UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended August 31, 2014
or
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from
__________________________________ to _________________________________
Commission File Number 333-190391
ARGAN BEAUTY CORP.
(Exact name of registrant as specified in its charter)
Nevada |
EIN 33-1227949 |
(State or other jurisdiction of incorporation or
organization) |
(IRS Employer Identification No.) |
|
|
Faraday Str. 31, Leipzig, Germany |
04159 |
(Address of principal executive offices) |
(Zip Code) |
49 (0) 1738264717
(Registrants
telephone number, including area code)
N/A
(Former name, former address and
former fiscal year, if changed since last report)
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.
[X]
YES [ ] 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 (§232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such
files).
[X] YES [ ] NO
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or a small
reporting company. See the definitions of large accelerated filer,
accelerated filer and smaller reporting company in Rule 12b-2 of the
Exchange Act.
Large accelerated filer [ ] |
|
Accelerated
filer
[ ] |
Non-accelerated filer [ ] |
(Do not check if a smaller
reporting company) |
Smaller reporting company [X]
|
Indicate by check mark whether the registrant is a shell
company (as defined in Rule 12b-2 of the Exchange Act)
[X]
YES [ ] NO
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Exchange Act
after the distribution of securities under a plan confirmed by a court.
[ ] YES [ ] NO
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the
issuers classes of common stock, as of the latest practicable date.
29,950,000
common shares issued and outstanding as of October 20, 2014.
TABLE OF CONTENTS
2
PART I FINANCIAL INFORMATION
Item
1. Financial
Statements
The condensed interim financial statements of our company have
been prepared in accordance with generally accepted accounting principles in the
United States of America and are presented in US dollars.
3
ARGAN BEAUTY CORP.
CONDENSED FINANCIAL STATEMENTS
AUGUST 31, 2014
4
ARGAN BEAUTY CORP.
TABLE OF CONTENTS
AUGUST 31, 2014
5
ARGAN BEAUTY CORP.
BALANCE SHEETS
|
|
August 31, |
|
|
May 31, |
|
ASSETS |
|
2014 |
|
|
2014 |
|
|
|
|
|
|
|
|
Current Assets |
|
|
|
|
|
|
Cash and cash equivalents
|
$ |
1,432 |
|
$ |
5,171 |
|
Total Current Assets |
|
1,432 |
|
|
5,171 |
|
|
|
|
|
|
|
|
Total Assets |
$ |
1,432 |
|
$ |
5,171 |
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
Current Liabilities |
|
|
|
|
|
|
Loan from
director |
|
8,216 |
|
|
8,216 |
|
|
|
|
|
|
|
|
Total Liabilities |
|
8,216 |
|
|
8,216 |
|
|
|
|
|
|
|
|
Stockholders Equity |
|
|
|
|
|
|
Common stock,
par value $0.001; 525,000,000 shares
authorized, 29,750,000 shares issued and
outstanding |
|
29,750 |
|
|
29,750 |
|
Additional paid in capital |
|
- |
|
|
- |
|
Accumulated deficit |
|
(36,534 |
) |
|
(32,795 |
) |
Total Stockholders Equity
|
|
(6,784 |
) |
|
(3,045 |
) |
|
|
|
|
|
|
|
Total Liabilities and
Stockholders Equity |
$ |
1,432 |
|
$ |
5,171 |
|
See accompanying notes to condensed financial statements.
F-1
ARGAN BEAUTY CORP.
CONDENSED STATEMENTS OF
OPERATIONS
(Unaudited)
|
|
For the three |
|
|
For the three |
|
|
|
months period |
|
|
months period |
|
|
|
ended |
|
|
ended |
|
|
|
August 31, |
|
|
August 31, |
|
|
|
2014 |
|
|
2013 |
|
|
|
|
|
|
|
|
REVENUES |
$ |
- |
|
$ |
- |
|
|
|
|
|
|
|
|
OPERATING EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
|
Advertising and Promotion |
|
15 |
|
|
36 |
|
Bank Service Charges |
|
60 |
|
|
46 |
|
Professional Fees |
|
3,663 |
|
|
5,999 |
|
Business License and Permit |
|
- |
|
|
- |
|
|
|
|
|
|
|
|
TOTAL OPERATING EXPENSES |
|
3,738 |
|
|
6,081 |
|
|
|
|
|
|
|
|
NET LOSS FROM OPERATIONS |
|
(3,738 |
) |
|
(6,081 |
) |
|
|
|
|
|
|
|
PROVISION FOR INCOME TAXES |
|
- |
|
|
- |
|
|
|
|
|
|
|
|
NET LOSS |
$ |
(3,738 |
) |
$ |
(6,081 |
) |
|
|
|
|
|
|
|
NET LOSS PER SHARE: BASIC AND DILUTED |
$ |
(0.00 |
) |
$ |
(0.00 |
) |
|
|
|
|
|
|
|
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING: BASIC AND DILUTED |
|
29,750,000 |
|
|
29,750,000 |
|
See accompanying notes to condensed financial statements.
