The following discussion of our financial condition and results of operations
should be read in conjunction with our financial statements for the years ended
June 30, 2016 and June 30, 2015 together with notes thereto as included in this
Annual Report on Form 10-K. 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 Annual Report,
particularly in the section entitled "Risk Factors." Our audited financial
statements are stated in United States Dollars and are prepared in accordance
with United States Generally Accepted Accounting Principles.
We are a development stage company since we have no current operations, are
currently pursuing options to find suitable merger candidates and have not
generated any significant revenue to date. We have incurred recurring losses to
date. Our financial statements have been prepared assuming that we will continue
as a going concern and, accordingly, do not include adjustments relating to the
recoverability and realization of assets and classification of liabilities that
might be necessary should we be unable to continue in operation.
We expect we will require additional capital to meet our long-term operating
requirements. We expect to raise additional capital through, among other things,
the sale of equity or debt securities.
RESULTS OF OPERATION
Year Ended June 30, 2016 Compared to Year Ended June 30, 2015
Our net loss for the year ended June 30, 2016 was ($141,067) compared to a net
loss of ($282,683) during the year ended June 30, 2015. The decrease in net loss
was mainly due to the decrease in management fees and the bad debt incurred in
the Kerr Transaction. We had advanced $100,000 to Kerr in May 2014 and a further
$100,000 to Kerr in July 2014. Kerr subsequently ceased business operations.
Therefore, at June 30, 2015, the original $100,000 was determined to be a bad
debt and, therefore, was recorded as bad debt for the year ended June 30, 2014.
The remaining $100,000 was reflected as a bad debt during the year ended June
30, 2015. During the years ended June 30, 2016 and June 30, 2015, we did not
generate any revenue.
During the year ended June 30, 2016, we incurred operating expenses of $138,371
compared to $279,933 incurred during the year ended June 30, 2015. The decrease
in operating expenses was mainly due to the decrease in management fees. In
addition, we had advanced $100,000 to Kerr in May 2014 and a further $100,000 to
Kerr in July 2014. Kerr subsequently ceased business operations. Therefore, at
June 30, 2014, the original $100,000 was determined to be a bad debt and,
therefore, was recorded as bad debt for the year ended June 30, 2014. The
remaining $100,000 was reflected as a bad debt during the year ended June 30,
2015.
During the year ended, we incurred interest expenses of $2,696, compared to
$2,750 incurred during the year ended June 30, 2015.
On January 1, 2015, the company entered into a management agreement with Mr.
Horkey for a period of 5 years and will issue 350,000 shares of its common stock
as consideration and is accounted for on the balance sheet as shares to be
issued and will be expensed over the life of the contract (5 years), which
resulted in a prepaid consulting expense of $210,000. For the year ended June
30, 2015, we expensed $42,000 in consulting expense for Mr. Horkey They were
valued on the date of the agreement and the stock price at that time was $.60.
Therefore, our net loss and loss per share during the year ended June 30, 2016
was ($141,067) to a net loss for year ended June 30, 2015 of ($282,683).
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LIQUIDITY AND CAPITAL RESOURCES
Year Ended June 30, 2016
As of June 30, 2016, our current assets were $0 and our current liabilities were
$219,056, which resulted in a working capital deficit of $219,056. As of June
30, 2016, current assets were comprised of $0 in cash and cash equivalents. As
of June 30, 2016, current liabilities were comprised of $152,546 due to related
parties and $12,610 in accounts payable and accrued expenses and notes payable
related party of $53,900. As of June 30, 2015, our current assets were $26 and
our current liabilities were $150,015, which resulted in a working capital
deficit of $149,989. As of June 30, 2015, current assets were comprised of $26
in cash and cash equivalents. As of June 30, 2015, current liabilities were
comprised of $89,850 due to related parties, $6,265 in accounts payable and
accrued expenses and notes payable related party of $53,900.
As of June 30, 2016, our total liabilities were $219,056 comprised entirely of
current liabilities. The increase in liabilities during the year ended June 30,
2016 from the year ended June 30, 2015 was primarily due to increase in amounts
due to other related parties and Management Fees.
