UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-Q
[X]
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR
THE QUARTERLY PERIOD ENDING MARCH 31, 2017
[
] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission
file number: 000-55489
BIM
HOMES, INC.
(Exact
name of registrant as specified in its charter)
DELAWARE
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|
47-4184146
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(State
or other jurisdiction of
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|
(I.R.S.
Employer
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incorporation
or organization)
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Identification
No.)
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40
Wall Street, 28
th
Floor,
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|
|
New
York, New York
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10005
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(Address
of principal executive offices)
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(Zip
Code)
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(646)
481-9671
(Registrant’s
telephone number, including area code)
N/A
(Former
name, former address and former fiscal year, if changed since last report)
Securities
Registered Pursuant to Section 12(b) of the Act:
Common
Stock, $0.0001 par value
|
|
OTC
QB
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(Title
of each class)
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|
(Name
of Exchange on
which
Registered)
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Securities
Registered Pursuant to Section 12(g) of the Act:
None
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 website, 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 smaller
reporting company. See the definition of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large
accelerated filer [ ]
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Accelerated
filer [ ]
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|
|
Non-accelerated
filer [ ] (Do not check if a smaller reporting company)
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Smaller
reporting company [X]
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Emerging
growth company [ ]
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act [ ]
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). [X] Yes [ ]
No
Indicate
by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the
Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. [X] Yes [ ]
No
The
aggregate market value of BIM Homes, Inc. common stock held by non-affiliates of BIM Homes, Inc. as of the last business day of
BIM Homes, Inc. most recently completed three month period (March 31, 2017) was approximately $0.00 (based on lack of any trade
or posted price reported by OTC on or prior to March 31, 2017). For this purpose, all of BIM Homes, Inc. officers and directors
and their affiliates were assumed to be affiliates of BIM Homes, Inc.
As
of May 19, 2017, the registrant had 2,634,165 shares of common stock, par value $0.0001 per share, issued and outstanding.
DOCUMENTS
INCORPORATED BY REFERENCE:
None.
BIM
HOMES, INC.
QUARTERLY
REPORT ON FORM 10-Q
FOR
THE THREE MONTHS ENDING MARCH 31, 2017
INDEX
ITEM
1. FINANCIAL STATEMENTS
BIM
Homes, Inc.
Condensed
Balance Sheet
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|
Notes
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As at
March 31, 2017
(Unaudited)
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As at
December 31, 2016
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ASSETS
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Current assets
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|
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Cash and cash equivalents
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2
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$
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-
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$
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-
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|
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Total current assets
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-
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-
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|
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|
|
|
|
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|
TOTAL ASSETS
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|
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$
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-
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$
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-
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LIABILITIES AND STOCKHOLDERS’ DEFICIT
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Current liabilities
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Accounts payable, trade
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|
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$
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18,467
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$
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17,115
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Accrued expenses and other current liabilities
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|
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9,600
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9,529
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Loans and convertible notes payable, short-term, net of unamortized debt discount of $59,384 and $84,000, respectively.
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6
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45,483
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17,867
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Advance from related parties
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8
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106
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|
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|
Derivative liability
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7
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331,101
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332,249
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|
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|
|
|
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|
|
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Total current liabilities
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404,757
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376,760
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|
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TOTAL LIABILITIES
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|
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404,757
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376,760
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STOCKHOLDERS’ DEFICIT
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Preferred stock: $0.0001 par value, 20,000,000 shares authorized, nil shares issued and outstanding as at March 31, 2017 and December 31, 2016
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5
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-
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|
-
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Common stock: $0.0001 par value, 100,000,000 shares authorized, 2,634,165 shares issued and outstanding as at March 31, 2017 and December 31, 2016
|
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5
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264
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264
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Additional paid-in capital
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55,464
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55,464
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Accumulated deficit
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|
(460,485
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)
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|
(432,488
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)
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|
|
|
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|
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TOTAL STOCKHOLDER’S DEFICIT
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|
|
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(404,757
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)
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|
|
(376,760
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)
|
|
|
|
|
|
|
|
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|
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TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT
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|
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$
|
-
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$
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-
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|
See
accompanying notes to these unaudited condensed financial statements
BIM
Homes, Inc.
Condensed
Statement of Operations
(Unaudited)
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For the Three Months Ending March 31,
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2017
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2016
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Revenues
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$
|
-
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|
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$
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-
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|
|
|
|
|
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Operating expenses
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1,500
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13,339
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Total operating expenses
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1,500
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13,339
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|
|
|
|
|
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Loss from operations
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(1,500
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)
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(13,339
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)
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|
|
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|
|
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|
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Other income (expenses)
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|
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Financing costs
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(3,029
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)
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|
-
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Gain on change in fair value of derivative liability on debt
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1,148
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|
|
|
-
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Amortization of debt discount
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|
|
(24,616
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)
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|
|
-
|
|
|
|
|
|
|
|
|
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Loss before provision for income tax
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|
|
(27,997
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)
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|
(13,339
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)
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|
|
|
|
|
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Provision for income tax
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|
|
-
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|
|
|
-
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|
|
|
|
|
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Net loss
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|
$
|
(27,997
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)
|
|
$
|
(13,339
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)
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|
|
|
|
|
|
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|
Net loss per common share
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|
|
|
|
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|
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Basic and diluted
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$
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(0.01
|
)
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|
$
|
(0.01
|
)
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding
|
|
|
|
|
|
|
|
|
Basic and diluted
|
|
|
2,634,165
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|
|
|
2,611,538
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|
See
accompanying notes to these unaudited condensed financial statements.
