ITEM 1. FINANCIAL STATEMENTS.
MONAR INTERNATIONAL INC.
|
(A DEVELOPMENT STAGE COMPANY)
|
CONSOLIDATED BALANCE SHEETS
|
(Unaudited)
|
|
|
|
|
April 30, 2013
|
|
July 31, 2012
|
AS
SETS
|
|
|
|
|
|
|
|
|
|
|
Cash
|
$
|
74
|
$
|
9
|
|
Prepaid expenses
|
|
-
|
|
344
|
Total current assets
|
|
74
|
|
353
|
|
|
|
|
|
TOTAL ASSETS
|
$
|
74
|
$
|
353
|
|
|
|
|
|
LIABILITIES & STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
Accounts payable
|
$
|
83,575
|
$
|
69,814
|
|
Accrued salary
|
|
7,500
|
|
7,500
|
|
Advances from related party
|
|
60,376
|
|
60,549
|
|
Advances from third party
|
|
68,281
|
|
28,457
|
Total current liabilities
|
|
219,732
|
|
166,320
|
|
|
|
|
|
Total liabilities
|
|
219,732
|
|
166,320
|
|
|
|
|
|
Stockholders’ equity (deficit)
|
|
|
|
|
|
|
|
|
|
|
|
Preferred Stock, $0.00001 par value, 100,000,000 shares authorized,
0 issued and outstanding
|
|
-
|
|
-
|
|
|
|
|
|
|
|
Common Stock, $0.00001 par value, 250,000,000 shares authorized,
64,750,000 and 57,600,000 issued and outstanding as of April 30,
2013 and July 31, 2012, respectively
|
|
648
|
|
576
|
|
Additional Paid-in Capital
|
|
951,902
|
|
75,474
|
|
Cumulative translation adjustment
|
|
(170)
|
|
(171)
|
|
Deficit accumulated during development stage
|
|
(1,172,038)
|
|
(241,846)
|
|
|
|
|
|
|
Total stockholders’ deficit
|
|
(219,658)
|
|
(165,967)
|
|
|
|
|
|
Total liabilities & stockholders’ equity
|
$
|
74
|
$
|
353
|
The accompanying notes are an integral part of these unaudited interim consolidated financial statements.
MONAR INTERNATIONAL INC.
|
(A DEVELOPMENT STAGE COMPANY)
|
CONSOLIDATED STATEMENTS OF EXPENSES
|
(UNAUDITED)
|
|
|
|
|
|
|
|
|
From July 6,
|
|
|
|
|
|
|
2009
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
(Inception) to
|
|
|
April 30,
|
|
April 30,
|
|
April 30,
|
|
April 30,
|
|
April 30,
|
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
2013
|
Revenues:
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
Advertising and promotion
|
|
-
|
|
3,058
|
|
210,000
|
|
3,308
|
|
212,126
|
Bank service charges
|
|
97
|
|
163
|
|
324
|
|
624
|
|
2,202
|
Business license and fees
|
|
650
|
|
-
|
|
7,650
|
|
315
|
|
7,965
|
Dues and subscriptions
|
|
-
|
|
39
|
|
103
|
|
39
|
|
245
|
Filing fees
|
|
40
|
|
615
|
|
775
|
|
1,570
|
|
10,993
|
Foreign currency exchange loss (gain)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(105)
|
Meals and entertainment
|
|
-
|
|
-
|
|
-
|
|
1,042
|
|
1,042
|
Office supplies and expenses
|
|
-
|
|
-
|
|
-
|
|
164
|
|
165
|
Officer’s salary
|
|
-
|
|
-
|
|
660,000
|
|
8,750
|
|
668,750
|
Postage and shipping
|
|
2
|
|
-
|
|
298
|
|
173
|
|
1,858
|
Professional fees
|
|
4,500
|
|
13,124
|
|
49,377
|
|
75,818
|
|
254,158
|
Public Relations
|
|
1,665
|
|
-
|
|
1,665
|
|
-
|
|
1,665
|
Rent expense
|
|
-
|
|
-
|
|
-
|
|
390
|
|
1,950
|
Travel expense
|
|
-
|
|
-
|
|
-
|
|
4,397
|
|
9,024
|
Total expenses
|
|
6,954
|
|
16,999
|
|
930,192
|
|