Cash Flows from Operating Activities
For the year ended June 30, 2016, net cash flows used in operating activities
was $(26) compared to net cash used in operating activity of $103,937 for the
same period in 2015.
Cash Flows from Investing Activities
For the year ended June 30, 2016 and June 30, 2015, net cash flows used in
investing activities was $0.
Cash Flows from Financing Activities
For the year ended June 30, 2016, net cash flows from financing activities was
$0. For the year ended June 30, 2015, net cash flows provided by financing
activities was $103,900.
PLAN OF OPERATION AND FUNDING
We expect that working capital requirements will continue to be funded through a
combination of our proceeds from the sales of stock and generation of revenues
from acquisitions. Our working capital requirements are expected to increase in
line with the growth of our business.
Our principal demands for liquidity are to increase business operations and for
general corporate purposes. We intend to meet our liquidity requirements,
including capital expenditures related to future business operations, and the
expansion of our business, through cash flow provided by funds raised through
proceeds from the issuance of debt or equity.
MATERIAL COMMITMENTS
Convertible Debenture
As of June 30, 2014, we had a note payable dated June 30, 2010 in the principal
amount of $1,253,095. As of March 31, 2015, this note has been either converted
to stock or paid. The note payable accrues interest at the rate of 5% per annum,
however that interest has been forgiven each year by the note holders. As of
September 21, 2014, the note payable balance of $691,926 ($650,000 at June 30,
2013 plus additional advances of $41,926 for the year ended June 30, 2014) has
been converted into shares of common stock. See "Item 5.
PURCHASE OF SIGNIFICANT
EQUIPMENT
We do not intend to purchase any significant equipment during the next twelve
months.
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OFF-BALANCE SHEET ARRANGEMENTS
As of the date of this Annual Report, 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 are material to investors.
RESULTS OF OPERATION
Quarter Ended September 30, 2015 Compared to Quarter Ended September 30, 2014
Our net loss for the quarter ended September 30, 2015 was ($34,075) compared to
a net loss of ($130,959) during the quarter ended September 30, 2014. The
decrease in net loss was mainly due to the fact we had advanced $100,000 to Kerr
in May 2014 and a further $100,000 to Kerr in July 2014. Kerr subsequently
ceased business operations. Therefore, at September 30, 2014, the original
$100,000 was determined to be a bad debt and, therefore, was recorded as bad
debt for the Year ended June 30, 2014. The remaining $100,000 was reflected as a
bad debt during the quarter ended September 30, 2014. During the quarters ended
September 30, 2015 and September 30, 2014, we did not generate any revenue.
During the quarter ended September 30, 2015, we incurred operating expenses of
$33,401 compared to $130,959 incurred during the quarter ended September 30,
2014. The decrease in net loss was mainly due to the fact we had advanced
$100,000 to Kerr in May 2014 and a further $100,000 to Kerr in July 2014. Kerr
subsequently ceased business operations. Therefore, at September 30, 2014, the
original $100,000 was determined to be a bad debt and, therefore, was recorded
as bad debt for the Year ended June 30, 2014. The remaining $100,000 was
reflected as a bad debt during the quarter ended September 30, 2014.
During the quarter ended September 30, 2015, we incurred interest expenses of
$674 compared to $0 incurred during the quarter ended September 30, 2014.
LIQUIDITY AND CAPITAL RESOURCES
Quarter Ended September 30, 2015
As of September 30, 2015, our current assets were $0 and our current liabilities
were $166,064, which resulted in a working capital deficit of $166,064. As of
September 30, 2015, current assets were comprised of $0 in cash and cash
equivalents. As of September 30, 2015, current liabilities were comprised of
$105,524 due to related parties and $6,640 in accounts payable and accrued
expenses and notes payable related party $53,900. As of September 30, 2014, our
current assets were $26 and our current liabilities were $150,015, which
resulted in a working capital deficit of $149,989. As of June 30, 2015, current
assets were comprised of $26 in cash and cash equivalents. As of June 30, 2015,
current liabilities were comprised of $89,850 due to related parties and $6,265
in accounts payable and accrued expenses and notes payable related party
$53,900.
