ITEM 1. FINANCIAL STATEMENTS
JUBILANT FLAME INTERNATIONAL, LTD.
FOR THE THREE-MONTH PERIODS ENDED August 31, 2020
Index to Unaudited Financial Statements
JUBILANT FLAME INTERNATIONAL, LTD
|
Balance Sheets
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
August 31,
|
|
|
February 29,
|
|
|
|
2020
|
|
|
2020
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
Cash
|
|
$
|
2,483
|
|
|
$
|
10,628
|
|
Accounts receivable
|
|
|
9,384
|
|
|
|
9,402
|
|
Prepaid expenses
|
|
|
3,000
|
|
|
|
9,000
|
|
Total current assets
|
|
|
14,867
|
|
|
|
29,030
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
$
|
14,867
|
|
|
$
|
29,030
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES & STOCKHOLDERS' DEFICIT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
$
|
2,050
|
|
|
$
|
8,698
|
|
Due to related party
|
|
|
47,643
|
|
|
|
47,643
|
|
Accrued officer compensation
|
|
|
535,500
|
|
|
|
535,500
|
|
Loan payable - related parties
|
|
|
516,401
|
|
|
|
489,945
|
|
Total current liabilities
|
|
|
1,101,594
|
|
|
|
1,081,786
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities
|
|
|
1,101,594
|
|
|
|
1,081,786
|
|
|
|
|
|
|
|
|
|
|
Stockholders' Deficit
|
|
|
|
|
|
|
|
|
Common stock, $0.001 par value per share 75,000,000 shares authorized; 19,048,208 and 19,048,208 shares issued and outstanding, respectively
|
|
|
19,049
|
|
|
|
19,049
|
|
Additional paid in capital
|
|
|
2,445,233
|
|
|
|
2,436,233
|
|
Accumulated deficit
|
|
|
(3,551,009
|
)
|
|
|
(3,508,038
|
)
|
Total Stockholders' Deficit
|
|
|
(1,086,727
|
)
|
|
|
(1,052,756
|
)
|
Total Liabilities and Stockholders' Deficit
|
|
$
|
14,867
|
|
|
$
|
29,030
|
|
The accompanying notes are an integral part of these financial statements.
JUBILANT FLAME INTERNATIONAL, LTD
|
Statements of Operations
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months ended
|
|
|
For the six months ended
|
|
|
|
August 31,
|
|
|
August 31,
|
|
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales of goods
|
|
$
|
-
|
|
|
$
|
10,185
|
|
|
$
|
-
|
|
|
|
16,515
|
|
Total revenue
|
|
|
-
|
|
|
|
10,185
|
|
|
|
-
|
|
|
|
16,515
|
|
Costs and Operating Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold
|
|
|
-
|
|
|
|
4,832
|
|
|
|
-
|
|
|
|
7,551
|
|
Operating, selling, general and administrative
|
|
|
19,872
|
|
|
|
22,755
|
|
|
$
|
42,972
|
|
|
$
|
52,108
|
|
Total operating expenses
|
|
|
19,872
|
|
|
|
27,587
|
|
|
|
42,972
|
|
|
|
59,659
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations
|
|
|
(19,872
|
)
|
|
|
(17,402
|
)
|
|
|
(42,972
|
)
|
|
|
(43,144
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before provision for income taxes
|
|
|
(19,872
|
)
|
|
|
(17,402
|
)
|
|
|
(42,972
|
)
|
|
|
(43,144
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss
|
|
$
|
(19,872
|
)
|
|
$
|
(17,402
|
)
|
|
$
|
(42,972
|
)
|
|
$
|
(43,144
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Basic and fully diluted)
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding
|
|
|
19,048,208
|
|
|
|
18,674,567
|
|
|
|
19,048,208
|
|
|
|
18,612,067
|
|
The accompanying notes are an integral part of these financial statements
JUBILANT FLAME INTERNATIONAL, LTD
Statements of Changes in Stockholders' Deficit
(Unaudited)
For the Three Months ended August 31, 2020 and 2019
|
|
|
|
|
|
|
|
|
Additional
|
|
|
|
|
|
Total
|
|
|
|
Common Stock
|
|
|
paid in
|
|
|
Accumulated
|
|
|
Stockholders'