BIM
Homes, Inc.
Condensed
Statement of Changes in Stockholders’ Deficit
For
the Three Months Ending March 31, 2017
(Unaudited)
|
|
Shares of Common Stock
|
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|
Common Stock
Value
|
|
|
Additional Paid-in Capital
|
|
|
Accumulated Deficit
|
|
|
Total
|
|
Balance brought forward as at January 1, 2017
|
|
|
2,634,165
|
|
|
$
|
264
|
|
|
$
|
55,464
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|
|
$
|
(432,488
|
)
|
|
$
|
(376,760
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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Net loss for period ending March 31,
2017
|
|
|
-
|
|
|
|
-
|
|
|
|
-
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|
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|
(27,997
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)
|
|
|
(27,997
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)
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|
|
|
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|
|
|
|
|
|
|
|
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Balance carried forward as at March 31, 2017
|
|
|
2,634,165
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|
|
$
|
264
|
|
|
$
|
55,464
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|
|
$
|
(460,485
|
)
|
|
$
|
(404,757
|
)
|
See
accompanying notes to these unaudited condensed financial statements.
BIM
Homes, Inc.
Condensed
Statement of Cash Flow
(Unaudited)
|
|
For the three months ending
March 31, 2017
|
|
|
For the three months ending
March 31, 2016
|
|
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(27,997
|
)
|
|
$
|
(13,339
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)
|
|
|
|
|
|
|
|
|
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
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Common stock issued for compensation
|
|
|
-
|
|
|
|
4
|
|
Amortization of debt discount
|
|
|
24,616
|
|
|
|
-
|
|
Gain on change in fair value derivative liability
|
|
|
(1,148
|
)
|
|
|
-
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses
|
|
|
4,423
|
|
|
|
(750
|
)
|
|
|
|
|
|
|
|
|
|
NET CASH USED IN OPERATING ACTIVITIES
|
|
|
(106
|
)
|
|
|
(14,085
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)
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
Proceeds from convertible note issuance
|
|
|
-
|
|
|
|
14,085
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|
Proceeds from related party advance
|
|
|
106
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
NET CASH PROVIDED BY FINANCING ACTIVITIES
|
|
|
106
|
|
|
|
14,085
|
|
|
|
|
|
|
|
|
|
|
NET INCREASE (DECREASE) IN CASH
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Cash, beginning of year
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Cash, end of year
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURES:
|
|
|
|
|
|
|
|
|
Interest paid
|
|
$
|
-
|
|
|
$
|
-
|
|
Income taxes paid
|
|
$
|
-
|
|
|
$
|
-
|
|
See
accompanying notes to these unaudited condensed financial statements.
BIM
Homes, Inc.
Notes
to Unaudited Condensed Financial Statements
For
the Three Months Ending March 31, 2017 and 2016
NOTE
1. NATURE AND BACKGROUND OF BUSINESS
BIM
Homes, Inc. (“the Company” or “the Issuer”) was organized under the laws of the State of Delaware on March
6, 2014. The Company was established as part of the Chapter 11 reorganization of Pacific Shores Development, Inc. (“PSD”).
Under PSD’s Plan of Reorganization, as confirmed by the U.S. Bankruptcy Court for the Southern District of California, the
Company was incorporated to: (1) receive and own the interest which PSD had in a development business which focused on the construction
of low cost homes; and (2) issue shares of its common stock to PSD’s general unsecured creditors and its administrative
creditors. The Company has been in the development stage since its formation and has not yet realized any revenues from its planned
operations.
Effective
June 17, 2016, certain stockholders and warrant holders of BIM Homes, Inc. (the “Company”) sold an aggregate of 2,495,000
shares of the Company’s common stock and warrants to purchase 2,500,000 shares of the Company’s common stock, resulting
in a change of control of the Company. Armada Enterprises GP, LLC (“Armada GP”), having purchased 2,000,000 of the
2,630,000 shares outstanding as of June 17, 2016 became the controlling shareholder of the Company.
Effective
July 6, 2016, the Company’s existing officers and directors resigned and Armada GP appointed its general counsel, Milan
Saha, to be the Company’s Chief Executive Officer, President, Secretary, Treasurer and sole director.
On
October 28, 2016, the Company’s board of directors approved a plan for conversion of the Company from a corporation to a
publicly traded limited partnership. It is anticipated that the Company, upon becoming a publicly traded limited partnership,
will be managed by Armada Enterprises GP, LLC, a Delaware limited liability company (currently the majority shareholder of the
Company), as the Company’s general partner. The Company has begun implementation of its plans to convert the Company from
a corporation to a publicly traded limited partnership.