F-2
ARGAN BEAUTY CORP.
CONDENSED STATEMENTS OF CASH
FLOWS
(Unaudited)
|
|
For the three |
|
|
For the three |
|
|
|
months ended |
|
|
months ended |
|
|
|
August 31, |
|
|
August 31, |
|
|
|
2014 |
|
|
2013 |
|
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
|
|
Net loss for the period |
$ |
(3,738 |
) |
$ |
(6,081 |
) |
Adjustments to reconcile net loss to net cash
(used in) operating activities: |
|
|
|
|
|
|
Changes in assets and
liabilities: |
|
|
|
|
|
|
Accounts payable |
|
- |
|
|
- |
|
CASH FLOWS (USED IN)
OPERATING ACTIVITIES |
|
(3,738 |
) |
|
(6,081 |
) |
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING
ACTIVITIES |
|
|
|
|
|
|
Loans from
director |
|
- |
|
|
4,500 |
|
CASH FLOWS PROVIDED BY
FINANCING ACTIVITIES |
|
- |
|
|
4,500 |
|
|
|
|
|
|
|
|
NET INCREASE (DECREASE) IN
CASH |
|
(3,738 |
) |
|
(1,581 |
) |
Cash, beginning of period |
|
5,171 |
|
|
3,065 |
|
Cash, end of period |
$ |
1,432 |
|
$ |
1,484 |
|
|
|
|
|
|
|
|
SUPPLEMENTAL CASH FLOW
INFORMATION: |
|
|
|
|
|
|
Interest
paid |
$ |
- |
|
$ |
- |
|
Income taxes paid |
$ |
- |
|
$ |
- |
|
See accompanying notes to condensed financial statements.
F-3
ARGAN BEAUTY CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
AUGUST 31,
2014
NOTE 1 ORGANIZATION AND NATURE OF BUSINESS
ARGAN BEAUTY CORP. is a development stage company registered in
the State of Nevada on April 15, 2013 formed to distribute Argan Oil products.
ARGAN BEAUTY CORP. will position itself to take full advantage of the
distributing Argan oil products from manufacturers to customers.
NOTE 2 SUMMARY OF SIGNIFCANT ACCOUNTING POLICIES
Basis of Presentation
The financial statements of
the Company have been prepared in accordance with generally accepted accounting
principles in the United States of America and are presented in US dollars.
Accounting Basis
The Company uses the accrual basis
of accounting and accounting principles generally accepted in the United States
of America (GAAP accounting). The Company has adopted a May 31 fiscal year
end.
Cash and Cash Equivalents
The Company considers all
highly liquid investments with the original maturities of three months or less
to be cash equivalents. The Company had $5,171 of cash as of May 31, 2014 and $
1,432 as of August 31, 2014.
Fair Value of Financial Instruments
The Companys
financial instruments consist of cash and cash equivalents and amounts due to
shareholder. The carrying amount of these financial instruments approximates
fair value due either to length of maturity or interest rates that approximate
prevailing market rates unless otherwise disclosed in these financial
statements.
Income Taxes
Income taxes are computed using the
asset and liability method. Under the asset and liability method, deferred
income tax assets and liabilities are determined based on the differences
between the financial reporting and tax bases of assets and liabilities and are
measured using the currently enacted tax rates and laws. A valuation allowance
is provided for the amount of deferred tax assets that, based on available
evidence, are not expected to be realized.
Use of Estimates
The preparation of financial
statements in conformity with generally accepted accounting principles 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 the financial statements and the reported amount of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
Revenue Recognition
The Company recognizes revenue
when products are fully delivered or services have been provided and collection
is reasonably assured.
Stock-Based Compensation
Stock-based compensation is
accounted for at fair value in accordance with ASC Topic 718. To date, the
Company has not adopted a stock option plan and has not granted any stock
options.
F-4
ARGAN BEAUTY CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
AUGUST 31,
2014
NOTE 2 SUMMARY OF SIGNIFCANT ACCOUNTING POLICIES
(CONTINUED)
Basic Income (Loss) Per Share
Basic income (loss)
per share is calculated by dividing the Companys 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 Companys 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 August 31, 2014.
Comprehensive Income
The Company has which
established standards for reporting and display of comprehensive income, its
components and accumulated balances. When applicable, the Company would disclose
this information on its Statement of Stockholders Equity. Comprehensive income
comprises equity except those resulting from investments by owners and
distributions to owners. The Company has not had any significant transactions
that are required to be reported in other comprehensive income.