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
deficit
|
|
|
Deficit
|
|
Balance as of May 31, 2020
|
|
|
19,048,208
|
|
|
$
|
19,049
|
|
|
$
|
2,440,733
|
|
|
$
|
(3,531,137
|
)
|
|
$
|
(1,071,355
|
)
|
Shares awarded for stock compensation
|
|
|
|
|
|
|
|
|
|
|
4,500
|
|
|
|
|
|
|
|
4,500
|
|
Net loss for the period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(19,872
|
)
|
|
|
(19,872
|
)
|
Balance as of August 31, 2020
|
|
|
19,048,208
|
|
|
$
|
19,049
|
|
|
$
|
2,445,233
|
|
|
$
|
(3,551,009
|
)
|
|
$
|
(1,086,727
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional
|
|
|
|
|
|
|
Total
|
|
|
|
Common Stock
|
|
|
paid in
|
|
|
Accumulated
|
|
|
Stockholders'
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
deficit
|
|
|
Deficit
|
|
Balance as of May 31, 2019
|
|
|
18,673,208
|
|
|
$
|
18,674
|
|
|
$
|
2,423,108
|
|
|
$
|
(3,457,631
|
)
|
|
$
|
(1,015,850
|
)
|
Shares awarded for stock compensation
|
|
|
125,000
|
|
|
|
125
|
|
|
|
4,375
|
|
|
|
|
|
|
|
4,500
|
|
Net loss for the period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(17,402
|
)
|
|
|
(17,402
|
)
|
Balance as of August 31, 2019
|
|
|
18,798,208
|
|
|
$
|
18,799
|
|
|
$
|
2,427,483
|
|
|
$
|
(3,475,033
|
)
|
|
$
|
(1,028,752
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Six Months ended August 31, 2020 and 2019
|
|
|
|
|
|
|
|
|
|
|
Additional
|
|
|
|
|
|
|
Total
|
|
|
|
Common Stock
|
|
|
paid in
|
|
|
Accumulated
|
|
|
Stockholders'
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
deficit
|
|
|
Deficit
|
|
Balance as of February 29, 2020
|
|
|
19,048,208
|
|
|
$
|
19,049
|
|
|
$
|
2,436,233
|
|
|
$
|
(3,508,037
|
)
|
|
$
|
(1,052,755
|
)
|
Shares awarded for stock compensation
|
|
|
|
|
|
|
|
|
|
|
9,000
|
|
|
|
|
|
|
|
9,000
|
|
Net loss for the period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(42,972
|
)
|
|
|
(42,972
|
)
|
Balance as of August 31, 2020
|
|
|
19,048,208
|
|
|
$
|
19,049
|
|
|
$
|
2,445,233
|
|
|
$
|
(3,551,009
|
)
|
|
$
|
(1,086,727
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional
|
|
|
|
|
|
|
Total
|
|
|
|
Common Stock
|
|
|
paid in
|
|
|
Accumulated
|
|
|
Stockholders'
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
deficit
|
|
|
Deficit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of February 28, 2019
|
|
|
18,548,208
|
|
|
$
|
18,549
|
|
|
$
|
2,418,733
|
|
|
$
|
(3,431,889
|
)
|
|
$
|
(994,608
|
)
|
Shares awarded for stock compensation
|
|
|
250,000
|
|
|
|
250
|
|
|
|
8,750
|
|
|
|
|
|
|
|
9,000
|
|
Net loss for the period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(43,144
|
)
|
|
|
(43,144
|
)
|
Balance as of August 31, 2019
|
|
|
18,798,208
|
|
|
$
|
18,799
|
|
|
$
|
2,427,483
|
|
|
$
|
(3,475,033
|
)
|
|
$
|
(1,028,752
|
)
|
accompanying notes are an integral part of these financial statements
JUBILANT FLAME INTERNATIONAL, LTD
|
Statements of Cash Flows
|
(Unaudited)
|
|
|
|
|
|
|
For the six months
ended August 31,
|
|
|
|
2020
|
|
|
2019
|
|
Cash Flows from Operating Activities:
|
|
|
|
|
|
|
Net loss
|
|
$
|
(42,972
|
)
|
|
$
|
(43,144
|
)
|
|
|
|
|
|
|
|
|
|
Adjustments to reconcile net (loss) to net cash (used in) operating activities
|
|
|
|
|
|
|
|
|
Website amortization
|
|
|
-
|
|
|
|
-
|
|
Share based compensation
|
|
|
9,000
|
|
|
|
9,000
|
|
Changes in Current Assets and Liabilities:
|
|
|
|
|
|
|
|
|
Account receivable
|
|
|
18
|
|
|
|
(1,234
|
)
|
Inventory
|
|
|
-
|
|
|
|
2,369
|
|
Prepaid expense
