Item
1. Financial Statements.
The
accompanying unaudited interim financial statements of Fortune Valley Treasures, Inc. (formerly Crypto-Services, Inc.) as of May
31, 2017, have been prepared by our management in conformity with accounting principles generally accepted in the United States
of America and in accordance with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X and, therefore, do not include
all information and footnotes necessary for a complete presentation of financial position, results of operations, cash flows,
and stockholders’ equity in conformity with generally accepted accounting principles. In the opinion of management, all
adjustments considered necessary for a fair presentation of the results of operations and financial position have been included
and all such adjustments are of a normal recurring nature.
Operating
results for the nine-month period ended May 31, 2017 are not necessarily indicative of the results that can be expected for the
year ending August 31, 2017.
As
used in this Quarterly Report, the terms “we,” “us,” “our,” “Fortune Valley,”
and the “Company” mean Fortune Valley Treasures, Inc. unless otherwise indicated. All dollar amounts in this Quarterly
Report are expressed in U.S. dollars, unless otherwise indicated.
Fortune
Valley Treasures, Inc. (formerly Crypto-Services, Inc.)
Balance
Sheets
|
|
May 31, 2017
|
|
|
August 31 , 2016
|
|
|
|
(Unaudited)
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Current Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prepaid expenses
|
|
$
|
10,178
|
|
|
$
|
8,833
|
|
|
|
|
|
|
|
|
|
|
Total Current Assets
|
|
$
|
10,178
|
|
|
$
|
8,833
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
$
|
10,178
|
|
|
$
|
8,833
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
$
|
16,098
|
|
|
$
|
20,150
|
|
Due to related party
|
|
|
58,717
|
|
|
|
3,000
|
|
Total Current Liabilities
|
|
|
74,815
|
|
|
|
23,150
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities
|
|
$
|
74,815
|
|
|
$
|
23,150
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ Deficit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock authorized: 75,000,000 shares, par value $0.001, 7,750,000 common shares issued and outstanding as of May 31, 2017 and August 31, 2016, respectively
|
|
|
7,750
|
|
|
|
7,750
|
|
|
|
|
|
|
|
|
|
|
Additional paid-in capital
|
|
|
81,729
|
|
|
|
71,229
|
|
|
|
|
|
|
|
|
|
|
Accumulated deficit
|
|
|
(154,116
|
)
|
|
|
(93,296
|
)
|
|
|
|
|
|
|
|
|
|
Total Stockholders’ Deficit
|
|
|
(64,637
|
)
|
|
|
(14,317
|
)
|
|
|
|
|
|
|
|
|
|
Total Liabilities and Stockholders’ Deficit
|
|
$
|
10,178
|
|
|
$
|
8,833
|
|
The
accompanying notes are an integral part of these unaudited financial statements
Fortune
Valley Treasures, Inc. (formerly Crypto-Services, Inc.)
Statements
of Operations
(Unaudited)
|
|
For the Three Months Ended
|
|
|
For the Three Months Ended
|
|
|
For the Nine Months Ended
|
|
|
For the Nine Months Ended
|
|
|
|
May 31, 2017
|
|
|
May 31, 2016
|
|
|
May 31, 2017
|
|
|
May 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative expenses
|
|
|
17,588
|
|
|
|
14,209
|
|
|
|
60,820
|
|
|
|
43,375
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
17,588
|
|
|
|
14,209
|
|
|
|
60,820
|
|
|
|
43,375
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations
|
|
$
|
(17,588
|
)
|
|
$
|
(14,209
|
)
|
|
$
|
(60,820
|
)
|
|
$
|
(43,375
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(17,588
|
)
|
|
$
|
(14,209
|
)
|
|
$
|
(60,820
|
)
|
|
$
|
(43,375
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss Per Common Share – Basic and Diluted
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
(0.01
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Common Shares Outstanding
|
|
|
7,750,000
|
|
|
|
7,750,000
|
|
|
|
7,750,000
|
|
|
|
7,750,000
|
|
The
accompanying notes are an integral part of these unaudited financial statements
Fortune
Valley Treasures, Inc. (formerly Crypto-Services, Inc.)