Recent Accounting Pronouncements
ARGAN BEAUTY CORP.
does not expect the adoption of recently issued accounting pronouncements to
have a significant impact on the Companys results of operations, financial
position or cash flow.
NOTE 3 GOING CONCERN
The accompanying financial statements have been prepared in
conformity with generally accepted accounting principle, which contemplate
continuation of the Company as a going concern. However, the Company had no
revenues as of August 31, 2014. The Company currently has limited working
capital, and has not completed its efforts to establish a stabilized source of
revenues sufficient to cover operating costs over an extended period of
time.
Management anticipates that the Company will be dependent, for
the near future, on additional investment capital to fund operating expenses The
Company intends to position itself so that it may be able to raise additional
funds through the capital markets. In light of managements efforts, there are
no assurances that the Company will be successful in this or any of its
endeavors or become financially viable and continue as a going concern.
NOTE 4 LOAN FROM DIRECTOR
As of August 31, 2014, a director loaned $8,216 to the Company
for business operations. The loans are unsecured, non-interest bearing and due
on demand.
The balance due to the director was $8,216 as of August 31,
2014.
NOTE 5 COMMON STOCK
The Company has 525,000,000, $0.001 par value shares of common
stock authorized.
On May 13, 2013, the Company issued 3,000,000 shares of common
stock to a director for cash proceeds of $3,000 at $0.001 per share.
On November 15, 2013, the Company issued 1, 250,000 shares of
common stock for cash proceeds of $ 25,000 at $0.02 per share.
On July 30, 2014, the Company effected a 7 new for 1 old split
of its issued and outstanding shares resulting in 29,750,000 shares outstanding
and with an increase in the authorized capital of the Company to 525,000,000.
There were 29,750,000 shares of common stock issued and
outstanding as of August 31, 2014.
F-5
ARGAN BEAUTY CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
AUGUST 31,
2014
NOTE 6 COMMITMENTS AND CONTINGENCIES
The Company neither owns nor leases any real or personal
property. An officer has provided office services without charge. There is no
obligation for the officer to continue this arrangement. Such costs are
immaterial to the financial statements and accordingly are not reflected herein.
The officers and directors are involved in other business activities and most
likely will become involved in other business activities in the future.
NOTE 7 SUBSEQUENT EVENTS
The Company is offering, on a private placement basis, units of
the Company (each a Unit), at a subscription price of U.S. $0.30 per Unit,
with each Unit consisting of one share of common stock and one non-transferable
common stock share purchase warrant (each a Warrant), and with each such
Warrant entitling the subscribers to purchase one additional common share of the
Company (each a Warrant Share), for the period commencing upon the date of
issuance of the within Units by the Company and ending on the day which is three
years from the date of issuance of the Units, at an exercise price of U.S. $0.50
Per Warrant Share. The private placement offering of Units by the Company is not
subject to any minimum subscription.
Pursuant to the above private placement, on September 17, 2014,
the Company entered into a Share Purchase Agreement with one non-US investor
pursuant to Regulation S, under the Securities Act of 1933, as amended. Pursuant
to the purchase agreement, the investor purchased 50,000 Units of the Company
and accordingly the Company issued 50,000 shares of its common stock and 50,000
Warrants for $15,000, at a value of $0.30 per Unit which represents a 33%
discount of the then current market value of the Companys common stock.
Pursuant to the above private placement, on September 18, 2014,
the Company entered into a Share Purchase Agreement with one US investor
pursuant to Rule 506 of Regulation D, under the Securities Act of 1933, as
amended. Pursuant to the purchase agreement, the investor purchased 150,000
Units of the Company and accordingly the Company issued 150,000 shares of its
common stock and 150,000 Warrants for $30,000, at a value of $0.30 per Unit
which represents a 33% discount of the then current market value of the
Companys common stock.
In accordance with SFAS 165 (ASC 855-10), the Company has
analyzed its operations subsequent to August 31, 2014 to the date these
financial statements were issued, and has determined that it does not have any
material subsequent events to disclose in these financial statements.
F-6
Item
2. Management's
Discussion and Analysis of Financial Condition and Results of Operation
FORWARD-LOOKING STATEMENTS
This quarterly report contains forward-looking statements.
These statements relate to future events or our future financial performance. In
some cases, you can identify forward-looking statements by terminology such as
may, should, expects, plans, anticipates, believes, estimates,
predicts, potential or continue or the negative of these terms or other
comparable terminology. These statements are only predictions and involve known
and unknown risks, uncertainties and other factors that may cause our or our
industry's actual results, levels of activity, performance or achievements to be
materially different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking statements. Although
we believe that the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity, performance
or achievements. Except as required by applicable law, including the securities
laws of the United States, we do not intend to update any of the forward-looking
statements to conform these statements to actual results.
