Item
1. Financial Statements.
DARKSTAR
VENTURES, INC.
INTERIM
CONSOLIDATED FINANCIAL STATEMENTS
AS
OF OCTOBER 31, 2016
IN
U.S. DOLLARS
UNAUDITED
TABLE
OF CONTENTS
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Page
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CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS:
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Condensed
Consolidated Balance sheets as of October 31, 2016 and July 31, 2016
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F-1
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Condensed
Consolidated Statements of Comprehensive Loss for the three months
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|
ended
October 31, 2016 and 2015
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F-2
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Condensed
Consolidated Statements of stockholders' deficit for the period of three months
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ended
October 31, 2016 and 2015
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F-3
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Condensed
Consolidated Statements of cash flows for the three months
|
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ended
October 31, 2016 and 2015
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F-4
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Notes
to condensed interim financial statements
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F-5
- F-6
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DARKSTAR
VENTURES, INC.
CONDENSED
CONSOLIDATED BALANCE SHEETS
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|
October 31,
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July 31,
|
|
|
2016
|
|
2016
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Unaudited
|
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Audited
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Assets
|
|
|
|
|
|
|
|
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CURRENT ASSETS:
|
|
|
|
|
|
|
|
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Cash and cash equivalents
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|
$
|
34,540
|
|
|
$
|
53,609
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|
Other current assets
|
|
|
124,546
|
|
|
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27,345
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|
Total current assets
|
|
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159,086
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|
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80,954
|
|
|
|
|
|
|
|
|
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Total assets
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$
|
159,086
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|
|
$
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80,954
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|
|
|
|
|
|
|
|
|
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Liabilities and Stockholders’ Deficit
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CURRENT LIABILITIES:
|
|
|
|
|
|
|
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Accounts payables and accrued expenses
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$
|
9,814
|
|
|
$
|
17,432
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|
Total current liabilities
|
|
|
9,814
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|
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17,432
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|
|
|
|
|
|
|
|
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LONG TERM LOAN
|
|
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251,282
|
|
|
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237,659
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|
|
|
|
|
|
|
|
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STOCKHOLDERS' EQUITY (DEFICIENCY):
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|
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|
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Preferred stock, 5,000,000 shares authorized, par value $0.0001, none issued and outstanding
Common shares par value $0.0001:
Authorized: 2,000,000,000 shares at October 31, 2016 and July 31, 2016.
Issued and outstanding: 647,345,000 shares at October 31, 2016 and July 31, 2016.
|
|
|
64,734
|
|
|
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64,734
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|
Additional paid-in capital
|
|
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511,116
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|
|
|
511,116
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Accumulated other comprehensive income
|
|
|
689
|
))
|
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(862
|
)
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Receivables on account of shares issued
|
|
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(30,000
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)
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(150,000
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)
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Accumulated deficit
|
|
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(647,171
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)
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|
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(599,125
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)
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Total Stockholders’ Equity (Deficiency)
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|
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(102,010
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)
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|
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(174,137
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)
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Total liabilities and Stockholders’ Equity (Deficiency)
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|
$
|
159,086
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|
|
$
|
80,954
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|
The
accompanying notes are an integral part of the consolidated financial statements.
DARKSTAR
VENTURES, INC.
CONDENSED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
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Three months ended
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October 31
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2016
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|
2015
|
|
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(Unaudited)
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|
|
|
|
|
|
|
|
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General and administrative expenses
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$
|
31,802
|
|
|
$
|
24,684
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|
Operating loss
|
|
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(31,802
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)
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(24,684
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)
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|
|
|
|
|
|
|
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Interest expense, net
|
|
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(15,382
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)
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(32
|
)
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Net loss
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|
$
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(47,184
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)
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$
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(24,716
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)
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|
|
|
|
|
|
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Other comprehensive loss - Foreign currency loss
|
|
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(862
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)
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|
|
—
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Comprehensive loss
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$
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(48,046
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)
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|
$
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(24,716
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)
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|
|
|
|
|
|
|
|
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Basic and diluted net loss per common share
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$
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(0.00
|
)
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$
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(0.00
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)
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|
|
|
|
|
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Weighted average number of common shares outstanding during the period – basic and diluted
|
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647,345,000
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|
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107,145,000
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The
accompanying notes are an integral part of the consolidated financial statements.
