GLOBE
NET WIRELESS CORP.
INTERIM
CONDENSED BALANCE SHEETS
(Unaudited)
|
|
February 28, 2018
|
|
|
August 31, 2017
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT ASSETS
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
1,532
|
|
|
$
|
8,599
|
|
Prepaid expenses
|
|
|
-
|
|
|
|
750
|
|
|
|
|
1,532
|
|
|
|
9,349
|
|
|
|
|
|
|
|
|
|
|
Intangible Assets, Net – Note 4
|
|
|
6,030
|
|
|
|
7,738
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
$
|
7,562
|
|
|
$
|
17,087
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES
|
|
|
|
|
|
|
|
|
Accounts Payable
|
|
$
|
12,702
|
|
|
$
|
2,688
|
|
Accrued Liabilities
|
|
|
31,746
|
|
|
|
32,868
|
|
Notes Payable – Note 5
|
|
|
30,000
|
|
|
|
30,000
|
|
Convertible Notes Payable – Note 6
|
|
|
72,633
|
|
|
|
71,833
|
|
|
|
|
|
|
|
|
|
|
Total Current Liabilities
|
|
|
147,081
|
|
|
|
137,389
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDER’S DEFICIT
|
|
|
|
|
|
|
|
|
Common Stock - Note 7 Par Value per share:$0.001 Authorized: 200,000,000 shares Issued
10,800,000 shares
|
|
|
10,800
|
|
|
|
10,800
|
|
Additional Paid in Capital
|
|
|
92,106
|
|
|
|
92,106
|
|
Deficit Accumulated
|
|
|
(242,425
|
)
|
|
|
(223,208
|
)
|
|
|
|
|
|
|
|
|
|
Total Stockholders’ Deficit
|
|
|
(139,519
|
)
|
|
|
(120,302
|
)
|
|
|
|
|
|
|
|
|
|
Total Liabilities and Stockholders’ Deficit
|
|
$
|
7,562
|
|
|
$
|
17,087
|
|
Going
concern – Note 2
The
accompanying notes are an integral part of the financial statements
GLOBE
NET WIRELESS CORP.
INTERIM
CONDENSED STATEMENT OF OPERATIONS
For
the three month and six month periods ended February 28, 2018 and 2017
(Unaudited)
|
|
For the three
|
|
|
For the three
|
|
|
For the six
|
|
|
For the six
|
|
|
|
months ended
|
|
|
months ended
|
|
|
months ended
|
|
|
months ended
|
|
|
|
February 28, 2018
|
|
|
February 28, 2017
|
|
|
February 28, 2018
|
|
|
February 28, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative expenses
|
|
$
|
5,770
|
|
|
$
|
8,293
|
|
|
$
|
13,438
|
|
|
$
|
13,849
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss before interest
|
|
|
(5,770
|
)
|
|
|
(8,293
|
)
|
|
|
(13,438
|
)
|
|
|
(13,849
|
)
|
Interest
|
|
|
(2,476
|
)
|
|
|
(1,983
|
)
|
|
|
(4,979
|
)
|
|
|
(3,719
|
)
|
Amortized interest
|
|
|
(400
|
)
|
|
|
(489
|
)
|
|
|
(800
|
)
|
|
|
(489
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss and comprehensive loss
|
|
$
|
(8,646
|
)
|
|
$
|
(10,765
|
)
|
|
$
|
(19,217
|
)
|
|
$
|
(18,058
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per share of common stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-Basic and diluted
|
|
$
|
(0.001
|
)
|
|
$
|
(0.001
|
)
|
|
$
|
(0.002
|
)
|
|
$
|
(0.002
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares of common stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-Basic and diluted
|
|
|
10,800,000
|
|
|
|
10,800,000
|
|
|
|
10,800,000
|
|
|
|
10,800,000
|
|
The
accompanying notes are an integral part of the financial statements
GLOBE
NET WIRELESS CORP.
