Item
1. Financial Statements.
TIANCI
INTERNATIONAL, INC.
Balance
Sheets
|
|
|
October 31,
2016
|
|
|
July 31,
2016
|
|
|
ASSETS
|
|
|
|
|
|
|
|
Current Assets
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
1,500
|
|
|
$
|
-
|
|
|
Assets held for sale
|
|
|
-
|
|
|
|
31,609
|
|
|
Total Current Assets
|
|
|
1,500
|
|
|
|
31,609
|
|
|
TOTAL ASSETS
|
|
$
|
1,500
|
|
|
$
|
31,609
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' DEFICIT
|
|
|
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
-
|
|
|
$
|
74,040
|
|
|
Due to related parities
|
|
|
11,824
|
|
|
|
131,824
|
|
|
Liabilities held for sale
|
|
|
-
|
|
|
|
252,726
|
|
|
TOTAL CURRENT LIABILITIES
|
|
|
11,824
|
|
|
|
458,590
|
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS' DEFICIT
|
|
|
|
|
|
|
|
|
|
Preferred stock, $0.0001 par value; 20,000,000 shares
authorized, 0 shares issued and outstanding
|
|
|
-
|
|
|
|
-
|
|
|
Common stock, $0.0001 par value, 100,000,000 shares
authorized; 30,320,460 and 27,767,269 shares issued and outstanding, respectively
|
|
|
3,032
|
|
|
|
2,777
|
|
|
Additional paid-in capital
|
|
|
989,252
|
|
|
|
750,867
|
|
|
Accumulated deficit
|
|
|
(1,002,608
|
)
|
|
|
(1,157,538
|
)
|
|
Accumulated other comprehensive loss
|
|
|
-
|
|
|
|
(23,087
|
)
|
|
TOTAL STOCKHOLDERS' DEFICIT
|
|
|
(10,324
|
)
|
|
|
(426,981
|
)
|
|
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT
|
|
$
|
1,500
|
|
|
$
|
31,609
|
|
The
accompanying notes are an integral part of these unaudited condensed financial statements.
TIANCI
INTERNATIONAL, INC.
Statements
of Operations and Comprehensive Income (Loss)
(Unaudited)
|
|
|
Three Months Ended
|
|
|
|
|
October 31,
|
|
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
REVENUES
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES
|
|
|
|
|
|
|
|
|
|
Office and miscellaneous
|
|
|
510
|
|
|
|
56,666
|
|
|
Professional fees
|
|
|
44,590
|
|
|
|
51,591
|
|
|
Total Operating Expenses
|
|
|
45,100
|
|
|
|
108,257
|
|
|
|
|
|
|
|
|
|
|
|
|
LOSS FROM OPERATIONS
|
|
|
(45,100
|
)
|
|
|
(108,257
|
)
|
|
|
|
|
|
|
|
|
|
|
|
LOSS BEFORE INCOME TAXES
|
|
|
(45,100
|
)
|
|
|
(108,257
|
)
|
|
Provision for income taxes
|
|
|
-
|
|
|
|
-
|
|
|
Loss from Continued Operations
|
|
|
(45,100
|
)
|
|
|
(108,257
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations
|
|
|
|
|
|
|
|
|
|
Loss from discontinued operations
|
|
|
(498
|
)
|
|
|
(151,285
|
)
|
|
Gain on sale of investment
|
|
|
200,528
|
|
|
|
-
|
|
|
Gain (Loss) from Discontinued Operations, Net of Tax Benefits
|
|
|
200,030
|
|
|
|
(151,285
|
)
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS)
|
|
$
|
154,930
|
|
|
$
|
(259,542
|
)
|
|
|
|
|
|
|
|
|
|
|
|
STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
|
|
|
|
|
|
|
|
|
|
Net Income (loss)
|
|
$
|
154,930
|
|
|
$
|
(259,542
|
)
|
|
Other Comprehensive loss:
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustments
|
|
|
2,601
|
|
|
|
(1,792
|
)
|
|
TOTAL COMPREHENSIVE INCOME (LOSS)
|
|
$
|
157,531
|
|
|
$
|
(261,334
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted loss per common share
|
|
$
|
0.01
|
|
|
$
|
(0.01
|
)
|
|
Basic and Diluted Weighted Average Common Shares Outstanding
|
|
|
28,738,592
|
|
|
|
27,216,778
|
|
The
accompanying notes are an integral part of these unaudited condensed financial statements.
