UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________
FORM 10-Q
____________
x QUARTERLY REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended January
31, 2015
OR
o
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: 333-186461
_______________________________________
SELECT-TV SOLUTIONS, INC.
(Exact name of registrant
as specified in its charter)
_______________________________________
Nevada |
|
99-0378854 |
(State or other jurisdiction of
incorporation or organization) |
|
(IRS Employer Identification No.) |
|
|
|
1395 Brickell Avenue, Suite
800
Miami, FL |
|
33131 |
(Address of principal executive offices) |
|
(Zip Code) |
(418) 264-7134
(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 x No ¨
Indicate
by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x 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 ¨ (Do not check if a smaller reporting company) |
Smaller reporting company x |
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x
As of March 17, 2015, the registrant
had 176,447,075 shares of its Common Stock, $0.001 par value, outstanding.
SELECT-TV SOLUTIONS INC.
FORM 10-Q
JANUARY 31, 2015
TABLE OF CONTENTS
PART I – FINANCIAL INFORMATION |
|
|
|
|
Item 1. |
Financial Statements |
|
|
Consolidated Balance Sheets as of January 31, 2015 (unaudited) and April 30, 2014 |
3 |
|
Consolidated Statements of Operations for the Three and Nine months Ended January 31, 2015 and 2014 (unaudited) |
4 |
|
Consolidated Statements of Cash Flows for the Nine months Ended January 31, 2015 and 2014 (unaudited) |
5 |
|
Notes to Consolidated Financial Statements (unaudited) |
7 |
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
15 |
Item 3. |
Quantitative and Qualitative Disclosures About Market Risk |
18 |
Item 4. |
Controls and Procedures |
18 |
|
|
|
PART II – OTHER INFORMATION |
|
|
|
|
Item 1. |
Legal Proceedings |
19 |
Item 1A. |
Risk Factors |
19 |
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds |
19 |
Item 3. |
Defaults Upon Senior Securities |
19 |
Item 4. |
Mine Safety Disclosures |
19 |
Item 5. |
Other Information |
19 |
Item 6. |
Exhibits |
19 |
|
|
|
SIGNATURES |
|
20 |
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
Select-TV Solutions, Inc.
Consolidated Balance Sheets
| |
January 31, | | |
April 30, | |
| |
2015 | | |
2014 | |
| |
(unaudited) | | |
Restated | |
| |
| | |
| |
ASSETS |
| |
| | |
| |
Current assets: | |
| | | |
| | |
Cash and cash equivalents | |
$ | 310,936 | | |
$ | 543,853 | |
Accounts receivable | |
| 2,696 | | |
| – | |
Sales tax receivable | |
| 52,740 | | |
| – | |
Due from related parties | |
| 320,706 | | |
| 346,050 | |
Inventory | |
| 284,305 | | |
| – | |
Prepaid expenses | |
| 887,367 | | |
| – | |
Total current assets | |
| 1,858,750 | | |
| 889,903 | |
| |
| | | |
| | |
Equipment, net | |
| 26,786 | | |
| – | |
| |
| | | |
| | |
Licenses, net | |
| 56,983 | | |
| – | |
| |
| | | |
| | |
Goodwill | |
| 3,446,495 | | |
| – | |
| |
| | | |
| | |
Total assets | |
$ | 5,389,014 | | |
$ | 889,903 | |
| |
| | | |
| | |
| |
| | | |
| | |
LIABILITIES AND STOCKHOLDERS' DEFICIT | |
| | | |
| | |
| |
| | | |
| | |
Current liabilities: | |
| | | |
| | |
Accounts payable | |
$ | 188,804 | | |
$ | 14,700 | |
Accrued liabilities | |
| 76,351 | | |
| – | |
Loans payable - current | |
| 40,645 | | |
| – | |
Total current liabilities | |
| 305,800 | | |
| 14,700 | |
| |
| | | |
| | |
Other liabilities | |
| – | | |
| – | |
| |
| | | |
| | |
Total liabilities | |
| 305,800 | | |
| 14,700 | |
| |
| | | |
| | |
Stockholders' equity: | |
| | | |
| | |
Common stock, $0.001 par value, 500,000,000 shares authorized,163,281,025 and 54,134,000 shares issued and outstanding at January 31, 2015 and April 30, 2014, respectively | |
| 163,281 | | |
| 54,134 | |
Paid-in capital (deficiency) | |
| 6,947,804 | | |
| (34,614 | ) |
Common stock issuable | |
| 1,400,855 | | |
| 1,482,366 | |
Deferred issuance costs | |
| – | | |
| (128,194 | ) |
Accumulated other comprehensive gain | |
| 5,234 | | |
| – | |
Accumulated deficit | |
| (3,433,960 | ) | |
| (498,489 | ) |
Total stockholders' equity | |
| 5,083,214 | | |
| 875,203 | |
| |
| | | |
| | |
Total liabilities and stockholders' equity | |
$ | 5,389,014 | | |
$ | 889,903 | |
See accompanying notes to consolidated financial statements.
Select-TV Solutions, Inc.
Consolidated Statements of Operations
(Unaudited)
| |
For the Three Months Ended | | |
For the Nine Months Ended | |
| |
January 31, | | |
January 31, | | |
January 31, | | |
January 31, | |
| |
2015 | | |
2014 | | |
2015 | | |
2014 | |
| |
| | |
| | |
| | |
| |
Revenues | |
$ | 1,152 | | |
$ | – | | |
$ | 30,977 | | |
$ | – | |
| |
| | | |
| | | |
| | | |
| | |
Operating expenses: | |
| | | |
| | | |
| | | |
| | |
Cost of revenues | |
| 20,492 | | |
| – | | |
| 190,073 | | |
| – | |
Selling and marketing expenses | |
| 5,347 | | |
| – | | |
| 26,000 | | |
| – | |
General and administrative expenses | |
| 876,310 | | |
| 1,164 | | |
| 2,749,008 | | |
| 9,462 | |
| |
| | | |
| | | |
| | | |
| | |
Total operating costs | |
| 902,149 | | |
| 1,164 | | |
| 2,965,081 | | |
| 9,462 | |
| |
| | | |
| | | |
| | | |
| | |
Loss from operations | |
| (900,997 | ) | |
| (1,164 | ) | |
| (2,934,104 | ) | |
| (9,462 | ) |
| |
| | | |
| | | |
| | | |
| | |
Other income (expense): | |
| | | |
| | | |
| | | |
| | |
Other income | |
| – | | |
| 1,450 | | |
| – | | |
| 1,450 | |
Currency exchange gain (loss) | |
| 817 | | |
| – | | |
| (1,367 | ) | |
| – | |
| |
| | | |
| | | |
| | | |
| | |
Income (loss) before income taxes | |
| (900,180 | ) | |
| 286 | | |
| (2,935,471 | ) | |
| (8,012 | ) |
| |
| | | |
| | | |
| | | |
| | |
Provision for income taxes | |
| – | | |
| – | | |
| – | | |
| – | |
| |
| | | |
| | | |
| | | |
| | |
Net income (loss) | |
$ | (900,180 | ) | |
$ | 286 | | |
$ | (2,935,471 | ) | |
$ | (8,012 | ) |
| |
| | | |
| | | |
| | | |
| | |
| |
| | | |
| | | |
| | | |
| | |
Net income (loss) per share - basic and diluted | |
$ | (0.01 | ) | |
$ | 0.00 | | |
$ | (0.02 | ) | |
$ | (0.00 | ) |
| |
| | | |
| | | |
| | | |
| | |
Weighted average number of shares
outstanding - Basic and Diluted |
|
|
159,884,891 |
|
|
|
54,134,000 |
|
|
|
120,026,306 |
|
|
|
54,134,000 |
|
| |
| | | |
| | | |
| | | |
| | |
Net income (loss) | |
| (900,180 | ) | |
| 286 | | |
| (2,935,471 | ) | |
| (8,012 | ) |
| |
| | | |
| | | |
| | | |
| | |
Foreign currency translation gain | |
| 3,500 | | |
| – | | |
| 3,500 | | |
| – | |
| |
| | | |
| | | |
| | | |
| | |
Total comprehensive income (loss) | |
$ | (896,680 | ) | |
$ | 286 | | |
$ | (2,931,971 | ) | |
$ | (8,012 | ) |
See accompanying notes to consolidated financial statements.