INTERIM
CONDENSED STATEMENT OF STOCKHOLDERS’ DEFICIT
(Unaudited)
|
|
Common stock
|
|
|
Additional
Paid-in
|
|
|
Deficit
|
|
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
Accumulated
|
|
|
Total
|
|
Balance, August 31, 2016
|
|
|
10,800,000
|
|
|
$
|
10,800
|
|
|
$
|
72,106
|
|
|
$
|
(176,868
|
)
|
|
$
|
(93,962
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value of Convertible debt assigned to equity
|
|
|
-
|
|
|
|
-
|
|
|
|
20,000
|
|
|
|
-
|
|
|
|
20,000
|
|
Net loss and comprehensive loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(46,340
|
)
|
|
|
(46,340
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, August 31, 2017
|
|
|
10,800,000
|
|
|
|
10,800
|
|
|
|
92,106
|
|
|
|
(223,208
|
)
|
|
|
(120,302
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss and comprehensive loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(19,217
|
)
|
|
|
(19,217
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance for the period, February 28, 2018
|
|
|
10,800,000
|
|
|
$
|
10,800
|
|
|
$
|
92,106
|
|
|
$
|
(242,425
|
)
|
|
$
|
(139,519
|
)
|
The
accompanying notes are an integral part of the financial statements
GLOBE
NET WIRELESS CORP.
INTERIM
CONDENSED STATEMENT OF CASH FLOWS
(Unaudited)
|
|
For the six
|
|
|
For the six
|
|
|
|
months ended
|
|
|
months ended
|
|
|
|
February 28,
2018
|
|
|
February 28,
2017
|
|
|
|
|
|
|
|
|
Cash Flows from (used in) Operating Activities
|
|
|
|
|
|
|
|
|
Net Loss
|
|
$
|
(19,217
|
)
|
|
$
|
(18,058
|
)
|
Adjustments to reconcile net income to net cash provided by (used in)
operating activities
|
|
|
|
|
|
|
|
|
Amortization
|
|
|
1,708
|
|
|
|
801
|
|
Interest on notes and convertible notes payable
|
|
|
4,979
|
|
|
|
3,720
|
|
Accretion on convertible notes payable
|
|
|
800
|
|
|
|
489
|
|
Increase (decrease) in Operating Assets and Liabilities
|
|
|
|
|
|
|
|
|
Prepaid Expense
|
|
|
750
|
|
|
|
750
|
|
Accounts Payable
|
|
|
10,014
|
|
|
|
996
|
|
Accrued Liabilities
|
|
|
(6,101
|
)
|
|
|
(5,500
|
)
|
|
|
|
|
|
|
|
|
|
Net Cash used in Operating Activities
|
|
|
(7,067
|
)
|
|
|
(16,802
|
)
|
|
|
|
|
|
|
|
|
|
Cash Flows from Financing Activities
|
|
|
|
|
|
|
|
|
Convertible notes payable
|
|
|
-
|
|
|
|
20,000
|
|
|
|
|
|
|
|
|
|
|
Net Cash provided by Financing Activities
|
|
|
-
|
|
|
|
20,000
|
|
|
|
|
|
|
|
|
|
|
Cash Flows used in Investment Activities
|
|
|
|
|
|
|
|
|
Intangible Assets
|
|
|
-
|
|
|
|
(5,246
|
)
|
|
|
|
|
|
|
|
|
|
Net Cash used in Investment Activities
|
|
|
-
|
|
|
|
(5,246
|
)
|
|
|
|
|
|
|
|
|
|
Increase (decrease) in Cash
|
|
|
(7,067
|
)
|
|
|
(2,048
|
)
|
|
|
|
|
|
|
|
|
|
Cash at Beginning of the period
|
|
|
8,599
|
|
|
|
3,684
|
|
|
|
|
|
|
|
|
|
|
Cash at End of the period
|
|
$
|
1,532
|
|
|
$
|
1,636
|
|
|
|
|
|
|
|
|
|
|
Supplemental cash flow information
|
|
|
|
|
|
|
|
|
Interest
|
|
$
|
4,979
|
|
|
$
|
3,719
|
|
Taxes
|
|
$
|
-
|
|
|
$
|
-
|
|
The
accompanying notes are an integral part of the financial statements
GLOBE
NET WIRELESS CORP.
NOTES
TO THE INTERIM CONDENSED FINANCIAL STATEMENTS
February
28, 2018
(Unaudited)
1.
|
Organization
and nature of operations
|
Globe
Net Wireless Corp. (“the Company”) was incorporated in the State of Nevada, USA on September 4, 2009. The Company
is in its early development stage since its formation and has realized limited revenues from its planned operations. At the
outset, the Company has been engaged in the development of a telecommunication business to provide internet and related
services to both consumers and businesses currently in under serviced or unserviced areas at real broadband speeds through
the proprietary wireless technology it acquired. During fiscal 2017, the Company entered the software mobile application
industry through the development of the TextPro Connect app and the BizPro app. These are utility services app specifically
designed for the mobile business market.