DARKSTAR
VENTURES, INC.
CONDENSED
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT)
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|
Common Stock, $0.0001 Par Value
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Receivables on account of
account of
shares
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Foreign currency
translation
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Additional paid-in
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Accumulated
|
|
Total Stockholders' Equity
|
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Shares
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Amount
|
|
issued
|
|
adjustments
|
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Capital
|
|
deficit
|
|
(deficit)
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|
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BALANCE AT JULY 31, 2016 (audited)
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647,345,000
|
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|
$
|
64,734
|
|
|
$
|
(150,000
|
)
|
|
$
|
(862
|
)
|
|
$
|
511,116
|
|
|
$
|
(599,125
|
)
|
|
$
|
(174,137
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)
|
|
|
|
|
|
|
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|
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Received on account of shares issued
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|
|
|
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|
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|
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120,000
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|
|
|
|
|
|
|
|
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120,000
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Foreign currency translation adjustments
|
|
|
|
|
|
|
|
|
|
|
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|
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173
|
|
|
|
|
|
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173
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Net loss for the three months ended October 31, 2016
|
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|
|
|
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—
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|
|
|
|
|
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(48,046
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)
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|
|
(48,046
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)
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BALANCE AT OCTOBER 31, 2016 (Unaudited)
|
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|
647,345,000
|
|
|
$
|
64,734
|
|
|
|
(30,000
|
)
|
|
$
|
(689
|
)
|
|
$
|
511,116
|
|
|
$
|
(647,171
|
)
|
|
$
|
(102,010
|
)
|
|
|
Common Stock, $0.0001 Par Value
|
|
Additional paid-in
|
|
Accumulated
|
|
Total Stockholders'
|
|
|
Shares
|
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Amount
|
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Capital
|
|
deficit
|
|
Equity (deficit)
|
|
|
|
|
|
|
|
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BALANCE AT JULY 31, 2015
(audited)
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|
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107,145,000
|
|
|
$
|
10,714
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|
|
$
|
24,936
|
|
|
$
|
(240,265
|
)
|
|
$
|
(204,615
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)
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|
|
|
|
|
|
|
|
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Net loss for the three months ended October 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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(24,716
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)
|
|
|
(24,716
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)
|
BALANCE AT OCTOBER 31, 2015
(Unaudited)
|
|
|
|
107,145,000
|
|
|
$
|
10,714
|
|
|
$
|
24,936
|
|
|
$
|
(264,981
|
)
|
|
$
|
(229,331
|
)
|
The
accompanying notes are an integral part of the consolidated financial statements.
DARKSTAR
VENTURES, INC.