|
|
|
6,000
|
|
|
|
6,000
|
|
Accounts payable
|
|
|
(6,647
|
)
|
|
|
49,866
|
|
Due to related party
|
|
|
-
|
|
|
|
(41,858
|
)
|
Accrued officer's compensation
|
|
|
-
|
|
|
|
-
|
|
Net cash used in operating activities
|
|
|
(34,601
|
)
|
|
|
(19,001
|
)
|
Cash Flows from Financing Activities:
|
|
|
|
|
|
|
|
|
Net proceeds from related party loans
|
|
|
26,456
|
|
|
|
9,287
|
|
Net cash provided by financing activities
|
|
|
26,456
|
|
|
|
9,287
|
|
Net (Decrease) In Cash
|
|
|
(8,145
|
)
|
|
|
(9,714
|
)
|
Cash at The Beginning Of The Period
|
|
|
10,628
|
|
|
|
12,115
|
|
Cash at The End Of The Period
|
|
$
|
2,483
|
|
|
$
|
2,401
|
|
The accompanying notes are an integral part of these financial statements
JUBILANT FLAME INTERNATIONAL, LTD
Notes to Financial Statements
August 31, 2020
(Unaudited)
NOTE 1 – ORGANIZATION AND OPERATIONS
Jubilant Flame International, Ltd. (the "Company"), was formed on September 29, 2009 under the name Liberty Vision, Inc. The Company provided web development and marketing services for clients. On December 5, 2012 the Company disposed of its subsidiary corporation to a shareholder for a nominal sum, as well as other management operations. On August 18, 2015, the Company changed its name to Jubilant Flame International, Ltd.
From the fourth quarter of the fiscal year ended February 28, 2018, the Company started to market and sell cosmetics products imported from Asia -Acropass Series products – in the United States market. The Company purchased the inventory from a related party company in China. The Company contracted with a third party to operate the online shopping platform and marketing campaign in the United States until January 2020 when it ceased this business.
From the third quarter of the year ended February 29, 2020, the company began providing technical support services for development of new nutrition food products to sell to customers in USA.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
Interim Financial Information
Interim financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") as promulgated in Item 210 of Regulation S-X. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP") have been condensed or omitted pursuant to such SEC rules and regulations. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of financial position as of August 31, 2020, results of operations, changes in stockholders' equity (deficit) and cash flows for the three month periods ended August 31, 2020 and 2019, as applicable, have been made. The results for these interim periods are not necessarily indicative of the results for the entire year. The accompanying financial statements should be read in conjunction with the financial statements and the notes thereto included in the Company's Form 10-K.
Use of Estimates and Assumptions
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 financial statements and the reported amounts of revenues and expenses during the reporting period. Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.
The Company’s significant estimates include income tax provisions and valuation allowances of deferred tax assets; the fair value of financial instruments and the assumption that the company will continue as a going concern. Those significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to those estimates or assumptions, and certain estimates or assumptions are difficult to measure or value.