TIANCI
INTERNATIONAL, INC.
Statements
of Cash Flows
(Unaudited)
|
|
|
Three Months Ended
|
|
|
|
|
October 31,
|
|
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(45,100
|
)
|
|
$
|
(108,257
|
)
|
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
|
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
Prepaid expenses and other deposits
|
|
|
-
|
|
|
|
(1,900
|
)
|
|
Accounts payable and accrued liabilities
|
|
|
(74,040
|
)
|
|
|
(33,541
|
)
|
|
Net cash used in continued operating activities
|
|
|
(119,140
|
)
|
|
|
(143,698
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in discontinued operating activities
|
|
|
(498
|
)
|
|
|
(108,919
|
)
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
Proceeds from sale of investment
|
|
|
2,000
|
|
|
|
-
|
|
|
Net cash provided by continued investing activities
|
|
|
2,000
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in discontinued investing activities
|
|
|
-
|
|
|
|
(10,882
|
)
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
Issuance of common stock for cash
|
|
|
-
|
|
|
|
300,000
|
|
|
Proceeds from related parties
|
|
|
118,640
|
|
|
|
38,333
|
|
|
Repayment to related parties
|
|
|
-
|
|
|
|
(17,811
|
)
|
|
Net cash provided by continued financing activities
|
|
|
118,640
|
|
|
|
320,522
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in discontinued financing activities
|
|
|
-
|
|
|
|
(1,064
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Effects on changes in foreign exchange rate
|
|
|
498
|
|
|
|
(1,736
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net increase in cash and cash equivalents
|
|
|
1,500
|
|
|
|
54,223
|
|
|
Cash and cash equivalents - beginning of period
|
|
|
-
|
|
|
|
-
|
|
|
Cash and cash equivalents - end of period
|
|
$
|
1,500
|
|
|
$
|
54,223
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Cash Flow Disclosures
|
|
|
|
|
|
|
|
|
|
Cash paid for interest
|
|
$
|
-
|
|
|
$
|
-
|
|
|
Cash paid for income taxes
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash financing and investing activities
|
|
|
|
|
|
|
|
|
|
Common shares issued for due to related party
|
|
$
|
120,000
|
|
|
$
|
-
|
|
|
Related party debt forgiven
|
|
$
|
118,640
|
|
|
$
|
-
|
|
|
Prepaid asset assumed in reverse acquisition
|
|
$
|
-
|
|
|
$
|
164,730
|
|
|
Short-term loans reclassified as inter-company loans
|
|
$
|
-
|
|
|
$
|
101,095
|
|
The
accompanying notes are an integral part of these unaudited condensed financial statements.
TIANCI
INTERNATIONAL, INC.
Notes
to the Unaudited Condensed Financial Statements
October
31, 2016
NOTE
1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
Tianci
International, Inc. (“the Company”, “Tianci”) was incorporated under the laws of the State of Nevada,
U.S. as Freedom Petroleum, Inc. on June 13, 2012. In May 2015, the Company changed its name to Steampunk Wizards Inc. and on November
9, 2016, the Company changed its name to Tianci International, Inc. The Company’s fiscal year end is July 31.
On
October 13, 2016, the Company entered into a spin-off agreement (the “Spin-Off Agreement”) with Steampunk Wizards
Ltd., the Company’s wholly owned subsidiary and a company incorporated pursuant to the laws of Malta (“Steampunk”),
and Praefidi Holdings Limited (the “Buyer”), an entity organized under the laws of Malta and owned by Brendon Grunewald,
former director of the Company. Pursuant to the Spin-Off Agreement, the Buyer shall receive all of the issued and outstanding
capital stock of Steampunk and the Company shall receive $2,000 as purchase price. The Buyer shall become the sole equity owner
of the Steampunk and the Company shall have no further interest in Steampunk.