As of September 30, 2015, and 2014, our total liabilities were comprised
entirely of current liabilities.
Cash Flows from Operating Activities
For the three months ended September 30, 2015, net cash flows used in operating
activities was $(26) compared to net cash provided by operating activity of $39
for the same period in 2014.
Cash Flows from Investing Activities
For the three months ended September 30, 2015 and September 30, 2014, net cash
flows used in investing activities was $0.
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Cash Flows from Financing Activities
For the three months ended September 30, 2015 and 2014, net cash flows from
financing activities was $0.
PLAN OF OPERATION AND FUNDING
We expect that working capital requirements will continue to be funded through a
combination of our proceeds from the sales of stock and generation of revenues
from acquisitions. Our working capital requirements are expected to increase in
line with the growth of our business.
Our principal demands for liquidity are to increase business operations and for
general corporate purposes. We intend to meet our liquidity requirements,
including capital expenditures related to future business operations, and the
expansion of our business, through cash flow provided by funds raised through
proceeds from the issuance of debt or equity.
MATERIAL COMMITMENTS
Convertible Debenture
As of March 31, 2014, we have a note payable dated June 30, 2010 in the
principal amount of $1,253,095 of which As of September 30, 2015 this note has
been either converted to stock or paid in full. The note payable accrued
interest at the rate of 5% per annum, however that interest has been forgiven
each year by the note holders. As of September 14, 2014, the amounts due to
related parties on convertible notes was $0. The Board of Directors approved
convert $691,926 of these related party notes payable, however as of September
30, 2015, the Shares have yet to be issued.
PURCHASE OF SIGNIFICANT EQUIPMENT
We do not intend to purchase any significant equipment during the next twelve
months.
OFF-BALANCE SHEET ARRANGEMENTS
As of the date of this Quarterly Report, 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 are material to investors.
RESULTS OF OPERATION
Quarter Ended December 31, 2015 Compared to Quarter Ended December 31, 2014
Our net loss for the quarter ended December 31, 2015 was ($35,630) compared to a
net loss of ($70,447) during the quarter ended December 31, 2014. The decrease
in net loss was mainly due to the decrease in management and consulting fees.
During the quarters ended December 31, 2015 and December 31, 2014, we did not
generate any revenue.
During the quarter ended December 31, 2015, we incurred operating expenses of
$34,956 compared to $69,044 incurred during the quarter ended December 31, 2014.
The decrease in net loss was mainly due to the decrease in management and
consulting fees.
During the quarter ended December 31, 2015, we incurred interest expenses of
$674 compared to $1,403 incurred during the quarter ended December 30, 2014.
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Six Months Ended December 31, 2015 Compared to Six Months Ended December 31,
2014
Our net loss for the six months ended December 31, 2015 was ($69,705) compared
to a net loss of ($201,406) during the six months ended December 31, 2014. This
decrease was mainly due to the Bad debt expense incurred and increase in
Management and consulting expense in the six months ended December 31, 2014.
During the six months ended December 31, 2015 and December 31, 2014, we did not
generate any revenue.
During the six months ended December 31, 2015, we incurred operating expenses of
$68,357 compared to $200,003 incurred during the six months ended December 31,
2014. The decrease in operating expenses was primarily attributable to the
$100,000 of bad debts during the six months ended December 31, 2014. We had
advanced $100,000 to Kerr in May 2014 and a further $100,000 to Kerr in July
2014. Kerr subsequently ceased business operations. Therefore, at June 30, 2014,
the original $100,000 was determined to be a bad debt and, therefore, was
recorded as bad debt for the year ended June 30, 2014. The remaining $100,000
was reflected as a bad debt during the six months ended December 31, 2014.
During the six months ended December 31, 2015, we incurred interest expenses of
$1,348 compared to $1,403 incurred during the six months ended December 31,
2014.