Select-TV Solutions, Inc.
Consolidated Statements of Cash Flows
(unaudited)
| |
For the Nine Months Ended | |
| |
January 31, | | |
January 31, | |
| |
2015 | | |
2014 | |
| |
| | |
| |
Cash flows from operating activities: | |
| | | |
| | |
Net loss | |
$ | (2,935,471 | ) | |
$ | (8,012 | ) |
Adjustments to reconcile net loss to net cash used in operations: | |
| | | |
| | |
Depreciation and amortization | |
| 32,002 | | |
| 486 | |
Stock issued and issuable for services | |
| 1,198,000 | | |
| – | |
Changes in operating assets and liabilities: | |
| | | |
| | |
Accounts receivable | |
| (424 | ) | |
| – | |
Sales tax receivable | |
| 5,015 | | |
| – | |
Inventory | |
| (19,160 | ) | |
| – | |
Prepaid expenses | |
| (149,630 | ) | |
| – | |
Accounts payable | |
| 40,324 | | |
| – | |
Accrued liabilities | |
| 64,908 | | |
| – | |
Net cash used in operating activities | |
| (1,764,436 | ) | |
| (7,526 | ) |
| |
| | | |
| | |
Cash flows from investing activities: | |
| | | |
| | |
Acquisition of equipment | |
| (10,373 | ) | |
| – | |
Cash acquired in merger | |
| 912 | | |
| – | |
Net cash used in investing activities | |
| (9,461 | ) | |
| – | |
| |
| | | |
| | |
Cash flows from financing activities: | |
| | | |
| | |
Advances to related parties | |
| (692,056 | ) | |
| – | |
Proceeds from sale of stock subscriptions | |
| 1,202,855 | | |
| – | |
Proceeds from sale of common stock and warrants, net of issuance costs | |
| 1,118,949 | | |
| – | |
Payments on loans payable | |
| (93,350 | ) | |
| – | |
Net cash provided by financing activities | |
| 1,536,398 | | |
| – | |
| |
| | | |
| | |
Effects of exchange rates on cash | |
| 4,582 | | |
| – | |
| |
| | | |
| | |
Net increase in cash | |
| (232,917 | ) | |
| (7,526 | ) |
| |
| | | |
| | |
Cash and cash equivalents at beginning of period | |
| 543,853 | | |
| 7,978 | |
| |
| | | |
| | |
Cash and cash equivalents at end of period | |
$ | 310,936 | | |
$ | 452 | |
Continued
Select-TV Solutions, Inc.
Consolidated Statements of Cash Flows (Continued)
(unaudited)
| |
For the Nine Months Ended | |
| |
January 31, | | |
January 31, | |
| |
2015 | | |
2014 | |
| |
| | |
| |
Supplemental disclosure of cash flow information: | |
| | | |
| | |
| |
| | | |
| | |
Cash paid for interest | |
$ | – | | |
$ | – | |
| |
| | | |
| | |
Cash paid for taxes | |
$ | – | | |
$ | – | |
| |
| | | |
| | |
Non-cash investing and financing activities: | |
| | | |
| | |
| |
| | | |
| | |
49,678,443 shares issued in acquisition of Select-TV Solutions (USA), Inc.: | |
| | |
Net liabilities acquired in acquisitions, net of cash | |
$ | 464,054 | | |
$ | – | |
Goodwill | |
$ | (3,446,495 | ) | |
$ | – | |
Common stock | |
$ | 49,679 | | |
$ | – | |
Paid in capital | |
$ | 2,931,028 | | |
$ | – | |
Other comprehensive loss | |
$ | 1,734 | | |
$ | – | |
| |
| | | |
| | |
Common stock issued and issuable for prepaid consulting services: | |
| | | |
| | |
Prepaid expenses | |
$ | (637,737 | ) | |
$ | – | |
Common stock | |
$ | 8,128 | | |
$ | – | |
Paid in capital | |
$ | 529,609 | | |
$ | – | |
Common stock issuable | |
$ | 100,000 | | |
$ | – | |
| |
| | | |
| | |
Common stock issued for subscriptions received: | |
| | | |
| | |
Common stock | |
$ | 29,647 | | |
$ | – | |
Paid in capital | |
$ | 1,324,525 | | |
$ | – | |
Common stock issuable | |
$ | (1,482,366 | ) | |
$ | – | |
Deferred issuance costs | |
$ | 128,194 | | |
$ | – | |
| |
| | | |
| | |
Common stock returned to treasury and cancelled: | |
| | | |
| | |
Common stock | |
$ | (8,100 | ) | |
$ | – | |
Paid in capital | |
$ | 8,100 | | |
$ | – | |
See accompanying notes to consolidated financial statements.
Select-TV Solutions, Inc.
Notes to Consolidated Financial Statements
January 31, 2015
(Unaudited)
Note 1 – Organization, Presentation and Going Concern
Organization
Select-TV Solutions, Inc. (the "Company"
or “SELT”) was incorporated in Nevada on May 17, 2011 under the name of Renaissance Films Inc. (“RFI”)
and intended to produce documentary films. On September 26, 2011, the Company changed its name to Sedition Films Inc.
On April 7, 2014, the Company
experienced a change in control. Conseil Plumage Blanc Ltd. (“CPB”) acquired a majority of the issued and
outstanding common stock of the Company in accordance with a stock purchase agreement by and between CPB and Jesse Lawrence,
the Company’s former director and majority shareholder. On the closing date, April 7, 2014, pursuant to the
terms of the Stock Purchase Agreement, CPB purchased from Jesse Lawrence 40,000,000 shares of the Company’s outstanding
common stock for $375,000. As a result of the change in control, CPB owned a total of 40,000,000 shares of the Company’s
common stock representing 74%.