The
Company has chosen an August 31 year end.
2.
|
Basis
of Presentation - Going Concern Uncertainties
|
These
financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America,
which contemplate continuation of the Company as a going concern. However, the Company has limited operations and has sustained
operating losses resulting in a deficit.
The
Company has accumulated a deficit of $242,425 since inception of September 4, 2009, has yet to achieve profitable operations
and further losses are anticipated in the development of its business. The Company’s ability to continue as a going
concern is in substantial doubt and is dependent upon obtaining additional financing and/or achieving a sustainable
profitable level of operations. The financial statements do not include any adjustments that might result from the outcome of
this uncertainty. The Company may seek additional equity as necessary and it expects to raise funds through private or public
equity investment in order to support existing operations and expand the range of its business. There is no assurance that
such additional funds will be available for the Company on acceptable terms, if at all.
3.
|
Interim
reporting and significant accounting policies
|
The
interim condensed financial statements are prepared under the accrual basis of accounting in accordance with accounting principles
generally accepted in the United States of America. While the information presented is unaudited, it includes all adjustments,
which are, in the opinion of management, necessary to present fairly the financial position, result of operation and cash flows
for the interim periods presented in accordance with accounting principles generally accepted in the United States of America.
All adjustments are of a normal recurring nature. It is suggested that the interim condensed financial statements be read in conjunction
with the Company’s August 31, 2017 annual financial statements. Operating results for the six months period ended February
28, 2018 are not necessarily indicative of the results that can be expected for the year ended August 31, 2018.
There
have been no changes in the accounting policies from those disclosed in the notes to the audited financial statements for the
year ended August 31, 2017.
Recently
issued accounting pronouncements
The
Company adopts new pronouncements relating to generally accepted accounting principles applicable to the Company as they are issued,
which may be in advance of their effective date. Management does not believe that any pronouncement not yet effective but recently
issued would, if adopted, have a material effect on the accompanying financial statements.
GLOBE
NET WIRELESS CORP.
NOTES
TO THE INTERIM CONDENSED FINANCIAL STATEMENTS
February
28, 2018
(Unaudited)
The
Company contracted out the development of utility software applications (“apps”). The assets are amortized over 3
years on a straight-line basis.
|
|
February 28, 2018
|
|
|
August 31, 2017
|
|
Item
|
|
Cost
|
|
|
Accumulated Amortization
|
|
|
Net
|
|
|
Costs
|
|
|
Accumulated Amortization
|
|
|
Net
|
|
Text Pro App
|
|
$
|
8,333
|
|
|
$
|
3,472
|
|
|
$
|
4,861
|
|
|
$
|
8,333
|
|
|
$
|
2,083
|
|
|
$
|
6,250
|
|
Biz Pro App
|
|
|
1,913
|
|
|
|
744
|
|
|
|
1,169
|
|
|
|
1,913
|
|
|
|
425
|
|
|
|
1,488
|
|
Total
|
|
$
|
10,246
|
|
|
$
|
4,216
|
|
|
$
|
6,030
|
|
|
$
|
10,246
|
|
|
$
|
2,508
|
|
|
$
|
7,738
|
|
The
company has four notes payable that are unsecured, bear interest at 8% per annum and are due on demand. Interest has not
been paid and is classified with accrued liabilities for financial statement purposes. The principal and interest owing
as of February 28, 2018 is as follows:
|
|
February 28, 2018
|
|
|
August 31, 2017
|
|
Date of Issue
|
|
Principal
|
|
|
Interest
|
|
|
Principal
|
|
|
Interest
|
|
September 16, 2011
|
|
$
|
5,000
|
|
|
$
|
2,583
|
|
|
$
|
5,000
|
|
|
$
|
2,385
|
|
October 4, 2011
|
|
|
5,000
|
|
|
|
2,563
|
|
|
|
5,000
|
|
|
|
2,385
|
|
November 4, 2011
|
|
|
10,000
|
|
|
|
5,059
|
|
|
|
5,000
|
|
|
|
4,662
|
|
December 3, 2012
|
|
|
10,000
|
|
|
|
4,193
|
|
|
|
10,000
|
|
|
|
3,7966
|
|
|
|
$
|
30,000
|
|
|
$
|
14,398
|
|
|
$
|
30,000
|
|
|
$
|
13,208
|
|
6.
|
Convertible
Note Payable
|
There
are five convertible notes payable that are unsecured, bearing interest at 8% per annum, due on demand, and convertible into shares
at the lenders’ option at a conversion price of $0.005 per share. Interest has not been paid and is classified with accrued
liabilities for financial statement purposes.
