Indicate by check mark whether the registrant:
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes
S
No
☐
Indicate by check mark whether the registrant
has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted
and posted pursuant to Rule 405 of Regulation S-T (§ 229.405 of this chapter) during the preceding 12 months (or
for such shorter period that the registrant was required to submit and post such files). Yes
S
No
☐
Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions
of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging
growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
S
No
☐
As of October 31, 2017, the issuer had
outstanding 5,054,985 shares of common stock.
PART I FINANCIAL INFORMATION
|
ITEM 1
|
Financial Statements
|
TIANCI INTERNATIONAL,
INC.
Balance Sheets
|
|
|
October 31,
|
|
|
July 31,
|
|
|
|
|
2017
|
|
|
2017
|
|
|
ASSETS
|
|
|
(Unaudited)
|
|
|
|
|
|
|
Current Assets
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
22,900
|
|
|
$
|
2,360
|
|
|
Prepaid expenses and other deposits
|
|
|
17,500
|
|
|
|
–
|
|
|
Total Current Assets
|
|
|
40,400
|
|
|
|
2,360
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS
|
|
$
|
40,400
|
|
|
$
|
2,360
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' DEFICIT
|
|
|
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
130
|
|
|
$
|
11,498
|
|
|
Due to related parties
|
|
|
56,698
|
|
|
|
–
|
|
|
TOTAL CURRENT LIABILITIES
|
|
|
56,828
|
|
|
|
11,498
|
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS' DEFICIT
|
|
|
|
|
|
|
|
|
|
Preferred stock, $0.0001 par value; 20,000,000 shares authorized, no shares issued and
outstanding
|
|
|
–
|
|
|
|
–
|
|
|
Common stock, $0.0001 par value, 100,000,000 shares authorized; 5,054,985 shares issued and
outstanding, respectively
|
|
|
505
|
|
|
|
505
|
|
|
Additional paid-in capital
|
|
|
1,127,046
|
|
|
|
1,110,016
|
|
|
Accumulated deficit
|
|
|
(1,143,979
|
)
|
|
|
(1,119,659
|
)
|
|
TOTAL STOCKHOLDERS' DEFICIT
|
|
|
(16,428
|
)
|
|
|
(9,138
|
)
|
|
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT
|
|
$
|
40,400
|
|
|
$
|
2,360
|
|
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,
|
|
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
REVENUES
|
|
$
|
–
|
|
|
$
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES
|
|
|
|
|
|
|
|
|
|
Office and miscellaneous
|
|
|
3,440
|
|
|
|
510
|
|
|
Professional fees
|
|
|
20,880
|
|
|
|
44,590
|
|
|
Total Operating Expenses
|
|
|
24,320
|
|
|
|
45,100
|
|
|
|
|
|
|
|
|
|
|
|
|
LOSS FROM OPERATIONS
|
|
|
(24,320
|
)
|
|
|
(45,100
|
)
|
|
|
|
|
|
|
|
|
|
|
|
LOSS BEFORE INCOME TAXES
|
|
|
(24,320
|
)
|
|
|
(45,100
|
)
|
|
Provision for income taxes
|
|
|
–
|
|
|
|
–
|
|
|
Loss from Continued Operations
|
|
|
(24,320
|
)
|
|
|
(45,100
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations
|
|
|
|
|
|
|
|
|
|
Loss from discontinued operations
|
|
|
–
|
|
|
|
(498
|
)
|
|
Gain on sale of investment
|
|
|
–
|
|
|
|
200,528
|
|
|
Gain from Discontinued Operations, Net of Tax Benefits
|
|
|
–
|
|
|
|
200,030
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS)
|
|
$
|
(24,320
|
)
|
|
$
|
154,930
|
|
|
|
|
|
|
|
|
|
|
|
|
STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
|
|
|
|
|
|
|
|
|
|
Net Income (loss)
|
|
$
|
(24,320
|
)
|
|
$
|
154,930
|
|
|
Other Comprehensive loss:
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustments
|
|
|
–
|
|
|
|
2,601
|
|
|
TOTAL COMPREHENSIVE INCOME (LOSS)
|
|
$
|
(24,320
|
)
|
|
$
|
157,531
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted loss per common share from continued operations
|
|
$
|
(0.00
|
)
|
|
$
|
(0.06
|
)
|
|
Basic and diluted income (loss) per common share from discontinued operations
|
|
$
|
–
|
|
|
$
|
0.28
|
|
|
Basic and Diluted Weighted Average Common Shares Outstanding
|
|
|
5,054,985
|
|
|
|
718,465
|
|
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,
|
|
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(24,320
|
)
|
|
$
|
(45,100
|
)