NOTE
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis
of Presentation
The
accompanying unaudited condensed financial statements as of March 31, 2017 have been prepared in accordance with the U.S. generally
accepted accounting principles (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all
the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, the unaudited
interim financial statements include all adjustments of a normal recurring nature necessary for a fair presentation of the Company’s
financial position as of March 31, 2017, the Company’s results of operation and the cash flows for the three months ended
March 31, 2017. These condensed financial statements should be read in conjunction with the audited financial statements included
in the Company’s Form 10-K filed on May 19, 2017. The December 31, 2016 condensed balance sheet data was derived from the
audited financial statements included in the Form 10-K filed on March 31, 2017. The financial statements and notes are representations
of the Company’s management (“Management”) and its board of directors (the “Board of Directors”),
who are responsible for their integrity and objectivity.
Results
for the three months ended March 31, 2017 are not necessarily indicative of the results that may be expected for the year ended
December 31, 2017 or any other future period.
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 of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
Cash
and Cash Equivalents
For
the Balance Sheet and Statements of Cash Flows, all highly liquid investments with maturity of three months or less are considered
to be cash equivalents. The Company had no cash equivalents as of March 31, 2017.
Income
Taxes
Income
taxes are provided in accordance with the FASB Accounting Standards (ASC 740), Accounting for Income Tax. A deferred tax asset
or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carry forwards.
Deferred tax expense (benefit) results from the net change during the year of deferred tax assets and liabilities.
Deferred
tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion
or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes
in tax laws and rates on the date of enactment.
Basic
and Diluted Net Loss per Share
Net
loss per share is calculated in accordance with Codification topic 260, “Earnings per Share” for the periods presented.
Basic net loss per share is computed using the weighted average number of common shares outstanding. Diluted loss per share has
not been presented because the common stock equivalents resulting from the issuance of these convertible notes have not been included
in the per share calculations because such inclusion would be anti-dilutive. Diluted earnings loss per share is based on the assumption
that all dilutive stock options, warrants, and convertible debt are converted or exercised applying the treasury stock method.
Under this method, options and warrants are assumed exercised at the beginning of the period (or at the time of issuance, if later),
and as if funds obtained thereby were used to purchase common stock at the average market price during the period. Options, warrants
and/or convertible debt will have a dilutive effect, during periods of net profit, only when the average market price of the common
stock during the period exceeds the exercise or conversion price of the items.
Stock
Based Compensation
Codification
topic 718 “Stock Compensation” requires that the cost resulting from all share-based transactions be recorded in the
financial statements and establishes fair value as the measurement objective for share-based payment transactions with employees
and acquired goods or services from non-employees. The codification also provides guidance on valuing and expensing these awards,
as well as disclosure requirements of these equity arrangements. The Company adopted the codification upon creation of the Company
and will expense share based costs in the period incurred. The Company has not adopted a stock option plan or completed a share-based
transaction; accordingly no stock-based compensation has been recorded to date.
Convertible
Instruments
The
Company evaluates and accounts for conversion options embedded in its convertible instruments in accordance with professional
standards for “Accounting for Derivative Instruments and Hedging Activities”.
Professional
standards generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments
and account for them as free standing derivative financial instruments. These three criteria include circumstances in which (a)
the economic characteristics and risks of the embedded derivative instruments are not clearly and closely related to the economic
characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument
and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with
changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative
instrument would be considered a derivative instrument. Professional standards also provide an exception to this rule when the
host instrument is deemed to be conventional as defined under professional standards as “The Meaning of Conventional Convertible
Debt Instrument”.
The
Company accounts for convertible instruments (when it has determined that the embedded conversion options should not be bifurcated
from their host instruments) in accordance with professional standards when “Accounting for Convertible Securities with
Beneficial Conversion Features,” as those professional standards pertain to “Certain Convertible Instruments.”
Accordingly, the Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options
embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment
date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements
are amortized over the term of the related debt to their earliest date of redemption. The Company also records when necessary
deemed dividends for the intrinsic value of conversion options embedded in preferred shares based upon the differences between
the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price
embedded in the note.
ASC
815-40 provides that, among other things, generally, if an event is not within the entity’s control and could require net
cash settlement, then the contract shall be classified as an asset or a liability.
Fair
Value of Financial Instruments
We
adopted the guidance of ASC-820 for fair value instruments, which clarifies the definition of fair value, prescribes methods for
determining fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value, as follows:
Level
1 –
|
Inputs
are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.
|
|
|
Level
2 –
|
Inputs
are quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and
liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or
corroborated by observable market data.
|
|
|
Level
3 –
|
Inputs
are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants
would use in pricing the asset or liability based on the best available information.
|
The
carrying amounts for cash, accounts receivable, accounts payable and accrued expenses, and loans payable approximate their fair
value based on the short-term maturity of these instruments. We did not identify any assets or liabilities that are required to
be presented on the balance sheet at fair value in accordance with the accounting guidance.