96,590
|
|
1,172,038
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations
|
|
(6,954)
|
|
(16,999)
|
|
(930,192)
|
|
(96,590)
|
|
(1,172,038)
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
$
|
(6,954)
|
$
|
(16,999)
|
$
|
(930,192)
|
$
|
(96,590)
|
$
|
(1,172,038)
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustment
|
|
-
|
|
(54)
|
|
1
|
|
(52)
|
|
(170)
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive loss
|
$
|
(6,954)
|
$
|
(17,053)
|
$
|
(930,191)
|
$
|
(96,642)
|
$
|
(1,172,208)
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share - - basic and diluted
|
$
|
(0.00)
|
$
|
(0.00)
|
$
|
(0.02)
|
$
|
(0.00)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding –
basic and diluted
|
|
64,750,000
|
|
57,600,000
|
|
54,505,331
|
|
57,600,000
|
|
|
The accompanying notes are an integral part of these unaudited interim consolidated financial statements.
MONAR INTERNATIONAL INC
|
(A DEVELOPMENT STAGE COMPANY)
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(UNAUDITED)
|
|
|
|
|
|
|
From July 6,
|
|
|
|
|
2009
|
|
|
Nine Months Ended
|
|
(Inception) to
|
|
|
April 30,
|
|
April 30,
|
|
April 30,
|
|
|
2013
|
|
2012
|
|
2013
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
Net loss
|
$
|
(930,192)
|
$
|
(96,590)
|
$
|
(1,172,038)
|
Adjustments to reconcile net loss to net cash used in
|
|
|
|
|
|
|
operating activities:
|
|
|
|
|
|
|
Stock issued to officers
|
|
660,000
|
|
-
|
|
660,000
|
Stock issued for services
|
|
216,500
|
|
-
|
|
216,500
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
Prepaid expenses and deposits
|
|
344
|
|
(161)
|
|
-
|
Accounts payable & accrued expenses
|
|
13,761
|
|
54,192
|
|
89,575
|
Accrued salary
|
|
-
|
|
8,750
|
|
7,500
|
Net cash used in operating activities
|
|
(39,587)
|
|
(33,809)
|
|
(198,463)
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
Proceeds from sale of stock to founder
|
|
-
|
|
-
|
|
50
|
Proceeds from advances from related party
|
|
259
|
|
34,123
|
|
103,566
|
Repayments of advances to related party
|
|
(432)
|
|
(325)
|
|
(43,190)
|
Proceeds from advances from third party
|
|
39,824
|
|
-
|
|
62,281
|
Proceeds from stock subscription
|
|
-
|
|
-
|
|
76,000
|
Net cash provided by financing activities
|
|
39,651
|
|
33,798
|
|
198,707
|
|
|
|
|
|
|
|
Effect of exchange rate on cash
|
|
1
|
|
(52)
|
|
(170)
|
|
|
|
|
|
|
|
Net increase (decrease) in cash
|
|
65
|
|
(63)
|
|
74
|
|
|
|
|
|
|
|
Cash at beginning of period
|
|
9
|
|
72
|
|
-
|
Cash at end of period
|
$
|
74
|
|
9
|
|
74
|
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid for interest
|
$
|
-
|
$
|
-
|
$
|
-
|
Cash paid for income taxes
|
$
|
-
|
$
|
-
|
$
|
-
|
|
|
|
|
|
|
|
NON-CASH INVESTING AND FINANCING
ACTIVITIES:
|
|
|
|
|
|
|
Payments of accounts payable by a third party
|
$
|
|
$
|
3,000
|
$
|
6,000
|
The accompanying notes are an integral part of these unaudited interim consolidated financial statements.