Net Loss Per Common Share
Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by dividing net loss by the weighted average number of shares of common stock and potentially outstanding shares of common stock during each period.
Since the company has incurred losses for all periods, the impact of the common stock equivalents would be anti- dilutive and therefore are not included in the calculation.
NOTE 3 – GOING CONCERN
The financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. As of August 31, 2020 the Company had current assets of $14,867, and current liabilities total $1,101,594 resulting in a working capital deficit of $1,086,727. The Company currently has small scale operation activities and has an accumulated deficit of $3,551,009 as of August 31, 2020. This raises substantial doubt about the Company's ability to continue as a going concern.
The Company may raise additional capital through the sale of its equity securities, through an offering of debt securities, or through borrowings from financial institutions or related parties. By doing so, the Company hopes to generate sufficient capital to execute its business plan in the nutrition product technology support sector on an ongoing basis. Management believes that actions presently being taken to obtain additional funding provide the opportunity for the Company to continue as a going concern. There is no guarantee the Company will be successful in achieving these objectives.
NOTE 4 – PREPAID EXPENSE
The Company is paying an annual fee for its OTC Markets service. The service period is from December 1, 2019 to November 30, 2020. The service charge is recorded as a prepaid expense and amortized using straight line amortization over the service period. The prepaid expense balance is $3,000 as of August 31, 2020 compared to $9,000 as of February 29, 2020.
NOTE 5 – RELATED PARTY TRANSACTIONS
In support of the Company’s efforts and cash requirements, it must rely on advances from related parties until such time that the Company can support its operations or attains adequate financing through sales of its common stock or traditional debt financing. There is no formal written commitment for continued support by shareholders. The advances are considered temporary in nature and have not been formalized by a promissory note.
As of August 31, 2020, the Company had a $516,401 loan outstanding with its CEO, Ms. Yan Li. This compares with the outstanding balance of $489,945 for Ms. Yan Li at February 29, 2020. The loans are non-interest bearing, due upon demand and unsecured.
A related party is providing accounting service to the company at an estimated annual service fee of $23,000.
From November 2017, the Company started to purchase cosmetic products from a related party controlled by our CEO. As of the three-month period ended August 31, 2020, the Company incurred a total of $47,643 due to related parties for inventory purchase. This compares with a total of $47,643 due to a related party for inventory purchased and accrued service fee at February 29, 2020.
NOTE 6 – ACCRUED OFFICER COMPENSATION AND STOCK COMPENSATION
On December 15, 2015, the Company entered into employment agreements with its president, Ms. Yan Li, and its former secretary and treasurer, Mr. Robert Ireland. Both agreements were retroactively effective as of December 4, 2015, for a term of 36 months (measured from December 4, 2015). On August 30, 2017, Mr. Robert Ireland resigned as Secretary/Treasurer of the company.
On January 15, 2019, the board of the company approved new compensation to its five officers including two new appointed directors. The five directors waived their salary and receive a total of 500,000 shares each year for a term of three years.
As of August 31, 2020, a total of $535,500 had been accrued as salary compensation payable compared to $535,500 at February 29, 2020 to the president only.
During the six months ended August 31, 2020 and 2019, a total of $9,000 stock compensation had been recorded to the five senior officers respectively.
NOTE 7 – STOCKHOLDERS’ EQUITY
For the six months ended August 31, 2020, a total of 250,000 equivalent shares valued at 9,000 was recorded as stock compensation expense to the president and other four senior officers for their service. It offsets with a same amount of Additional in Capital entry in equity.
NOTE 8 – SUBSEQUENT EVENTS
None.
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the financial statements and the notes to those statements included elsewhere in this Quarterly Report on Form 10-Q. This Quarterly Report on Form 10-Q contains certain statements that are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. Certain statements contained in the MD&A are forward-looking statements that involve risks and uncertainties. The forward-looking statements are not historical facts, but rather are based on current expectations, estimates, assumptions and projections about our industry, business and future financial results. Our actual results could differ materially from the results contemplated by these forward-looking statements due to a number of factors, including those discussed in other sections of this Quarterly Report on Form 10-Q.
