UNITED STATES 
SECURITIES AND EXCHANGE COMMISSION 
Washington, D.C. 20549

 

FORM 10-Q

 

☒     Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended June 30, 2020

 

or

 

☐     Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (For the transition period from    to     ).

 

Commission File Number: 000-55348

 

Palayan Resources, Inc. 
(Exact name of registrant as specified in its charter)

 

Nevada 83-4575865
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)

 

9300 Conroy Windermere Rd. #3250  
Windermere, FL   34786
(Address of principal executive offices) (Zip code)

 

(407) 536-9422
(Registrant’s telephone number, including area code)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days ☒ Yes     ☐ No

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or such shorter period that the registrant was required to submit such files). Yes ☒     No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer ☐ Accelerated filer ☐
   
Non-accelerated filer ☒ Smaller Reporting Company ☒
   
Emerging Growth Company ☐  

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in rule 12b-2 of the Exchange Act.) ☒  Yes     ☐ No

 

The number of shares of the Registrant’s common stock, par value $.001 per share, outstanding as of September 17, 2020 was 34,376,758.

 

Title of Class Trading Symbol(s) Name of Exchange on which registered
Common Stock PLYN OTCMarkets

 

 

 

 

 

 

Palayan Resources Inc.

June 30, 2020

(unaudited)

 

  Index
   
Condensed Balance Sheets (unaudited) F-1
   
Condensed Statements of Operations (unaudited) F-2
   
Condensed Statements of Shareholders’ Deficit (unaudited) F-3
   
Condensed Statements of Cash Flows (unaudited) F-4
   
Notes to the Condensed Financial Statements (unaudited) F-5

 

 

 

 

Palayan Resources Inc.

Condensed Balance Sheets

(Expressed in U.S. dollars)

(unaudited)

 

 

    June 30,
2020
$
(unaudited)
    March 31,
2020
$
 
ASSETS                
                 
Current Assets                
                 
   Cash     15,489       77  
Prepaid deposit and expenses (Note 5)     16,000        
Total Assets     31,489       77  
                 
                 
LIABILITIES AND STOCKHOLDERS’ DEFICIT                
                 
Accounts payable and accrued liabilities     29,916       6,645  
Loans payable (Note 4)     68,000       38,000  
Due to related parties (Note 3)     186,330       163,830  
                 
Total Liabilities     284,246       208,475  
                 
Stockholders’ Deficit                
                 
Common Stock                
Authorized: 500,000,000 common shares, with par value $0.001                
Issued and outstanding: 34,366,758 and 30,020,000 common shares, respectively     34,367       30,020  
Additional paid-in capital     26,059       13,019  
Accumulated deficit     (313,183 )     (251,437 )
Total Stockholders’ (Deficit)     (252,757 )     (208,398 )
Total Liabilities and Stockholders’ (Deficit)     31,489       77  

 

Nature of Operations and Continuance of Business (Note 1)

Subsequent Events (Note 6)

 

(The accompanying notes are an integral part of these condensed financial statements)

 

F-1  

 

 


Palayan Resources Inc.

Condensed Statements of Operations

(Expressed in U.S. dollars)

(unaudited)

 

    Three Months
Ended
June 30,
2020
    Three Months Ended
June 30,
2019
 
    $     $  
Operating Expenses                
                 
Consulting     29,911       8,500  
General and administrative     5,299       1,180  
Professional fees     25,500       6,500  
Total Operating Expenses     60,710       16,180  
Net Loss Before Other Expense     (60,710 )     (16,180 )
Other Expense                
Interest expense     (1,036 )     (64 )
Net Loss     (61,746 )     (16,244 )
Net Loss Per Share – Basic and Diluted     (0.00 )     (0.00 )
Weighted Average Shares Outstanding – Basic and Diluted     31,012,692       30,000,000  

 

(The accompanying notes are an integral part of these condensed financial statements)

 

F-2  

 

 

Palayan Resources Inc.