Statements
of Cash Flows
(Unaudited)
|
|
For the Nine Months Ended
|
|
|
|
May 31, 2017
|
|
|
May 31 2016
|
|
|
|
|
|
|
|
|
Cash Flows From Operating Activities:
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(60,820
|
)
|
|
$
|
(43,375
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses paid by related party on behalf of the Company
|
|
|
66,217
|
|
|
|
-
|
|
Prepaid expense
|
|
|
(1,345
|
)
|
|
|
(8,333
|
)
|
Accounts payable
|
|
|
6,448
|
|
|
|
9,997-
|
|
|
|
|
|
|
|
|
|
|
Cash Used in/from Operating Activities
|
|
|
10,500
|
|
|
|
(41,711
|
)
|
|
|
|
|
|
|
|
|
|
Cash Flows From Financing Activities:
|
|
|
|
|
|
|
|
|
Advances from related parties
|
|
|
-
|
|
|
|
1,500
|
|
Loan forgiven by former shareholder
|
|
|
(10,500
|
)
|
|
|
|
|
Cash Used in /from Financing Activities
|
|
|
(10,500
|
)
|
|
|
1,500
|
|
|
|
|
|
|
|
|
|
|
Net Decrease in Cash and Cash Equivalents
|
|
|
-
|
|
|
|
(40,211
|
)
|
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents at Beginning of period
|
|
|
-
|
|
|
|
42,492
|
|
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents at End of Period
|
|
$
|
-
|
|
|
$
|
2,281
|
|
|
|
|
|
|
|
|
|
|
Supplemental Disclosures of Cash Flow Information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest paid
|
|
$
|
-
|
|
|
$
|
-
|
|
Income taxes paid
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
Non-Cash Investing and Financing Activity:
|
|
|
|
|
|
|
1,500
|
|
Loan forgiven by former shareholder
|
|
$
|
10,500
|
|
|
$
|
-
|
|
The
accompanying notes are an integral part of these unaudited financial statements
Fortune
Valley Treasures, Inc. (formerly Crypto-Services, Inc.)
Notes
to Financial Statements
(Unaudited)
1.
Nature of Operations
Fortune
Valley Treasures, Inc., formerly Crypto-Services, Inc., was incorporated in the State of Nevada as a for-profit company on March
21, 2014 and established a fiscal year end of August 31. The Company is an early stage company which intended to offer an information
based website at www.digitalcoindaily.com that would provide users with up to date information on the world of digital currencies.
Gordon
Hum, the Company’s director, President, Treasurer, Secretary, Chief Executive Officer, Chief Financial Officer and holder
of 3,500,000 shares of the Company’s common stock representing approximately 45.16% of the Company’s issued and outstanding
securities, entered into a Stock Purchase Agreement, pursuant to which he agreed to sell to twelve unrelated third parties all
of his securities of the Company, for aggregate cash consideration of $35,000. On the same day, Edwin Jong, the Company’s
director, Vice President and holder of 1,500,000 shares of the Company’s common stock representing approximately 19.35%
of the Company’s issued and outstanding securities, entered into a Stock Purchase Agreement, pursuant to which he agreed
to sell to five unrelated third parties all of his securities of the Company, for aggregate cash consideration of $15,000. In
connection with the sales of the Company’s securities, Gordon Hum and Edwin Jong resigned from all of their positions with
the Company effective August 3, 2016. Concurrently, Xinlong Shen was appointed to serve as the sole director, President, Treasurer,
Secretary, Chief Executive Officer and Chief Financial Officer of the Company. Effective December 14, 2016, the Company accepted
the resignation of Xinlong Shen from the position of President, Secretary and Treasurer. He will remain on the Board as a director.
Also effective December 14, 2016, the Company appointed Yumin Lin as the new President, Secretary and Treasurer. He will also
serve as a director.