Our Business
Jubilant Flame International, Ltd., (the "Company", "the "Registrant", "we", "us" or "our") was formed on September 29, 2009 under the name Liberty Vision, Inc. The Company provided web development and marketing services for clients. On December 5, 2012, the Company disposed of its subsidiary corporation to a shareholder for a nominal sum, as well as other management operations. On December 16, 2012, the Company changed its name to Jiu Feng Investment Hong Kong, Inc. On January 27, 2013, the Company announced the change of its ticker symbol from "LBYV" to "JFIL." On July 24, 2013, the Company changed its business sector to the medical sector. On August 18, 2015 the Company changed its name to Jubilant Flame International, Ltd.
From the fourth quarter of the fiscal year ended February 28, 2018, the Company started to market and sell cosmetics products imported from Asia -Acropass Series products – in the United States market. The Company purchased the inventory from a related party company in China. The Company contracted with a third party to operate the online shopping platform and marketing campaign in the United States.
From the third quarter of the year ended February 29, 2020, the company began providing technical support services for development of new nutrition food products to sell to customers in USA.
The Company has the right to develop and market medical products under a license from BioMark. The primary intended products include Bone-Induction Artificial Bone (“BIAB”) and Vacuum Sealing Drainage (“VSD”) but the Company currently does not have any plan to deploy such licenses and is focusing its operation on the Acropass products.
Results of Operations
Revenue
We recognized zero sales revenue in the three months and in six months ended August 31, 2020 respectively compared to $10,185 sales revenue in the three months and $16,515 sales revenue in the six months ended August 31, 2019.
Operating Expenses
For the three months ended August 31, 2020 compared to the three months ended August 31, 2019
The major components of our operating expenses for the three months ended August 31, 2020 and 2019 are outlined in the table below:
|
|
Three Months Ended
|
|
|
Three Months Ended
|
|
|
|
August 31, 2020
|
|
|
August 31, 2019
|
|
|
|
|
|
|
|
|
Officer compensation
|
|
$
|
4,500
|
|
|
$
|
4,500
|
|
Selling expense
|
|
|
-
|
|
|
|
3,898
|
|
Professional fee
|
|
|
12,324
|
|
|
|
11,257
|
|
OTC Filing fees
|
|
|
3,000
|
|
|
|
3,000
|
|
Office expense
|
|
|
48
|
|
|
|
100
|
|
Total operating expenses
|
|
$
|
19,872
|
|
|
$
|
22,755
|
|
The $2,883 decrease in our operating costs for the three months ended August 31, 2020 compared to three months ended August 31, 2019, was mainly due to a decrease of $3,898 in selling expense due to promotion activity reduction offset with $1,068 increase in professional fee.
For the six months ended August 31,2020 compared to the six months ended August 31,2019
The major components of our operating expenses for the six months ended August 31, 2020 and 2019 are outlined in the table below:
|
|
Six Months Ended
|
|
|
Six Months Ended
|
|
|
|
August 31, 2020
|
|
|
August 31, 2019
|
|
|
|
|
|
|
|
|
Officer compensation
|
|
$
|
9,000
|
|
|
$
|
9,000
|
|
Selling expense
|
|
|
18
|
|
|
|
6,661
|
|
Transfer agent
|
|
|
3,484
|
|
|
|
3,350
|
|
Edgar filing fees
|
|
|
1,922
|
|
|
|
1,458
|
|
Accounting & audit fees
|
|
|
22,000
|
|
|
|
22,900
|
|
OTC Filing fees
|
|
|
6,000
|
|
|
|
6,000
|
|
Office expense
|
|
|
90
|
|
|
|
1,191
|
|
Legal fees
|
|
|
458
|
|
|
|
1,548
|
|
Total operating expenses
|
|
$
|
42,972
|
|
|
$
|
52,108
|
|
The $9,136 decrease in our operating costs for the six months ended August 31, 2020 compared to six months ended August 31, 2019, was mainly due to a decrease of $6,643 in selling expense due to new product campaign and promotion activity reduction.