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
Increase in prepaid expenses
|
|
|
(17,500
|
)
|
|
|
–
|
|
|
Decrease in accounts payable and accrued liabilities
|
|
|
(11,368
|
)
|
|
|
(74,040
|
)
|
|
Net cash used in continuing activities
|
|
|
(53,188
|
)
|
|
|
(119,140
|
)
|
|
Net cash used in discontinued operations
|
|
|
–
|
|
|
|
(498
|
)
|
|
Net cash used in operating activities
|
|
|
(53,188
|
)
|
|
|
(119,638
|
)
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
Proceeds from sale of investment
|
|
|
–
|
|
|
|
2,000
|
|
|
Net cash provided by investing activities
|
|
|
–
|
|
|
|
2,000
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
Proceeds from related parties
|
|
|
73,728
|
|
|
|
118,640
|
|
|
Net cash provided by financing activities
|
|
|
73,728
|
|
|
|
118,640
|
|
|
|
|
|
|
|
|
|
|
|
|
Effects on changes in foreign exchange rate
|
|
|
–
|
|
|
|
498
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase in cash and cash equivalents
|
|
|
20,540
|
|
|
|
1,500
|
|
|
Cash and cash equivalents - beginning of period
|
|
|
2,360
|
|
|
|
–
|
|
|
Cash and cash equivalents - end of period
|
|
$
|
22,900
|
|
|
$
|
1,500
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Cash Flow Disclosures
|
|
|
|
|
|
|
|
|
|
Cash paid for interest
|
|
$
|
–
|
|
|
$
|
–
|
|
|
Cash paid for income taxes
|
|
$
|
–
|
|
|
$
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash financing and investing activities
|
|
|
|
|
|
|
|
|
|
Common shares issued in exchange for related party debt
|
|
$
|
–
|
|
|
$
|
120,000
|
|
|
Related party debt forgiven
|
|
$
|
17,030
|
|
|
$
|
118,640
|
|
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,
2017
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 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.
2017 Securities Sale and Change in Control
On August 3, 2017, Tianci, ShiFang Wan
(“SFW”), Chuah Su Mei, and the Chuah Su Chen executed a Stock Purchase Agreement (the “Stock Purchase Agreement”),
pursuant to which SFW sold to Chuah Su Chen and Chuah Su Mei an aggregate of 4,397,837 shares of Common Stock, or approximately
87% of the issued and outstanding Common Stock, at a purchase price of $350,000. The acquisition consummated on August 15, 2017,
and 2,000,000 shares of the Company’s common stock were purchased by Chuah Su Chen using her own personal funds. Upon consummation,
the sole executive officer and director of Tianci resigned from all of her positions with Tianci, and Chuah Su Mei, Chuah Su Chen,
and Yeow Yuen Kai were appointed to serve in as executive officers and directors of the Corporation.
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, 2017 filed on October 17, 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, 2017 are not necessarily indicative of the results that may be expected for the year ended July
31, 2018 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,
2017, the Company had $22,900 in cash held in trust, had incurred a net loss from continued operations of $24,320, and used $53,188
in cash for continued operating activities for the three months ended October 31, 2017.
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.
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 of October 31, 2017 and July 31, 2017, the Company has $22,900 and $2,360 in cash and
cash equivalents, respectively.
Fair Value Measurements
The
Company follows ASC 820, "Fair Value Measurements and Disclosures", which defines fair value as the exchange price that
would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for
the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes
a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from
independent sources (observable inputs) and (2) an entity's own assumptions about market participant assumptions developed based
on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad
levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level
1) and the lowest priority to unobservable inputs (Level 3).