Our unaudited financial statements are stated in United States
Dollars (US$) and are prepared in accordance with United States Generally
Accepted Accounting Principles. The following discussion should be read in
conjunction with our financial statements and the related notes that appear
elsewhere in this quarterly report. The following discussion contains
forward-looking statements that reflect our plans, estimates and beliefs. Our
actual results could differ materially from those discussed in the
forward-looking statements. Factors that could cause or contribute to such
differences include, but are not limited to, those discussed below and elsewhere
in this quarterly report.
Unless otherwise specified in this quarterly report, all dollar
amounts are expressed in United States dollars and all references to common
stock refer to shares of our common stock.
As used in this annual report, the terms we, us, our and
our company mean Argan Beauty Corp., unless the context clearly requires or
states otherwise.
Corporate Overview
We were incorporated in the State of Nevada on April 15, 2013.
Our company is planning to be a distributor of Argan oil and Argan oil products
to stores, spas, massage therapy offices and individuals in Germany. We intend
to bring the 100% pure and organic Argan oil and skin products made with Argan
oil directly from the manufacturers in Morocco to Germany and in the future to
the rest of Europe. We expect to generate revenues from sales of our products to
individual customers and commercial customers such as spas, stores and massage
therapy offices. Both individual and commercial customers will be able to order
our products by telephone, our website www.arganbeautycorp.com using our special
contact form, or directly at an arranged meeting with our representative. We
will import 100% pure Argan oil and all the skin care products made with Argan
oil straight from the manufacturer in Morocco and deliver them to our clients in
Germany without the help of commission base agents.
At this stage, we have no revenues. The only operations we have
engaged in are preparing our business plan and the development of our website.
Our potential client list consists of 4 companies ranging from beauty stores,
spas and massage therapy offices.
The majority of our business will be initially marketed in
Germany but as our operations expand, we plan to expand to other European
markets. We are also looking at opportunities to expand our operations and
product lines in the USA market.
6
Our company will focus on providing helpful customer service.
We will have vast selection of products as well as same-day delivery services
within 100 miles radius. We also offer a no minimum order size and no shipping
charges, as well as returns of unused, saleable products for an instant
credit.
On July 31, 2014, our companys board of directors approved a
resolution to effect a 7 new for 1 old forward split of our authorized, issued
and outstanding shares of common stock. A Certificate of Change for the stock
split was filed and became effective with the Nevada Secretary of State on
August 19, 2014. Consequently, our authorized share capital increases from
75,000,000 to 525,000,000 shares of common stock and our issued and outstanding
common stock increases from 4,250,000 to 29,750,000 shares, all with a par value
of $0.001.
The forward stock split was approved by the Financial Industry
Regulatory Authority (FINRA) with an effective date of August 19, 2014. Our new
CUSIP number is 04014V206.
Our principal executive office is located at Faraday Str. 31,
Leipzig, Germany, 04159. Our telephone number is 49 (0) 173 8264 717.
One June 1, 2013, we entered into a web site design agreement
with Smart Creations. As compensation, our company will pay Smart Creations $300
upon completion of the creation of our companys website which was estimated to
be completed on October 30, 2013. We are now looking at re-designing our website
in order to better market our brand and image to consumers. This re-design
should be completed prior to October 31, 2014.
Results of Operations for the Three Months Ended August 31,
2014 and 2013
The following summary of our results of operations should be
read in conjunction with our unaudited financial statements for the three months
ended August 31, 2014 and 2013.
Our operating results for the three months ended August 31,
2014 and 2013 are summarized as follows:
|
|
Three Months Ended |
|
|
|
August 31, |
|
|
|
2014 |
|
|
2013 |
|
Advertising and promotion |
$ |
15 |
|
$ |
36 |
|
Bank service charges |
$ |
60 |
|
$ |
46 |
|
Professional fees |
$ |
3,663 |
|
$ |
5,999 |
|
Net Loss |
$ |
(3,738 |
) |
$ |
(6,081 |
) |
Our net loss for the three months ended August 31, 2014 was
$3,738. Our net loss for three months ended August 31, 2013 was $6,081. During
the three months ended August 31, 2014 we did not generate any revenue.
During the three months ended August 31, 2014, our operating
expenses were advertising and promotion of $15 bank service charges of $60 and
professional fees of $3,663. During the three months ended August 31, 2013, our
operating expenses were advertising and promotion of $36, bank service charges
of $46 and professional fees of $5,999. The weighted average number of shares
outstanding were 4,250,000 and 4,250,000 for the three months ended August 31,
2014 and August 31, 2013, respectively.