On May 1, 2014, the Company filed an amendment
to its Articles of Incorporation in the State of Nevada to change its name to Select-TV Solutions, Inc.
On July 18, 2014, the Company entered into
a Merger Agreement with Select-TV Solutions (USA), Inc. (“STVU”), a Florida corporation. Pursuant to the terms of the
Agreement, the Company issued 1.25 shares of common stock for each share STVU, or 49,678,443 shares. As a result of the merger,
the Company, as the surviving entity, acquired the license rights to Select-TV HITV (Hospitality Interactive TV, software and hardware),
and EMAGINE (home IPTV software and hardware), thus enabling the Company to provide end-to-end IPTV (Internet Protocol Television)
solutions to the Hospitality, Residential and Hospital subscribers in North America. The Closing of the transaction was effective
on the close of business July 31, 2014.
On January 13, 2015, the Company formed
Select-TV USA Holdings, Inc. (“STVH”), a Nevada corporation, as a wholly-owned subsidiary to acquire companies in and
related to the Hospitality, Residential and Hospital IPTV industry.
Stock Split
On May 1, 2014, the Company's Board of
Directors declared a ten-to-one forward stock split of all outstanding shares of common stock. The effect of the stock split increased
the number of shares of common stock outstanding from 5,413,400 to 54,134,000 as of May 1, 2014. All common share and per common
share data in these financial statements and related notes hereto have been retroactively adjusted to account for the effect of
the stock split for all periods presented prior to May 1, 2014. The total number of authorized common shares and the par value
thereof was not changed by the split.
Basis of Presentation
The accompanying unaudited consolidated
financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S.
GAAP”) for interim financial statement presentation and in accordance with Form 10-Q. Accordingly, they do not include all
of the information and footnotes required in annual financial statements. In the opinion of management, the unaudited consolidated
financial statements contain all adjustments (consisting only of normal recurring accruals) necessary to present fairly the financial
position and results of operations and cash flows for the interim periods reported in this Form 10-Q. The results of operations
presented are not necessarily indicative of the results to be expected for any other interim period or for the entire year.
These unaudited consolidated financial
statements should be read in conjunction with the April 30, 2014 audited annual financial statements included in the Annual Report
on Form 10-K/A, filed with the U.S. Securities and Exchange Commission (“SEC”) on September 10, 2014.
Going Concern
The accompanying unaudited consolidated
financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business. The Company has incurred a net loss of $2,935,471 for the nine months ended January
31, 2015 and has incurred cumulative losses since inception of $3,433,960. These conditions raise substantial doubt about the ability
of the Company to continue as a going concern.
Select-TV Solutions, Inc.
Notes to Consolidated Financial Statements
January 31, 2015
(Unaudited)
Note 1 – Organization, Presentation and Going Concern
(Continued)
Going Concern (Continued)
The ability of the Company to continue
as a going concern is dependent upon its abilities to generate revenues, to continue to raise investment capital, and develop and
implement its business plan. No assurance can be given that the Company will be successful in these efforts.
The unaudited financial statements do not
include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification
of liabilities that might be necessary should the Company be unable to continue as a going concern. Management believes that actions
presently being taken to obtain additional funding and implement its strategic plans provide the opportunity for the Company to
continue as a going concern. No assurance can be given that the Company will be successful in these efforts.
Significant Accounting Policies
Revenue Recognition
Revenue is recognized upon delivery when
the following conditions are met:
| · | The Company has transferred the significant
risks and rewards of ownership to the buyer; |
| · | The amount of revenue can be measured
reliably; |
| · | It is probable that the economic benefits
associated with the transaction will flow to the Company; |
| · | And collection is assured. |
These conditions occur when the goods or
services have been delivered to the contractually agreed location of the customer.
Inventory
Inventories are stated at the lower of
cost or market (“LCM”). The Company uses the first-in-first-out (“FIFO”) method of valuing inventory. Inventory
consists primarily of finished goods and accessories for use in the delivery of media content to its customers.
Goodwill and Other Intangible Assets
Goodwill represents the excess of acquisition
consideration paid over the fair value of identifiable net tangible and identifiable intangible assets acquired. Goodwill and other
indefinite-lived intangible assets are not amortized, but are reviewed for impairment at least annually, in the fourth quarter,
or earlier upon the occurrence of certain triggering events.
Goodwill is allocated among and evaluated
for impairment at the reporting unit level. Management evaluates goodwill for impairment using a two-step process provided by Financial
Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 350, Intangibles —
Goodwill and Other. The first step is to compare the fair value of each of our reporting units to their respective book values,
including goodwill. If the fair value of a reporting unit exceeds its book value, reporting unit goodwill is not considered impaired
and the second step of the impairment test is not required. If the book value of a reporting unit exceeds its fair value, the second
step of the impairment test is performed to measure the amount of impairment loss, if any. The second step of the impairment test
compares the implied fair value of the reporting unit’s goodwill with the book value of that goodwill. If the book value
of the reporting unit’s goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an
amount equal to that excess. Intangible assets with determinable useful lives are amortized using the straight-line method over
the expected life of the assets. The Company did not recognize any impairment losses for the nine months ended January 31, 2015.
Principles of Consolidation
The consolidated financial statements include
the accounts of Select-TV Solutions, Inc. and its wholly-owned subsidiaries, Oriana Technologies Canada Inc., Select-TV Solutions
(Canada), Inc. and Select-TV USA Holdings, Inc. All significant inter-company balances and transactions have been eliminated in
consolidation.
Select-TV Solutions, Inc.
Notes to Consolidated Financial Statements
January 31, 2015
(Unaudited)
Note 2 – Prepaid Expenses
Prepaid expenses consist of the following
at January 31, 2015 and April 30, 2014:
| |
January 31, | | |
April 30, | |
| |
2015 | | |
2014 | |
| |
| | |
| |
Prepaid consulting | |
$ | 113,385 | | |
$ | – | |
| |
| | | |
| | |
Acquisition deposits | |
| 600,000 | | |
| | |
| |
| | | |
| | |
Hotel deployment partnership agreement | |
| 98,000 | | |
| – | |
| |
| | | |
| | |
Deposits on inventory | |
| 69,500 | | |
| – | |
| |
| | | |
| | |
Other | |
| 6,482 | | |
| – | |
| |
| | | |
| | |
Prepaid expenses | |
$ | 887,367 | | |
$ | – | |
During the nine months ended January 31,
2015, the Company issued an aggregate of 8,127,366 shares of its restricted common stock, and an additional 1,000,000 shares of
its restricted common stock are included in common stock issuable, to twelve consultants for services to be provided pursuant to
consulting agreements. The shares were valued at an average price of $0.07 per share based on the most recent sales of stock subscriptions
to investors as of the dates of obligation for a total of $637,737. Based on the terms of the agreements, $524,352 has been included
in general and administrative expenses for the nine months ended January 31, 2015 and $113,385 is included in prepaid expenses
at January 31, 2015. (See Note 5 – Stockholders’ Equity).