The hierarchy prioritizes the inputs into three broad levels
based on the reliability of the inputs as follows:
|
|
·
|
Level 1 – Inputs are quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Valuation of these instruments does not require a high degree of judgment as the valuations are based on quoted prices in active markets that are readily and regularly available.
|
|
|
|
|
|
|
·
|
Level 2 – Inputs other than quoted prices in active markets that are either directly or indirectly observable as of the measurement date, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
|
|
|
|
|
|
|
·
|
Level 3 – Valuations based on inputs that are unobservable and not corroborated by market data. The fair value for such assets and liabilities is generally determined using pricing models, discounted cash flow methodologies, or similar techniques that incorporate the assumptions a market participant would use in pricing the asset or liability.
|
The
Company's financial instruments consist of cash, prepaid expense, deposits, accounts payable, and due to related parties. The
carrying amounts of these financial instruments approximate fair value due to either length of maturity or interest rates that
approximate prevailing rates unless otherwise disclosed in these financial statements.
Income Taxes
Income taxes are
accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective
tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax
rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.
The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes
the enactment date. A valuation allowance is recognized if it is more likely than not that some portion, or all, of a deferred
tax asset will not be realized. There were no significant deferred tax items as of October 31, 2017 and July 31, 2017.
The Company applied
the provisions of ASC 740-10-50, “Accounting For Uncertainty In Income Taxes”, which provides clarification related
to the process associated with accounting for uncertain tax position recognized in our financial statements. Audit periods remain
open for review until the statute of limitations has passed. The completion of review or the expiration of the statute of limitations
for a given audit period could result in an adjustment to the Company’s liability for income taxes. Any such adjustment could
be material to the Company’s results of operations for any given quarterly or annual period based, in part, upon the results
of operations for the given period. At October 31, 2017 and July 31, 2017, management considered that the Company had no uncertain
tax positions, and will continue to evaluate for uncertain positions in the future.
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, 2017 and July 31, 2017.
Reclassification
Certain classifications
have been made to the prior year financial statements to conform to the current year presentation. The reclassification had no
impact on previously reported net income (loss) or accumulated deficit.
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 – 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, 2017 and 2016 which are included in the gain
(loss) from discontinued operations:
|
|
|
Three Months Ended
|
|
|
|
|
October 31,
|
|
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
Office and miscellaneous
|
|
$
|
–
|
|
|
$
|
(498
|
)
|
|
Gain on sale of investment
|
|
|
–
|
|
|
|
200,528
|
|
|
Total Income (Expense)
|
|
|
–
|
|
|
|
200,030
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Gain from Discontinued Operations, Net of Tax Benefits
|
|
$
|
–
|
|
|
$
|
200,030
|
)
|
NOTE 4 – DUE TO RELATED PARTIES
During
the three months ended October 31, 2017, a former officer of the Company advanced $17,030 for working capital purpose. This amount
was forgiven and recorded to additional paid in capital, as part of the change of control
(see
Note 1).
During the three
months ended October 31, 2017, a shareholder of the Company advanced $56,698 for working capital purpose.
As of October
31, 2017 and July 31, 2017, the Company owed $56,698 and $0, respectively, to a shareholder of the Company. This loan is non-interest
bearing and due on demand.
NOTE 5 - EQUITY
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, 2017 and July 31, 2017.
Common Stock
The Company has
100,000,000 authorized common shares with a par value of $0.0001 per share.
There were 5,054,985
shares of common stock issued and outstanding as of October 31, 2017 and July 31, 2017, respectively.
NOTE 6 - SUBSEQUENT EVENTS
The Company has
evaluated subsequent events through the date which the financial statements were available to be issued. All subsequent events
requiring recognition as of October 31, 2017 have been incorporated into these financial statements and there are no subsequent
events that require disclosure in accordance with FASB ASC Topic 855, “Subsequent Events.”
