NOTES TO THE FINANCIAL STATEMENTS
(Unaudited)
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NATURE OF BUSINESS, ORGANIZATION AND BASIS OF PRESENTATION
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TGI Solar Power Group, Inc. (“TGI”
or the “Company”) is a publicly held corporation formed under the laws of the State of Delaware as Liberty Leasing
Co. Inc. in 1967. The Company changed its name to LIBCO Corporation on June 29, 1973, RDIS Corporation on Jan 11, 1993 and TenthGate
International, Inc. on February 20, 2007 before adopting its current name in June 2008. Tenth Gate International, Inc. acquired
TenthGate Incorporated, a Delaware corporation, by merger of TGI’s subsidiary, TenthGate Merger Sub, Inc., a Utah corporation,
with and into TenthGate Incorporated in April 2007. Thereafter, TenthGate International, Inc. became a development stage company
which owned various subsidiaries with licenses and patents held by those subsidiaries. On July 25, 2008, Tenth Gate International,
Inc., acquired from Solar 18 Corporation, a Florida corporation, (“Solar 18”), Solar 18’s patented technology
which the Company believed to be viable in commercial and residential applications, especially in the field of green energy. Thereafter,
the Company changed its name to TGI Solar Power Group, Inc. TGI Solar Power Group, Inc. discontinued operations of its other subsidiaries
(of the former TenthGate International, Inc.) to pursue energy technology products and services. The Company’s fiscal year
end is July 31st.
TGI Solar Power Group, Inc. is primarily
engaged in the business of providing potential alternative energy solutions to residential and business customers. The Company
markets alternative solutions on its website and directly to potential customers and creates a Present Value (PV) solution that
details price, tax benefits or cost support and the potential energy savings that might be realized from customers.
Accordingly, TGI intends to launch new
business initiatives intended to provide clients with management, tools and resources to deliver interactive, real-time, on
demand staffing for full time and project based personnel. The Company is exploring the possibility of entering into a
business to provide staffing for contract projects in solar energy, as well as potentially in other businesses. We hope these
business initiatives will result in infrastructure which supports qualifying, investigating and on-boarding of viable project
management candidates, a process that includes automated reporting of hours, benefits and insurance and obtaining insurance
and building expertise that may drive continued support of this model which may include the three offerings to companies;
permanent, temporary and contract based and the five established vertical markets, information technology, engineering, light
industrial and blue collar, financial services and medical.
The accompanying financial statements have
been prepared on the basis the Company will continue as going concern, which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business. The Company has a history of operating losses and the Company continues to rely
on financing and the issuance of Preferred and Common shares to raise capital. The Company's significant losses from operations
and the Company’s dependence on equity and debt financing raise substantial doubt about the Company's ability to continue
as a going concern. The financial statements of the Company do not include any adjustments relating to the recoverability and classification
of recorded assets, or the amounts and classifications of liabilities that might be necessary should the Company be unable to continue
as a going concern.
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BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
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These financial statements have been prepared
by the Company in accordance with generally accepted accounting principles in the United States of America (" GAAP").
Use of Estimates
The preparation of financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of
contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during
the reporting periods. Actual results could differ from those estimates.
Income Taxes
Estimates of taxable income of the
legal entity and jurisdiction are used in the tax rate calculation. Management uses judgment in estimating what the Company's
income tax will be for the year. Since judgment is involved, there is a risk that the tax rate may increase or decrease in
any period. In determining income/(loss) for financial statement purposes, management must make certain estimates and
judgments.
These estimates and judgments occur in
the calculation of certain tax liabilities and in the determination of the recoverability of certain deferred tax assets,
which arise from temporary differences between the tax and financial statement recognition of revenue and expense. FASB
issued authoritative guidance concerning accounting for income taxes also requires that the deferred tax assets be reduced by
a valuation allowance if, based on the available evidence, it is more likely than not that all or some portion of the
recorded deferred tax assets will not be realized in future periods. In evaluating the Company's ability to recover the
Company's deferred tax assets, management considers all available positive and negative evidence including the Company's past
operating results, the existence of management is using to manage the underlying businesses.
Through October 31, 2016, the Company
has recorded a valuation allowance against the Company's deferred tax assets arising from net operating losses due to
uncertainty of their realization as a result of the Company's earnings history, the number of years the Company's net
operating losses and tax credits can be carried forward, the existence of taxable temporary differences and near-term
earnings expectations. The amount of the valuation allowance could decrease if facts and circumstances change that materially
increase taxable income prior to the expiration of the loss carryforwards. Any reduction in the valuation allowance would
result in an income tax benefit in the period such determination is made by the Company.
Due to the Company experiencing
several events that qualify as a change in control since its inception, The Company may be limited by section 382 of the
Internal Revenue Code as to the amount of net operating losses that may be used in future years.
Net (Loss) Earnings per Share
Basic earnings per share are calculated
on the basis of the weighted-average number of common shares outstanding during the year. Basic earnings per share are computed
by dividing income available to common stockholders by the weighted-average common shares outstanding during the period. Diluted
earnings per share takes into account the potential dilution that could occur if securities or other contracts to issue common
stock were exercised and converted to common stock
Dilutive common share equivalents consist of shares issuable
upon conversion of convertible debt, and Preferred Stock.