During the nine months ended January 31,
2015, the Company has advanced $600,000 related to potential acquisitions (See Note 8 – Subsequent Events).
On May 1, 2014, STVU (which was merged
into the Company on July 31, 2014) entered into a Hotel Deployment Partnership Agreement with AACSA Partners LLC (“AACSA”)
whereby AACSA is to provide the Company with up to 1,000 hotel customers through three distinct phases. The agreement has an initial
term of seven years and renews annually for each subsequent year unless terminated as permitted in the agreement.
The three Phases are as follows:
Phase 1 – Includes a commitment
by AACSA for contracting of 100 hotels nationwide by December 31, 2014. The Company has paid a $100,000 fee for Phase 1 as of July
31, 2014. Two hotels have been deployed as of January 31, 2015 and $2,000 is included in cost of revenues for the three and nine
months ended January 31, 2015. $98,000 is included in prepaid expenses at January 31, 2015.
Phase 2 – Includes a commitment
by AACSA for contracting an additional 150 hotels nationwide between January 1, 2015 and June 30, 2015. Fees of $150,000 will be
payable in installments of $75,000 due on January 15, 2015 (unpaid) and $75,000 due on April 15, 2015 for the Phase 2 implementation.
Phase 3 – Includes a commitment
by AACSA for contracting an additional 750 hotels nationwide between July 1, 2015 and June 30, 2016. Fees of $750,000 will be payable
in three equal quarterly installments of $250,000 each starting on July 1, 2015 for the Phase 3 implementation.
As of January 31, 2015, the Company has
prepaid $69,500 on a purchase order for inventory from a supplier.
Select-TV Solutions, Inc.
Notes to Consolidated Financial Statements
January 31, 2015
(Unaudited)
Note 3 – Equipment, net
Equipment, net, is recorded at cost and consisted of the following
at January 31, 2015 and April 30, 2014:
| |
January 31, | | |
April 30, | |
| |
2015 | | |
2014 | |
| |
| | |
| |
Equipment | |
$ | 57,494 | | |
$ | – | |
| |
| | | |
| | |
Accumulated depreciation | |
| (30,708 | ) | |
| – | |
| |
| | | |
| | |
Equipment, net | |
$ | 26,786 | | |
$ | – | |
Depreciation expense was $5,702 and $486
for the nine months ended January 31, 2015 and 2014, respectively. The balance of equipment at January 31, 2015 was a result of
the merger with STVU on July 31, 2014 and equipment purchases of $10,373 during the nine months ended January 31, 2015. In April
2014, in conjunction with the Company’s change in control, the total amount of film equipment was disposed of at a loss of
$498.
Note 4 – Licenses, net
As a result of the merger with STVU, the
Company acquired the license rights to Select-TV HITV (Hospitality Interactive TV, software and hardware), and EMAGINE (home IPTV
software and hardware), thus enabling the Company to provide end-to-end IPTV (Internet Protocol Television) solutions to the Hospitality,
Residential and Hospital subscribers in North America. Licenses, net, consisted of the following at January 31, 2015 and April
30, 2014:
| |
January 31, | | |
April 30, | |
| |
215 | | |
2014 | |
| |
| | |
| |
Licenses | |
$ | 263,000 | | |
$ | – | |
| |
| | | |
| | |
Accumulated amortization | |
| (206,017 | ) | |
| – | |
| |
| | | |
| | |
Licenses, net | |
$ | 56,983 | | |
$ | – | |
Amortization expense was $26,300 and $-0- for the nine months
ended January 31, 2015 and 2014, respectively.
Note 5 – Stockholders’ Equity
The Company has authorized 500,000,000
shares of Common Stock, $0.001 par value.
On May 1, 2014, the Company's Board of
Directors declared a ten-to-one forward stock split of all outstanding shares of common stock. The effect of the stock split increased
the number of shares of common stock outstanding from 5,413,400 to 54,134,000 as of May 1, 2014. All common share and per common
share data in these consolidated financial statements and related notes hereto have been retroactively adjusted to account for
the effect of the stock split for all periods presented prior to May 1, 2014. The total number of authorized common shares and
the par value thereof was not changed by the split.
During the nine months ended January 31,
2015, the Company issued 29,647,316 shares of its restricted common stock for stock subscriptions received as of April 30, 2014
of $1,482,366. These shares were included in common stock issuable at April 30, 2014. $128,194 of issuance costs were charged to
paid in capital relating to these shares during the nine months ended January 31, 2015.
Select-TV Solutions, Inc.
Notes to Consolidated Financial Statements
January 31, 2015
(Unaudited)
Note 5 – Stockholders’ Equity (Continued)
During the nine months ended January 31,
2015, the Company issued 18,293,900 shares of its restricted common stock for cash of $1,118,949 (net of issuance costs of $415,440).
500,000 of these shares included warrants to purchase an aggregate of 250,000 additional shares of the Company’s restricted
common stock at an exercise price of $0.15. The warrants expire three years after their grant.
Pursuant to the merger with STVU, the Company
issued 1.25 shares of its restricted common stock for each share of STVU, or 49,678,443 shares. These shares have been valued at
a fair value of $2,980,707 based on the average vale of stock subscriptions sold to investors at the date of merger.
During the nine months ended January 31,
2015, the Company issued an aggregate of 8,000,000 shares of its restricted common stock to its then two directors. The shares
were valued at $0.10 per share based on the most recent sales of stock subscriptions to investors at the date of issuance for a
total of $800,000, which is included in general and administrative expenses for the nine months ended January 31, 2015.
During the nine months ended January 31,
2015, the Company issued an aggregate of 2,500,000 shares of its restricted common stock to a consultant for services pursuant
to a consulting agreement. The shares were valued at an average of $0.08 per share based on the most recent sales of stock subscriptions
to investors at the dates of obligation for a total of $200,000, which is included in general and administrative expenses for the
nine months ended January 31, 2015.
During the nine months ended January 31,
2015, the Company issued an aggregate of 1,000,000 shares of its restricted common stock to two of its directors for services.
The shares were valued at $0.10 per share based on the most recent sales of stock subscriptions to investors at the date of obligation
for a total of $100,000, which is included in general and administrative expenses for the nine months ended January 31, 2015.
During the nine months ended January 31,
2015, the Company issued an aggregate of 8,127,366 shares of its restricted common stock, and an additional 1,000,000 shares of
its restricted common stock are included in common stock issuable, to twelve consultants for services to be provided pursuant to
consulting agreements. The shares were valued at an average price of $0.07 per share based on the most recent sales of stock subscriptions
to investors as of the dates of obligation for a total of $637,737. Based on the terms of the agreements, $524,352 has been included
in general and administrative expenses for the nine months ended January 31, 2015 and $113,385 is included in prepaid expenses
at January 31, 2015.