7
Liquidity and Financial Condition
Working Capital |
|
|
|
|
|
|
|
|
At August 31, |
|
|
At May 31, |
|
|
|
2014 |
|
|
2014 |
|
Current Assets |
$ |
1,432 |
|
$ |
5,171 |
|
Current Liabilities |
$ |
8,216 |
|
$ |
8,216 |
|
Working Capital |
$ |
(6,784 |
) |
$ |
(3,045 |
)
|
Cash Flows |
|
|
|
|
|
|
|
|
At August 31, |
|
|
At August 31, |
|
|
|
2014 |
|
|
2013 |
|
Net cash used in operations
|
$ |
(3,738 |
) |
$ |
(6,081 |
) |
Net cash (used in) provided by investing
activities |
$ |
Nil |
|
$ |
Nil |
|
Net cash (used in) provided
by financing activities |
$ |
Nil |
|
$ |
4,500 |
|
Increase (Decrease) in Cash During the Period
|
$ |
(3,738 |
) |
$ |
(1,581 |
) |
As at August 31, 2014, our total assets were $1,432 compared to
$5,171 in total assets at May 31, 2014. Total assets were comprised of $2.543 in
cash and cash equivalents. As at August 31, 2014, our current liabilities were
$8,216 compared to $8,216 in current liabilities as at May 31, 2014.
Stockholders equity was $(6,784) as of August 31, 2014 compared to
stockholders' equity of $3,045 as of May 31, 2014.
Cash Flows from Operating Activities
We have not generated positive cash flows from operating
activities. For the three months ended August 31, 2014, net cash flows used in
operating activities was $3,738 compared to $6,081 for the three months ended
August 31, 2013.
Cash Flows from Investing Activities
For the three months ended August 31, 2014 and 2013 we did not
have any net cash flows used in investing activities.
Cash Flows from Financing Activities
We have financed our operations primarily from either
advancements or the issuance of equity. For the three months ended August 31,
2014, cash flow provided by financing activities was $Nil compared to $4,500 for
the three months ended August 31, 2013.
8
Plan of Operation and Future Financings
We expect that working capital requirements will continue to be
funded through a combination of our existing funds and further issuances of
securities. Our working capital requirements are expected to increase in line
with the growth of our business.
Existing working capital, further advances and debt
instruments, and anticipated cash flow are expected to be adequate to fund our
operations over the next three months. We have no lines of credit or other bank
financing arrangements. Generally, we have financed operations to date through
the proceeds of the private placement of equity and debt instruments. In
connection with our business plan, management anticipates additional increases
in operating expenses and capital expenditures relating to: (i) acquisition of
inventory; (ii) developmental expenses associated with a start-up business; and
(iii) marketing expenses. We intend to finance these expenses with further
issuances of securities, and debt issuances. Thereafter, we expect we will need
to raise additional capital and generate revenues to meet long-term operating
requirements. Additional issuances of equity or convertible debt securities will
result in dilution to our current shareholders. Further, such securities might
have rights, preferences or privileges senior to our common stock. Additional
financing may not be available upon acceptable terms, or at all. If adequate
funds are not available or are not available on acceptable terms, we may not be
able to take advantage of prospective new business endeavors or opportunities,
which could significantly and materially restrict our business operations. We
will have to raise additional funds in the next twelve months in order to
sustain and expand our operations. We currently do not have a specific plan of
how we will obtain such funding; however, we anticipate that additional funding
will be in the form of equity financing from the sale of our common stock. We
have and will continue to seek to obtain short-term loans from our directors,
although no future arrangement for additional loans has been made. We do not
have any agreements with our directors concerning these loans. We do not have
any arrangements in place for any future equity financing.
Cash Requirements
We estimate our operating expenses and working capital
requirements for the twelve month period to be as follows:
Estimated
Expenses For the Twelve Month Period ending August 31, 2015 |
|
Professional fees |
$ |
36,000 |
|
Establishing an office |
$ |
5,000 |
|
Advertising |
$ |
1,500 |
|
Website development |
|
2,500 |
|
General and administrative expenses |
|
30,000 |
|
Total |
$ |
75,000 |
|
At present, our cash requirements for the next 12 months
outweigh the funds available to maintain our operations or development of any
future properties. Of the $75,000 that we require for the next 12 months, we had
$1,432 in cash as of August 31, 2014, and a working capital deficit of $6,784.