Effective
August 28, 2016, shareholders of Crypto-Services, Inc. representing 54.19% of the Company’s issued stock approved changing
the Company’s name from Crypto-Services, Inc., to Fortune Valley Treasures, Inc. The Company filed a Certificate of Amendment
with the State of Nevada on September 21, 2016. Effective March 29, 2017, we received formal notification from FINRA that our
request to change the Company name from Crypto-Services, Inc. to Fortune Valley Treasures, Inc. and to change our trading symbol
from CRYT to FVTI have been approved. On March 30, 2017 our name and symbol change took effect with FINRA and on the OTCMarkets
OTCQB platform.
Effective
December 14, 2016, the Company executed a Sale and Purchase Agreement (the Agreement”) to acquire 100% of the shares and
assets of DaXingHuaShang Investment Group Limited (“DIGL”), a company incorporated under the laws of Republic of Seychelles.
Pursuant to the Agreement, the Company has agreed to issue 300 million shares of the Company to DIGL to acquire 100% of the shares
and assets for a cost of $12 million reflecting the value of the rights, titles and interests in the business assets and all attendant
or related assets of DIGL. Both partied agreed that this share issuance by the Company represents payment in full of the $12 million.
As of the May 31, 2017, the agreement has not been closed and the Company has not yet increased the authorized shares and issue
the 300 million shares.
2.
Going Concern
These
financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets
and discharge its liabilities in the normal course of business. During the period ended May 31, 2017, the Company had recurring
losses and net cash used in operations, and had accumulated deficit of $154,116 as of May 31, 2017. The continuation of the Company
as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain
necessary equity financing to continue operations, and the attainment of profitable operations. These factors raise substantial
doubt regarding the Company’s ability to continue as a going concern. These financial statements do not include any adjustments
to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should
the Company be unable to continue as a going concern.
3.
Basis of Presentation
The
accompanying unaudited interim financial statements 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 financial statements and notes thereto for the year ended August 31, 2016 contained in the Company’s Form 10-K/A
filed with the Securities and Exchange Commission on February 17, 2017. 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 periods presented have been reflected herein. The results of operations for the interim periods are not necessarily indicative
of the results to be expected for the full year. Notes to the interim financial statements which would substantially duplicate
the disclosure contained in the audited financial statements as reported in the Company’s Form 10-K/A have been omitted.
These financial statements and notes are presented in accordance with accounting principles generally accepted in the United States.
The Company’s fiscal year end is August 31.
4.
Related Party Transactions
|
a)
|
Our
former CEO Gordon Hum assumed $10,500 accrued liabilities occurred before his resignation on August 3, 2016 and paid off on
November 30, 2016. Gordon Hum forgave the repayment of $10,500 from the Company, which was recorded as gain on liabilities
paid by former shareholder.
|
|
|
|
|
b)
|
As
of May 31, 2017, the Company was indebted to the then-CEO Xinlong Shen in the amount of $55,717, which is non-interest bearing,
unsecured, and due on demand. This is an advance from Xinlong Shen to finance the operation of the Company.
|
|
|
|
|
c)
|
A
friend of Xinlong Shen provided non-compensated financial reporting services from August 2016 to May, 2017.
|
|
|
|
|
d)
|
Our
principal executive office of the Company is provided by a friend of Xinlong Shen at no charge.
|
5.
Subsequent Event
Effective
December 14, 2016, the Company executed a Sale and Purchase Agreement (the Agreement”) to acquire 100% of the shares and
assets of DaXingHuaShang Investment Group Limited (“DIGL”), a company incorporated under the laws of the Republic
of Seychelles. Pursuant to the Agreement, the Company has agreed to issue 300 million shares of the Company to DIGL to acquire
100% of the shares and assets for a cost of $12 million reflecting the value of the rights, titles and interests in the business
assets and all attendant or related assets of DIGL. Both parties agreed that this share issuance by the Company represents payment
in full of the $12 million. Effective May 24,2017,the Company issued the statement that they would effect the Amendment to our
Articles of Incorporation and increase our authorized capital from 75,000,000 common shares with a par value of $0.001 to 2,000,000,000
common shares with a par value of $0.001. There will be no change to the issued and outstanding common shares as a result of the
increase in our authorized capital. As of May 31, 2017, the agreement has not been closed and the Company has not yet increased
the authorized shares and issue the 2000 million shares.