LIQUIDITY AND CAPITAL RESOURCES
Six Months Ended December 31, 2015
As of December 31, 2015, our current assets were $0 and our current liabilities
were $183,694, which resulted in a working capital deficit of $183,694. As of
December 31, 2015, current assets were comprised of $0 in cash and cash
equivalents. As of December 31, 2015, current liabilities were comprised of
$121,199 due to related parties and $8,595 in accounts payable and accrued
expenses and $53,900 in notes payable related party. As of June 30, 2015, our
current assets were $26 and our current liabilities were $150,015, which
resulted in a working capital deficit of $149,989. As of June 30, 2015, current
assets were comprised of $26 in cash and cash equivalents. As of June 30, 2015,
current liabilities were comprised of $89,850 due to related parties and $6,265
in trade accounts payable and accrued expenses and $53,900 in notes payable
related party.
As of December 31, 2015, and June 30, 2015 our total liabilities were entirely
of current liabilities.
Cash Flows from Operating Activities
For the six months ended December 31, 2015, net cash flows used in operating
activities was $(26) compared to net cash used in operating activity of
$(103,837) for the same period in 2014.
Cash Flows from Investing Activities
For the six months ended December 31, 2015 and December 31, 2014, net cash flows
used in investing activities was $0.
Cash Flows from Financing Activities
For the six months ended December 31, 2015 and 2014, net cash flows from
financing activities was $0 and $103,905 respectively.
PLAN OF OPERATION AND FUNDING
We expect that working capital requirements will continue to be funded through a
combination of our proceeds from the sales of stock and generation of revenues
from acquisitions. Our working capital requirements are expected to increase in
line with the growth of our business.
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Our principal demands for liquidity are to increase business operations and for
general corporate purposes. We intend to meet our liquidity requirements,
including capital expenditures related to future business operations, and the
expansion of our business, through cash flow provided by funds raised through
proceeds from the issuance of debt or equity.
MATERIAL COMMITMENTS
Convertible Debenture
As of March 31, 2014, we have a note payable dated June 30, 2010 in the
principal amount of $1,253,095 of which As of December 31, 2014 this note has
been either converted to stock or paid in full. The note payable accrued
interest at the rate of 5% per annum, however that interest has been forgiven
each year by the note holders. As of September 14, 2014, the amounts due to
related parties on convertible notes was $0. The Board of Directors approved
convert $691,926 of these related party notes payable, however as of December
31, 2015, the Shares have yet to be issued.
PURCHASE OF SIGNIFICANT EQUIPMENT
We do not intend to purchase any significant equipment during the next twelve
months.
OFF-BALANCE SHEET ARRANGEMENTS
As of the date of this Quarterly Report, 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 are material to investors.
RESULTS OF OPERATION
Quarter Ended March 31, 2016 Compared to Quarter Ended March 31, 2015
Our net loss for the quarter ended March 31, 2016 was ($35,592) compared to a
net loss of ($35,553) during the quarter ended March 31, 2015. During the
quarters ended March 31, 2016 and March 31, 2015, we did not generate any
revenue.
During the quarter ended March 31, 2016, we incurred operating expenses of
$34,918 compared to $34,879 incurred during the quarter ended March 31, 2015.
During the quarter ended March 31, 2016, we incurred interest expenses of $674
compared to $674 incurred during the quarter ended March 31, 2015.
Nine months Ended March 31, 2016 Compared to Nine months Ended March 31, 2015
Our net loss for the nine months ended March 31, 2016 was ($105,296) compared to
a net loss of ($236,959) during the nine months ended March 31, 2015. This
decrease was mainly due to the Bad debt expense incurred and increase in
Management and consulting expense in the nine months ended March 31, 2015.
During the quarters and nine months ended March 31, 2016 and March 31, 2015, we
did not generate any revenue.
During the nine months ended March 31, 2016, we incurred operating expenses of
$103,274 compared to $234,882 incurred during the nine months ended March 31,
2015. The decrease in operating expenses was primarily attributable to the
$100,000 of bad debt expense incurred during the nine months ended March 31,
2015 and the decrease in management and consulting expense. We had advanced
$100,000 to Kerr in May 2014 and a further $100,000 to Kerr in July 2014. Kerr
subsequently ceased business operations. Therefore, at June 30, 2014, the
original $100,000 was determined to be a bad debt and, therefore, was recorded
as bad debt for the year ended June 30, 2014. The remaining $100,000 was
reflected as a bad debt during the nine months ended March 31, 2015.