Condensed Statement of Stockholders’ Equity (Deficit)

(Expressed in U.S. dollars)

(unaudited)

 

    Common Shares     Additional
Paid-in
Capital
    Accumulated
Deficit
    Total  
      #       $       $       $       $  
                                         
Balance, March 31, 2020     30,020,000       30,020       13,019       (251,437 )     (208,398 )
                                         
Shares issued for services     346,758       347       1,040             1,387  
                                         
Shares issued as deposit for acquisition of SMG-Gold B.V.     4,000,000       4,000       12,000             16,000  
                                         
Net loss for the period                       (61,746 )     (61,746 )
                                         
Balance, June 30, 2020     34,366,758       34,367       26,059       (313,183 )     (252,757 )

 

    Common Shares     Additional
Paid-in
Capital
    Accumulated
Deficit
    Total  
      #       $       $       $       $  
                                         
Balance, March 31, 2019     30,000,000       30,000             (178,248 )     (148,248 )
                                         
Net loss for the period                       (16,244 )     (16,244 )
                                         
Balance, June 30, 2019     30,000,000       30,000             (194,492 )     (164,492 )

 

(The accompanying notes are an integral part of these condensed financial statements)

 

F-3  

 

 

Palayan Resources Inc.

Condensed Statements of Cash Flows

(Expressed in U.S. dollars)

(unaudited)

 

    For the
Three Months
Ended June 30,
2020
    For the
Three Months Ended June 30,
2019
 
    $     $  
Operating Activities                
Net loss     (61,746 )     (16,244 )
Items not involving cash:                
Shares issued for services     1,387        
Changes in operating assets and liabilities:                
Accounts payable and accrued liabilities     23,271       7,699  
Due to related party     22,500       3,655  
Net Cash Used In Operating Activities     (14,588 )     (4,890 )
Financing Activities                
Proceeds from loans payable     30,000       5,000  
Net Cash Provided By Financing Activities     30,000       5,000  
Increase in Cash     15,412       110  
Cash – Beginning of Period     77       2,111  
Cash – End of Period     15,489       2,221  
Non-Cash Investing and Financing Activities:                
Common shares issued as deposit for acquisition of SMG-Gold B.V.     16,000        
Supplemental Disclosures                
Interest paid            
Income tax paid            

 

(The accompanying notes are an integral part of these condensed financial statements)

 

F-4  

 

 

Palayan Resources Inc.

Notes to the Condensed Financial Statements

(Expressed in U.S. dollars)

(unaudited)

 

1. Nature of Operations and Continuance of Business

 

Palayan Resources Inc. (the “Company”) was incorporated in the State of Nevada on July 26, 2013 and is a mineral exploration and production company engaged in the exploration, acquisition, and development of mineral properties. On April 1, 2020, the Company entered into a share exchange agreement with Scythian Mining Group Ltd. to acquire 100% interest in SMG-Gold B.V. (“SMG Gold”), a Netherlands company. The agreement was closed on July 7, 2020 and SMG-Gold became a wholly-owned subsidiary of the Company.

 

On March 11, 2020, the World Health Organization declared COVID-19 a global pandemic. This contagious disease outbreak and any related adverse public health developments, has adversely affected workforces, economies, and financial markets globally, leading to an economic downturn. The impact on the Company is not currently determinable, but management continues to monitor the situation.

 

Going Concern

 

These condensed financial statements have been prepared on a going concern basis, which implies that the Company will continue to realize its assets and discharge its liabilities in the normal course of business. As of June 30, 2020, the Company has generated no revenues to date, has a working capital deficit of $252,757, and has an accumulated deficit of $313,183. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability to raise equity or debt financing, and the attainment of profitable operations from the Company’s future business. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

2. Summary of Significant Accounting Policies

 

(a) Basis of Presentation

 

These condensed financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States (“US GAAP”), and are expressed in US dollars. The Company’s fiscal year-end is March 31.