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
Three months ended
|
|
|
October 31
|
|
|
2016
|
|
2015
|
|
|
(Unaudited)
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(48,046
|
)
|
|
$
|
(24,716
|
)
|
Adjustments required to reconcile net loss
|
|
|
|
|
|
|
|
|
to net cash used in operating activities:
|
|
|
|
|
|
|
|
|
Increase in accrued interest on long term loan
|
|
|
13,623
|
|
|
|
|
|
Increase in prepaid expenses and other receivables
|
|
|
(97,202
|
)
|
|
|
(4,060
|
)
|
Increase (decrease) in other account payables
|
|
|
(7,617
|
)
|
|
|
6,669
|
|
Net cash used in operating activities
|
|
|
(139,242
|
)
|
|
|
(22,107
|
)
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Proceeds from receivables on account of shares
|
|
|
120,000
|
|
|
|
—
|
|
Proceeds from loan Payable – related party
|
|
|
—
|
|
|
|
21,892
|
|
Net cash provided by financing activities
|
|
|
120,000
|
|
|
|
21,892
|
|
|
|
|
|
|
|
|
|
|
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
|
|
(19,242
|
)
|
|
|
(215
|
)
|
|
|
|
|
|
|
|
|
|
EFFECT OF EXCHANGE RATE CHANGES
|
|
|
173
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
|
|
|
53,609
|
|
|
|
215
|
|
|
|
|
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS AT END OF PERIOD
|
|
$
|
34,540
|
|
|
$
|
—
|
|
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
|
|
|
|
|
|
|
|
|
Cash paid during the period for:
|
|
|
|
|
|
|
|
|
Interest
|
|
$
|
—
|
|
|
$
|
—
|
|
Income taxes
|
|
$
|
—
|
|
|
$
|
—
|
|
The
accompanying notes are an integral part of the consolidated financial statement
DARKSTAR
VENTURES, INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
NOTE
1 - GENERAL
Darkstar
Ventures, Inc. (“the Company” or “we”) was incorporated on May 8, 2007 under the laws of the State of
Nevada.
The
Company established a wholly-owned subsidiary in Israel, Bengio Urban Renewals Ltd ("Bengio")., to focus its limited
resources in the area of real estate development, particularly focusing on the urban renewal market in Israel.
The
Company’s activities are subject to significant risks and uncertainties, including failing to secure additional funding
to operationalize the Company’s current business plan.
NOTE
2 - INTERIM FINANCIAL STATEMENTS
The
accompanying unaudited interim consolidated financial statements as of October 31, 2016 and for the three months then ended, have
been prepared in accordance with accounting principles generally accepted in the United States relating to the preparation of
financial statements for interim periods. Accordingly, they do not include all the information and footnotes required for annual
financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary
for a fair presentation have been included. Operating results for the three months ended October 31, 2016 are not necessarily
indicative of the results that may be expected for the year ending July 31, 2017.
The
July 31, 2016 Condensed Balance Sheet data was derived from audited financial statements, but does not include all disclosures
required by accounting principles generally accepted in the United States of America. These financial statements should be read
in conjunction with the financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for
the year ended July 31, 2016.
NOTE
3 – SIGNIFICANT ACCOUNTING POLICIES
The
significant accounting policies applied in the annual financial statements of the Company as of July 31, 2016, are applied consistently
in these financial statements.
DARKSTAR
VENTURES, INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
NOTE
4 - GOING CONCERN
The
Company has not commenced planned principal operations. The Company had an accumulated deficit of $647,171 as of October 31, 2016.
In addition, the Company continues to have negative cash flows from operations. These factors raise substantial doubt about the
Company’s ability to continue as a going concern.
There
can be no assurance that sufficient funds required during the next year or thereafter will be generated from operations or that
funds will be available from external sources such as debt or equity financings or other potential sources. The lack of additional
capital resulting from the inability to generate cash flow from operations or to raise capital from external sources would force
the Company to substantially curtail or cease operations and would, therefore, have a material adverse effect on its business.
Furthermore, there can be no assurance that any such required funds, if available, will be available on attractive terms or that
they will not have a significant dilutive effect on the Company’s existing stockholders.
The
accompanying financial statements do not include any adjustments related to the recoverability or classification of asset-carrying
amounts or the amounts and classification of liabilities that may result should the Company be unable to continue as a going concern.
NOTE
5 - NEWLY ISSUED ACCOUNTING PRONOUNCEMENTS:
No
new accounting standards have been adopted since the Company’s Annual Report on Form 10-K for the fiscal year ended July
31, 2016 was filed.
NOTE
6 - RELATED PARTY TRANSACTIONS:
As
of October 31, 2016 other current assets includes loans to an officer of the Company in the amount of $34,961. The loan is due
on demand with no interest.