There
was no value assigned to the conversion feature of these notes as the shares that would have been issued on conversion would not
have been readily convertible into cash. The principal and interest owing as at February 28, 2018 is as follows:
GLOBE
NET WIRELESS CORP.
NOTES
TO THE INTERIM CONDENSED FINANCIAL STATEMENTS
February
28, 2018
(Unaudited)
|
|
February 28, 2018
|
|
|
August 31, 2017
|
|
Date of Issue
|
|
Principal
|
|
|
Interest
|
|
|
Principal
|
|
|
Interest
|
|
May 17, 2013
|
|
$
|
10,000
|
|
|
$
|
3,831
|
|
|
$
|
10,000
|
|
|
$
|
3,434
|
|
September 11, 2015
|
|
|
10,000
|
|
|
|
1,975
|
|
|
|
10,000
|
|
|
|
1,578
|
|
November 12, 2015
|
|
|
5,000
|
|
|
|
920
|
|
|
|
5,000
|
|
|
|
721
|
|
November 13, 2015
|
|
|
5,000
|
|
|
|
918
|
|
|
|
5,000
|
|
|
|
720
|
|
April 11, 2016
|
|
|
500
|
|
|
|
75
|
|
|
|
500
|
|
|
|
56
|
|
|
|
$
|
30,500
|
|
|
$
|
7,719
|
|
|
$
|
30,500
|
|
|
$
|
6,509
|
|
There
are two convertible notes payable that bear interest at 8% per annum, due on demand and convertible into shares at the lenders’
option at a conversion price of $0.5625 per share. Interest has not been paid and is classified with accrued liabilities for financial
statement purposes.
One
note for $20,000 was issued for which no value was assigned to the conversion feature as the shares that would have been issued
on conversion would not have been readily convertible into cash.
|
|
February 28, 2018
|
|
|
August 31, 2017
|
|
Date of Issue
|
|
Principal
|
|
|
Interest
|
|
|
Principal
|
|
|
Interest
|
|
July 11, 2016
|
|
$
|
20,000
|
|
|
$
|
2,617
|
|
|
$
|
20,000
|
|
|
$
|
1,823
|
|
Another
note for $20,000 was issued on October 31, 2016, when the market price per share was $1.48. The conversion feature was valued
at $20,000. $800 was accreted and charged to interest during the six months ended February 28, 2018 ($1,333 for the year
ended August 31, 2017). At February 28, 2018, the unamortized discount was $17,867.
|
|
February 28, 2018
|
|
|
August 31, 2017
|
|
|
|
Principal
|
|
|
Interest
|
|
|
Principal
|
|
|
Interest
|
|
Proceeds on issue
|
|
$
|
20,000
|
|
|
|
-
|
|
|
$
|
20,000
|
|
|
|
-
|
|
Value assigned to conversion feature
|
|
|
20,000
|
|
|
|
-
|
|
|
|
20,000
|
|
|
|
-
|
|
Value of convertible note payable at issuance
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Accretion charges
|
|
|
2,133
|
|
|
|
-
|
|
|
|
1,333
|
|
|
|
-
|
|
Interest
|
|
|
-
|
|
|
$
|
2,126
|
|
|
|
-
|
|
|
$
|
1,333
|
|
Balance, convertible note payable, end of period
|
|
$
|
2,133
|
|
|
$
|
2,126
|
|
|
$
|
1,333
|
|
|
$
|
1,333
|
|
There
is one convertible note payable that bear interest at 10% per annum, due on demand and convertible at a conversion price of $0.10
per share at the lender’s option. The interest is classified as accrued liabilities for financial statement purposes.
There
was no beneficial conversion feature at the time of issuance and, accordingly, no value has been assigned to the conversion feature.