 

(b) Use of Estimates

 

The preparation of these condensed financial statements in conformity with generally accepted accounting principles in the United States 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. The Company regularly evaluates estimates and assumptions related to the recoverability of mineral properties, and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

 

(c) Interim Condensed Financial Statements

 

These interim condensed financial statements have been prepared on the same basis as the annual financial statements and in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s financial position, results of operations and cash flows for the periods shown. The results of operations for such periods are not necessarily indicative of the results expected for a full year or for any future period.

 

F-5  

 

 

Palayan Resources Inc.

Notes to the Condensed Financial Statements

(Expressed in U.S. dollars)

(unaudited)

 

2. Summary of Significant Accounting Policies (continued)

 

(d) Basic and Diluted Net Loss per Share

 

The Company computes net income (loss) per share in accordance with ASC 260, Earnings per Share. ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti dilutive. As of June 30 and March 31, 2020, the Company had no potentially dilutive shares.

 

(e) Recent Accounting Pronouncements

 

The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

 

3.       

Related Party Transactions

 

(a) As at June 30, 2020, the Company owed $146,425 (March 31, 2020 - $146,425) to the former President and Director of the Company. The amount owing is unsecured, non-interest bearing, and due on demand

 

(b) As at June 30, 2020, the Company owed $39,905 (March 31, 2020 - $17,405) to the President of the Company. The amount is unsecured, non-interest bearing, and due on demand. During the period ended June 30, 2020, the Company incurred consulting fees of $22,500 (June 30, 2019 - $8,500) to the President of the Company.

 

(c) During the period ended June 30, 2020, the Company issued 30,968 common shares with a fair value of $124 to directors of the Company for services. Refer to Note 5(b).

 

4.       

Loans Payable

 

(a) On June 17, 2020 the Company issued a note payable for $25,000 to a non-related party. As at June 30, 2020, the Company owed a total of $58,000 (March 31, 2020 - $33,000) to the non-related party, all notes are unsecured, bear interest at 10% per annum, and are due on demand. During the period ended June 30, 2020, the Company incurred interest expense of $912 (June 30, 2019 - $nil) which has been recorded in accounts payable and accrued liabilities.

 

(b) On June 3, 2020 the Company issued a note payable for $5,000 to a non-related party. As at June 30, 2020, the Company owed $5,000 (March 31, 2020 - $nil) to the non-related party, which is unsecured, bears interest at 10% per annum, and is due on demand.

 

(c) As at June 30, 2020, the Company owed $5,000 (March 31, 2020 - $5,000) to a non-related party, which is unsecured, bears interest at 10% per annum, and is due on demand. During the period ended June 30, 2020, the Company incurred interest expense of $125 (June 30, 2019 - $64) which has been recorded in accounts payable and accrued liabilities.

 

5. Share Capital

 

(a) On June 8, 2020, the Company issued 4,000,000 common shares with a fair value of $16,000 as a deposit for the proposed acquisition of SMG Gold. The fair value of the common shares issued was based on an independent valuation of the fair value of the Company’s common stock on the date of issuance. Refer to Note 6(a).

 

(b) On June 8, 2020, the Company issued 30,968 common shares with a fair value of $124 to directors of the Company for services. The fair value of the common shares issued was based on an independent valuation of the fair value of the Company’s common stock on the date of issuance.

 

(c) On June 19, 2020, the Company issued 315,790 common shares with a fair value of $1,263 for consulting and advisory services to a non-related party. The fair value of the common shares issued was based on an independent valuation of the fair value of the Company’s common stock on the date of issuance.

 

F-6  

 

 

Palayan Resources Inc.

Notes to the Condensed Financial Statements

(Expressed in U.S. dollars)

(unaudited)

 

6.       