NOTE
7 - COMMON SHARES:
On
April 14, 2016, the Board of Directors of the Company has approved the issuance of 150,000,000 restricted shares under a subscription
agreement with investors for total consideration of $150,000. During the period ended October 31, 2016, the Company received $120,000
of such subscription amounts.
NOTE
8 - LONG-TERM LOAN:
On
February 28, 2016, Bengio and TCSM INC signed a loan agreement according to which TCSM would grant the Company a loan of up to
$256,016 (NIS 1,000,000) in two installments of which $222,048 (NIS 850,000) was received as of the balance sheet date. The loan
bears interest at an annual rate of 25%. The principal and interest will be repaid at March 1, 2019.
On
February 28, 2016 TCSM INC assigned its rights in the above loan agreement to a third party. The loan is secured by Avraham Bengio,
the Company's majority holder of the issued and outstanding shares of common stock and its Sole Director, CEO and CFO in an amount
of up to $172,826 (NIS 650,000).
Item
2. Management ’ s Discussion and Analysis or Plan of Operations.
As
used in this Form 10-Q, references to “Darkstar ", the ” Company, ”“ we, ”“ our ”
or “ us ” refer to Darkstar, unless the context otherwise indicates.
Forward-Looking
Statements
The
following discussion should be read in conjunction with our unaudited financial statements, which are included elsewhere in this
Form 10-Q (the “ Report” ). This Report contains forward-looking statements which relate to future events or our future
financial performance. In some cases, you can identify forward-looking statements by terminology such as “ may, ”“
should, ”“ expects, ”“ plans, ”“ anticipates, ”“ believes, ”“ estimates,
”“ predicts, ”“ potential ” or “ continue ” or the negative of these terms or other
comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties, and other factors
that may cause our or our industry ’ s actual results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking
statements.
Corporate
Background and Business Overview
We
were incorporated on May 8, 2007 in the State of Nevada. We are a development stage company that was originally established to
offer eco-friendly health and wellness products to the general public via the internet. As we had previously disclosed, on November
20, 2012, we entered into a binding letter of intent (“LOI”) with Real Aesthetic, Inc., a Nevada corporation (“Real
Aesthetic”), to acquire all of the issued and outstanding shares of common stock in exchange for common stock of the Company.
The closing of the transactions contemplated by the LOI was subject to the completion of the due diligence investigation of both
parties, execution and delivery of documentation for the transaction, consents from the respective boards of directors of both
companies and any third parties and the delivery of audited financial statements by Real Aesthetic. Subsequently, we decided not
to pursue the contemplated transaction with Real Aesthetic. The Company has since abandoned its business plan.
The
Registrant has recently determined, through its recently established, wholly-owned new Israeli subsidiary, Bengio Urban Renewals
Ltd to focus its limited resources in the area of real estate development, particularly focusing on the urban renewal market in
Israel. We believe, based upon the current real estate market in Israel, that urban renewal projects present an opportunity for
us to generate revenues and profits, which we have never experienced since our inception. The basis for our belief is that
in several major Israeli cities, there is virtually no more room to grow. As a result, several municipal governments have allowed
older buildings to be renovated, thereby giving their respective cities the opportunity to develop new apartments to be added
to or replacing existing buildings.
Additionally,
municipalities have express their concern that many buildings constructed before 1980 will be unable to withstand earthquakes.
In Israel, very few apartment buildings are owned by a single person or entity and since the majority of apartments within buildings
are privately owned, the burden to renovate buildings in order to render them safer in the event of a major earthquake primarily
falls on the multiple owners of various apartment buildings and complexes.
“Tama
38” is an Israeli national zoning plan whereby a contractor assumes the responsibility of renovating an apartment building.
In exchange for covering all costs of renovations, securing building permits and paying requisite taxes, the contractor has is
granted the right to build additional floors to the existing building and sell the apartments built on these floors.