MONAR INTERNATIONAL INC
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 – ORGANIZATION AND BUSINESS OPERATIONS
Monar International Inc. (the “Company”) was incorporated in Nevada on July 6, 2009. On December 15, 2010, the Company incorporated a wholly owned subsidiary, Monar Hong Kong Limited (Monar HK), in Hong Kong. Monar HK had minimal activities since incorporation through April 30, 2013, and the results of its operations are included in these consolidated financial statements. On September 2, 2011, the Company incorporated Syntas Inc, a wholly owned subsidiary, in Nevada, United States, which had not had any assets or activities from the date of its inception. The Company subsequently decided that it did not need Syntas Inc. for its future activities and its corporate registration of with the State of Nevada was allowed to lapse.
The Company has limited operations and in accordance with FASB ASC 915-15, is considered a development stage company. The company has had no revenues from operations since its inception.
Initial operations have included organization, capital formation, target market identification, and marketing plans. The Company was originally planning to offer to the public through its website
(www.monarinc.com
) tasteful traditional style Chinese furniture adapted to modern needs for Asian ethnic and high end markets in North America). As of April 30, 2013, the Company has decided to cease its furniture business.
NOTE 2 – BASIS OF PRESENTATION
The accompanying unaudited interim consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Financial Report on Form 10-K for the fiscal year ended July 31, 2012, as filed with the SEC.
In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim period presented, have been reflected herein. The results of operations for the interim period are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal period, as reported in the Form 10-K, have been omitted.
The Company’s consolidated financial statements include all accounts of Monar International Inc. and its two wholly owned subsidiaries: Monar HK and Syntas. All significant inter-company balances and transactions have been eliminated in consolidation.
NOTE 3 – GOING CONCERN
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. If the Company fails to generate positive cash flow or obtain additional financing, when required, it may have to modify, delay, or abandon some or all of its business and expansion plans.
MONAR INTERNATIONAL INC
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
As of April 30, 2013, the Company had cash and cash equivalents of $74 and working capital deficit of $219,658, which compares to $9 cash and $165,967 working capital deficit, respectively, as of July 31, 2012. The ability of the Company to emerge from the development stage is dependent upon the Company’s successful efforts to raise sufficient capital and then attaining profitable operations. The Company intends to fund operations through sales and equity financing arrangements.
For the three months ended April 30, 2013 and 2012, the Company had net operating losses of $6,954 and $16,999, respectively. For the nine months ended April 30, 2013 and 2012, the Company had net operating losses of $930,192 and $96,590, respectively. From inception through April 30, 2013, the Company incurred a cumulative net operating loss of $1,172,038.
The Company believes that its existing capital resources may not be adequate to enable it to execute its business plan, and that it will require additional cash resources during 2012-2013 based on its current operating plan and conditions. These conditions raise substantial doubt as to the Company’s ability to continue as a going concern. The accompanying statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.
NOTE 4 – RELATED PARTY TRANSACTIONS
To support its operations, the Company receives advances from Robert Clarke, President and Director, and 7bridge Capital Partners Limited, which is controlled by Mr. Clarke. These advances are non-interest bearing, unsecured and due on demand.
During the nine months ended April 30, 2013, the Company received $259 in advances from the related party for its operating expenses and repaid $432 of the advances. During the nine months ended April 30, 2012, the Company received $34,123 from the related party and repaid $325 of the advances.
As of April 30, 2013 and July 31, 2012, $60,376 and $60,549, respectively, were due to 7bridge and Robert Clarke for the advances.
NOTE 5 - ADVANCES FROM THIRD PARTY
On June 12, 2012, the Company entered into a loan agreement with a third party up to a maximum of $50,000. This loan is non-interest bearing and had an original maturity date of September 1, 2012, which was extended to July 31, 2013.
On November 16, 2012, the Company entered into a loan agreement with a third party. Per the terms of the agreement, the third party will advance to the Company a loan of funds and /or payment of third party expenses to a maximum of $50,000. This loan is non-interest bearing; all funds are to be repaid on or before July 31, 2013, unless the parties agree otherwise.