Until we complete a transaction, acquisition or business combination, our cash
requirements will be in regards to maintaining our corporate existence, and
ensuring compliance with our SEC continuous disclosure obligations, including
our financial reporting requirements. In addition, we will require additional
capital in order to investigate and conclude any future transaction, acquisition
or business combination. In order to improve our liquidity, we plan to pursue
additional equity financing from private investors or possibly a registered
public offering. We do not currently have any definitive arrangements in place
for the completion of any further private placement financings and there is no
assurance that we will be successful in completing any further private placement
financings. If we are unable to achieve the necessary additional financing, then
we plan to reduce the amounts that we spend on our business activities and
administrative expenses in order to be within the amount of capital resources
that are available to us.
Contractual Obligations
As a smaller reporting company, we are not required to
provide tabular disclosure obligations.
9
Going Concern
We have suffered recurring losses from operations and are
dependent on our ability to raise capital from stockholders or other sources to
meet our obligations and repay our liabilities arising from normal business
operations when they become due. In their report on our audited financial
statements for the year ended May 31, 2014, our independent auditors included an
explanatory paragraph regarding concerns about our ability to continue as a
going concern. Our financial statements contain additional note disclosure
describing the circumstances that lead to this disclosure by our independent
auditors.
Off-Balance Sheet Arrangements
We have no 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
stockholders.
Critical Accounting Policies
Basis of Presentation
The financial statements of our company have been prepared in
accordance with generally accepted accounting principles in the United States of
America and are presented in US dollars.
Accounting Basis
Our company uses the accrual basis of accounting and accounting
principles generally accepted in the United States of America (GAAP
accounting). Our company has adopted a May 31 fiscal year end.
Cash and Cash Equivalents
Our company considers all highly liquid investments with the
original maturities of three months or less to be cash equivalents. Our company
had $5,171 of cash as of May 31, 2014 and $1,432 as of August 31, 2013.
Fair Value of Financial Instruments
Our companys financial instruments consist of cash and cash
equivalents and amounts due to shareholder. The carrying amount of these
financial instruments approximates fair value due either to length of maturity
or interest rates that approximate prevailing market rates unless otherwise
disclosed in these financial statements.
Income Taxes
Income taxes are computed using the asset and liability method.
Under the asset and liability method, deferred income tax assets and liabilities
are determined based on the differences between the financial reporting and tax
bases of assets and liabilities and are measured using the currently enacted tax
rates and laws. A valuation allowance is provided for the amount of deferred tax
assets that, based on available evidence, are not expected to be realized.
Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles 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 the financial
statements and the reported amount of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
10
Revenue Recognition
Our company recognizes revenue when products are fully
delivered or services have been provided and collection is reasonably
assured.
Stock-Based Compensation
Stock-based compensation is accounted for at fair value in
accordance with ASC Topic 718. To date, our company has not adopted a stock
option plan and has not granted any stock options.
Basic Income (Loss) Per Share
Basic income (loss) per share is calculated by dividing our
companys 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 our companys 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 August 31, 2014.
Comprehensive Income
Our company has which established standards for reporting and
display of comprehensive income, its components and accumulated balances. When
applicable, our company would disclose this information on its Statement of
Stockholders Equity. Comprehensive income comprises equity except those
resulting from investments by owners and distributions to owners. Our company
has not had any significant transactions that are required to be reported in
other comprehensive income.
Recent Accounting Pronouncements
Our company does not expect the adoption of recently issued
accounting pronouncements to have a significant impact on our companys results
of operations, financial position or cash flow.
Item
3. Quantitative
and Qualitative Disclosures About Market Risk.
As a smaller reporting company, we are not required to
provide the information required by this Item.
Item
4. Controls and
Procedures
Managements Report on Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are
designed to ensure that information required to be disclosed in our reports
filed under the Securities Exchange Act of 1934, as amended, is recorded,
processed, summarized and reported within the time periods specified in the
Securities and Exchange Commission's rules and forms, and that such information
is accumulated and communicated to our management, including our chief executive
officer (our principal executive officer) and chief financial officer (our
principal financial officer and principal accounting officer), to allow for
timely decisions regarding required disclosure.
11
As of the end of our quarter covered by this report, we carried
out an evaluation, under the supervision and with the participation of chief
executive officer (our principal executive officer) and chief financial officer
(our principal financial officer and principal accounting officer), of the
effectiveness of the design and operation of our disclosure controls and
procedures. Based on the foregoing, chief executive officer (our principal
executive officer) and chief financial officer (our principal financial officer
and principal accounting officer) concluded that our disclosure controls and
procedures were not effective in providing reasonable assurance in the
reliability of our reports as of the end of the period covered by this quarterly
report.
Changes in Internal Control over Financial Reporting
During the period covered by this report there were no changes
in our internal control over financial reporting that materially affected, or
are reasonably likely to materially affect, our internal control over financial
reporting.