On
October 26, 2016, the Company entered into an Agreement and Plan of Merger with its wholly-owned subsidiary, Tianci International,
Inc., a newly formed Nevada Corporation ("Merger Sub"), formed on November 09, 2016, with Merger Sub being the surviving
entity. The transaction contemplated in the Merger Agreement (“Merger”) which became effective on November 9, 2016.
NOTE
2 -
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis
of Presentation
The
interim financial information referred to above has been prepared and presented in conformity with accounting principles generally
accepted in the United States applicable to interim financial information and with the instructions to Form 10-Q and Article 8
of Regulation S-X. The interim financial information has been prepared on a basis consistent with prior interim periods and years
and includes all disclosures that are necessary and required by applicable laws and regulations. This report on Form 10-Q should
be read in conjunction with the Company’s financial statements and notes thereto included in the Company’s Form 10-K
for the fiscal year ended July 31, 2016 filed on January 13, 2017.
The
unaudited condensed financial statements and notes are presented in accordance with accounting principles generally accepted in
the United States of America (GAAP). These interim financial statements include all adjustments that, in the opinion of management,
are necessary in order to make the financial statements not misleading.
Results
of the three months ended October 31, 2016 are not necessarily indicative of the results that may be expected for the year ended
July 31, 2017 and any other future periods.
Basis
of Consolidation
These
financial statements include the accounts of the Company and its subsidiary. All material intercompany balances and transactions
have been eliminated.
Use
of Estimates
The
preparation of financial statements in conformity with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the financial statements. The estimates and judgments will also affect the
reported amounts for certain revenues and expenses during the reporting period. Actual results could differ from these good faith
estimates and judgments.
Going
Concern Matters
At
October 31, 2016, the Company had $1,500 in cash on hand, had incurred a net loss from continued operations of $45,100 and used
$119,140 in cash for continued operating activities for the three months ended October 31, 2016. In addition, the Company had
negative working capital (current liabilities exceeded current asset) of $10,324.
The
Company’s cash balance and revenues generated are not currently sufficient and cannot be projected to cover operating expenses
for the next twelve months from the date of this report. These matters raise substantial doubt about the Company’s ability
to continue as a going concern. Management's plans include attempting to improve its business profitability, its ability to generate
sufficient cash flow from its operations to meet its operating needs on a timely basis, obtain additional working capital funds
through equity and debt financing arrangements, and restructure on-going operations to eliminate inefficiencies to raise cash
balance in order to meet its anticipated cash requirements for the next twelve months from the date of this report. However,
there can be no assurance that these plans and arrangements will be sufficient to fund the Company’s ongoing capital expenditures,
working capital, and other requirements. Management intends to make every effort to identify and develop sources of funds. The
outcome of these matters cannot be predicted at this time. There can be no assurance that any additional financings will be available
to the Company on satisfactory terms and conditions, if at all.
The
ability of the Company to continue as a going concern is dependent upon its ability to raise additional capital and continue profitable
operations. The accompanying unaudited condensed consolidated 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.
Foreign
Currency Translation and Re-measurement
The
Company's functional and reporting currency is the U.S. dollar. All transactions initiated in EURO are translated into U.S. dollars
in accordance with ASC 830-30, "Translation of Financial Statements," as follows:
|
|
i)
|
Assets
and liabilities at the rate of exchange in effect at the balance sheet date.
|
|
|
ii)
|
Equities
at historical rate
|
|
|
iii)
|
Revenue
and expense items at the average rate of exchange prevailing during the period.
|
Adjustments
arising from such translations are included in accumulated other comprehensive income in shareholders’ equity.