Item
2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
This
section 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. These forward-looking statements
are subject to certain risks and uncertainties that could cause actual results to differ materially from our predictions.
We
qualify as an “emerging growth company” under the JOBS Act. As a result, we are permitted to, and intend to, rely
on exemptions from certain disclosure requirements. For so long as we are an emerging growth company, we will not be required
to:
|
●
|
have
an auditor report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act;
|
|
|
|
|
●
|
comply
with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation
or a supplement to the auditor’s report providing additional information about the audit and the financial statements
(i.e., an auditor discussion and analysis); ·
|
|
|
|
|
●
|
submit
certain executive compensation matters to shareholder advisory votes, such as “say-on-pay” and “say-on-frequency;”
and
|
|
·
|
|
|
●
|
disclose
certain executive compensation related items such as the correlation between executive compensation and performance and comparisons
of the CEO’s compensation to median employee compensation.
|
In
addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition
period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words,
an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply
to private companies. We have elected to take advantage of the benefits of this extended transition period. Our financial statements
may therefore not be comparable to those of companies that comply with such new or revised accounting standards.
We
will remain an “emerging growth company” for up to five years, or until the earliest of (i) the last day of the first
fiscal year in which our total annual gross revenues exceed $1 billion, (ii) the date that we become a “large accelerated
filer” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, which would occur if the market value of our
ordinary shares that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed
second fiscal quarter or (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding
three year period.
Overview
Fortune
Valley Treasures, Inc. (the “Company”), formerly Crypto-Services, Inc. was incorporated in the State of Nevada as
a for-profit company on March 21, 2014 and established a fiscal year end of August 31. The Company is an early stage company which
intended to offer an information based website at www.digitalcoindaily.com that would provide users with up to date information
on the world of digital currencies.
Gordon
Hum, the Company’s director, President, Treasurer, Secretary, Chief Executive Officer, Chief Financial Officer and holder
of 3,500,000 shares of the Company’s common stock representing approximately 45.16% of the Company’s issued and outstanding
securities, entered into a Stock Purchase Agreement, pursuant to which he agreed to sell to twelve unrelated third parties all
of his securities of the Company, for aggregate cash consideration of $35,000. On the same day, Edwin Jong, the Company’s
director, Vice President and holder of 1,500,000 shares of the Company’s common stock representing approximately 19.35%
of the Company’s issued and outstanding securities, entered into a Stock Purchase Agreement, pursuant to which he agreed
to sell to five unrelated third parties all of his securities of the Company, for aggregate cash consideration of $15,000. In
connection with the sales of the Company’s securities, Gordon Hum and Edwin Jong resigned from all of their positions with
the Company effective August 3, 2016. Concurrently, Xinlong Shen was appointed to serve as the sole director, President, Treasurer,
Secretary, Chief Executive Officer and Chief Financial Officer of the Company. Effective December 14, 2016, Company accepted the
resignation of Xinlong Shen from the position of President, Secretary and Treasurer. He will remain on the Board as a director.
Also effective December 14, 2016, the Company appointed Yumin Lin as the new President, Secretary and Treasurer. He will also
serve as a director.
Effective
August 28, 2016, shareholders of the Company representing 54.19% of the Company’s issued stock approved changing the Company’s
name from Crypto-Services, Inc., to Fortune Valley Treasures, Inc. The Company filed a Certificate of Amendment with the State
of Nevada on September 21, 2016. Effective March 29, 2017, we received formal notification from FINRA that our request to change
the Company name from Crypto-Services, Inc. to Fortune Valley Treasures, Inc. and to change our trading symbol from CRYT to FVTI
have been approved. On March 30, 2017 our name and symbol change took effect with FINRA and on the OTC Markets OTCQB platform.
