividing income available to common stockholders by the weighted-average common shares outstanding during
the period. Diluted earnings per share takes into account the potential dilution that could occur if securities or other
contracts to issue common stock were exercised and converted to common stock
Dilutive common share
equivalents consist of shares issuable upon conversion of convertible debt, and Preferred Stock.
As of January 31, 2017
and July 31, 2016 there were 10,000,000 outstanding shares of Preferred Series A Stock which convert to 30,000,000 common shares,
2,000,000 outstanding shares of Preferred Series B Stock which convert to 200,000,000 common shares and 275,000 outstanding shares
of Preferred Series C Stock which convert to 17,055,321,260 common shares.
Accountings Standards Issued But
Not Yet Effective
In August 2014, FASB
issued ASU No. 2014-15, "Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties
about an Entity’s Ability to Continue as a Going Concern." Under the new guidance, an entity should evaluate whether
there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability
to continue as a going concern within one year after the date that the financial statements are issued. The guidance is effective
for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application
is permitted. The Company is currently evaluating the impact of ASU 2014-15 on its financial statements.
The Company received
advances of $65,000 by a third party in September 2014 in order to cover expenses associated with a possible investment which was
not pursued by the Company. The advance and related interest of approximately 12% was satisfied in full through the issuance of
40,000,000 shares of common stock on July 31 2016.
Interest expense on
the Advance was $0 for the three months ended January 31, 2017 and 2016. Interest was $0 and $1,957 for the six months ended January
31, 2017 and 2016.
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5.
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RELATED PARTY TRANSACTION
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During the three months
and six months ended January 31, 2017 the Company incurred and paid $22,933 and $67,933 of consulting expenses to its officer.
As of January 31, 2017 and July 31, 2016 the Company prepaid consulting fees to its officer in the amount of $3,000 and $15,000
which is included in prepaid expense on the accompanying condensed balance sheet.
Common
:
At January 31, 2017
and July 31, 2016, the Company had 2,400,000,000 shares authorized and 1,705,036,105 shares of $.001 par value common stock issued
and outstanding.
Common shares are voting
and dividends are paid at the discretion of the Board of Directors.
Series A Preferred Stock
At January, 31 2017
and July 31, 2016, the Company had 10,000,000 shares of Series A Preferred Stock, $.001 par value, authorized, issued and, outstanding.
The Series A Preferred Stock has a liquidation preference over the common stock and any other class or series of capital stock
whose terms expressly provide that the holders of the Series A Preferred Stock should receive preferential payment. Holders of
the Preferred Stock Series A are entitled to vote on all matters submitted to shareholders of the Company and are entitled to 10
votes for each share of the Series A Preferred Stock owned.
Each share of Series A Preferred Stock
is convertible, at the option of the holder, into three shares of the Company's common stock. However, holders cannot
convert any share of Series A Preferred Stock into shares of common stock until (a) the Series A Preferred Stock has been held
for a minimum of 24 months; (b) the Common Stock is trade for at least $0.50 per share (c) the Company has a positive Net Worth;
and (c) The Company is traded on the Pink Sheets, or higher exchange.
Holders of the Series
A Preferred Stock are entitled to receive dividends as declared at the discretion of the Board of Directors. These
dividends are based on the number of shares of Common Stock into which each share of Series A Preferred Stock is convertible.
Series B Preferred Stock
At January 31, 2017
and July 31, 2016, the Company had 2,000,000 shares of Series B Preferred Stock, $.001 par value, authorized, issued and outstanding.
Holders of the Series B Preferred Stock Series B are entitled to vote on all matters submitted to shareholders of the
Company and are entitled to 1,000 votes for each share of the Series B Preferred Stock owned.
Each share of the Series
B Preferred Stock is convertible, at the option of the holder, into one hundred shares of the Company's common stock. However,
holders cannot convert any share of Series B Preferred Stock into shares of common stock until (a) the Series B Preferred Stock
has been held for a minimum of 12 months; (b) the Common Stock is traded at least $0.01 per share (c) The Company is traded on
the Pink Sheets, or higher exchange.
Holders of the Series
B Preferred Stock are entitled to receive dividends as declared at the discretion of the Board of Directors. These dividends are
based on the number of shares of Common Stock into which each share of Series B Preferred Stock is convertible
Series C Preferred Stock
On June 22 2016,
the Company authorized 275,000 shares of $1 Par Value Series C Convertible Preferred Stock. On June 26, 2016, the Company
sold 137,500 shares of its Series C Convertible Preferred Stock each to Ensure HR, LLC, a New Jersey limited liability
company, and Meros HR, LLC, a New Jersey
limited liability company for $275,000. The proceeds were reduced by $19,460
of legal expenses related to the sale. These 275,000 shares of Series C Preferred Stock are authorized issued and outstanding
as of July 31, 2016.
The Series Preferred
C Stock has a liquidation of twice its stated value, and converts into shares of Common Stock at the initial conversion price of
$.000016124 per share, subject to adjustment for stock splits, reclassification and distributions. The Series C Preferred Stock
votes on an as converted basis multiplied by 1.9. The conversion price is initially $.000016124 per share, subject to adjustment
for dilutive issuances, so that upon conversion the holders of the Series C Preferred Stock would hold shares of Common constituting
90 % of the fully diluted Common Stock upon conversion. Accordingly, the sale of the Series C Stock resulted in a change of control
of the Company. The Series C Preferred Stock cannot be converted until the Company files an amendment increasing the authorized
number of shares of Common Stock and/or effecting a reverse stock split of the Common Stock so that the Company has a sufficient
number of authorized and unissued shares of Common Stock so as to permit the conversion of all outstanding shares of Series C Preferred
Stock.
Holders of the Series
C Preferred Stock are entitled to receive dividends as declared at the discretion of the Board of Directors. These dividends are
based on the number of shares of Common Stock into which each share of Series C Preferred Stock is convertible.