Basic
and Diluted Earnings (Loss) Per Share
Basic
income (loss) per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted
average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net
income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted
weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt
or equity. There are no such common stock equivalents outstanding as of October 31, 2016 and July 31, 2016.
Recent
Accounting Pronouncements
Management
has considered all recent accounting pronouncements issued and their potential effect on our financial statements. The Company's
management believes that these recent pronouncements will not have a material effect on the Company's condensed financial statements.
NOTE
3 – CASH AND CASH EQUIVALENTS
Cash
and cash equivalents include cash in banks, money market funds, and certificates of term deposits with maturities of less than
three months from inception, which are readily convertible to known amounts of cash and which, in the opinion of management, are
subject to an insignificant risk of loss in value. As at October 31, 2016 and July 31, 2016, the Company has $1,500 and $0 cash
and cash equivalents, respectively.
NOTE
4 – DISCONTINUED OPERATIONS
On
October 13, 2016, the Company entered into a spin-off agreement (the “Spin-Off Agreement”) with Steampunk Wizards
Ltd., the Company’s wholly owned subsidiary and a company incorporated pursuant to the laws of Malta (“Steampunk”),
and Praefidi Holdings Limited (the “Buyer”), an entity organized under the laws of Malta and owned by Brendon Grunewald,
former director of the Company. Pursuant to the Spin-Off Agreement, the Buyer shall receive all of the issued and outstanding
capital stock of Steampunk and the Company shall receive $2,000 as purchase price. The Buyer shall become the sole equity owner
of Steampunk and the Company shall have no further interest in Steampunk.
During
the three months ended October 31, 2016, the Company recorded a gain on the sale of $200,528. The Company has no continuing involvement
in the operations of Steampunk. The sale of Steampunk qualified as a discontinued operation of the Company and accordingly, the
Company has excluded results of Steampunk’ operations from its Statements of Operations and Comprehensive Income (Loss)
to present this business in discontinued operations.
The
following table shows the results of operations of Steampunk for three months ended October 31, 2016 and 2015 which are included
in the gain (loss) from discontinued operations:
|
|
|
Three Months Ended
|
|
|
|
|
October 31,
|
|
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
-
|
|
|
$
|
13,090
|
|
|
|
|
|
|
|
|
|
|
|
|
Advertising and marketing
|
|
|
-
|
|
|
|
(54,438
|
)
|
|
Consulting fees
|
|
|
-
|
|
|
|
(5,025
|
)
|
|
Development costs
|
|
|
-
|
|
|
|
(27,848
|
)
|
|
Management fees
|
|
|
-
|
|
|
|
(27,990
|
)
|
|
Office and miscellaneous
|
|
|
(498
|
)
|
|
|
(27,654
|
)
|
|
Professional fees
|
|
|
-
|
|
|
|
(17,271
|
)
|
|
Rents
|
|
|
-
|
|
|
|
(2,931
|
)
|
|
Interest expenses
|
|
|
-
|
|
|
|
(1,218
|
)
|
|
Gain on sale of investment
|
|
|
200,528
|
|
|
|
-
|
|
|
Total Income (Expense)
|
|
|
200,030
|
|
|
|
(164,375
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Gain (Loss) from Discontinued Operations, Net of Tax Benefits
|
|
$
|
200,030
|
|
|
$
|
(151,285
|
)
|
The
following table shows the carrying amounts of the major classes of assets and liabilities associated with the steampunk as of
the October 13, 2016.
|
|
|
October 13,
|
|
|
|
|
2016
|
|
|
Cash overdraft
|
|
$
|
529
|
|
|
Prepaid expenses and other deposits
|
|
|
(4,752
|
)
|
|
Other current assets
|
|
|
(13,538
|
)
|
|
Property and equipment, net
|
|
|
(12,614
|
)
|
|
Accounts payable and accrued liabilities
|
|
|
15,787
|
|
|
Due to related parities
|
|
|
233,602
|
|
|
Net assets and liabilities
|
|
|
219,014
|
|
|
Accumulated other comprehensive loss
|
|
|
(20,486
|
)
|
|
Consideration received in cash
|
|
|
2,000
|
|
|
Gain on sale of investment
|
|
$
|
200,528
|
|
The
following table presents the carrying amounts of the major classes of assets and liabilities associated with Steampunk reported
as discontinued operations and classified as held for sale on our accompanying consolidated balance sheets.