Other Expenses
No other expense during the period of three months and six months ended August 31, 2020 and 2019.
Net Loss
For the three months ended August 31, 2020, we recognized a net loss of $19,872 compared to the net loss of $17,402 for the corresponding period in 2019.
For the six months ended August 31, 2020, we recognized a net loss of $42,972 compared to the net loss of $43,144 for the corresponding period in 2019.
Liquidity and Capital Resources
Working Capital
|
|
August 31,
2020
|
|
|
February 29,
2020
|
|
Current Assets
|
|
$
|
14,867
|
|
|
$
|
29,030
|
|
Current Liabilities
|
|
$
|
1,101,594
|
|
|
$
|
1,081,786
|
|
Working Capital Deficit
|
|
$
|
(1,086,727
|
)
|
|
$
|
(1,052,756
|
)
|
As of August 31, 2020, the Company had current assets of $14,867, primarily comprising of cash of $2,483, Account receivable of $9,384 and prepaid expense of $3,000, and current liabilities of $1,101,594, resulting in a working capital deficit of $1,086,727. The Company had limited profitable trading activities and has an accumulated deficit of $3,551,009 as of August 31, 2020. This raises substantial doubt about the Company's ability to continue as a going concern.
The financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future.
Based on the Company’s current operating plan and global coronavirus pandemic impact, the Company does not have sufficient cash and cash equivalents to fund its operations for at least the next twelve months. The Company will need to obtain additional financing to operate our business. The Company may raise additional capital through the sale of its equity securities, through an offering of debt securities, or through borrowings from financial institutions or related parties. By doing so, the Company hopes to generate sufficient capital to execute its business plan in the nutrition product technology support sector on an ongoing basis. Management believes that actions presently being taken to obtain additional funding provide the opportunity for the Company to continue as a going concern. There is no guarantee the Company will be successful in achieving these objectives.
Cash Flows from Operating Activities
Our net cash used in operating activities increased by $15,600 in the six months ended August 31, 2020 compared to the net cash used in operating activities in the six months ended August 31, 2019, representing an increase of 82.1%. The increase in net cash used in operating activities was primarily the result of a $16,515 decrease in sale.
Cash Flows from Investing Activities
We did not generate or use any cash from investing activities during the six months ended August 31, 2020 or 2019.
Cash Flows from Financing Activities
Our cash provided by financing activities increased from $9,287 for the six months ended August 31, 2019 to $26,456 for the six months ended August 31, 2020. In both periods, cash was provided by way of loans from related parties.
Future Financings
We anticipate that additional funding will be required in the form of equity financing from the sale of our common stock, through an offering of debt securities, or through borrowings from financial institutions or related parties. However, 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.
Recent Accounting Pronouncements
In December 2019, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (ASU 2019-12), which simplifies the accounting for income taxes. This guidance will be effective for entities for the fiscal years beginning after 15 December 2021, and interim periods within those fiscal years, beginning after December 15, 2022 on a prospective basis, with early adoption permitted. We will adopt the new standard effective March 1, 2021 and do not expect the adoption of this guidance to have a material impact on our consolidated financial statements.
In January 2020, the FASB issued Accounting Standards Update No. 2020-01, Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) (ASU 2020-01), which clarifies the interaction of the accounting for equity securities under Topic 321, the accounting for equity method investments in Topic 323, and the accounting for certain forward contracts and purchased options in Topic 815. This guidance will be effective for entities for the fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020 on a prospective basis, with early adoption permitted. We are currently evaluating the impact of the new guidance.
Off Balance Sheet Arrangements
As of August 31, 2020, we did not have any off-balance-sheet arrangements, as defined in Item 303(a)(4)(ii) of Regulation S-K.