PART II OTHER INFORMATION
Item
1. Legal
Proceedings
We know of no material, existing or pending legal proceedings
against our company, nor are we involved as a plaintiff in any material
proceeding or pending litigation. There are no proceedings in which any of our
directors, officers or affiliates, or any registered or beneficial shareholder,
is an adverse party or has a material interest adverse to our interest.
Item 1A. Risk
Factors
As a smaller reporting company, we are not required to
provide the information required by this Item.
Item
2. Unregistered
Sales of Equity Securities and Use of Proceeds
Our company is offering, on a private placement basis, units of
our company (each a Unit), at a subscription price of U.S. $0.30 per Unit,
with each Unit consisting of one share of common stock and one non-transferable
common stock share purchase warrant (each a Warrant), and with each such
Warrant entitling the subscriber to purchase one additional common share of our
company (each a Warrant Share), for the period commencing upon the date of
issuance of the within Units by our company and ending on the day which is three
years from the date of issuance of the Units, at an exercise price of U.S. $0.50
Per Warrant Share. The private placement offering of Units by our company is not
subject to any minimum subscription.
Pursuant to the above private placement, on September 17, 2014,
we entered into a share purchase agreement with one non-US investor pursuant to
Regulation S, under the Securities Act of 1933, as amended. Pursuant to which
the investor purchased 50,000 Units of our company and accordingly we issued
50,000 shares of our common stock and 50,000 Warrants for $15,000, at a value of
$0.30 per Unit which represents a 33% discount of the then current market value
of our companys common stock.
Pursuant to the above private placement, on September 18, 2014,
we entered into a share purchase agreement with one US investor pursuant to Rule
506 of Regulation D, under the Securities Act of 1933, as amended. Pursuant to
the purchase agreement, the investor purchased 150,000 Units of our company and
accordingly we issued 150,000 shares of our common stock and 150,000 Warrants
for $30,000, at a value of $0.30 per Unit which represents a 33% discount of the
then current market value of our companys common stock.
Item
3. Defaults
Upon Senior Securities
None.
12
Item
4. Mine Safety
Disclosures
Not applicable.
Item
5. Other
Information
None.
Item
6. Exhibits
13
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
|
ARGAN BEAUTY CORP. |
|
(Registrant) |
|
|
|
|
|
|
Dated: October 20, 2014 |
/s/
Burt Ensley |
|
Burt Ensley |
|
Chief Executive Officer |
|
(Principal Executive Officer) |
|
|
|
|
|
|
Dated: October 20, 2014 |
/s/
Vitaliy Gorelik |
|
Vitaliy Gorelik |
|
President, Chief Financial Officer, Treasurer
and Director |
|
(Principal Financial Officer and Principal
Accounting |
|
Officer) |
14
EXHIBIT 31.1
CERTIFICATION PURSUANT TO
18 U.S.C. ss 1350, AS
ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Burt Ensley, certify that:
1. I have reviewed
this quarterly report on Form 10-Q of Argan Beauty Corp.;
2. Based on my
knowledge, this report does not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements made, in light
of the circumstances under which such statements were made, not misleading with
respect to the period covered by this report;
3. Based on my
knowledge, the financial statements, and other financial information included in
this report, fairly present in all material respects the financial condition,
results of operations and cash flows of the registrant as of, and for, the
periods presented in this report;
4. The
registrant's other certifying officer(s) and I are responsible for establishing
and maintaining disclosure controls and procedures (as defined in Exchange Act
Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as
defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and
have:
|
(a) |
Designed such disclosure controls and procedures, or
caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the period in which
this report is being prepared; |
|
|
|
|
(b) |
Designed such internal control over financial reporting,
or caused such internal control over financial reporting to be designed
under our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted
accounting principles; |
|
|
|
|
(c) |
Evaluated the effectiveness of the registrant's
disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and
procedures, as of the end of the period covered by this report based on
such evaluation; and |
|
|
|
|
(d) |
Disclosed in this report any change in the registrant's
internal control over financial reporting that occurred during the
registrant's most recent fiscal quarter (the registrant's fourth fiscal
quarter in the case of an annual report) that has materially affected, or
is reasonably likely to materially affect, the registrant's internal
control over financial reporting; and |
5. The
registrant's other certifying officer(s) and I have disclosed, based on our most
recent evaluation of internal control over financial reporting, to the
registrant's auditors and the audit committee of the registrant's board of
directors (or persons performing the equivalent functions):
|
(a) |
All significant deficiencies and material weaknesses in
the design or operation of internal control over financial reporting which
are reasonably likely to adversely affect the registrant's ability to
record, process, summarize and report financial information; and |
|
|
|
|
(b) |
Any fraud, whether or not material, that involves