|
|
|
October 31,
|
|
|
July 31,
|
|
|
|
|
2016
|
|
|
2016
|
|
|
Assets held for sale
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
-
|
|
|
$
|
339
|
|
|
Prepaid expenses and other deposits
|
|
|
-
|
|
|
|
4,808
|
|
|
Other current assets
|
|
|
-
|
|
|
|
13,698
|
|
|
Property and equipment, net
|
|
|
-
|
|
|
|
12,764
|
|
|
Total assets held for sale
|
|
$
|
-
|
|
|
$
|
31,609
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities held for sale
|
|
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
$
|
-
|
|
|
$
|
21,590
|
|
|
Due to related parities
|
|
|
-
|
|
|
|
92,379
|
|
|
Short-term loans
|
|
|
-
|
|
|
|
138,757
|
|
|
Total liabilities held for sale
|
|
$
|
-
|
|
|
$
|
252,726
|
|
NOTE
5 – DUE TO RELATED PARTIES
On
October 6, 2016, the Company entered into the debt conversion agreement with the former Chief Executive Officer (“CEO”)
and shareholder of the Company. The former CEO is owed $120,000 (“Debt”) as payment for preciously unpaid salary and
accrued expense from January 2015 to January 2016 to convert into shares of the Company’s common stock. During the three
months ended October 31, 2016, Debt of $120,000 was converted into shares of common stock, at a price per share of 0.047, for
an aggregate number of 2,553,191 shares. As at October 31, 2016 and July 31, 2016, the Company owed $0 and $120,000 to the former
CEO and shareholder.
During
the three months ended October 31, 2016, the Company had a change of control, pursuant to which former shareholders paid $118,640
for outstanding accounts payable. The $118,640 was immediately forgiven and recorded as contributed capital pursuant conditions
of the change of control.
During
the year ended July 31, 2016, a shareholder of the Company made vendor payments of $11,824 directly on behalf of the Company.
As at October 31, 2016 and July 31, 2016, the Company owed $11,824 to a shareholder of the Company. This loan is non-interest
bearing and due on demand
NOTE
6 - EQUITY
Share
capital
Preferred
Stock
The
Company has 20,000,000 authorized preferred shares with a par value of $0.0001 per share. The Board of Directors are authorized
to divide the authorized shares of Preferred Stock into one or more series, each of which shall be so designated as to distinguish
the shares thereof from the shares of all other series and classes.
There
were no shares of preferred stock issued and outstanding as at October 31, 2016 and July 31, 2016.
Common
Stock
During
the three months ended October 31, 2016, the Company issued 2,553,191 shares of common stock for conversion of debt (see Note5).
There
were 30,320,460 and 27,767,269 shares of common stock issued and outstanding as of October 31, 2016 and July 31, 2016, respectively.
NOTE
7 -SUBSEQUENT EVENTS
Management
has evaluated subsequent events through the date these financial statements were available to be issued. Based on our evaluation
no additional events have occurred that require disclosure except below.
On January 4, 2017, the
Company issued 19,532,820 shares of its Common Stock, at a per share price of $0.005, in a private placement to 42 investors,
for which it received cash proceeds of approximately $70,104 and subscriptions receivable of $27,560.
Item
2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Contrary
to the rules of the SEC, the Company's consolidated financial statements included in this filing have not been reviewed by an
independent public accountant in accordance with professional standards for conducting such reviews. Nevertheless, in order to
complete a corporate action, we are filing this Quarterly Report on Form 10-Q for the period ended October 31, 2016 (“Form
10-Q”) to meet FINRA’s requirement that this Form 10-Q be filed on or before January 27, 2017.