During the nine months ended April 30, 2013, we received advances of $39,824, which was deemed to be a part of the loans. During the nine months ended April 30, 2013, the Company did not make any payments on the loans, and as of April 30, 2013 and July 31, 2012, the balance of the loans were $68,281 and $28,457, respectively.
MONAR INTERNATIONAL INC
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 6 – SERVICE AGREEMENTS
On November 26, 2012, the Company entered into a consulting agreement with Emerging Growth Corp (EGC). Per the terms of the agreement, beginning November 1, 2012, EGC will provide to the Company services related to development of an online advertising and awareness program. The services will include one nine month campaign. In consideration for the services provided, the Company will pay EGC compensation in the amount of $35,000, with a $10,000 payment due upon execution of the agreement which has been paid to EGC. The Company issued EGC 1,000,000 common shares valued at $200,000.
The Company also issued 150,000 shares to individuals for services rendered valued at $16,500.
NOTE 7 – STOCKHOLDERS’ EQUITY
During the nine months ended April 30, 2013, the Company issued a total of 6,000,000 common shares for salaries. The value of salaries were $660,000 and was based on the trading value on the date of issuance.
NOTE 8- SUBSEQUENT EVENTS
On May 1, 2013, the Company entered into a non-interest bearing line of credit agreement with National Leasing Brokerage, a related party, for up to $40,000 with a maturity date of July 31, 2013.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION.
|
This section of this quarterly report includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like: believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements, which apply only as of the date of this report. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or our predictions.
Results of operations
From Inception on July 6, 2009 to April 30, 2013
We have not generated any revenues from operations since inception. We have exhausted our cash as a result of expenses incurred in connection with proposed acquisitions with other entities, all of which were unsuccessful. We had a net loss from operations of $930,192 for the nine months ended April 30, 2013, of which $49,377 were incurred for professional fees, $660,000 for officer salaries, $210,000 for advertising and promotion, $7,650 for business license and fees and $3,165 for other operating expenses. During the nine months ended April 30, 2012, the Company incurred a net operating loss of $96,590, consisting of professional fees of $75,818, officer’s salaries of $8,750 and other operating expenses of $12,022. We are in the start-up phase of our proposed business operations.
From inception on July 6, 2009 to July 31, 2012, we incorporated the company, hired the attorney, hired an auditor and our registration statement was declared effective by the SEC. We incorporated a wholly owned subsidiary, Monar International Hong Kong Limited on December 15, 2010. We have prepared an internal business plan. We have reserved the domain name”www.monarinc.com” and commenced construction of our web site. We have had loss from operations from inception on July 6, 2009 to April 30, 2013, of $1,172,038, consisting primarily of professional fees of $254,158, advertising and promotion of $212,126, filing fees of $10,993, travel expenses of $9,024, business licenses and fees of $7,965 and officer’s salary of $668,750.
Since inception, we sold 5,000,000 shares of common stock to our sole officer and director for $50 and have collected gross proceeds under our public offering of $76,000 to July 31, 2012. Shares totaling 760,000 shares of common stock were issued to the subscribers to our public offering on August 17, 2010.
On July 8, 2010, the completion of our public offering provided us with sufficient capital to begin our operations.
On January 12, 2011, we declared a stock dividend of 9 new shares for each 1 share held (10:1) with a record date of January 24, 2011. These additional shares were issued immediately after the record date.
On January 24, 2011 our Board of Directors approved an increase in authorized capital from 100,000,000 common shares to 250,000,000 common shares. This increase was approved by written consent of our majority shareholder, Robert Clarke, our President, who holds approximately 86.81% of our common stock. All shareholders at the record date of February 1, 2011 were notified by mail of the increase in authorized capital when it became effective.
