Item
1. Financial Statements.
DARKSTAR
VENTURES, INC.
INTERIM
CONSOLIDATED FINANCIAL STATEMENTS
AS
OF
OCTOBER 31
,
2018
IN
U.S. DOLLARS
UNAUDITED
TABLE
OF CONTENTS
|
Page
|
CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS:
|
|
Condensed
Consolidated Balance sheets as of October 31, 2018 and July 31, 2018
|
3
|
Condensed
Consolidated Statements of Comprehensive Loss
for
the three months
|
|
ended
October 31, 2018 and 2017
|
4
|
Condensed
Consolidated Statements of stockholders' deficit for the period of three months
|
|
ended
October 31, 2018 and 2017
|
5
|
Condensed
Consolidated Statements of cash flows
for
the three months
|
|
ended
October 31, 2018 and 2017
|
6
|
Notes
to condensed interim financial statements
|
7
- 8
|
DARKSTAR
VENTURES, INC.
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
October
31,
|
|
July
31,
|
|
|
2018
|
|
2018
|
|
|
Unaudited
|
|
Audited
|
A
s s e t s
|
|
|
|
|
|
|
|
|
CURRENT
ASSETS:
|
|
|
|
|
|
|
|
|
Related
parties
|
|
$
|
—
|
|
|
$
|
3,667
|
|
Other
current assets
|
|
|
24,172
|
|
|
|
24,511
|
|
T
o t a l current assets
|
|
|
24,172
|
|
|
|
28,178
|
|
|
|
|
|
|
|
|
|
|
LAND
DEVELOPMENT COSTS
|
|
|
45,687
|
|
|
|
47,244
|
|
|
|
|
|
|
|
|
|
|
PROPERTY
AND EQUIPMENT, NET
|
|
|
3,841
|
|
|
|
4,368
|
|
|
|
|
|
|
|
|
|
|
OTHER
ASSETS
|
|
|
2,452
|
|
|
|
8,490
|
|
|
|
|
|
|
|
|
|
|
T
o t a l assets
|
|
$
|
76,152
|
|
|
$
|
88,280
|
|
|
|
|
|
|
|
|
|
|
Liabilities
and Stockholders’ Deficit
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
|
|
|
|
|
Short
term bank credit
|
|
$
|
10,734
|
|
|
$
|
7,016
|
|
Trade
payables
|
|
|
17,397
|
|
|
|
18,227
|
|
Short
term loans
|
|
|
60,366
|
|
|
|
44,760
|
|
Other
accounts payables and accrued expenses
|
|
|
39,503
|
|
|
|
34,646
|
|
Related
parties
|
|
|
26,101
|
|
|
|
—
|
|
T
o t a l current liabilities
|
|
|
154,101
|
|
|
|
104,649
|
|
|
|
|
|
|
|
|
|
|
LONG
TERM LOAN
|
|
|
745,666
|
|
|
|
712,376
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS'
EQUITY (DEFICIENCY):
|
|
|
|
|
|
|
|
|
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, 2018 and July 31, 2018.
Issued and outstanding: 647,345,000 shares at October 31,
2018 and July 31, 2018.
|
|
|
64,734
|
|
|
|
64,734
|
|
Additional
paid-in capital
|
|
|
575,851
|
|
|
|
575,851
|
|
Accumulated
other comprehensive income
|
|
|
4,643
|
|
|
|
(5,099
|
)
|
Accumulated
deficit
|
|
|
(1,468,843
|
)
|
|
|
(1,364,231
|
)
|
T
o t a l Stockholders’ Equity (Deficiency)
|
|
|
(823,615
|
)
|
|
|
(728,745
|
)
|
T
o t a l liabilities and Stockholders’ Equity (Deficiency)
|
|
$
|
76,152
|
|
|
$
|
88,280
|
|
The
accompanying notes are an integral part of the consolidated financial statements.
DARKSTAR
VENTURES, INC.
CONDENSED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
|
|
|
|
|
|
|
Three
months ended
|
|
|
October
31
|
|
|
2018
|
|
2017
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Project
development and general and administrative expenses
|
|
$
|
53,311
|
|
|
$
|
35,359
|
|
Operating
loss
|
|
|
(53,311
|
)
|
|
|
(35,359
|
)
|
|
|
|
|
|
|
|
|
|
Interest
expense, net
|
|
|
(51,301
|
)
|
|
|
(26,301
|
)
|
Net
loss
|
|
$
|
(104,612
|
)
|
|
$
|
(61,660
|
)
|
|
|
|
|
|
|
|
|
|
Other
comprehensive loss - Foreign currency gain (loss)
|
|
|
9,742
|
|
|
|
(8,594
|
)
|
Comprehensive
loss
|
|
$
|
(94,870
|
)
|
|
$
|
(70,254
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
and diluted net loss per common share
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
|
|
|
|
|
|
|
|
Weighted
average number of common shares outstanding during the period – basic and diluted
|
|
|
647,345,000
|
|
|
|
647,345,000
|
|
|
|
|
|
|
|
|
|
|
The
accompanying notes are an integral part of the consolidated financial statements.
DARKSTAR
VENTURES, INC.