The
following discussion should be read in conjunction with our audited financial statements and the related notes that appear elsewhere
in this annual report. The following discussion contains forward-looking statements based upon current expectations that involve
risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual results and the timing of events could
differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including those
set forth under the Item 1A. Risk Factors, Cautionary Notice Regarding Forward-Looking Statements and Business sections in this
Form 10-K. We use words such as “anticipate,” “estimate,” “plan,” “project,”
“continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,”
“will,” “should,” “could,” and similar expressions to identify forward-looking statements.
Our
audited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted
Accounting Principles.
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, but we cannot guarantee
that we will be able to achieve same.
We
have not yet generated significant revenues and have accumulated deficit of $1,002,608 since inception through October 31, 2016.
The
following table provides selected financial data about our company as of October 31, 2016 and July 31, 2016.
Balance
Sheet Data
|
|
|
October 31,
|
|
|
July 31,
|
|
|
|
|
|
|
|
|
|
|
2016
|
|
|
2016
|
|
|
Change
|
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
1,500
|
|
|
$
|
-
|
|
|
$
|
339
|
|
|
|
-
|
|
|
Total assets
|
|
$
|
1,500
|
|
|
$
|
31,609
|
|
|
$
|
(30,109
|
)
|
|
|
(95
|
%)
|
|
Total liabilities
|
|
$
|
11,824
|
|
|
$
|
458,590
|
|
|
$
|
(446,766
|
)
|
|
|
(97
|
%)
|
|
Stockholders' deficit
|
|
$
|
(10,324
|
)
|
|
$
|
(426,981
|
)
|
|
$
|
416,657
|
|
|
|
(98
|
%)
|
Three
Months Ended October 31, 2016, Compared to Three Months Ended October 31, 2015
|
|
|
Three Months Ended
October 31,
|
|
|
|
|
|
|
|
|
|
|
2016
|
|
|
2015
|
|
|
Change
|
|
|
%
|
|
|
Revenue
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
-
|
|
|
Operating expenses
|
|
|
45,100
|
|
|
|
108,257
|
|
|
|
(63,157
|
)
|
|
|
(58
|
)%
|
|
Loss from Continued Operation
|
|
|
(45,100
|
)
|
|
|
(108,257
|
)
|
|
|
(63,157
|
)
|
|
|
(58
|
)%
|
|
Gain (Loss) from Discontinued Operation
|
|
|
200,030
|
|
|
|
(151,285
|
)
|
|
|
351,315
|
|
|
|
(232
|
)%
|
|
Net Loss
|
|
$
|
154,930
|
|
|
$
|
(259,542
|
)
|
|
$
|
414,472
|
|
|
|
(160
|
)%
|
Revenue
For
the three months ended October 31, 2016 and 2015 we generated no revenue.
Operating
Expenses
Operating expenses decreased $63,157 for the three
months ended October 31, 2016 as compared to the three months ended October 31, 2015. The following table presents operating expenses
for 2016 and 2015:
|
|
|
Three Months Ended
October 31,
|
|
|
|
|
|
|
|
|
|
|
2016
|
|
|
2015
|
|
|
Change
|
|
|
%
|
|
|
Office and miscellaneous
|
|
$
|
510
|
|
|
$
|
56,666
|
|
|
$
|
(56,156
|
)
|
|
|
(99
|
)%
|
|
Professional fees
|
|
|
44,590
|
|
|
|
51,591
|
|
|
|
(7,001
|
)
|
|
|
(14
|
)%
|
|
Total Operating Expenses
|
|
$
|
45,100
|
|
|
$
|
108,257
|
|
|
$
|
(63,157
|
)
|
|
|
(58
|
)%
|
The
decrease in operating expenses is primarily as a result of a decrease in management fee of $30,000, advertising expense of $13,360,
rent of $7,661 and professional fees of $7,001.