ASC
825-10 “Financial Instruments” allows entities to voluntarily choose to measure certain financial assets and liabilities
at fair value (fair value option). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable,
unless a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that
instrument should be reported in earnings at each subsequent reporting date. We did not elect to apply the fair value option to
any outstanding instruments.
Derivative
Liabilities
The
Company assessed the classification of its derivative financial instruments as of March 31, 2017, which consist of convertible
instruments and rights to shares of the Company’s common stock, and determined that such derivatives meet the criteria for
liability classification under ASC 815.
ASC
815 generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments
and account for them as free standing derivative financial instruments. These three criteria include circumstances in which (a)
the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic
characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument
and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with
changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative
instrument would be considered a derivative instrument subject to the requirement of ASC 815. ASC 815 also provides an exception
to this rule when the host instrument is deemed to be conventional, as described.
Impact
of New Accounting Standards
The
Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company’s
results of operations, financial position, or cash flow.
NOTE
3. GOING CONCERN
The
Company’s financial statements are prepared in accordance with generally accepted accounting principles applicable to a
going concern. This contemplates the realization of assets and the liquidation of liabilities in the normal course of business.
Realization values may be substantially different from carrying values as shown and these financial statements do not give effect
to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company
be unable to continue as a going concern. Currently, the Company does not have significant cash or other material assets, nor
does it have operations or a source of revenue sufficient to cover its operation costs and allow it to continue as a going concern.
The Company has no significant operating history and had a cumulative net loss from inception to March 31, 2017 of $460,485. The
Company has a working capital deficit of $404,757 as of March 31, 2017. The accompanying financial statements for the period ending
March 31, 2017, have been prepared assuming the Company will continue as a going concern. The ability to continue as a going concern
is dependent upon the Company’s ability to generate future profitable operations and/or to obtain the necessary financing
to meet its obligations and repay its liabilities arising from normal business operations when they come due.
The
president has committed to advancing certain operating costs of the Company. The Company’s future operations are dependent
upon external funding and its ability to execute its business plan, realize sales and control expenses. Management believes that
sufficient funding will be available from additional borrowings and private placements to meet its business objectives including
anticipated cash needs for working capital for a reasonable period of time. However, there can be no assurance that the Company
will be able to obtain sufficient funds to continue the development of its business operation, or if obtained, upon terms favorable
to the Company.
NOTE
4. STOCK WARRANTS
On
March 6, 2014 (inception), the Company issued 2,500,000 warrants exercisable into 2,500,000 shares of the Company’s common
stock. These warrants were issued per order of the U.S. Bankruptcy Court to the administrative creditors of PSD. These creditors
received an aggregate of 2,500,000 warrants issued in the series and exercise prices as set forth below:
Warrant
Class
|
|
Number
Issued
|
|
|
Exercise
Price
|
|
|
Expiry
Date
|
A
|
|
|
500,000
|
|
|
$
|
4.00
|
|
|
August
30, 2016
|
B
|
|
|
500,000
|
|
|
$
|
5.00
|
|
|
August
30, 2016
|
C
|
|
|
500,000
|
|
|
$
|
6,00
|
|
|
August
30, 2016
|
D
|
|
|
500,000
|
|
|
$
|
7.00
|
|
|
August
30, 2016
|
E
|
|
|
500,000
|
|
|
$
|
8.00
|
|
|
August
30, 2016
|
On
August 19, 2016, the Company entered into a series of warrant amendment agreements (collectively, the “Warrant Amendments”)
in order to extend the expiration date of certain outstanding warrants from August 30, 2016 to August 30, 2017. The Company analyzed
the incremental value of the modified warrants as compared to the original warrant value, both valued as of the modification date,
The Company determined there was no warrant modification expense as the warrants had nominal value. The warrants subject to the
term extension were valued using the Black-Scholes Option Pricing Model and the following weighted average assumptions:
Assumption
|
|
Pre-Modification
|
|
|
Post-Modification
|
|
Market price per share
|
|
$
|
0.01
|
|
|
$
|
0.01
|
|
Average exercise price per Share
|
|
$
|
6.00
|
|
|
$
|
6.00
|
|
Risk-free interest rate
|
|
|
0.20
|
%
|
|
|
0.59
|
%
|
Remaining contractual term in years
|
|
|
0.03
|
|
|
|
1.03
|
|
Volatility
|
|
|
100.0
|
%
|
|
|
100.0
|
%
|
Dividend rate
|
|
|
0.0
|
%
|
|
|
0.0
|
%
|
Fair value per share
|
|
$
|
0.00
|
|
|
$
|
0.00
|
|
On
September 12, 2016, the Company issued 4,165 shares of its common stock upon exercise of 4,165 class C warrants for cash proceeds
of $24,990. The following table summarizes the warrants outstanding and the related prices for the shares of the Company’s
common stock at March 31, 2017:
|
|
Number of Warrants
|
|
|
Weighted Average
Exercise Price
|
|
|
Weighted Average Remaining Contractual Term (Years)
|
|
|
Aggregate Intrinsic Value
|
|
Balance outstanding December 31, 2015
|
|
|
2,500,000
|
|
|
$
|
6.00
|
|
|
|
0.66
|
|
|
$
|
-
|
|
Granted
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Exercised
|
|
|
(4,165
|
)
|
|
|
6.00
|
|
|
|
0.63
|
|
|
|
-
|
|
Cancelled
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Balance outstanding December 31, 2016
|
|
|
2,495,835
|
|
|
$
|
6.00
|
|
|
|
0.66
|
|
|
$
|
-
|
|
Granted
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Exercised
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Cancelled
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance outstanding March 31, 2017
|
|
|
2,495,835
|
|
|
$
|
6.00
|
|
|
|
0.41
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercisable, March 31, 2017
|
|
|
2,495,835
|
|
|
$
|
6.00
|
|
|
|
0.41
|
|
|
$
|
-
|
|
NOTE
5. COMMON STOCK AND PREFERRED STOCK
As
of March 31, 2017 the authorized share capital of the Company consisted of 100,000,000 shares of common stock with $0.0001 par
value and 20,000,000 shares of preferred stock also with $0.0001 par value. No other classes of stock are authorized.