During the nine months ended January 31,
2015, the Company received stock subscriptions of $1,202,855 for 14,856,050 shares of common stock. These shares are included in
common stock issuable at January 31, 2015. 10,750,000 of these shares include warrants to purchase an aggregate of 5,375,000 additional
shares of the Company’s restricted common stock at an exercise price of $0.15. The warrants expire three years after their
grant.
Pursuant to consulting agreements, the
Company is obligated to issue 980,000 shares of its restricted common stock to two consultants for fees related to the receipt
of common stock subscriptions from investors for the nine months ended January 31, 2015. The shares were valued at a total of $98,000
based on the most recent sales of stock subscriptions to investors at the date of the obligation, which is included as a reduction
of paid in capital as issuance costs as of January 31, 2015. These shares are included in common stock issuable at January 31,
2015.
During the nine months ended January 31,
2015, three shareholders returned an aggregate of 8,100,000 common shares to treasury as a capital contribution. These shares were
cancelled by the Company.
Select-TV Solutions, Inc.
Notes to Consolidated Financial Statements
January 31, 2015
(Unaudited)
Note 5 – Stockholders’ Equity (Continued)
Warrants
The following table summarizes warrant transactions for the
nine months ended January 31, 2015:
| |
| | |
| | |
Weighted | | |
| |
| |
| | |
Weighted | | |
average | | |
| |
| |
| | |
average | | |
remaining | | |
Aggregate | |
| |
Number | | |
exercise | | |
contractual | | |
intrinsic | |
| |
of warrants | | |
price | | |
term (years) | | |
value | |
| |
| | |
| | |
| | |
| |
Outstanding at April 30, 2014 | |
| – | | |
$ | – | | |
| | | |
$ | – | |
| |
| | | |
| | | |
| | | |
| | |
Granted in 2015 | |
| 5,625,000 | | |
$ | 0.15 | | |
| | | |
| | |
| |
| | | |
| | | |
| | | |
| | |
Outstanding at January 31, 2015 | |
| 5,625,000 | | |
$ | 0.15 | | |
| 2.91 | | |
$ | – | |
| |
| | | |
| | | |
| | | |
| | |
Exercisable at January 31, 2015 | |
| 5,625,000 | | |
$ | 0.15 | | |
| 2.91 | | |
$ | – | |
| |
| | | |
| | | |
| | | |
| | |
Weighted Average Grant Date Fair Value | |
| | | |
$ | 0.09 | | |
| | | |
| | |
During the nine months ended January 31,
2015, the Company issued warrants to purchase a total of 5,625,000 shares of the Company’s common stock in conjunction with
sales of Units. These warrants have contractual lives of three years and were valued at a grant date fair value of $0.09 per warrant
using the Black-Scholes Option Pricing Model with the following assumptions:
Stock price | |
$0.10 |
Contractual term | |
3 years |
Expected volatility | |
203.79% |
Risk free interest rate | |
0.85% to 1.07% |
Dividend yield | |
0 |
The stock price was based on the price
of shares sold to investors and volatility was based on comparable volatility of other companies since the Company had no significant
historical volatility.
Note 6 – Related Party Transactions
As of April 30, 2013, the Company owed
a shareholder and officer $101 which was repaid during the year ended April 30, 2014.
During the three months ended July 31,
2014 and the year ended April 30, 2014, the Company advanced $371,350 and $346,050, respectively, to STVU for working capital purposes
of STVU. As of July 31, 2014, due to the merger with STVU, the amounts are eliminated in consolidation.
On January 26, 2015, Philippe Germain,
the Company’s Chairman and Director, advanced the Company $50,000 for working capital purposes. The advance is non-interest
bearing and the Company expects to repay the loan no later than April 3, 2015.
During the nine months ended January 31,
2015, the Company advanced $320,706 to Cannoco PLC, a U.K corporation for its services and expenses related to possible future
acquisitions. The advances are noninterest bearing and are due no later than October 31, 2015. Philippe Germain, the Company’s
Chairman and director, is the sole shareholder of Cannoco PLC.
Select-TV Solutions, Inc.
Notes to Consolidated Financial Statements
January 31, 2015
(Unaudited)
Note 7 – Business Combinations
On July 18, 2014, the Company entered into
a Merger Agreement with Select-TV Solutions (USA), Inc. (“STVU”), a Florida corporation. Pursuant to the terms of the
Agreement, the Company issued 1.25 shares of its common stock for each share of STVU, or 49,678,443 shares.
The following table summarizes the consideration
given for the net assets of STVU and the fair values of the assets acquired and liabilities assumed recognized at the merger date.
Management is in the process of valuing any identifiable tangible and intangible assets. Until the valuation is complete and values
are assigned to tangible or intangible assets, if any, the entire amount of the excess of the consideration given over the net
liabilities acquired is allocated to goodwill.
Consideration Given: | |
| | |
| |
| | |
49,678,443 shares of common stock | |
$ | 2,980,707 | |
| |
| | |
Fair value of identifiable assets acquired and liabilities assumed: | |
| | |
| |
| | |
Cash | |
| 912 | |
Accounts receivable | |
| 2,272 | |
Sales tax receivable | |
| 57,755 | |
Deposits on inventory | |
| 265,145 | |
Prepaid expenses | |
| 100,000 | |
Equipment, net | |
| 25,537 | |
Licenses, net | |
| 83,283 | |
Accounts payable | |
| (133,780 | ) |
Accrued liabilities | |
| (11,443 | ) |
Loans payable - current | |
| (136,335 | ) |
Amounts due to Select TV Solutions, Inc. | |
| (717,400 | ) |
Accumulated other comprehensive loss | |
| (1,734 | ) |
Identified intangible assets | |
| – | |
Total identifiable net assets (liabilities) | |
| (465,788 | ) |
| |
| | |
Goodwill and unidentified intangible assets | |
| 3,446,495 | |
| |
| | |
| |
$ | 2,980,707 | |
Select-TV Solutions, Inc.
Notes to Consolidated Financial Statements
January 31, 2015
(Unaudited)
Note 8 – Subsequent Events
On February 2, 2015, the Company issued
an aggregate of 2,080,000 shares of its common stock to three consultants as payment for services. These shares were valued at
a fair value of $208,000 or $0.10 per share.
On February 2, 2015 and February 12, 2015,
the Company issued 8,000,000 shares of its common stock to two investors for $800,000 in cash.
On February 2, 2015 and February 12, 2015,
the Company issued 3,086,050 shares of its common stock at a value of $308,605 to investors which were included in common stock
issuable at January 31, 2015 and for which it had previously received $308,605.
On February 19, 2015,
our wholly-owned subsidiary, Select-TV USA Holdings, Inc. entered into an Asset Purchase Agreement with JIFM Holdings,
LLC. (“JIFM”) for the immediate sale of certain assets of JIFM. In exchange for the assets acquired under the
Asset Purchase Agreement, the Company paid JIFM $350,000 (of which $300,000 had been paid prior to January 31, 2015 and
included in Prepaid Expenses in the Balance Sheet) and a secured promissory note for $200,000 bearing interest at 2% per
annum, due May 15, 2015, for an aggregate total of $550,000.