On April 28, 2011, Charlie Rodriguez was appointed treasurer, principal financial officer and principal accounting officer. Mr. Rodriguez replaced Robert Clarke in those positions. Mr. Clarke continued as president, principal executive officer, secretary, and the sole member of the board of directors. Mr. Rodriquez was selected for the foregoing positions as a result of his past experiences with public companies. On November 14, 2011, Mr. Rodriguez resigned as chief financial officer. Mr. Rodriguez has not expressed any disagreements with us over any
financial or accounting matter. During his period with us we orally agreed with Mr. Rodriguez to pay him a monthly fee of $2,500 as his compensation. In total $7,500 is still owed to Mr. Rodriguez for three and nine months compensation up to the date of his resignation on November 14, 2011. We expect to have sufficient funds to pay the compensation owed to Mr. Rodriguez over the next 3 to 4 months.
On December 7, 2012 we announced the appointment of Dr. Tri Vu Truong and Claude Pellerin to our board of directors. As of the same date we appointed Dr. Truong as president and chief operating officer and Mr. Pellerin as secretary.
On May 14, 2013 we announced the resignations of Dr. Tri Vu Truong and Claude Pellerin, as members of our board of directors. On the same date, Dr. Truong resigned as president and Mr. Pellerin resigned as secretary. Also on May 14, 2013, we announced the appointment of Roberto Roman, Jr. to our board of directors and Mr. Roman was appointed as our chief financial officer and secretary, while our chairman and chief executive officer was re-appointed as our president.
On May 5, 2011, we entered into a non-binding memorandum of understanding (MOU) with a group of shareholders of Integrated Clinical Care Corporation, a Nevada corporation (“ICC”) to acquire up to 100% of the outstanding shares of common stock of ICC in exchange for 50,000,000 restricted shares of our common stock. ICC offers to medical practices workflow solutions that include advanced support systems at the point-of-care in the field medical/clinical services with special emphasis on the rapidly evolving practice of oncology. On July 5, 2011 we replaced the MOU with a binding share exchange agreement with an anticipated closing date of July 31, 2011. It subsequently proved impossible to close the contemplated transaction by July 31, 2011, nor for an extended period thereafter, and as a result, we gave formal notice to ICC on October 17, 2011 that the proposed share exchange was cancelled.
On March 20, 2012, we announced that we had initiated a new business strategy which we believed would increase the scale and profitability of our China business activities and will enhance shareholder value. In developing the supplier base for our online sales of Chinese furniture we came to the conclusion that major opportunities exist for the supply of sustainable forest products to the Chinese market and we decided to develop a business based on supply such products to the Chinese market. We further believed that this would involve a re-structuring of our company to enable both the online sales and forest products sales to develop efficiently and we expected to have our plans for re-structuring finalized by the end of May 2012.
In order to implement the forest products business, on April 10, 2012, we entered into an agreement with Pan Pacific Group International Inc. (“PPGI”) whereby PPGI was to be paid a fee of 10% fee for negotiating logging contracts in the Republic of Suriname over a four-year period. Further, PPGI was to be paid $5.00 per cubic meter for Asia and European export logs; a $20,000 set up fee upon signing a formal agreement with us; 10% net profits on domestic log and lumber sales; and 500,000 restricted shares of our common stock. However, market prospects for the sale of wood products to the Chinese market declined as the Chinese economy slowed through much of 2012 and no sales contracts were signed with Chinese customers. As a result of the delay the time limit on the initial agreement with PPGI expired and the agreement became null and void. Until late May we maintained contact with representatives of PPGI to negotiate a new agreement, but with no confirmed orders from Chinese customers we canceled our plans to enter the wood products business and also cancelled our plans to re-structure the Company.
On August 31, 2012 we announced we had signed a non-binding Letter of Intent (LOI) to acquire the assets of Gravity Collection, Inc. (GCI) a Denver-based multi-media company. On September 3, 2012, we were informed by GCI that they were cancelling the LOI.
We have been operating our Hong Kong office from a location in the Causeway Bay district as of August 2011. We have allocated $10,000 for the initial setup of the office and do not expect to exceed that amount. We do not intend to hire employees for the foreseeable future. As of December 2012 we intended to concentrate most of our management and administration activities in Montreal, Canada and will move our head office to Montreal at a
date to be determined in the near future while maintaining our Hong Kong office for our activities in Asia. In May 2013 we concluded that we would be better positioned to develop our business internationally with a main office in the United States and concentrate our management functions at a location in the greater Los Angeles, California area. Our online sales business is still in its start-up stage and we have not generated any sales to date. In January 2013 we made a decision to terminate our involvement in this business.