Discontinued
Expenses
Pursuant
to the Spin-Off Agreement, the Company recorded all expenses from the subsidiary in Malta as discontinued expenses. Loss from
discontinued operations for the three months ended October 31, 2016 and 2015
was $498
and $151,285, respectively. As a result of this agreement, the Company recognized the gain on sale of investment of $200,528 during
the three months ended October 31, 2016.
Liquidity
and Capital Resources
Working
Capital
|
|
|
October 31,
|
|
|
July 31,
|
|
|
|
|
|
|
|
2016
|
|
|
2016
|
|
|
Change
|
|
|
%
|
|
|
Current Assets
|
|
$
|
1,500
|
|
|
$
|
31,609
|
|
|
$
|
(30,109
|
)
|
|
|
(95
|
)%
|
|
Current Liabilities
|
|
|
11,824
|
|
|
|
458,590
|
|
|
|
(446,766
|
)
|
|
|
(97
|
)%
|
|
Working Capital (Deficiency)
|
|
$
|
(10,324
|
)
|
|
$
|
(426,981
|
)
|
|
$
|
416,657
|
|
|
|
(98
|
)%
|
Working
Capital Deficiency decreased due to the spin-off of the subsidiary and a decrease in accounts payable of $74,040 and due to related
parties of $120,000.
Cash
Flows
|
|
|
Three Months Ended
October 31,
|
|
|
|
|
2016
|
|
|
2015
|
|
|
Cash used in continued operating activities
|
|
$
|
(119,140
|
)
|
|
$
|
(143,698
|
)
|
|
Cash used in discontinued operating activities
|
|
$
|
(498
|
)
|
|
$
|
(108,919
|
)
|
|
Cash provided by continued investing activities
|
|
$
|
2,000
|
|
|
$
|
-
|
|
|
Cash used in discontinued investing activities
|
|
$
|
-
|
|
|
$
|
(10,882
|
)
|
|
Cash provided by continued financing activities
|
|
$
|
118,640
|
|
|
$
|
320,522
|
|
|
Cash used in discontinued financing activities
|
|
$
|
-
|
|
|
$
|
(1,064
|
)
|
|
Effects on changes in foreign exchange rate
|
|
$
|
498
|
|
|
$
|
(1,736
|
)
|
|
Net increase in cash and cash equivalents
|
|
$
|
1,500
|
|
|
$
|
54,223
|
|
Cash
Flow from Operating Activities
During the three months
ended October 31, 2016, cash used in continued operating activities was $119,140 compared to cash used in continued operating
activities of $143,698 during the three months ended October 31, 2015. The decrease in cash used in continued operating activities
was due to the decrease in operating expenses. For the three months ended October 31, 2016, the Company had a net loss from continued
operation of $45,100 and a net change in working capital of $74,040.
During
the three months ended October 31, 2016, cash used in discontinued operating activities was $498 compared to cash used in discontinued
operating activities of $108,919 during the three months ended October 31, 2015.
Cash
Flow from Investing Activities
Cash
used in continued investing activities were $2,000 and $0 for the three months ended October 31, 2016 and 2015, respectively
During
the three months ended October 31, 2016, the Company sold the investment in subsidiary for $2,000 pursuant to the Spin-Off Agreement.
Cash
used in discontinued investing activities were $0 and $10,882 for the three months ended October 31, 2016 and 2015, respectively.
During
the three months ended October 31, 2015, the Company used $10,882 cash to purchase equipment.
Cash
Flow from Financing Activities
Cash
provided by continued financing activities were $118,640 and $320,522 for the three months ended October 31, 2016 and 2015, respectively.
During the three months ended October 31, 2015, the Company received cash of $118,640 from related parties. During the three months
ended October 31, 2015, the Company received cash from issuance of 281,064 shares of common of $300,000, loan from the former
CEO of $38,333 and the Company repaid $17,811 to the former CEO.
Cash
used in discontinued financing activities were $0 and $1,064 for the three months ended October, 31, 2016 and 2015, respectively.