GLOBE
NET WIRELESS CORP.
NOTES
TO THE INTERIM CONDENSED FINANCIAL STATEMENTS
February
28, 2018
(Unaudited)
|
|
February 28, 2018
|
|
|
August 31, 2017
|
|
Date of Issue
|
|
Principal
|
|
|
Interest
|
|
|
Principal
|
|
|
Interest
|
|
April 17, 2017
|
|
$
|
20,000
|
|
|
$
|
1,737
|
|
|
$
|
20,000
|
|
|
$
|
745
|
|
A
summary of the value assigned to the convertible debt and accrued interest thereon is as follows:
|
|
|
February 28, 2018
|
|
|
August 31, 2017
|
|
Conversion price of notes into shares
|
|
|
Convertible
debt
|
|
|
Interest
|
|
|
Convertible
debt
|
|
|
Interest
|
|
$
|
0.005
|
|
|
$
|
30,500
|
|
|
$
|
7,719
|
|
|
$
|
30,500
|
|
|
$
|
6,509
|
|
$
|
0.5625
|
|
|
|
22,133
|
|
|
|
4,743
|
|
|
|
21,333
|
|
|
|
3,156
|
|
$
|
0.10
|
|
|
|
20,000
|
|
|
|
1,737
|
|
|
|
20,000
|
|
|
|
745
|
|
|
|
|
|
$
|
72,633
|
|
|
$
|
14,199
|
|
|
$
|
71,833
|
|
|
$
|
10,410
|
|
There
were no warrants or stock options outstanding as of February 28, 2018.
There
were no significant non-cash transactions during the period ended February 28, 2018.
FORWARD
LOOKING STATEMENTS
Statements
made in this Form 10-Q that are not historical or current facts are “forward-looking statements” made pursuant to
the safe harbor provisions of Section 27A of the Securities Act of 1933 (the “Act”) and Section 21E of the Securities
Exchange Act of 1934. These statements often can be identified by the use of terms such as “may,” “will,”
“expect,” “believe,” “anticipate,” “estimate,” “approximate” or “continue,”
or the negative thereof. We intend that such forward-looking statements be subject to the safe harbors for such statements. We
wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made.
Any forward-looking statements represent management’s best judgment as to what may occur in the future. However, forward-looking
statements are subject to risks, uncertainties and important factors beyond our control that could cause actual results and events
to differ materially from historical results of operations and events and those presently anticipated or projected. We disclaim
any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such
statement or to reflect the occurrence of anticipated or unanticipated events.
ITEM
2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
GENERAL
Globe
Net Wireless Corp.
was incorporated under the laws of the State of Nevada, U.S. on September 4, 2009. Our registration statement
on Form S-1 was filed with the Securities and Exchange Commission was declared effective on May 15, 2013.
On
December 9, 2016, Globe Net issued a press release announcing that it had launched BizPro Mobile Apps, a suite of mobile app development
services for the small to medium sized business mobile app market. For more information, please refer to Exhibit 99.1 filed of
the form 8-K filed on December 13, 2016 for more details.
Description
of Business
Rural
Internet Service Provider (RISP)
Globe
Net is in the business of providing rural communities with high-speed internet connectivity at speeds equal or better than existing
competing services. With its Internet and wireless connectivity systems, Globe Net’s plan was to provide internet and related
services to both consumers and businesses in currently under serviced or unserviceable areas at real broadband speeds. Globe Net
planned to offer for sale its GNW Systems to residents and businesses located in under-serviced or non-serviced rural areas worldwide
with the initial focus on North America and China. Although Globe Net continues to attempt to achieve its goal of becoming a rural
internet provider, management intends to focus on Globe Net’s mobile app business.
App
Incubator
In
August of 2016, Globe Net began a second business concept to capitalize on the proliferation of open source application programming
interface (API) ecosystems. Management ascertained one of the key success metrics today is service velocity or the speed with
which services can be developed and introduced to the market to generate revenue.
Digital
services in the API economy are increasingly being developed using a new design pattern known as microservices. Wikipedia defines
microservices as “a software architecture style in which complex applications are composed of small, independent processes
communicating with each other using language-agnostic APIs.