Common
Stock
As
of March 31, 2017 and December 31, 2016 there were a total of 2,634,165 common shares issued and outstanding.
On
February 11, 2016 the Company issued a total of 40,000 restricted shares of its common stock to five individuals: 20,000 restricted
shares of its common stock to Konstantin Zecevic; 5,000 restricted shares of its common stock to Frances Munro; 5,000 restricted
shares of its common stock to Joseph LeBlanc; 5,000 restricted shares of its common stock to Gulten Balaban Umancan; and 5,000
restricted shares of its common stock to Muzeyyen Balaban. All of these issuances were for services at par value of $0.0001 per
share. We relied upon Section 4(2) of the Securities Act of 1933, as amended for the above issuances. We believed that Section
4(2) was available because:
-
The issuance involved no underwriter, underwriting discounts or commissions;
-
We placed restrictive legends on all certificates issued;
-
No sales were made by general solicitation or advertising;
-
Sales were made only to accredited investors who are Company officers.
In
connection with the above transactions, we provided the following to the investor:
-
Access to all our books and records.
-
Access to all material contracts and documents relating to our operations.
-
The opportunity to obtain any additional information, to the extent we possessed such information, necessary to verify the accuracy
of the information to which the investors were given access.
On
September 12, 2016, the Company issued 4,165 shares of its common stock upon exercise of 4,165 warrants for cash proceeds of $24,990.
As
a result of these issuances there were a total 2,634,165 common shares issued and outstanding, and a total of 2,495,835 warrants
to acquire common shares issued and outstanding, as at March 31, 2017 and December 31, 2016.
Preferred
Stock
The
authorized share capital of the Company includes 20,000,000 shares of preferred stock with $0.0001 par value. As of March 31,
2017 and December 31, 2016 no shares of preferred stock had been issued or outstanding.
NOTE
6. LOANS AND CONVERTIBLE NOTES PAYABLE
Line
of credit
On
October 1, 2016, the Company entered into a revolving line of credit agreement (the “Line of Credit”) with Deonarayan
P. Saha, the father of the Company’s chief executive officer (the “Lender”). The Lender established a revolving
line of credit in the Company’s favor in the amount of Twenty Thousand Dollars ($20,000), in the form of approved charges
on two of the Lender’s credit cards. The Lender may cancel either or both of these credit cards at any time. At any time
that the Company desires the Lender make a charge against a credit card, the Company may request the same, and the Lender for
any or no reason may deny such request. The line of credit advances made will not bear interest if the Company pays off the balance
on the credit cards when a monthly payment is due, and the Company will pay the interest on the credit cards on the amount of
any unpaid balance on the credit cards for the Company’s charges against the credit cards. All monies borrowed through this
facility were repaid by the year end.
Convertible
Note Payable
During
the year ended December 31, 2015 the then President advanced a total of $13,140 to the Company to cover expenses and the Company
issued the President three convertible notes. During the year ended December 31, 2016, the President advanced a further $17,335
to the Company to cover expenses and the Company issued the President a further convertible note. All four convertible notes were
canceled by the Company on May 13, 2016, resulting in an increase in Additional paid-in capital of $30,475.
As
at March 31, 2017, the Company had one convertible loan note outstanding with a repayment date of November 4, 2017. The principal
amount of the loan note was $100,000, received on November 4, 2016, and the note has an annual interest rate of 12%, to be applied
to the outstanding principal sum. Including accrued interest of $4,867, the amount outstanding as at March 31, 2017 was $104,867.