management or other employees who have a significant role in the
registrant's internal control over financial
reporting. |
Date: October 20, 2014 |
|
|
|
|
|
/s/ Burt
Ensley |
|
Burt Ensley |
|
Chief Executive Officer |
|
(Principal Executive Officer) |
|
EXHIBIT 31.2
CERTIFICATION PURSUANT TO
18 U.S.C. ss 1350, AS
ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Vitaliy Gorelik, certify that:
1. I have reviewed
this quarterly report on Form 10-Q of Argan Beauty Corp.;
2. Based on my
knowledge, this report does not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements made, in light
of the circumstances under which such statements were made, not misleading with
respect to the period covered by this report;
3. Based on my
knowledge, the financial statements, and other financial information included in
this report, fairly present in all material respects the financial condition,
results of operations and cash flows of the registrant as of, and for, the
periods presented in this report;
4. The registrant's
other certifying officer(s) and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) and internal control over financial reporting (as
defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and
have:
|
(a) |
Designed such disclosure controls and procedures, or
caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the period in which
this report is being prepared; |
|
|
|
|
(b) |
Designed such internal control over financial reporting,
or caused such internal control over financial reporting to be designed
under our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted
accounting principles; |
|
|
|
|
(c) |
Evaluated the effectiveness of the registrant's
disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and
procedures, as of the end of the period covered by this report based on
such evaluation; and |
|
|
|
|
(d) |
Disclosed in this report any change in the registrant's
internal control over financial reporting that occurred during the
registrant's most recent fiscal quarter (the registrant's fourth fiscal
quarter in the case of an annual report) that has materially affected, or
is reasonably likely to materially affect, the registrant's internal
control over financial reporting; and |
5. The registrant's
other certifying officer(s) and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the registrant's
auditors and the audit committee of the registrant's board of directors (or
persons performing the equivalent functions):
|
(a) |
All significant deficiencies and material weaknesses in
the design or operation of internal control over financial reporting which
are reasonably likely to adversely affect the registrant's ability to
record, process, summarize and report financial information; and |
|
|
|
|
(b) |
Any fraud, whether or not material, that involves
management or other employees who have a significant role in the
registrant's internal control over financial
reporting. |
Date: October 20, 2014 |
|
|
|
|
|
/s/ Vitaliy
Gorelik |
|
Vitaliy Gorelik |
|
President, Chief Financial Officer, Treasurer and |
|
Director |
|
(Principal Financial Officer and Principal Accounting |
|
Officer) |
|
EXHIBIT 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED
PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Burt Ensley, hereby certify, pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
that:
(1) |
the Quarterly Report on Form 10-Q of Argan Beauty Corp.
for the period ended August 31, 2014 (the "Report") fully complies with
the requirements of Section 13(a) or 15(d) of the Securities Exchange Act
of 1934; and |
|
|
(2) |
the information contained in the Report fairly presents,
in all material respects, the financial condition and results of
operations of Argan Beauty Corp. |
Dated: October 20, 2014
|
/s/
Burt Ensley |
|
Burt Ensley |
|
Chief Executive Officer |
|
(Principal Executive Officer) |
|
Argan Beauty Corp. |
A signed original of this written statement required by Section
906, or other document authenticating, acknowledging, or otherwise adopting the
signature that appears in typed form within the electronic version of this
written statement required by Section 906, has been provided to Argan Beauty
Corp. and will be retained by Argan Beauty Corp. and furnished to the Securities
and Exchange Commission or its staff upon request.
EXHIBIT 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED
PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Vitaliy Gorelik, hereby certify, pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, that:
(1) |
the Quarterly Report on Form 10-Q of Argan Beauty Corp.
for the period ended August 31, 2014 (the "Report") fully complies with
the requirements of Section 13(a) or 15(d) of the Securities Exchange Act
of 1934; and |
|
|
(2) |
the information contained in the Report fairly presents,
in all material respects, the financial condition and results of
operations of Argan Beauty Corp. |
Dated: October 20, 2014
|
/s/
Vitaliy Gorelik |
|
Vitaliy Gorelik |
|
President, Chief Financial Officer, Treasurer
and Director |
|
(Principal Financial Officer and Principal
Accounting Officer) |
|
Argan Beauty Corp. |
A signed original of this written statement required by
Section 906, or other document authenticating, acknowledging, or otherwise
adopting the signature that appears in typed form within the electronic version
of this written statement required by Section 906, has been provided to Argan
Beauty Corp. and will be retained by Argan Beauty Corp. and furnished to the
Securities and Exchange Commission or its staff upon request.