|
ITEM 2
|
Management’s Discussion and Analysis of Financial Condition and
Results of Operations
|
Forward-looking statements
The following discussion
of our financial condition and results of operations should be read in conjunction with the financial statements and the related
notes thereto included elsewhere in this quarterly report on Form 10-Q. This quarterly report on Form 10-Q contains certain forward-looking
statements and our future operating results could differ materially from those discussed herein. Certain statements contained in
this discussion, including, without limitation, statements containing the words "believes," "anticipates,"
"expects" and the like, constitute "forward-looking statements" within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). However,
as we issue “penny stock,” as such term is defined in Rule 3a51-1 promulgated under the Exchange Act, we are ineligible
to rely on these safe harbor provisions. Such forward-looking statements involve known and unknown risks, uncertainties and other
factors which may cause our actual results, performance or achievements to be materially different from any future results, performance
or achievements expressed or implied by such forward-looking statements. Given these uncertainties, readers are cautioned not to
place undue reliance on such forward-looking statements. We disclaim any obligation to update any such factors or to announce publicly
the results of any revisions of the forward-looking statements contained herein to reflect future events or developments.
Currency and exchange
rate
Unless otherwise
noted, all currency figures quoted as “U.S. dollars”, “dollars” or “$” refer to the legal currency
of the United States. Throughout this report, assets and liabilities of the Company’s subsidiaries are translated into U.S.
dollars using the exchange rate on the balance sheet date. Revenue and expenses are translated at average rates prevailing during
the period. The gains and losses resulting from translation of financial statements of foreign subsidiaries are recorded as a separate
component of accumulated other comprehensive income within the statement of stockholders’ equity.
Overview
We are currently a
“shell company” with no meaningful assets or operations other than our efforts to identify and merge with an operating
company.
We were incorporated
in the State of Nevada on June 13, 2012. Our current business office is located at No. 45-2, Jalan USJ 21/10, Subang Jaya 47640,
Selangor Darul Ehsan, Malaysia. Our telephone number is +6012 503 7322.
We were initially an
exploration stage company under the name of Freedom Petroleum Inc. (changed to Steampunk Wizards, Inc., effective on July 2, 2015)
that originally intended to engage in the exploration and development of oil and gas properties. In April 2015, after reviewing
the markets with investor appetite and management's duties to its shareholders, the Company determined to discontinue its oil and
gas operation. We then began exploring opportunities in the computer gaming and application industry.
We engaged in computer
game development until October 13, 2016, when control of our company changed pursuant to a share purchase agreement and a spin-off
agreement. On October 26, 2016, our corporate name was changed from “Steampunk Wizards, Inc.” to "Tianci International,
Inc." The name change was effected on November 27, 2016, pursuant to Nevada Revised Statutes Section 92A.180 in connection
with the merger of us into our then subsidiary, Tianci International Inc.
On
August 3, 2017, we entered into a Stock Purchase Agreement (the “SPA”) with Shifang Wan (the “Seller”),
the record holder of 4,397,837 common shares, or approximately 87.00% of the issued and outstanding of Common Stock of the Company,
and Chuah Su Chen and Chuah Su Mei (collectively, the “Purchasers”, and together with the Company and the Seller, the
“Parties”). Pursuant to the SPA, the Seller sold to the Purchasers and the Purchasers acquired from the Sellers the
Shares for a total gross purchase price of Three Hundred Fifty Thousand Dollars ($350,000). The acquisition was consummated on
August 15, 2017. The Purchasers used personal funds to acquire the Shares.
Upon
the consummation of the sale, Ms. Cuilian Cai resigned from her positions as director, Chief Executive Officer and Chief Financial
Officer of the Company. Her resignation was not due to any dispute or disagreement with the Company on any matter relating to the
Company's operations, policies or practices. The following individuals were also appointed to serve in the positions set forth
next to their names below:
|
Name
|
Age
|
Position
|
|
Chuah Su Chen
|
34
|
Director, Chief Financial Officer and Secretary
|
|
Chuah Su Mei
|
38
|
Director, Chief Executive Officer and President
|
|
Yeow Yuen Kai
|
44
|
Director and Chief Technology Officer
|
Jerry Ooi was
appointed to serve as a director effective August 30, 2017.
We are in active discussions
with an operating business affiliated with our executive officers regarding potential acquisition. There is no assurance that we
will be able to successfully acquire such company or any company in the near future.
Limited Operating History; Need
for Additional Capital
We have had limited
operations and have been issued a "going concern" opinion by our auditor, based upon our reliance on the sale of our
common stock and loans from a related party, as the sole source of funds for our future operations.