In
order to take advantage of the API ecosystem economy, Globe Net wants to become an agile business, able to participate in on-demand,
context driven API economy value chains and to bring new services to market faster. The network as a digital platform will enable
them to design and deploy customer-facing digital services by “mashing up” network and IT service components that
run in the platform with each other, and potentially with services exposed by third-party platforms.
RESULTS
OF OPERATIONS
Our
financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments
relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be
unable to continue in operation. We expect we will require additional capital to meet our long term operating requirements. We
expect to raise additional capital through, among other things, the sale of equity or debt securities.
Six-month
Period Ended February 28, 2018 Compared to the Six-month Period Ended February 29, 2017.
Our
net loss for the six-month period ended February 28, 2018 was $19,217 (2017: $18,058), which consisted of general and administration
expenses and interest on notes payable. We did not generate any revenue during either six-month period in fiscal 2018 or 2017.
The increase in expenses in the current fiscal year relate to an increase in interest on notes payable.
The
weighted average number of shares outstanding was 10,800,000 for the six-month period ended February 28, 2018 and 10,800,000 for
the six-month period ended February 29, 2017.
LIQUIDITY
AND CAPITAL RESOURCES
As
at February 28, 2018, our current assets were $1,532 compared to $9,349 in current assets at August 31, 2017. As at February 28,
2018, our current liabilities were $147,081 compared to $137,389 at August 31, 2017. Current liabilities at February 28, 2018
were comprised of $102,633 in notes payable and $12,702 in accounts payable and $31,746 in accrued liabilities.
Stockholders’
deficit increased from $120,302 as of August 31, 2017 to $139,519 as of February 28, 2018.
Cash
Flows from Operating Activities
We
have not generated positive cash flows from operating activities. For the six-month period ended February 28, 2018, net cash flows
used in operating activities were $7,067 consisting of an adjusted net loss of $11,730 and $4,663 provided by an increase in accounts
payable. For the six-month period ended February 29, 2017, net cash flows used in operating activities were $16,802.
Cash
Flows from Financing Activities
We
have financed our operations primarily from either the issuance of our shares of common stock or notes payable. For the six-month
period ended February 28, 2018, we generated $nil cash from financing activities from the issuance of a convertible promissory
note. We generated $20,000 cash in the comparative period in fiscal 2017.
PLAN
OF OPERATION AND FUNDING
We
expect that working capital requirements will continue to be funded through a combination of our existing funds and further issuances
of securities. Our working capital requirements are expected to increase in line with the growth of our business.
Existing
working capital, further advances and debt instruments, and anticipated cash flow are expected to be adequate to fund our operations
over the next three months. We have no lines of credit or other bank financing arrangements. Generally, we have financed operations
to date through the proceeds of the private placement of equity and debt instruments. In connection with our business plan, management
anticipates additional increases in operating expenses and capital expenditures relating to: (i) acquisition of inventory; (ii)
developmental expenses associated with a start-up business; and (iii) marketing expenses. We intend to finance these expenses
with further issuances of securities and director loans. Thereafter, we expect we will need to raise additional capital and generate
revenues to meet long-term operating requirements. Additional issuances of equity or convertible debt securities will result in
dilution to our current shareholders. Further, such securities might have rights, preferences or privileges senior to our common
stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are
not available on acceptable terms, we may not be able to take advantage of prospective new business endeavors or opportunities,
which could significantly and materially restrict our business operations. We will have to raise additional funds in the next
twelve months in order to sustain and expand our operations. We currently do not have a specific plan of how we will obtain such
funding; however, we anticipate that additional funding will be in the form of equity financing from the sale of our common stock.
We have and will continue to seek to obtain short-term loans from our directors, although no future arrangement for additional
loans has been made. We do not have any agreements with our directors concerning these loans. We do not have any arrangements
in place for any future equity financing.
OFF-BALANCE
SHEET ARRANGEMENTS
As
of the date of this report, 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.
GOING
CONCERN
The
independent auditors’ report accompanying our August 31, 2017 financial statements contained an explanatory paragraph expressing
substantial doubt about our ability to continue as a going concern. The financial statements have been prepared “assuming
that we will continue as a going concern,” which contemplates that we will realize our assets and satisfy our liabilities
and commitments in the ordinary course of business.
CHANGE
IN ACCOUNTING POLICY
The
Company adopts new pronouncements relating to generally accepted accounting principles applicable to the Company as they are issued,
which may be in advance of their effective date.