During the three months ended October 31, 2015, the Company received $10,983 short-term loans from unrelated third party and repaid
$12,047 short-term loans.
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 is material to investors.
Critical
Accounting Policies
The
preparation of financial statements in conformity with accounting principles generally accepted in the United States of America
(“U.S. GAAP”) requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues
and expenses, and related disclosures of contingent assets and liabilities in the consolidated financial statements and accompanying
notes. The SEC has defined a company’s critical accounting policies as the ones that are most important to the portrayal
of the company’s financial condition and results of operations, and which require the company to make its most difficult
and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. Based on this
definition, we have not identified any additional critical accounting policies and judgments. We also have other key accounting
policies, which involve the use of estimates, judgments and assumptions that are significant to understanding our results, which
are described in note 2 to our financial statements. Although we believe that our estimates, assumptions and judgments are reasonable,
they are based upon information presently available. Actual results may differ significantly from these estimates under different
assumptions, judgments or conditions.
Going
Concern
The
financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets
and discharge its liabilities in the normal course of business for the foreseeable future. As at October 31, 2016, the Company
has working capital deficiency of $10,324 and has incurred losses since inception resulting in an accumulated deficit of $1,002,608.
Further losses are anticipated in the development of the business, raising substantial doubt about the Company’s ability
to continue as a going concern. The consolidated financial statements do not include any adjustment that might result from the
outcome of this uncertainty.
The
ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or to
obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when
they come due. Management intends to finance operating costs over the next twelve months with loans from directors and/or private
placements of common stock.
PART
II – OTHER INFORMATION
Item
1. Legal Proceedings.
From
time to time, the Company may be involved in litigation relating to claims arising out of our operations in the normal course
of business. We are not aware of any pending or threatened legal proceeding that, if determined in a manner adverse to us, could
have a material adverse effect on our business and operations.
Item
2. Unregistered Sales of Equity Securities and Use of Proceeds.
Information
on any and all equity securities we have sold during the three month period ended October 31, 2016, that were not registered under
the Securities Act of 1933 as amended, is set forth below:
On January 4, 2017, the Company issued 19,532,820
shares of its Common Stock, at a per share price of $0.005, in a private placement to 42 investors, for which it received gross
cash proceeds of approximately $70,104 and subscriptions receivable of $27,560. The private placement was made pursuant to an
exemption from registration afforded by Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”)
and Regulation S thereunder.
Item
3. Defaults Upon Senior Securities.
None.
Item
4. Mine Safety Disclosures.
Not
applicable.
Item
5. Other Information.
None.
Item
6. Exhibits.
|
Exhibit
|
|
|
|
Number
|
|
Description of Exhibit
|
|
|
|
|
|
(3)
|
|
Articles of Incorporation and Bylaws
|
|
|
|
|
|
3.1
|
|
Articles of Incorporation (incorporated by reference to our Registration Statement on Form S-1 filed on September 24, 2012)
|
|
|
|
|
|
3.2
|
|
Bylaws (incorporated by reference to our Registration Statement on Form S-1 filed on September 24, 2012)
|
|
|
|
|
|
(31)
|
|
Rule 13a-14(a) / 15d-14(a) Certifications
|
|
|
|
|
|
31.1*
|
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.
|
|
|
|
|
|
31.2*
|
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.
|
|
|
|
|
|
(32)
|
|
Section 1350 Certifications
|
|
|
|
|
|
32.1*
|
|
Rule 1350 Certification of Chief Executive Officer.
|
|
|
|
|
|
32.2*
|
|
Rule 1350 Certification of Chief Financial Officer.
|
|
|
|
|
|
101
|
|
Interactive Data File
|
|
|
|
|
|
101*
|
|
Interactive Data File (Form 10-Q for the quarter ended January 31, 2016 furnished in XBRL).
|
|
101.INS
|
|
XBRL Instance Document
|
|
101.SCH
|
|
XBRLTaxonomy Extension Schema Document
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
*
Filed herewith.