The note is convertible at the holders’ election, into shares of Common Stock at a 75% discount to the Market Price, where
Market Price is defined as the average of the lowest three (3) days’ trading prices for the Common Stock during the ten
(10) Trading Day period ending one Trading Day prior to the Conversion Date. This conversion right exists from the issue date
of November 4, 2016 until the later of (i) the Maturity Date of November 4, 2017, and (ii) the date of payment of the outstanding
principal and all accrued and unpaid interest, and can be applied in whole or in part to the amount outstanding at the point of
conversion. The Note also provides for an equity kicker allowing conversion of up to an additional 10% of the principal amount
at the higher of (i) the same conversion price and (ii) $1.00 per share, with the same calculation used to determine Market Price
as described above. The initial fair value of the beneficial conversion feature relating to this convertible loan was $331,973
using the Black Scholes method at the date of the grant of conversion rights and based on the following assumptions: (1) risk-free
interest rate of 1.81%; (2) dividend yield of 0%; (3) volatility factor of the expected market price of our Common Stock of 31.91%;
(4) an expected life of the beneficial conversion feature of 1 year and (5) in the absence of an active market for the Company’s
Common Stock, a stock price of $6.00 per share based on the price of the warrants exercised on September 12, 2016.
During
the three months ended March 31, 2017 and 2016, the Company amortized the debt discount of $24,616 and $0 to operations as interest
expense, respectively.
NOTE
7. DERIVATIVE LIABILITIES
The
Company applies the provisions of ASC Topic 815-40, Contracts in Entity’s Own Equity (“ASC Topic 815-40”), under
which convertible instruments, which contain terms that protect holders from declines in the stock price (reset provisions), may
not be exempt from derivative accounting treatment. As a result, embedded conversion options in convertible debt are recorded
as a liability and are revalued at fair value at each reporting date. If the fair value of the note exceeds the face value of
the related debt, the excess is recorded as change in fair value in operations on the issuance date.
The
Company identified embedded derivatives related to the Convertible Promissory Note issued in November 2016. These embedded derivatives
included certain conversion features. The accounting treatment of derivative financial instruments requires that the Company record
the fair value of the derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair value as
of each subsequent balance sheet date. At the inception of the Convertible Promissory Note, the Company determined a fair value
of $331,973 for the embedded derivative. The fair value of the embedded derivative was determined using the Black Scholes Model
based on the following assumptions:
Dividend yield:
|
|
|
0.00
|
%
|
Volatility
|
|
|
31.91
|
%
|
Risk free rate:
|
|
|
1.81
|
%
|
The
initial fair values of the embedded debt derivative $100,000 was allocated as a debt discount up to the proceeds of the note with
the remainder $231,973 charged to operations for the year ended December 31, 2016 as interest expense.
The
following table provides a summary of changes in fair value of the Company’s Level 3 derivative liabilities for the period
ending March 31, 2017 and year ended December 31, 2016:
|
|
March 31, 2017
|
|
|
December 31, 2016
|
|
Balance, beginning of period
|
|
$
|
332,249
|
|
|
$
|
-
|
|
Additions
|
|
|
-
|
|
|
|
331,973
|
|
Mark-to-market at modification date
|
|
|
(1,148
|
)
|
|
|
276
|
|
Reclassified to additional paid in capital upon modification of term
|
|
|
-
|
|
|
|
-
|
|
Balance closing
|
|
$
|
331,101
|
|
|
$
|
332,249
|
|
Net gain (loss) due to change in fair value included in statement of operations
|
|
$
|
1,148
|
|
|
$
|
(276
|
)
|
NOTE
8. RELATED PARTY TRANSACTIONS
During
the year ended December 31, 2015 the then President advanced a total of $13,140 to the Company to cover expenses and the Company
issued the President three convertible notes. During the year ended December 31, 2016, the President advanced a further $17,335
to the Company to cover expenses and the Company issued the President a further convertible note. All four convertible notes were
canceled by the Company on May 13, 2016.
Effective
June 17, 2016, certain stockholders and warrant holders of the Company sold an aggregate of 2,495,000 shares of the Company’s
common stock and warrants to purchase 2,500,000 shares of the Company’s common stock, resulting in a change of control of
the Company. Armada Enterprises GP, LLC (“Armada”) purchased 2,000,000 shares of common stock, representing 76.0%
of the Company’s outstanding common stock, and 2,005,000 warrants to purchase shares of common stock in these transactions.
The Company’s chief executive officer, Milan Saha serves as Armada’s Chief General Counsel. During the year ending
December 31, 2016, Armada advanced the Company $15,202 for working capital purposes which was repaid. The advances bore no interest,
were unsecured and were repayable on demand.
In
February 2017, the President advanced a sum of $106 to the Company as a short-term advance. This amount attracts no interest and
will be repaid when the Company receives additional cash.
NOTE
9. COMMITMENT AND CONTINGENCY
There
is no commitment or contingency to disclose during the period ending March 31, 2017.
NOTE
10. SUBSEQUENT EVENTS
There
have been no material events subsequent to March 31, 2017 and up to the date of this report.
ITEM
2.