There
is no historical financial information about us upon which to base an evaluation of our performance. We have not generated any
revenues from operations. We cannot guarantee we will be successful in our business operations. Our business is subject to risks
inherent in the establishment of a new business enterprise, including limited capital resources, possible delays in the launching
of our games and market or wider economic downturns. We do not believe we have sufficient funds to operate our business for the
next 12 months.
We
have no assurance that future financing will be available to us on acceptable terms, or at all. If financing is not available on
satisfactory terms, we may be unable to continue, develop or expand our operations. Equity financing could result in additional
dilution to existing shareholders.
If
we are unable to raise additional capital to maintain our operations in the future, we may be unable to carry out our full business
plan or we may be forced to cease operations.
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 $1,143,979 as of October 31, 2017.
The following table
provides selected financial data about our company as of October 31, 2017 and July 31, 2017.
Balance Sheet Data
|
|
|
October 31,
|
|
|
July 31,
|
|
|
|
|
|
|
|
|
|
|
2017
|
|
|
2017
|
|
|
Change
|
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
22,900
|
|
|
$
|
2,360
|
|
|
$
|
20,540
|
|
|
|
870%
|
|
|
Total assets
|
|
$
|
40,400
|
|
|
$
|
2,360
|
|
|
$
|
38,040
|
|
|
|
1612%
|
|
|
Total liabilities
|
|
$
|
56,828
|
|
|
$
|
11,498
|
|
|
$
|
45,330
|
|
|
|
394%
|
|
|
Stockholders’ equity(deficit)
|
|
$
|
(16,428
|
)
|
|
$
|
(9,138
|
)
|
|
$
|
(7,290
|
)
|
|
|
80%
|
|
Three
Months Ended October 31, 2017, Compared to Three Months Ended October 31, 2016
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
|
|
|
October 31,
|
|
|
|
|
|
|
|
|
|
|
2017
|
|
|
2016
|
|
|
Change
|
|
|
%
|
|
|
Revenue
|
|
$
|
–
|
|
|
$
|
–
|
|
|
$
|
–
|
|
|
|
–
|
|
|
Operating expenses
|
|
|
24,320
|
|
|
|
45,100
|
|
|
|
(20,780
|
)
|
|
|
(46
|
)%
|
|
Loss from Continued Operation
|
|
|
(24,320
|
)
|
|
|
(45,100
|
)
|
|
|
20,780
|
|
|
|
(46
|
)%
|
|
Gain (Loss) from Discontinued Operation
|
|
|
–
|
|
|
|
200,030
|
|
|
|
(200,030
|
)
|
|
|
(100
|
)%
|
|
Net Income (Loss)
|
|
$
|
(24,320
|
)
|
|
|
154,930
|
|
|
|
(179,250
|
)
|
|
|
(116
|
)%
|
Revenue
.
During the three months ended October 31, 2017, and 2016, we did not generate any revenues.
Operating
Expenses
. Operating expenses were $24,320 for the three months ended October 31, 2017, consisting of professional
fees of $20,880 and office and miscellaneous expenses of $3,440. Operating expenses were $45,100 for the three months ended October
31, 2016, including professional fees of $44,590 and office and miscellaneous expenses of $510. The decrease in operating expenses
was primarily attributable to the decrease in professional fees.
Discontinued
Operations
. Pursuant to the Spin-Off Agreement, the Company recorded all expenses from the subsidiary in Malta as discontinued
expenses. Gain (Loss) from discontinued operations was $0 and $(498) for the three months ended October 31, 2017 and 2016, 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,
|
|
|
|
|
|
|
|
2017
|
|
|
2017
|
|
|
Change
|
|
|
%
|
|
|
Current Assets
|
|
$
|
40,400
|
|
|
$
|
2,360
|
|
|
$
|
38,040
|
|
|
|
1612%
|
|
|
Current Liabilities
|
|
|
56,828
|
|
|
|
11,498
|
|
|
|
45,330
|
|
|
|
394%
|
|
|
Working Capital (Deficiency)
|
|
$
|
(16,428
|
)
|
|
$
|
(9,138
|
)
|
|
$
|
(7,290
|
)
|
|
|
80%
|
|
As
of October 31, 2017, we had working capital deficit of $16,428 as compared to working capital deficit of $9,138 as of July 31,
2017. The increase in working capital deficiency was mainly due to the increase in amounts due to related parties offset by an
increase in cash and cash equivalents and prepaid expenses and other deposits.