On March 1, 2015, our
wholly-owned subsidiary, Select-TV USA Holdings, Inc. entered into an Asset Purchase Agreement with MyStay, Inc.
(“MyStay”) and Brooks Pickering for the immediate sale of certain assets of MyStay. In exchange for the assets
acquired under the Asset Purchase Agreement, the Company paid MyStay $400,000 (of which $250,000 had been paid prior to
January 31, 2015 and included in Prepaid Expenses in the balance sheet) and 9,500,000 shares of our common stock (unissued as
of the date of this report).
On March 1, 2015, the Company entered
into an employment agreement with Mr. Brooks Pickering to serve as the Company’s President and Chief Operating Officer. Terms
of the consulting agreement include 1) a monthly fee of $12,500 (to be increased to $25,000 upon the achievement of
three consecutive months of positive EBITDA), 2) a semi-annual bonus equal to 75% of the consulting fee paid in the prior six
month period if the Company achieves certain semi-annual target goals, 3) stock options to purchase 2,500,000 at $0.10 of
the Company’s common stock vesting upon the achievement of certain performance objectives in fiscal 2015, and 4)
stock options to purchase 2,500,000 at $0.10 of the Company’s common stock vesting upon the achievement of
certain performance objectives in fiscal 2016. The term of the agreement is effective March 1, 2015 until February 28, 2017,
unless terminated by either party with a thirty (30) days advance written notice,or as extended by the parties by
written agreement. Should the Executive continue providing the Services after February 28, 2017 without a
further agreement in writing, the terms of the Agreement shall continue to apply on a month-to-month basis until the Parties
enter into a further agreement.
On March 2, 2015, our wholly-owned subsidiary,
Select-TV USA Holdings, Inc. entered into a Loan Sale Agreement with ZON Capital Partners, LP (“ZON”) for the immediate
sale of certain assets of ZON. In exchange for the loan assets acquired, the Company paid ZON $250,000 (of which $50,000 had been
paid prior to January 31, 2015 and included in Prepaid Expenses in the Balance Sheet).
The Company has evaluated subsequent events
through the date the financial statements were issued and filed with the SEC. The Company has determined that there are no other
events that warrant disclosure or recognition in the consolidated financial statements.
Item 2. Management’s
Discussion and Analysis of Financial Condition and Results of Operations.
SPECIAL NOTE CONCERNING FORWARD-LOOKING
STATEMENTS
Certain statements made in this Form 10-Q
are "forward-looking statements" (within the meaning of the Private Securities Litigation Reform Act of 1995) regarding
the plans and objectives of management for future operations. Such statements involve known and unknown risks, uncertainties and
other factors that may cause actual results, performance or achievements of the Company to be materially different from any future
results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking statements included
herein are based on current expectations that involve numerous risks and uncertainties. The Company's plans and objectives are
based, in part, on assumptions involving the continued expansion of business. Assumptions relating to the foregoing involve judgments
with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of
which are difficult or impossible to predict accurately and many of which are beyond the control of the Company. Although the
Company believes its assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove
to be inaccurate and, therefore, there can be no assurance the forward-looking statements included in this report will prove to
be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion
of such information should not be regarded as a representation by the Company or any other person that the objectives and plans
of the Company will be achieved.
The forward-looking statements included
in this Form 10-Q and referred to elsewhere are related to future events or our strategies or future financial performance. In
some cases, you can identify forward-looking statements by terminology such as "may," "should," "believe,"
"anticipate," "future," "potential," "estimate," "encourage," "opportunity,"
"growth," "leader," "expect," "intend," "plan," "expand," "focus,"
"through," "strategy," "provide," "offer," "allow," commitment," "implement,"
"result," "increase," "establish," "perform," "make," "continue,"
"can," "ongoing," "include" or the negative of such terms or comparable terminology. All forward-looking
statements included in this Form 10-Q are based on information available to us as of the filing date of this report, and the Company
assumes no obligation to update any such forward-looking statements, except as required by law. Our actual results could differ
materially from the forward-looking statements.
Important factors that might cause our
actual results to differ materially from the results contemplated by the forward-looking statements are contained in the “Risk
Factors” section of our Annual Report on Form 10-K for the fiscal year ended April 30, 2014 and in our subsequent filings
with the Securities and Exchange Commission. The following discussion of our results of operations should be read together
with our financial statements and related notes included elsewhere in this report.
Company Overview
Select-TV Solutions, Inc. (the "Company",
“SELT”, “we”, “us” or “our”) was incorporated in Nevada on May 17, 2011 under the
name of Renaissance Films Inc. (“RFI”) and intended to produce documentary films. On September 26, 2011, the Company
changed its name to Sedition Films Inc.
On April 7, 2014, the Company experienced
a change in control. Conseil Plumage Blanc Ltd. (“CPB”) acquired a majority of the issued and outstanding
common stock of the Company in accordance with a stock purchase agreement by and between CPB and Jesse Lawrence, the Company’s
former director and majority shareholder. On the closing date, April 7, 2014, pursuant to the terms of the Stock Purchase
Agreement, CPB purchased from Jesse Lawrence 4,000,000 (40,000,000 post-split) shares of the Company’s outstanding common
stock for $375,000. As a result of the change in control, CPB owned a total of 4,000,000 (40,000,000 post-split) shares
of the Company’s common stock representing 74%.
In conjunction with the change in control,
Mr. Jesse Lawrence resigned as the Company's director, and any other positions held by him on April 9, 2014. The resignation was
not the result of any disagreement with the Company or any matter relating to the Company's operations, policies or practices.
On the same date, Mr. Philippe Germain and Mr. Antonio Treminio were appointed as directors.
On May 1, 2014, the Company filed an amendment
to its Articles of Incorporation in the State of Nevada to change its name to Select-TV Solutions, Inc. The Company intends to
pursue significant opportunities available within the entertainment sector and online interactive niche.
On May 1, 2014, the Company's Board of
Directors declared a ten-to-one forward stock split of all outstanding shares of common stock. The effect of the stock split increased
the number of shares of common stock outstanding from 5,413,400 to 54,134,000 at May 1, 2014. The total number of authorized common
shares and the par value thereof was not changed by the split.
On July 7, 2014, the company’s shareholders
appointed Mr. Geoffrey P. Mott as the Company’s Chief Executive Officer.
On July 18, 2014, the Company entered into
a Merger Agreement with Select-TV Solutions (USA), Inc. (“STVU”), a Florida corporation. Pursuant to the terms of the
Agreement, the Company issued 1.25 shares of common stock for each share STVU, or 49,678,443 shares. As a result of the merger,
the Company, as the surviving entity, acquired the license rights to Select-TV HITV (Hospitality Interactive TV, software and hardware),
and EMAGINE (home IPTV software and hardware), thus enabling the Company to provide end-to-end IPTV (Internet Protocol Television)
solutions to the Hospitality, Residential and Hospital subscribers in North America. The Closing of the transaction was effective
on the close of business July 31, 2014.
