Item 1. Financial Statements.
The financial statements for the quarter ended September 30, 2017 are provided herein.
SEE
ATT
ACHED
FORWARD-LOOKING STATEMENTS
This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are forward-looking statements for purposes of federal and state securities laws, including, but not limited to, any projections of earnings, revenue or other financial items; any statements of the plans, strategies and objections of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions or performance; any statements or belief; and any statements of assumptions underlying any of the foregoing.
Forward Looking Statements may include the words may, could, estimate, intend, continue, believe, expect or anticipate or other similar words. These forward-looking statements present our estimates and assumptions only as of the date of this report. Except for our ongoing securities laws, we do not intend, and undertake no obligation, to update any forward-looking statement.
Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any or our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and inherent risks and uncertainties. The factors impacting these risks and uncertainties include, but are not limited to:
·
increased competitive pressures from existing competitors and new entrants;
·
our ability to raise adequate working capital;
·
deterioration in general or regional economic conditions;
·
adverse state or federal legislation or regulation that increases the costs of compliance, or adverse findings by a regulator with respect to existing operations;
·
loss of customers or sales weakness;
·
inability to achieve sales levels or other operating results;
·
the unavailability of funds for capital expenditures; and
·
operational inefficiencies.
For a detailed description of these and other factors that could cause actual results to differ materially from those expressed in any forward-looking statement, please see Factors That May Affect Our Results of Operations in this document.
Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
Note Regarding Forward Looking Statements.
This quarterly report on Form 10-Q of Prosalutis Holdings Inc. (formerly Greenflag Ventures Inc.) for the period ended
September 30, 2017, contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created thereby. To the extent that such statements are not recitations of historical fact, such statements constitute forward-looking statements which, by definition, involve risks and uncertainties. In particular, statements under the Sections; Description of Business, Management's Discussion and Analysis of Financial Condition and Results of Operations contain forward-looking statements. Where, in any forward-looking statement, the Company expresses an expectation or belief as to future results or events, such expectation or belief is expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the statement of expectation or belief will result or be achieved or accomplished.
The following are factors that could cause actual results or events to differ materially from those anticipated, and include but are not limited to: general economic, financial and business conditions; changes in and compliance with governmental regulations; changes in tax laws; and the costs and effects of legal proceedings.
|
|
|
|
|
|
(a)
|
an abrupt economic change resulting in an unexpected downturn in demand;
|
|
|
(b)
|
governmental restrictions or excessive taxes on land;
|
|
|
(c)
|
over-abundance of companies developing commercial properties to lease space or sell the developed building;
|
|
|
(d)
|
economic resources to support the development of our projects;
|
|
|
|
|
(e)
|
expansion plans, access to potential clients, and advances in technology; and
|
|
(f)
|
lack of working capital that could hinder the land acquisition for development of our projects.
|
Financial information provided in this Form 10-Q, for periods subsequent to September 30, 2017, is preliminary and remains subject to audit. As such, this information is not final or complete, and remains subject to change, possibly materially.
Managements Discussion and Analysis of Financial Condition and Results of Operations
This Managements Discussion and Analysis (MD&A) is dated FE unless otherwise indicated and should be read in conjunction with the unaudited condensed interim financial statements of Prosalutis Holdings Inc. (the Company, we, our or us) for the nine months ended September 30, 2017, and the related notes thereto. These condensed consolidated interim unaudited financial statements, have been prepared using accounting policies consistent with International Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) and interpretations of the IFRS Interpretations Committee (IFRIC).
For the purposes of preparing this MD&A, management, in conjunction with the Board of Directors, considers the materiality of information. Information is considered material if: (i) such information results in, or would reasonably be expected to result in, a significant change in the market price or value of Driven common shares; or (ii) there is a substantial likelihood that a reasonable investor would consider it important in making an investment decision; or (iii) if it would significantly alter the total mix of information available to investors. Management, in conjunction with the Board of Directors, evaluates materiality with reference to all relevant circumstances, including potential market sensitivity.
Further information about the Company and its operations can be obtained from the offices of the Company or from
www.sedar.com
.
Cautionary Note Regarding Forward-Looking Information
Certain statements contained in the following MD&A constitute forward-looking statements. Such forward looking statements involve a number of known and unknown risks, uncertainties and other factors which may cause the 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. Readers are cautioned not to place undue reliance on these forward-looking statements.
Operating Expenses
There was no revenue realized in the quarter ended September 30, 2017.