Subsequent Events

 

(a) On April 2, 2020, the Company entered into a Share Exchange Agreement with Scythian Mining Group Limited (“SMG”), and its wholly owned subsidiary SMG-Gold B.V. (“SMG-Gold”). As per the terms of the agreement, the Company shall acquire 100% of the shares of SMG-Gold in exchange for 1,000,000 Series A preferred shares, and 300,000 Series C preferred shares. In addition, the Company will issue 4,000,000 common shares (issued on June 8, 2020 with a fair value of $16,000 – refer to Note 5(a) above) as part of the payment of outstanding liabilities that will be assumed by SMG-Gold as part of the acquisition. The Company received its 100% interest in SMG-Gold on July 7, 2020 but has not released the Series A and C preferred shares to SMG pending the transfer of the mineral property rights to SMG-Gold which is still outstanding as of the date of the filing. The acquisition is accounted for as an acquisition of a wholly-owned subsidiary, as the acquisition of SMG-Gold did not result in a change in control either through voting rights or with management and board representation in the Company.

 

(b) On July 7, 2020, the Company, through SMG-Gold, its wholly owned subsidiary, received $47,500 from the issuance of a loan payable which is unsecured, non-interest bearing, and due on December 31, 2020.

 

(c) On July 14, 2020, the Company issued 10,000 common shares for consulting services.

 

(d) On August 3, 2020 the Company entered into a consulting agreement with KBHS, LLC, Kevin Harrington, Member. On August 31, 2020 the Company sent a notice terminating the Agreement with KBHS, LLC.

 

F-7  

 

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

FORWARD-LOOKING STATEMENTS

 

This Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) contains forward-looking statements that involve known and unknown risks, significant uncertainties and other factors that may cause our 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 those forward-looking statements. You can identify forward-looking statements by the use of the words may, will, should, could, expects, plans, anticipates, believes, estimates, predicts, intends, potential, proposed, or continue or the negative of those terms. These statements are only predictions. In evaluating these statements, you should consider various factors which may cause our actual results to differ materially from any forward-looking statements. Although we believe that the exceptions reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. We undertake no obligation to revise or update publicly any forward-looking statements for any reason.

 

Liquidity and Capital Resources

 

Since inception we have raised capital through private placements of common stock aggregating $35,000. Our capital commitments for the coming 12 months consist of administrative expenses, expenses associated with the completion of our planned exploration program and costs of distribution of the securities being registered in this report. Including this exploration work and other costs, we estimate that we will have to incur the following expenses during the next 12 months:

 

Description Estimated
Completion Date (1)
Estimated
Expenses
($)
License Renewal Fee SMG-Gold B.V.   27,500
Legal and accounting fees and expenses(2) 12 months 90,000
Investor relations and capital raising 12 months 500,000
General and administrative expenses 12 months 2,200,000
Exploration expenses(3) 12 months 905,000
Transfer Agent 12 months 4,500
Total   3,727,000

 

  (1) Budget Items are listed in order of priority.

  (2) Includes $45,000 for accounting and auditing.

  (3) For Phase I and Phase II of the recommended exploration program.

 

Since our initial share issuances, our company has been unable to raise additional cash forcing it to rely in the future upon cash advances from its loans to meet current and future liabilities over the foreseeable future. Based on our cash on hand of approximately $15,489 as at June 30, 2020, we will be required to raise additional funds to execute our current plan of operation. We have no commitment from anyone to contribute funds to the Company. If we are unable to raise sufficient funds to execute our plan of operation, we intend to scale back our operations commensurately with the funds available to us. In that regard, we will prioritize expenditures to (in order of priority): (i) maintain our mineral exploration license; and (ii) to conduct our planned exploration activities. We intend to raise the capital that we require through the private placement of our securities or through loans. However, we have not received any financing commitments and there is no guarantee that we will be successful in so doing.

 

We have no plant or significant equipment to sell, nor are we going to buy any plant or significant equipment during the next 12 months. We do not intend to hire any employees at this time.