On August 29, 2014, the shareholders of
the Company voted to add Eric Gareau and Christian Trudeau to the Board of Directors, joining Mr. Germain. On the same date, Mr.
Antonio Treminio resigned his position as Director.
On January 13, 2015, the Company formed
Select-TV USA Holdings, Inc. (“STVH”), a Nevada corporation, as a wholly-owned subsidiary to acquire companies in and
related to the Hospitality, Residential and Hospital IPTV industry.
Plan of Operations
The Company, through its sublicense, has
the right to carry on the Select-TV Business, Intellectual Property, Trademarks, trade Names, Copyrights and Trade Secrets. The
Company believes it has a strong technology platform, proven market validation in some of the best hotels in the world and a great
opportunity to become a leader in the North American hospitality market over the next few years. At a time when consumer expectations
for entertainment quality and service value-added are on the rise, hotel owners and brands know they need to redefine what
they should expect from in-room entertainment systems and their vendors.
Management continues to explore new investment opportunities
with a focus on technology and the hospitality market.
Results of Operations
For the three months ended January 31, 2015 compared to
the three months ended January 31, 2014
Revenues
The Company had revenue
of $1,152 for the three months ended January 31, 2015 compared to no revenue for the three months ended January 31, 2014.
The increase in revenue is due to the merger with Select-TV Solutions (USA), Inc.
Operating Expenses
For the three months
ended January 31, 2015, total operating expenses were $902,149 compared to $1,164 for the three months ended January 31, 2014 resulting
in an increase of $900,985.
Cost of revenues increased $20,492 and
is directly attributable to the initial costs associated with bringing new customers on-line to receive the Company’s products
and services.
Selling and marketing expenses increased
$5,347 and is primarily due to the merger with Select-TV Solutions (USA), Inc.
General
and administrative expenses increased by $875,146 and were primarily due to $469,425 of stock based consulting fees and
$177,830 of consulting fees. The remaining increase of $227,891 is related to general and overhead costs due to the
Company’s change in business to provide products and services to the hospitality, residential, and hospital
subsidiaries, and the merger with Select-TV Solutions (USA), Inc.
Net loss for the three
months ended January 31, 2015 was $900,180 compared to net income of $286 for the three months ended January 31, 2014.
For the nine months ended January 31, 2015 compared to
the nine months ended January 31, 2014
Revenues
The Company had revenue
of $30,977 for the nine months ended January 31, 2015 compared to no revenue for the nine months ended January 31, 2014.
The increase in revenue is due to the merger with Select-TV Solutions (USA), Inc.
Operating Expenses
For the nine months ended
January 31, 2015, total operating expenses were $2,965,081 compared to $9,462 for the nine months ended January 31, 2014
resulting in an increase of $2,955,619.
Cost of revenues increased $190,073 and
is directly attributable to the initial costs associated with bringing new customers on-line to receive the Company’s products
and services.
Selling and marketing expenses increased
$26,000 and is primarily due to the merger with Select-TV Solutions (USA), Inc.
General and
administrative expenses increased by $2,739,546 and were primarily due to 8,000,000 shares issued for stock based
compensation of in the amount of $800,000, $824,352 of stock based consulting fees, and $463,156 of consulting fees. The
remaining increase of $652,238 is related to general and overhead costs due to the
Company’s change in business to provide products and services to the hospitality, residential, and hospital
subsidiaries, and the merger with Select-TV Solutions
(USA), Inc.
Net loss for the nine
months ended January 31, 2015 was $2,935,471 compared to $8,012 for the nine months ended January 31, 2014.
Liquidity and Capital Resources
As of January 31, 2015, we had cash of
$310,936 and working capital of $1,552,950. Cash used in operating activities was $1,764,436 and $7,526 for the nine months
ended January 31, 2015, and 2014, respectively. The principal elements of cash flow used in operations for the nine
months ended January 31, 2015 included a net loss of $2,935,471, offset by depreciation and amortization of $32,002 and stock issued
and issuable for services of $1,198,000; and increased by changes in operating assets and liabilities of $58,967. The principal
elements of cash flow used in operations for the nine months ended January 31, 2014 included a net loss of $8,012, offset by depreciation
expense of $486.
Cash used in investing activities for the
nine months ended January 31, 2015 consisted of $10,373 for the acquisition of equipment offset by $912 of cash received in the
merger with STVU. No cash was used in investing activities during the nine months ended January 31, 2014.
Cash provided by financing activities was
$1,536,398 for the nine months ended January 31, 2015 compared to no cash provided by financing activities for the nine months
ended January 31, 2014. Financing activities for the nine months ended January 31, 2015 included $1,118,949 from the sale of common
stock, $1,202,855 received for stock subscriptions offset by payments on loan payable of $93,350 and advances to related parties
of $692,056.
Going Concern
Due to the uncertainty of our ability to
meet our current operating and capital expenses, our independent auditors included an explanatory paragraph in their report on
the financial statements for the year ended April 30, 2014 regarding concerns about our ability to continue as a going concern.
Our consolidated financial statements contain additional note disclosures describing the circumstances that lead to this conclusion
by our independent auditors.
Our unaudited consolidated financial statements
have been prepared on a going concern basis, which assumes the realization of assets and settlement of liabilities in the normal
course of business. Our ability to continue as a going concern is dependent upon our ability to generate profitable operations
in the future and/or to obtain the necessary financing to meet our obligations and repay our liabilities arising from normal business
operations when they become due. The outcome of these matters cannot be predicted with any certainty at this time and raise substantial
doubt that we will be able to continue as a going concern. Our unaudited consolidated financial statements do not include any adjustments
to the amount and classification of assets and liabilities that may be necessary should we be unable to continue as a going concern.
There is no assurance that our operations
will be profitable. Our continued existence and plans for future growth depend on our ability to obtain the additional capital
necessary to operate either through the generation of revenue or the issuance of additional debt or equity.
Off-Balance Sheet Arrangements
We currently have no off-balance sheet
arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, changes
in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
Critical Accounting Policies
The preparation of financial statements
in conformity with accounting principles generally accepted in the United States of America requires us to make a number of 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. Such estimates and assumptions affect the reported amounts of revenues and expenses during
the reporting period. We base our estimates on historical experiences and on various other assumptions that we believe to be reasonable
under the circumstances. Actual results may differ materially from these estimates under different assumptions and conditions.
We continue to monitor significant estimates made during the preparation of our financial statements. On an ongoing basis, we
evaluate estimates and assumptions based upon historical experience and various other factors and circumstances. We believe our
estimates and assumptions are reasonable in the circumstances; however, actual results may differ from these estimates under different
future conditions.
See Item 7, “Management’s Discussion
and Analysis of Financial Condition and Results of Operations” and Note 2, “Summary of Significant Accounting Policies”
in our audited financial statements as of and for the year ended April 30, 2014, included in our Annual Report on Form 10-K/A filed
with the U.S. Securities and Exchange Commission (“SEC”) on September 10, 2014.
Item 3. Quantitative
and Qualitative Disclosures About Market Risk.