Effective
December 14, 2016, the Company has accepted the resignation of Xinlong Shen from the position of President, Secretary and Treasurer.
He will remain on the Board as a Director.
Also
effective December 14, 2016, the Company announced the appointment of Yumin Lin to the Board of Directors in the position of President,
Secretary and Treasurer. He will also serve as a Director.
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 as the sole source of funds for our future operations.
Plan
of Operation
We
are an early stage company devoting substantially all of our efforts to establishing a new business for which our planned principal
operations have not yet commenced. We believe our current equity at risk is sufficient to finance our current activities.
Our
auditors have issued a going concern opinion on our audited financial statements for the year ended August 31, 2016.This means
that there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional
capital to pay our bills. This is because we have not generated any revenues and no revenues are anticipated until we launch our
business platform. There is no assurance we will ever reach this point. Accordingly, we must raise cash from other sources. Our
only other source for cash at this time is investments by others or loans from our shareholders or officers. We have no assurances
that such loans will become available upon acceptable terms when the funds are required for our operations.
Results
of Operations
Our
operating results for the three and nine months ended May 31, 2017 and 2016 are summarized in the table below.
|
|
For the Three Months Ended
|
|
|
For the Three Months Ended
|
|
|
For the Nine Months Ended
|
|
|
For the Nine Months Ended
|
|
|
|
May 31, 2017
|
|
|
May 31, 2016
|
|
|
May 31, 2017
|
|
|
May 31, 2016
|
|
Revenue
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
General and administrative
|
|
$
|
17,588
|
|
|
$
|
14,209
|
|
|
$
|
60,820
|
|
|
$
|
43,375
|
|
Net Loss
|
|
$
|
(17,588
|
)
|
|
$
|
(14,209
|
)
|
|
$
|
(60,820
|
)
|
|
$
|
(43,375
|
)
|
Revenues
We
did not generate any revenue during the three-month period and nine-month period ended May 31, 2017 and 2016.
Operating
Expenses
Our
expenses were $60,820 for the nine months ended May 31, 2017 as compared to $43,375 for the nine months ended May 31, 2016. The
increase for the nine months was directly related to the expenses related to consulting and professional fees related to our reporting
responsibilities with the Securities and Exchange Commission (the “SEC”).
Our
expenses were $17,588 for the three months ended May 31, 2017 as compared to $14,209 for the three months ended May 31, 2016.
The increase for the three months is related to consulting and professional fee related to our reporting responsibilities with
the SEC.
Capital
Resources and Liquidity
Working
Capital
|
|
May 31, 2017
|
|
|
August 31, 2016
|
|
Current Assets
|
|
$
|
10,178
|
|
|
$
|
8,833
|
|
Current Liabilities
|
|
$
|
74,815
|
|
|
$
|
23,150
|
|
Working Capital (Deficiency)
|
|
$
|
(64,637
|
)
|
|
$
|
(14,317
|
)
|
Current
Assets was $10,178 as of May 31, 2017 as compared to $8,833 as of August 31, 2016. The increase was due to increase in prepaid
expense to OTC markets, for our annual quotation fee for the OTCBB. Current liabilities was $74,815 as of May 31, 2017 compared
to $23,150 as of August 31, 2016. The increase was mainly due to an increase of $55,717 for amounts owing to a related party for
paying operating expenses of the Company.
Cash
Flows
|
|
For the Nine Months Ended,
|
|
|
|
May 31, 2017
|
|
|
May 31, 2016
|
|
Net cash used in operating activities
|
|
$
|
(10,500
|
)
|
|
$
|
(41,711
|
)
|
Net cash used in investing activities
|
|
$
|
-
|
|
|
$
|
-
|
|
Net cash used in/ provided by financing activities
|
|
$
|
(10,500
|
)
|
|
$
|
1,500
|
|
Net change in cash
|
|
$
|
-
|
|
|
$
|
(40,211
|
)
|
Net
cash from operations was $10,500 for the nine-months period ended May 31, 2017 compared to net cash used in operations of $41,711
for the period ended May 31, 2016. The increase in cash inflow is because of operating expense being paid by a related party.