 

Limited Operating History; Need for Additional Capital

 

There is no historical financial information about us upon which to base an evaluation of our performance as an exploration corporation. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources.

 

8 

 

 

We have no assurance that financing will be available to us on acceptable terms. If financing is not available on satisfactory terms, we may be unable to commence, continue, develop or expand our exploration activities. Even if available, equity financing could result in additional dilution to existing shareholder.

 

Results of Operations

 

Revenues

 

From our inception on July 26, 2013 (date of inception) to June 30, 2020, we did not generate any revenues.

 

Expenses

 

Three months ended June 30, 2020 and 2019

 

During the three months ended June 30, 2020, we incurred operating expenses of $60,710 compared to $16,180 during the three months ended June 30, 2019. The increase in operating expenses is due to issuance of share-based compensation of $1,387 relating to the issuance of common shares for director’s fees and consulting services, as well as an increase in professional fees of $19,000 relating to audit, accounting, and legal costs relating to our SEC filing requirements. Furthermore, we incurred management consulting fees of $22,500 to our Chief Executive Officer and Director.

 

Net Loss

 

During the three months ended June 30, 2020, we incurred a net loss of $61,746 compared to a net loss of $16,244 for the three months ended June 30, 2019. In addition to operating expense, the Company incurred $1,036 of interest expense for loans payable of $68,000 which is unsecured, bears interest at 10% per annum, and is due on demand. For the three months ended June 30, 2020 and 2019, we had a net loss per share of $nil.

 

Liquidity and Capital Resources

 

At June 30, 2020, the Company had cash of $15,489 and total assets of $31,489 compared with cash and total assets of $77 at March 31, 2020. During the period, we issued 4,000,000 common shares with a fair value of $16,000 which was issued in June 2020, as a deposit for the acquisition of SMG-Gold B.V. The fair value of the common shares issued was based on an independent valuation of the fair value of the Company’s common stock on the date of issuance. Refer to Note 6(a).

 

At June 30, 2020, the Company had liabilities of $284,246 compared to liabilities of $208,475 at March 31, 2020. The increase in liabilities is due to $23,271 increase in accounts payable and accrued liabilities relating to unpaid professional fees and day-to-day transactional costs, an increase of $30,000 in loans payable for two additional loans issued during the period which are unsecured, bear interest at 10% per annum, and are due on demand, and $22,500 increase in amounts due to related parties relating to unpaid management fees incurred during the period.

 

On June 8, 2020, the Company issued 4,000,000 common shares with a fair value of $16,000 as a deposit for the acquisition of SMG-Gold B.V., which acquisition was entered into on April 6, 2020, and closed on July 7, 2020. The fair value of the common shares issued was based on an independent valuation of the fair value of the Company’s common stock on the date of issuance. Refer to Note 6(a). Furthermore, we issued 346,758 common shares with a fair value of $1,387 for services including 30,968 common shares with a fair value of $124 for director’s fees.

 

Cash Flows

 

Cash from Operating Activities

 

During the three months ended June 30, 2020, we used cash of $14,588 for operating activities compared to $4,890 during the three months ended June 30, 2019. Overall, we had limited cash flows during the period and the use of cash is consistent on a year-to-year basis.

 

Cash from Investing Activities

 

During the three months ended June 30, 2020 and 2019, we did not have any investing activities.

 

9 

 

 

Cash from Financing Activities

 

During the three months ended June 30, 2020, we received $30,000 of funding from a loan payable which is unsecured, bears interest at 10% per annum, and is due on demand compared to $5,000 of proceeds from a loan payable received during the three months ended June 30, 2019.

 

Trends

 

We are in the pre-exploration stage, have not generated any revenue and have no prospects of generating any revenue in the foreseeable future. We are unaware of any known trends, events or uncertainties that have had, or are reasonably likely to have, a material impact on our business or income, either in the long term of short term, other than as described in this section or in “Risk Factors”.