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
Information
Regarding Forward Looking Statements
This
document contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act
of 1995. These forward-looking statements involve a number of risks and uncertainties. We caution readers that any forward-looking
statement is not a guarantee of future performance and that actual results could differ materially from those contained in the
forward-looking statement. These statements are based on current expectations of future events. You can find many of these statements
by looking for words like “believes,” “expects,” “anticipates,” “intend,” “estimates,”
“may,” “should,” “will,” “could,” “plan,” “predict,” “potential,”
or similar expressions in this document or in documents incorporated by reference in this document. Examples of these forward-looking
statements include, but are not limited to:
●
|
our
business and growth strategies;
|
●
|
our
future results of operations;
|
●
|
anticipated
trends in our business;
|
●
|
the
capacity and utilization of our resources;
|
●
|
our
ability to successfully and economically explore for and develop geothermal resources;
|
●
|
our
business development prospects, projects and programs, including timing and cost of construction of new projects and expansion
of existing projects;
|
●
|
the
fulfillment of the respective parties’ rights and obligations under our joint ventures, leases, permits and all other
agreements;
|
●
|
our
liquidity and ability to finance our business development activities;
|
●
|
our
working capital requirements and availability;
|
●
|
our
illustrative growth goals and business development and acquisition projections;
|
●
|
market
conditions in the different industries in which we operate; and
|
●
|
the
impact of environmental and other governmental regulation.
|
These
forward-looking statements are based on the current beliefs and expectations of our management and are subject to significant
risks and uncertainties. If underlying assumptions prove inaccurate or unknown risks or uncertainties materialize, actual results
may differ materially from current expectations and projections. The following factors, among others, could cause actual results
to differ from those set forth in the forward-looking statements:
●
|
the
failure to obtain sufficient capital resources to fund our operations;
|
●
|
unsuccessful
construction and expansion activities, including delays or cancellations;
|
●
|
incorrect
estimates of required capital expenditures;
|
●
|
increases
in the cost of operations;
|
|
impact
of environmental and other governmental regulation, including delays in obtaining permits or other permissions;
|
●
|
hazardous
and risky operations relating to the development of any projects;
|
●
|
our
ability to successfully identify and integrate acquisitions;
|
●
|
our
dependence on key personnel;
|
●
|
changes
in applicable laws, rules or regulations;
|
●
|
the
potential for claims arising from any operations;
|
●
|
general
competitive conditions within the different industries in which we operate; and
|
●
|
financial
market conditions.
|
All
subsequent written or oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified
in their entirety by the cautionary statements contained or referred to in this section. We do not undertake any obligation to
release publicly any revisions to these forward-looking statements to reflect events or circumstances after the date of this document
or to reflect the occurrence of unanticipated events, except as may be required under applicable U.S. securities law. If we do
update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect
to those or other forward-looking statements.
The
U.S. dollar is the Company’s functional currency. All references to “dollars” or “$” are to United
States dollars.
General
Background
The
following discussion and analysis is intended to help you understand our results of operations for the three months ending March
31, 2017 and 2016, and our financial condition as at March 31, 2017 and December 31, 2016. You should read the following discussion
and analysis together with our audited financial statements and the notes to the financial statements included under Item 1 in
this report. Our future financial condition and results of operations will vary from our historical financial condition and results
of operations described below based on a variety of factors. You should carefully review the risks described under Item 1A and
elsewhere in this report, which identify certain important factors that could cause our future financial condition and results
of operations to vary.
Liquidity,
Capital Resources and Financial Condition
Financial
Condition as at March 31, 2017 (“2017 Period”) versus December 31, 2016 (“2016 Period”)
As
of March 31, 2017 we had no assets (2016 Period: nil), liabilities totaling $404,757 (2016 Period: $376,760) and an accumulated
deficit of $460,485 (2016 Period: $432,488). This increase in liabilities was the result of expenses incurred through our efforts
to develop the business and related to our registration as a reporting issuer with the SEC, as outlined below. We will, in all
likelihood, sustain continued operating expenses without corresponding revenues until we can execute on one or more of our business
development and acquisition opportunities, and we will continue to depend upon shareholders and officers to make loans to the
Company to meet any costs that may occur. All such advances will be interest-free.
Results
of Operations
Results
of Operations for the three months ending March 31, 2017 (“2017 Period”) and 2016 (“2016 Period”)
The
Company has not yet realized any revenues or earnings from operations. Our expenses in the 2017 Period were for general and administrative
costs of $1,500 (2016 Period: $13,339), finance costs of $3,029 (2016 Period: nil), amortization of debt discount of $24,616 (2016
Period: nil), and gain on change in fair value of derivative liability of $1,148 (2016: nil), related to the outstanding convertible
loan note. We will, in all likelihood, sustain continued operating expenses without corresponding revenues until we can execute
on one or more of our business development and acquisition opportunities.
Going
Concern
The
accompanying financial statements are presented on a going concern basis. The Company’s financial condition raises substantial
doubt about the Company’s ability to continue as a going concern. The Company does not have cash or other material assets
nor does it have any operations or revenues from operations. It is relying on interest free advances from its officers and directors
to meet its limited operating expenses.
Off-Balance
Sheet Arrangements
We
do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial
condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital
resources that is material to investors.
Disclosure
of Contractual Obligations
The
Company has no contractual obligations.
ITEM
3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Management
believes that the Company bears no direct market risk. The Company holds no debt or equity securities, no foreign currencies,
and has no credit facility. The two officers and directors of the Company have agreed to extend loans to the Company as needed
to meet obligations, however these will be interest free. The Company has not made any sales, purchases, or commitments with foreign
entities which would expose it to currency risks.