The
apartment owners benefit by receiving a modernized building, strengthened against earthquakes, as well as the additional apartments
added to their buildings. In some cases balconies, storage rooms, parking spaces and elevators may be added as well, further enhancing
the building’s value.
“PinuiBinui”
projects are defined as development where the residents of apartments are temporarily evacuated so that the buildings may be demolished
and rebuilt. The tenants then return to new apartments in the newly finished and renovated building. The contractor
pays all costs for demolition, construction, relocating apartment owners and renting their temporary homes during construction.
In exchange, the contractor adds new apartments in the building which are sold to generate profit.
As
with “Tama 38,” the value of the apartments in the building is increased thereby benefitting the owners and the tenants
return to a new, often larger and safer apartment in a building often with more amenities.
Since
February 2016, the Registrant’s Board of Directors authorized the establishment of a new wholly-owned Israeli
subsidiary, Bengio Urban Renewals Ltd (“Bengio Urban”) to focus its limited resources in the area of real estate development,
particularly focusing on the urban renewal market in Israel. To that end, the Registrant raised $150,000 from the sale of restricted
shares to investors to fund the new real estate development operations of Bengio Urban, which has recently hired employees
and has signed contracts with the current tenants of three buildings who have agreed to vacate the buildings so that they can
be redeveloped into modern state of the art new residential buildings .
On
February 16, 2016, the Board of Directors of the Company and the holder of a majority of the issued and outstanding shares of
common stock of the Company (the "Majority Consenting Stockholder"), together, executed a joint written consent to authorize
and approve a Certificate of Amendment to the Company's Articles of Incorporation to increase the authorized capital stock of
the Company from 505,000,000 shares (the "Capital Stock"), consisting of 500,000,000 shares of common stock, par value
$0.0001 (the "Common Stock") and 5,000,000 shares of preferred stock, par value $0.0001 (the "Preferred Stock"),
to an authorized capital stock of the Corporation of 2,005,000,000 shares consisting of 2,000,000,000 shares of Common Stock and
five million 5,000,000 shares of Preferred Stock. It was also decided that the Board of Directors shall have the authority to
establish one or more series of Preferred Stock and fix relative rights and preferences of any series of Preferred Stock, without
any further action or approval of our stockholders.
Other
than our current director and officer, we have no employees October 31 2016 .
Transfer
Agent
We
have engaged Vstock Transfer LLC, 77 Spruce Street, Suite 201, Cedarhurst, NY, 11516 as our stock transfer agent. Their telephone
number is (212) 828-8436 and their fax number is (646) 536-3179. The transfer agent is responsible for all record-keeping and
administrative functions in connection with our issued and outstanding common stock.
Results
of Operations
Results
of operations for the three months ended October 31 2016
The
Company did not generate any revenues from operations for the three months ended October 31 2016
During
the three months ended October 31 2016 the operating expenses and the net loss was $31,802 and $48,046 respectively. The operating
expenses and net loss was primarily the result of professional fees, legal, auditing and other consulting fees associated with
SEC compliance and operating expenses in the subsidiary from its commencement of its business activities .
We
expect to continue to incur significant operating expenses. As a result, we will need to generate significant revenues to achieve
profitability, which may not occur. Even if we do achieve profitability, we may be unable to sustain or increase profitability
on a quarterly or annual basis in the future.
Liquidity
and Capital Resources
Our
cash balance as of October 31 2016 was $34,540. The Company is currently seeking to raise additional equity thru private placements
to enable the continuation of its current TAMA 38 business plan ..
Going
Concern Consideration
Our
auditors have issued an opinion on our annual financial statements which includes a statement describing our going concern status.
This means that there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain
additional capital to pay our bills and meet our other financial obligations. This is because we have not generated any revenues
and no revenues are anticipated until we begin marketing the product which cannot be guaranteed.
Off-Balance
Sheet Arrangements
We
do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial
condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital
resources that are material to investors.