Cash Flows
|
|
|
Three Months Ended
October 31, 2017
|
|
|
Three Months Ended
October 31, 2016
|
|
|
Net cash used in continued operating activities
|
|
$
|
(53,188
|
)
|
|
$
|
(119,140
|
)
|
|
Net cash used in discontinued operating activities
|
|
$
|
–
|
|
|
$
|
(498
|
)
|
|
Net cash provided by continued investing activities
|
|
$
|
–
|
|
|
$
|
2,000
|
|
|
Net cash provided by continued financing activities
|
|
$
|
73,728
|
|
|
$
|
118,640
|
|
|
Effects on changes in foreign exchange rate
|
|
$
|
–
|
|
|
$
|
498
|
|
|
Net increase in cash and cash equivalents
|
|
$
|
20,540
|
|
|
$
|
1,500
|
|
Cash Flow from
Operating Activities
During
the three months ended October 31, 2017, net cash used in continued operating activities was $53,188, compared to $119,140 for
the three months ended October 31, 2016. The decrease in cash used in continued operating activities was mainly due to the decrease
in accounts payable and the decrease in net loss during the three months ended October 31, 2017.
During
the three month period ended October 31, 2017, cash used in discontinued operating activities was $0 compared to cash used in discontinued
operating activities of $498 during the three month period ended October 31, 2016.
Cash Flow from
Investing Activities
During
the three months ended October 31, 2017, net cash provided by investing activities was $0. For the same period ended October 31,
2016, net cash provided by investing activities was $2,000, consisting of proceeds from the sale of investment pursuant to the
Spin-Off Agreement.
Cash Flow from
Financing Activities
During
the three months ended October 31, 2017, financing activities provided net cash of $73,728, consisting of the cash from related
parties.
During
the same period ended October 31, 2016, financing activities provided net cash of $118,640, consisting of cash from related parties.
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 of October 31, 2017, the Company has
working capital deficiency of $16,428 and has incurred losses since inception resulting in an accumulated deficit of $1,143,979.
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.
Recent accounting pronouncements
The Company has reviewed
all recently issued, but not yet effective, accounting pronouncements and do not believe the future adoption of any such pronouncements
may be expected to cause a material impact on its financial condition or the results of its operations.
|
ITEM 3
|
Quantitative and Qualitative Disclosures about Market Risk
|
We are a smaller reporting
company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.
|
ITEM 4
|
Controls and Procedures
|
Conclusion Regarding the Effectiveness
of Disclosure Controls and Procedures
We conducted an evaluation
of the effectiveness of the design and operation of our disclosure controls and procedures, as such term is defined under Rule
13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (Exchange Act), under the supervision of and with the
participation of our management, including the Chief Executive Officer and Chief Financial Officer. Based on that evaluation, our
management, including the Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures,
subject to limitations as noted below, as of October 31, 2017, and during the period prior to and including the date of this report,
were not effective to ensure that all information required to be disclosed by us in the reports that we file or submit under the
Exchange Act is: (i) recorded, processed, summarized and reported, within the time periods specified in the Commission’s
rule and forms; and (ii) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial
Officer, as appropriate to allow timely decisions regarding required disclosure.
Inherent Limitations
Because of its inherent
limitations, our disclosure controls and procedures may not prevent or detect misstatements. A control system, no matter how well
conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.
Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control
issues and instances of fraud, if any, have been detected. Also, projections of any evaluation of effectiveness to future periods
are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance
with the policies and procedures may deteriorate.
Changes in Internal Control over Financial
Reporting
Our annual report on
Form 10-K reported that our internal control over financial reporting was not effective as of July 31, 2017, due to certain material
weaknesses more fully discussed in our annual report. Subject to the foregoing disclosures in this Item 4, there were no changes
in our internal control over financial reporting that occurred during our first fiscal quarter ended October 31, 2017, that materially
affected, or are reasonably likely to materially affect, our internal control over financial reporting.