ITEM
4. CONTROLS AND PROCEDURES
Evaluation
of Disclosure Controls and Procedures
An
evaluation was carried out under the supervision and with the participation of our management, including our Principal Executive
Officer, of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report on
Form 10-Q. Disclosure controls and procedures are procedures designed with the objective of ensuring that information required
to be disclosed in our reports filed under the Securities Exchange Act of 1934, such as this Form 10-Q, is recorded, processed,
summarized and reported, within the time period specified in the Securities and Exchange Commission’s rules and forms, and
that such information is accumulated and is communicated to our management, including our Principal Executive Officer, or persons
performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. Based on that evaluation,
our management concluded that, as of March 31, 2017, our disclosure controls and procedures were not effective for the same reasons
that our internal controls over financial reporting were not adequate.
Management’s
Report on Internal Control over Financial Reporting
Our
management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is
defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, for the company. Internal control over financial reporting includes
those policies and procedures that: (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary
to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts
and expenditures are being made only in accordance with authorizations of its management and directors; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have
a material effect on the financial statements.
Management
recognizes that there are inherent limitations in the effectiveness of any system of internal control, and accordingly, even effective
internal control can provide only reasonable assurance with respect to financial statement preparation and may not prevent or
detect material misstatements. In addition, effective internal control at a point in time may become ineffective in future periods
because of changes in conditions or due to deterioration in the degree of compliance with our established policies and procedures.
A material weakness is a significant deficiency, or combination of significant deficiencies, that results in there being a more
than remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected.
Under
the supervision and with the participation of our Principal Executive Officer we conducted an evaluation of the effectiveness
of our internal control over financial reporting, as of March 31, 2017, based on the framework set forth in Internal Control-Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on our evaluation under
this framework, management concluded that our internal control over financial reporting was not effective as of the evaluation
date due to the factors stated below.
-
|
Insufficient
Resources:
We have an inadequate number of personnel with requisite expertise in the key functional areas of finance
and accounting to be able to have appropriately designed and operating entity level controls including risk assessment; information
and communication; monitoring; and financial reporting.
|
|
|
-
|
Inadequate
Segregation of Duties:
We have an inadequate number of personnel to properly segregate duties to implement control
procedures.
|
-
|
Lack
of Audit Committee and Outside Directors on the Company’s Board of Directors:
We do not have a functioning audit
committee or outside directors on our board of directors, resulting in ineffective oversight in the establishment and monitoring
of required internal controls and procedures.
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Management
is committed to improving its internal controls and will (1) continue to assess and address shortfalls in staffing and to assist
the Company with accounting and finance responsibilities, (2) increase the frequency of independent reconciliations of significant
accounts which will mitigate the lack of segregation of duties until there are sufficient personnel and (3) may consider appointing
outside directors and audit committee members in the future.
Management
has discussed the material weakness noted above with our independent registered public accounting firm. This report does not include
an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s
report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the SEC that permit
us to provide only management’s report in this quarterly report.
Changes
in Internal Control over Financial Reporting
There
have been no changes in the Company’s internal controls over financial reporting during the latest quarter that have materially
affected, or are reasonably likely to materially affect, its internal control over financial reporting
.
PART
II
ITEM
1. LEGAL PROCEEDINGS
There
is no litigation, pending or threatened, by or against the Company.
ITEM
1A. RISK FACTORS
Not
applicable.
ITEM
2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM
3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM
4. MINE SAFETY DISCLOSURES
Not
applicable.
ITEM
5. OTHER INFORMATION
None.
ITEM
6. EXHIBITS
31.1*
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Rule
13a-14(a)/15d-14(a) Certification of Chief Executive Officer
|
31.2*
|
Rule
13a-14(a)/15d-14(a) Certification of Chief Financial Officer
|
32.1*
|
Section
1350 Certification of Chief Executive Officer and Chief Financial Officer
|
|
|
101
|
The
following materials from the Company’s Quarterly Report on Form 10-Q for the Three Months Ending March 31, 2017, formatted
in XBRL (eXtensible Business Reporting Language); (i) Condensed Balance Sheets at March 31, 2017 (Unaudited) and December
31, 2016, (ii) Condensed Statement of Operations for the Three Months Ending March 31, 2017 and 2016 (Unaudited), (iii) Condensed
Statement of Changes in Stockholders’ Equity for the Three Months Ending March 31, 2017 (Unaudited), (iv) Condensed
Statement of Cash Flow for the Three Months Ending March 31, 2017 and 2016 (Unaudited), and (v) Notes to Unaudited Condensed
Financial Statements.
|
*
Filed herewith.
SIGNATURES
Pursuant
to the requirements 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.
|
BIM
HOMES, INC.
|
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(Registrant)
|
|
|
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Date:
May 22, 2017
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By:
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/s/
Milan Saha
|
|
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Milan
Saha
|
|
|
Chief
Executive Officer and Chief Financial Officer
|