As of October 31, 2016 and July 31, 2016
there were 10,000,000 outstanding shares of Preferred Series A Stock which convert to 30,000,000 common shares, 2,000,000 outstanding
shares of Preferred Series B Stock which convert to 200,000,000 common shares and 275,000 outstanding shares of Preferred Series
C Stock which convert to 17,055,321,260 common shares.
Accountings Standards Issued But Not Yet Effective
In August 2014, FASB issued ASU No.
2014-15, "Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an
Entity’s Ability to Continue as a Going Concern." Under the new guidance, an entity should evaluate whether there
are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to
continue as a going concern within one year after the date that the financial statements are issued. The guidance is
effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early
application is permitted. The Company is currently evaluating the impact of ASU 2014-15 on its financial statements.
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RELATED PARTY TRANSACTION
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During the three months ended
October 31, 2016 and 2015 the Company incurred $45,000 and paid $35,000 and $0 of consulting expense with its officer. As of
October 31, 2016 and July 31, 2016 the Company prepaid consulting fees to its officer in the amount of $5,000 and
$15,000.
Common:
At October 31, 2016 and July 31, 2016, the
Company had 2,400,000,000 shares authorized and 1,705,036,105 shares of $.001 par value common stock issued and outstanding.
Common shares are voting and dividends are
paid at the discretion of the Board of Directors.
Series A Preferred Stock:
At October 31, 2016 and July 31, 2016, the
Company had 10,000,000 shares of Series A Preferred Stock, $.001 par value, authorized, issued and, outstanding. The Series A Preferred
Stock has a liquidation preference over the common stock and any other class or series of capital stock whose terms expressly provide
that the holders of the Series A Preferred Stock should receive preferential payment. Holders of the Preferred Stock Series A are
entitled to vote on all matters submitted to shareholders of the Company and are entitled to 10 votes for each share of the Series
A Preferred Stock owned.
Each share of Series A Preferred Stock is
convertible, at the option of the holder, into three shares of the Company's common stock. However, holders cannot convert any
share of Series A Preferred Stock into shares of common stock until (a) the Series A Preferred Stock has been held for a minimum
of 24- months; (b) the Common Stock is trade for at least $0.50 per share (c) the Company has a positive Net Worth; and (c) The
Company is traded on the Pink Sheets, or higher exchange.
Holders of the Series A Preferred Stock
are entitled to receive dividends as declared at the discretion of the Board of Directors. These dividends are based on the number
of shares of Common Stock into which each share of Series A Preferred Stock is convertible
Series B Preferred Stock:
At October 31, 2016 and July 31, 2016,
the Company had 2,000,000 shares of Series B Preferred Stock, $.001 par value, authorized, issued and outstanding. Holders of
the Series B Preferred Stock Series B are entitled to vote on all matters submitted to shareholders of the Company and are
entitled to 1,000 votes for each share of the Series B Preferred Stock owned.
Each share of the Series B Preferred
Stock is convertible, at the option of the holder, into one hundred shares of the Company's common stock. However, holders
cannot convert any share of Series B Preferred Stock into shares of common stock until (a) the Series B Preferred Stock has
been held for a minimum of 12 months; (b) the Common Stock is traded at least $0.01 per share (c) The Company is traded on
the Pink Sheets, or higher exchange.
Holders of the Series B Preferred Stock
are entitled to receive dividends as declared at the discretion of the Board of Directors. These dividends are based on the number
of shares of Common Stock into which each share of Series B Preferred Stock is convertible.
Series C Preferred Stock:
On June 22 2016, the Company authorized 275,000 shares of $1
Par Value Series C Convertible Preferred Stock. On June 26, 2016, the Company sold 137,500 shares of its Series C Convertible Preferred
Stock each to Ensure HR, LLC, a New Jersey limited liability company, and Meros HR, LLC, a New Jersey limited liability company
for $275,000. The proceeds were reduced by $19,460 of legal expenses related to the sale. These 275,000 shares of Series C Preferred
Stock are authorized issued and outstanding as of July 31, 2016.
The Series Preferred C Stock has a
liquidation of twice its stated value, and converts into shares of Common Stock at the initial conversion price of
$.000016124 per share, subject to adjustment for stock splits, reclassification and distributions. The Series C Preferred
Stock votes on an as-converted basis multiplied by 1.9. The conversion price is initially $.000016124 per share, subject to
adjustment for dilutive issuances, so that upon conversion the holders of the Series C Preferred Stock would hold shares of
Common constituting 90 % of the fully diluted Common Stock upon conversion. Accordingly, the sale of the Series C Stock
resulted in a change of control of the Company.
The Series C Preferred Stock cannot be
converted until the Company files an amendment increasing the authorized number of shares of Common Stock and/or effecting a
reverse stock split of the Common Stock so that the Company has a sufficient number of authorized and unissued shares of
Common Stock so as to permit the conversion of all outstanding shares of Series C Preferred Stock.
Holders of the Series C Preferred Stock
are entitled to receive dividends as declared at the discretion of the Board of Directors. These dividends are based on the number
of shares of Common Stock into which each share of Series C Preferred Stock is convertible.