The disclosure required under this item
is not required to be reported by smaller reporting companies.
Item 4. Controls and
Procedures.
| (a) | Evaluation of Disclosure Controls and Procedures |
In connection with the preparation of
this Quarterly Report on Form 10-Q, an evaluation was carried out by the Company's management, with the participation of the
principal executive officer and the principal financial officer, of the effectiveness of the Company's disclosure controls
and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 ("Exchange
Act")) as of January 31, 2015. Disclosure controls and procedures are designed to ensure that information required to be
disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the
time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated
and communicated to management, including the chief executive officer and the chief financial officer, to allow timely
decisions regarding required disclosures.
Based on that evaluation, the Company's
management concluded, as of the end of the period covered by this report, that the Company's disclosure controls and procedures
were not effective in recording, processing, summarizing, and reporting information required to be disclosed, within the time periods
specified in the Commission's rules and forms, and that such information was accumulated and communicated to management, including
the principal executive officer and the principal financial officer, to allow timely decisions regarding required disclosures.
| (b) | Changes in Internal Control over Financial Reporting |
There were no changes in our internal control
over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably
likely to materially affect, our internal control over financial reporting.
PART II – OTHER INFORMATION
Item 1. Legal Proceedings.
We are currently not involved in any litigation
that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit,
proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body
pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting
our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in
their capacities as such, in which an adverse decision could have a material adverse effect.
Item 1A. Risk Factors.
The disclosure required under this item
is not required to be reported by smaller reporting companies.
Item 2. Unregistered
Sales of Equity Securities and Use of Proceeds.
On November 25, 2014, pursuant
to consulting agreements, the Company issued 450,000 shares of the Company’s common stock to two consultants at a fair value
of $45,000.
On November 25, 2014, pursuant
to stock subscription agreements, the Company issued 3,610,180 shares of the Company’s common stock to 12 investors for $361,018.
On January 26, 2015, pursuant
to a consulting agreement, the Company issued 1,500,000 shares of the Company’s common stock to a consultant at a fair value
of $150,000.
On January 26, 2015, the
Company issued 1,000,000 shares of the Company’s common stock to two directors for fees at a fair value of $100,000.
On February 2, 2015, the Company issued an aggregate of 2,080,000
shares of its common stock to three consultants as payment for services. These shares were valued at a fair value of $208,000 or
$0.10 per share.
On February 2, 2015 and February 12, 2015, the Company issued
8,000,000 shares of its common stock to two investors for $800,000 in cash.
On February 2, 2015 and February 12,
2015, the Company issued 3,086,050 shares of its common stock at a value of $308,605 to investors which were included in
common stock issuable at January 31, 2015 and for which it had previously received $308,605.
Proceeds from the above unregistered sales
of equity securities are to be used for working capital purposes.
These securities were not registered under
the Securities Act of 1933, as amended (the “Securities Act”), but were issued in reliance upon the exemption from
registration provided by Section 4(2) of the Securities Act as a transaction by an issuer not involving a public offering.
Item 3. Defaults Upon
Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
None.
Item 6. Exhibits
|
Exhibit 31.1 |
Rule 13a-14(a) Certification by the Principal Executive Officer |
|
Exhibit 31.2 |
Rule 13a-14(a) Certification by the
Principal Financial Officer |
|
Exhibit 32.1 |
Certification by the Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
|
Exhibit 32.2 |
Certification by the Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
|
Exhibit 101.INS |
XBRL Instance Document |
|
Exhibit 101.SCH |
XBRL Schema Document |
|
Exhibit 101.CAL |
XBRL Calculation Linkbase Document |
|
Exhibit 101.DEF |
XBRL Definition Linkbase Document |
|
Exhibit 101.LAB |
XBRL Label Linkbase Document |
|
Exhibit 101.PRE |
XBRL Presentation Linkbase Document |
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.
Select-TV Solutions, Inc.
/s/ Geoffrey P. Mott |
|
March
17, 2015 |
Geoffrey P. Mott, Chief Executive Officer |
|
Date |
Exhibit 31.1
CERTIFICATION OF
PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO RULE 13A-14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 312
OF
THE SARBANES-OXLEY ACT OF 2002
I, Geoffrey P. Mott, certify that:
1.
I have reviewed this quarterly report on Form 10-Q of Select-TV Solutions, Inc.;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to
the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all
material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented
in this report;
4.
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined
in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed
such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being prepared;
(b) Designed
such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated
the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about
the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
and
(d) Disclosed
in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most
recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or
is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control
over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons
performing the equivalent functions):
(a) All
significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which
are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information;
and
(b) Any
fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal
control over financial reporting.
Date: March 17, 2015
/s/ Geoffrey P. Mott |
|
Geoffrey P. Mott |
|
Chief Executive Officer |
|
(Principal Executive Officer) |
|
Exhibit 31.2
CERTIFICATION OF
PRINCIPAL FINANCIAL OFFICER
PURSUANT TO RULE 13A-14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 312
OF
THE SARBANES-OXLEY ACT OF 2002
I, Geoffrey P. Mott, certify that:
1.
I have reviewed this quarterly report on Form 10-Q of Select-TV Solutions, Inc.;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to
the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all
material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented
in this report;
4.
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined
in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed
such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being prepared;
(b) Designed
such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated
the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about
the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
and
(d) Disclosed
in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most
recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or
is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control
over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons
performing the equivalent functions):
(a) All
significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which
are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information;
and
(b) Any
fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal
control over financial reporting.
Date: March 17, 2015
/s/ Geoffrey P. Mott |
|
Geoffrey P. Mott |
|
Interim Chief Financial Officer |
|
(Principal Financial Officer) |
|
Exhibit 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
In connection with this Quarterly Report
of Select-TV Solutions, Inc. (the “Company”) on Form 10-Q for the period ended January 31, 2015 as filed
with the Securities and Exchange Commission on the date hereof (the “Report”), I, Geoffrey P. Mott, Chief Executive
Officer of the Company, certify to the best of my knowledge, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002, that:
1. |
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
2. |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: March 17, 2015 |
|
|
|
/s/ Geoffrey P. Mott |
|
Geoffrey P. Mott
Chief Executive Officer
(Principal Executive Officer) |
|
Exhibit 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
In connection with this Quarterly Report
of Select-TV Solutions, Inc. (the “Company”) on Form 10-Q for the period ended January 31, 2015 as filed
with the Securities and Exchange Commission on the date hereof (the “Report”), I, Geoffrey P. Mott, Interim Chief Financial
Officer of the Company, certify to the best of my knowledge, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002, that:
1. |
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
2. |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: March 17, 2015 |
|
|
|
/s/ Geoffrey P. Mott |
|
Geoffrey P. Mott
Interim Chief Financial Officer
(Principal Financial Officer) |
|
The foregoing certification is furnished
as an exhibit to the Report and will not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act
of 1934, as amended, and will not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange
Act, whether made before or after the date hereof, regardless of any general incorporation language in such filing.