 

Off-Balance Sheet Arrangements

 

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our stockholders.

 

Inflation

 

The effect of inflation on our revenues and operating results has not been significant.

 

Critical Accounting Policies

 

Set forth below are certain of our important accounting policies. For a full explanation of these and other of our important accounting policies, see Note 2 to Notes to the Financial Statements below.

 

Our financial statements are presented in United States dollars and are prepared using the accrual method of accounting which conforms to US GAAP.

 

Going Concern

 

On March 11, 2020, the World Health Organization declared COVID-19 a global pandemic. This contagious disease outbreak and any related adverse public health developments, has adversely affected workforces, economies, and financial markets globally, leading to an economic downturn. The impact on the Company is not currently determinable, but management continues to monitor the situation.

 

The Company’s financial statements have been prepared on a going concern basis, which implies that the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has generated no revenues to date, and an accumulated deficit of $313,813. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability to raise equity or debt financing, and the attainment of profitable operations from the Company’s future business. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

The Company’s plan of action over the next twelve months is to raise capital.

 

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 certain 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 periods presented. We are required to make judgments and estimates about the effect of matters that are inherently uncertain. Although, we believe our judgments and estimates are appropriate, actual future results may be different; if different assumptions or conditions were to prevail, the results could be materially different from our reported results.

 

10 

 

 

Long-Lived Assets

 

Long-Lived assets, such as property and equipment and purchased intangibles with finite lives (subject to amortization), are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable in accordance with A 360 “Property, Plant, and Equipment”. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed significantly before the end of its estimated useful life.

 

Recoverability of assets is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by an asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized as the amount by which the carrying amount exceeds the estimated fair value of the asset. The estimated fair value is determined using a discounted cash flow analysis. Any impairment in value is recognized as an expense in the period when the impairment occurs.

 

Recent Accounting Pronouncements

 

We review new accounting standards as issued. Although some of these accounting standards issued or effective after the end of our previous fiscal year may be applicable to us, we have not identified any standards that we believe merit further discussion. We believe that none of the new standards will have a significant impact on our financial position, future operations or cash flows

 

Item 3. Quantitative and Qualitative Disclosure about Market Risk

 

None

 

Item 4. Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures

 

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the evaluation, both the Principal Executive Officer and the Principal Financial Officer concluded that our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, were not effective as of June 30, 2020.

 

Internal Control over Financial Reporting

 

There was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Securities Act of 1934) that materially affected, or is reasonably likely to materially affect, such internal control over financial reporting during the quarter ended June 30, 2020.

 

11 

 

 

Part II — OTHER INFORMATION

 

Item 1. Legal Proceedings

 

None.

 

Item 1A. Risk Factors

In addition to other information set forth in this report, you should carefully consider the risk factors described in our Registration Statement on Form S-1, which was declared effective on November 12, 2014. Those factors could materially affect our business, financial condition or future results. In addition, risks and uncertainties not currently known to us or that we currently deem to be immaterial may also have a materially adverse effect on our business, financial condition and/or operating results.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

None.

 

Item 3. Defaults Upon Senior Securities

 

None.

 

Item 4. (Removed and reserved)
   
Item 5. Other Information

 

None.

 

Item 6. Exhibits

 

Exhibit
Number
  Ref   Description of Document
         
31.1       Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
         
31.2       Certification of Principal Financial and Accounting Officer pursuant to Section 302 of the Sarbanes- Oxley Act of 2002.
         
32.1       Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002.
         
32.2       Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002.
         
101   *   The following materials from this Quarterly Report on Form 10-Q for the quarter ended December 31, 2011, formatted in XBRL (eXtensible Business Reporting Language):
         

 

* Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

 

12 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

  PALAYAN RESOURCES, INC.
   
Date: September 22, 2020 By: /s/ James Jenkins
    James Jenkins
    President
    (Principal Executive Officer; Principal Financial Officer)

 

13 

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