On November 30, 2012, we announced that we had entered into a Strategic Alliance and Distribution Agreement for M-Fuel with Ecolocap Solutions, Inc of Chicago, Illinois. We will set up a production center in Canada for M-Fuel, the first in North America. M-Fuel is a fuel emulsion, which in tests has proven to reduce consumption of diesel fuel by up to 30% and reduce emissions by up to 80%. We are making M-Fuel the main focus of our business activities from this point onward and have terminated the development of the online furniture merchandising business.
To date we have spent nominal time designing the website, but during the past quarter we developed and implemented a re-designed web site focused on the M-fuel business.
Plan of Operation
Our plan is to develop a business based on the production and distribution of M-fuel. We believe there is good business potential in the Canadian market as well as in Southeast Asia where we hold exclusive rights for M-fuel. As well, we believe other markets can be developed on a non-exclusive basis. We intend to develop markets for M-fuel by the following steps.
1.
|
We will focus on large volume potential customers for M-fuel, such as electricity generators using diesel fuel and fleet operators. Our initial approach will be to get potential customers to test M-fuel on a limited scale to prove the effectiveness of the product. This will be our primary focus for the next three to nine months and we estimate the cost of this market development program will be between $20,000 and $30,000.
|
|
|
2.
|
We also plan to develop a full-scale production unit in Canada, likely in the Montreal area. We will use this unit to demonstrate the economics of M-fuel production and also it will provide us with a supply of M-fuel to test with potential customers. We estimate that we will need four to six months lead time to order and install the production unit and a further three months to debug and optimize it to the point where it is fully operational. We estimate the cost of acquiring and installing the unit will be $250,000 and we are budgeting an additional $100,000 to fund the running in period. We are currently seeking coastal to fund this stage of our plan of operation.
|
|
|
3.
|
We anticipate that we will not be able to generate revenues until the unit is fully operational and in the first three months after operational start-up we expect that revenues will be nominal, but after that we expect to be able to scale up our revenues.
|
|
|
4.
|
We are budgeting $100,000 for business development and general operating costs over the next twelve months. These costs are in addition to the $350,000 we require to acquire and set-up the M-fuel production unit. We are currently seeking capital of $500,000. Until we have sufficient capital to order the M-fuel unit we are in preliminary discussions with potential customers in Canada, Vietnam and Australia to create interest in the use of M-fuel.
|
|
|
5.
|
If we cannot raise sufficient capital we will not order the M-fuel production unit and if, after making the unit operational, we cannot generate sufficient revenues to continue operations, we will suspend or cease operations. If we cease operations, we do not know what we will do and we do not have any plans to do anything.
|
Limited operating history and need for additional capital
There is no historical financial information about us upon which to base an evaluation of our performance. We are in a start-up stage operations and have not generated any revenues. 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 and possible cost overruns due to price and cost increases in services and products.
To become profitable and competitive, we have to locate and negotiate agreements with users to use M-fuel in their operations. We are in the process of locating suitable customers, but there is no assurance that we will be successful in doing so. We will also need to seek additional equity financing to provide capital if we are to grow rapidly.
We have no assurance that future financing will be available to us on acceptable terms. 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.
Liquidity and capital resources
As of the date of this report, we have yet to generate any revenues from our business operations.
We issued 5,000,000 shares of common stock pursuant to the exemption from registration contained in Regulation S of the Securities Act of 1933. This was accounted for as a sale of common stock. We completed our public offering on July 8, 2010 and sold 760,000 shares of common stock at an offering price of $0.10 per share to 48 individuals and raised $76,000.
As of April 30, 2013, our total assets were $74 and our total liabilities were $219,732, of which $60,376 was due to a related party, 7bridge Capital Partners Limited, for cash advances and payments for operating expenses made to our attorney, auditor and accountant, transfer agent and other third parties.