CONDENSED
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT)
|
|
Common
Stock, $0.0001 Par Value
|
|
Receivables
on
|
|
Foreign
currency
|
|
Additional
paid-in
|
|
Accumulated
|
|
Total
Stockholders'
|
|
|
Shares
|
|
Amount
|
|
|
|
|
|
Capital
|
|
deficit
|
|
Equity
(deficit)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE
AT JULY 31, 2018
(audited)
|
|
|
647,345,000
|
|
|
$
|
64,734
|
|
|
|
—
|
|
|
$
|
(5,099
|
)
|
|
$
|
575,851
|
|
|
|
(1,364,231
|
)$
|
|
$
|
(728,745
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign
currency translation adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,742
|
|
|
|
|
|
|
|
|
|
|
|
9,742
|
|
Net
loss for the three months ended October 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(104,612
|
)
|
|
|
(104,612
|
)
|
BALANCE
AT OCTOBER 31, 2018 (Unaudited)
|
|
|
647,345,000
|
|
|
$
|
64,734
|
|
|
|
—
|
|
|
$
|
4,643
|
|
|
$
|
575,851
|
|
|
$
|
(1,468,843
|
)
|
|
$
|
(823,615
|
)
|
|
|
Common
Stock, $0.0001 Par Value
|
|
Receivables
on
|
|
Foreign
currency
|
|
Additional
paid-in
|
|
Accumulated
|
|
Total
Stockholders'
|
|
|
Shares
|
|
Amount
|
|
|
|
|
|
Capital
|
|
deficit
|
|
Equity
(deficit)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE
AT JULY 31, 2017
(audited)
|
|
|
647,345,000
|
|
|
$
|
64,734
|
|
|
$
|
(12,561
|
)
|
|
$
|
(18,033
|
)
|
|
$
|
575,851
|
|
|
$
|
(985,968
|
)
|
|
$
|
(375,977
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Received
on account of shares issued
|
|
|
|
|
|
|
|
|
|
|
12,561
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,561
|
|
Foreign
currency translation adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(8,594
|
)
|
|
|
|
|
|
|
|
|
|
|
(8,594
|
)
|
Net
loss for the three months ended October 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(70,254
|
)
|
|
|
(70,254
|
)
|
BALANCE
AT OCTOBER 31, 2017 (Unaudited)
|
|
|
647,345,000
|
|
|
$
|
64,734
|
|
|
|
—
|
|
|
$
|
(26,627
|
)
|
|
$
|
575,851
|
|
|
$
|
(1,056,222
|
)
|
|
$
|
(442,264
|
)
|
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
|
|
|
2018
|
|
2017
|
|
|
(Unaudited)
|
CASH
FLOW
S FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Net
loss
|
|
$
|
(104,612
|
)
|
|
$
|
(70,254
|
)
|
Adjustments
required to reconcile net loss
|
|
|
|
|
|
|
|
|
to
net cash used in operating activities:
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
527
|
|
|
|
502
|
|
Land
development costs
|
|
|
1,557
|
|
|
|
(117
|
)
|
Expenses
in respect of loans
|
|
|
43,046
|
|
|
|
46,843
|
|
Increase
in accrued interest on related party loan
|
|
|
29,768
|
|
|
|
(23,016
|
)
|
Increase
(decrease) in prepaid expenses and other current assets
|
|
|
339
|
|
|
|
8,942
|
|
Increase
(decrease) in trade payables and other account payables
|
|
|
4,027
|
|
|
|
18,615
|
|
Net
cash used in operating activities
|
|
$
|
(25,348
|
)
|
|
|
(18,485
|
)
|
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Loan
received
|
|
|
15,606
|
|
|
|
—
|
|
Proceeds
from receivables on account of shares
|
|
|
—
|
|
|
|
12,561
|
|
Net
cash provided by financing activities
|
|
$
|
15,606
|
|
|
|
12,561
|
|
|
|
|
|
|
|
|
|
|
INCREASE
(DECREASE) IN CASH AND CASH EQUIVALENTS
|
|
|
(9,742
|
)
|
|
|
(5,924
|
)
|
|
|
|
|
|
|
|
|
|
EFFECT
OF EXCHANGE RATE CHANGES
|
|
|
9,742
|
|
|
|
(8,594
|
)
|
|
|
|
|
|
|
|
|
|
CASH
AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
|
|
|
—
|
|
|
|
34,205
|
|
|
|
|
|
|
|
|
|
|
CASH
AND CASH EQUIVALENTS AT END OF PERIOD
|
|
$
|
—
|
|
|
$
|
19,687
|
|
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, 2018 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, 2018 are not necessarily
indicative of the results that may be expected for the year ending July 31, 2019.
The
July 31, 2018 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/A for
the year ended July 31, 2018.
NOTE
3 – SIGNIFICANT ACCOUNTING POLICIES
The
significant accounting policies applied in the annual financial statements of the Company as of July 31, 2018, 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 $1,468,843 as of October 31,
2018. 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/A for the fiscal year ended July
31, 2018 was filed.
NOTE
6 – RELATED PARTY TRANSACTIONS:
As
of July 31, 2018 the balance of the related party includes loans to an officer of the Company in the amount of $3,667. The loan
is due twenty four months from the date of the loan and bears an interest of 26% per annum. As of October 31, 2018 the officer
paid the loan in full.
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 seven 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, the Company currently has no employees.
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, 2018
The
Company did not generate any revenues from operations for the three months ended October 31, 2018
During
the three months ended October 31, 2018 the operating expenses and the comprehensive loss was $53,311 and $94,870 respectively.
The operating expenses and comprehensive 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
We
had no cash balance as of October 31, 2018. 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.