General and administrative expenses for the quarter ended September 30, 2017 were $8,662 of which $1,607 represented loan interest on $64,287 of loans payable and $3,364 of loan interest on notes payable of $400,000. Professional fees of $2,527 were also included expenses noted above
Liquidity and Capital Resources
Currently, we have limited operating capital. The Company anticipates that it will require approximately $1,500,000 of working capital to complete all of its desired business activity during the next twelve months. The Company has earned limited revenue from its business operations. Our current capital and our other existing resources will be
sufficient only to provide a limited amount of working capital, and, to date, the revenues generated from our business operations have not been sufficient to fund our operations or planned growth. As noted above, we will likely require additional capital to continue to operate our business, and to further expand our business. We may be unable to obtain the additional capital required. Our inability to generate capital or raise additional funds when required will have a negative impact on our operations, business development and financial results.
In the event we are not successful in reaching our sustained proceeds from convertible financing and private placement targets, we anticipate that depending on market conditions and our plan of operations, we may incur operating losses.
We base this expectation, in part, on the fact that we may not be able to generate enough gross profit to cover our operating expenses. Consequently, there remains the possibility that the Company may not continue to operate as a going concern in the long term. We are subject to many factors, which could detrimentally affect us. Many of these risk factors are outside managements control, including demand for our product, our ability to hire and retain talented and skilled employees and service providers, as well as other factors.
The following discussion outlines the state of our liquidity and capital resources for the period ended June 30, 2017.
Liquidity
At September 30, 2017, the Company had negative working capital of $349,393 of which $206 was cash and equivalents. The Company manages its capital structure and makes adjustments to it, based on available funds to the Company.
As of September 30, 2017, the Company has no outstanding commitments except for its best effort commitment to fund $1,500,000 based on the Technology Agreement of March 15, 2016. The Company has not pledged any of its assets as security for loans, or otherwise and is not subject to any debt covenants. The Company has sufficient working capital at this time to meet its ongoing financial obligations.
Off-Balance Sheet Arrangements
As of the date of this filing, the Company does not have any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on the results of operations or financial condition of the Company including, without limitation, such considerations as liquidity and capital resources that have not previously been discussed.
RELATED PARTY TRANSACTIONS
The following amounts due to related parties are included in trade payables and accrued liabilities:
|
|
|
|
Companies controlled by former directors of the Company
|
$
196,661
|
These amounts are unsecured, non-interest bearing and have no fixed terms of repayment.
The Company did not incur any additional related party transactions with companies that are controlled by directors, former directors, or key management personnel of the Company during the quarter ended September 30, 2017.
Critical Accounting Estimates
The preparation of the financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of expenses during the reporting period. Actual outcomes could differ from these estimates. The financial statements include estimates which, by their nature, are uncertain. The impacts of such estimates are pervasive throughout the financial statements, and may require accounting adjustments based on future occurrences. Revisions to accounting estimates are recognized in the period in which the estimate is revised and the revision affects both current and future periods.
Significant assumptions about the future that management has made that could result in a material adjustment to the carrying amounts of assets and liabilities, in the event that actual results differ from assumptions made, relate to, but are not limited to, the following:
the inputs used in measurement for warrants
the inputs used in measurement for share based payments expense
the $nil provision for income taxes which is included in the unaudited condensed interim statements of comprehensive loss and recognition of deferred income tax assets and liabilities included in the year-end audited statement of financial position at December 31, 2016.
Change in Accounting Policies
Recent accounting pronouncements
The following standards, amendments, and interpretations have been adopted by the Company as of January 1, 2015. There was no impact on the financial statements as a result of the adoption of these standards, amendments, and interpretations:
a)
IFRS 8 Operating Segments;
b)
IAS 32 Financial Instruments; Presentation;
c)
IAS 36 Impairment of Assets; and
d)
IFRIC 21 Levies.
Financial Instruments
The Company's financial instruments, consisting of cash and cash equivalents of $206, approximate fair values due to the relatively short-term maturities of the instruments. It is managements opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments.
As at September 30, 2017, the Company had negative working capital of $349,393 and an accumulated deficit of $4,666,268. The Companys continuation as a going concern is dependent upon the successful results from the successful development of its new drug product and its ability to attain profitable operations and generate funds there from and/or raise equity capital or borrowings sufficient to meet current and future obligations. Management intends to finance operating costs over the next twelve months with loans from directors and companies controlled by directors and or private placement of common shares.
For more information see Note 10 of the notes to the condensed consolidated interim financial statements.