As of May 31, 2017, the Company was indebted to this related party in the amount of $55,717, which is non-interest bearing, unsecured,
and due on demand.
Net
cash used in investing activities and financing activities was $0 for the period ended May 31, 2017.
Net
cash used in financing activities was $10,500 for the nine-months period ended May 31, 2017 compared to net cash from financing
activities of $1,500 for the period ended May 31, 2017. It represents loan forgiven by a related party, which is a non-cash item.
We
have substantial capital resource requirements and have incurred significant losses since inception. As of May 31, 2017, we had
$0 in cash. Based upon our current business plans, we will need considerable cash investments to be successful. Such capital requirements
are in excess of what we have in available cash and what we currently have commitment for. Therefore, we do not have enough available
cash to meet our obligations over the next twelve (12) months.
Anticipated
Cash Requirements
We
will require additional funds to fund our budgeted expenses over the next 12 months. These funds may be raised through, equity
financing, debt financing, or other sources, which may result in further dilution in the equity ownership of our shares.
We
anticipate that our cash expenses over the next 12 months will be approximately $50,000 as described in the table below. These
estimates may change significantly depending on the nature of our business activities and our ability to raise capital from our
shareholders or other sources.
Description
|
|
Estimated Expenses
|
|
Legal and accounting fees
|
|
$
|
34,000
|
|
Marketing and advertising
|
|
|
-
|
|
Investor relations and capital raising
|
|
|
-
|
|
Management and operating costs
|
|
|
-
|
|
Salaries and consulting fees
|
|
|
15,000
|
|
General and administrative expenses
|
|
|
1,000
|
|
Total
|
|
$
|
50,000
|
|
Our
general and administrative expenses for the year will consist primarily of transfer agent fees, bank and interest charges and
general office expenses. The professional fees are related to our regulatory filings throughout the year and include legal, accounting
and auditing fees.
Based
on our planned expenditures, we will require approximately $50,000 to proceed with our business plan over the next 12 months.
As of May 31, 2017, we had $0 cash on hand. If we secure less than the full amount of financing that we require, we will not be
able to carry out our complete business plan and we will be forced to proceed with a scaled back business plan based on our available
financial resources.
We
intend to raise the balance of our cash requirements for the next 12 months from private placements, shareholder loans or possibly
a registered public offering (either self-underwritten or through a broker-dealer). If we are unsuccessful in raising enough money
through such efforts, we may review other financing possibilities such as bank loans. At this time we do not have a commitment
from any broker-dealer to provide us with financing. There is no assurance that any financing will be available to us or if available,
on terms that will be acceptable to us.
Even
though we plan to raise capital through equity or debt financing, we believe that the latter may not be a viable alternative for
funding our operations as we do not have sufficient tangible assets to secure any such financing. We anticipate that any additional
funding will be in the form of equity financing from the sale of our common stock. However, we do not have any financing arranged
and we cannot provide any assurance that we will be able to raise sufficient funds from the sale of our common stock to finance
our operations. In the absence of such financing, we may be forced to abandon our business plan.
Going
Concern
During
the period ended May 31, 2017, the Company had net operating loss and net cash used in operation, and had accumulated deficit
of $154,116 as of May 31, 2017. The continuation of the Company as a going concern is dependent upon the continued financial support
from its shareholders, the ability of the Company to obtain necessary equity financing to continue operations, and the attainment
of profitable operations. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern.
These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and
classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
Off-balance
sheet arrangements
The
Company has no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect or change
on the Company’s financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital
resources that are material to investors. The term “off-balance sheet arrangement” generally means any transaction,
agreement or other contractual arrangement to which an entity unconsolidated with the Company is a party, under which the Company
has (i) any obligation arising under a guarantee contract, derivative instrument or variable interest; or (ii) a retained or contingent
interest in assets transferred to such entity or similar arrangement that serves as credit, liquidity or market risk support for
such assets.