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On January 1, 2015, the company entered into a management agreement with Frank
Horkey for a period of 5 years and will issue 350,000 shares of its common stock
as consideration and is accounted for on the balance sheet as shares to be
issued and will be expensed over the life of the contract (5 years), which
resulted in a prepaid consulting expense of $210,000. They were valued on the
date of the agreement and the stock price at that time was $.60. As of March 31,
2016, the shares were unissued and recorded as shares to be issued. We did incur
management fees of $45,000 for the nine months ended March 31, 2016 compared to
$95,900 to outside consultants during the nine months ended March 31, 2015 to
locate and vet potential acquisition candidates.
LIQUIDITY AND CAPITAL RESOURCES
Nine months Ended March 31, 2016
As of March 31, 2016, our current assets were $0 and our current liabilities
were $201,286, which resulted in a working capital deficit of $201,286. As of
March 31, 2016, current assets were comprised of $0 in cash and cash
equivalents. As of March 31, 2016, current liabilities were comprised of
$136,873 due to related parties, Notes payable to related parties of $53,900 and
$10,513 in accounts payable and accrued expenses. As of June 30, 2015, our
current assets were $26 and our current liabilities were $150,015, which
resulted in a working capital deficit of $149,989. As of June 30, 2015, current
assets were comprised of $26 in cash and cash equivalents. As of June 30, 2015,
current liabilities were comprised of $89,850 due to related parties $6,265 in
trade accounts payable and accrued expenses and notes payable related party and
notes payable related parties of $53,900.
As of March 31, 2016, our total liabilities were comprised entirely of current
liabilities.
Cash Flows from Operating Activities
For the nine months ended March 31, 2016, net cash flows used in operating
activities was $(26) compared to net cash used in operating activity of
$(103,867) for the same period in 2015.
Cash Flows from Investing Activities
For the nine months ended March 31, 2016 and March 31, 2015, net cash flows used
in investing activities was $0.
Cash Flows from Financing Activities
For the nine months ended March 31, 2016, net cash flows from financing
activities was $0. For the nine months ended March 31, 2015 net cash flows used
in financing activities was $103,900.
PLAN OF OPERATION AND FUNDING
We expect that working capital requirements will continue to be funded through a
combination of our proceeds from the sales of stock and generation of revenues
from acquisitions. Our working capital requirements are expected to increase in
line with the growth of our business.
Our principal demands for liquidity are to increase business operations and for
general corporate purposes. We intend to meet our liquidity requirements,
including capital expenditures related to future business operations, and the
expansion of our business, through cash flow provided by funds raised through
proceeds from the issuance of debt or equity.
MATERIAL COMMITMENTS
Convertible Debenture
As of March 31, 2016, we have a note payable dated June 30, 2010 in the
principal amount of $1,253,095. As of March 31, 2016, this note has been either
converted to stock or paid. The note payable accrues interest at the rate of 5%
per annum, however that interest has been forgiven each year by the note
holders. As of September 14, 2014, the amounts due to related parties on
convertible notes was $0. The Board of Directors approved convert $691,926 of
these related party notes payable, however as of March 31, 2016, the Shares have
yet to be issued.
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PURCHASE OF SIGNIFICANT EQUIPMENT
We do not intend to purchase any significant equipment during the next twelve
months.
GOING CONCERN
The independent auditors' report accompanying our June 30, 2016 and June 30,
2015 financial statements contains an explanatory paragraph expressing
substantial doubt about our ability to continue as a going concern. The
financial statements have been prepared "assuming that we will continue as a
going concern," which contemplates that we will realize our assets and satisfy
our liabilities and commitments in the ordinary course of business. We have
suffered recurring losses from operations and have a working capital deficit.
These factors raise substantial doubt about our ability to continue as a going
concern.
RECENTLY ISSUED ACCOUNTING STANDARDS
The following describes the recently issued accounting standards used in
reporting our financial condition and results of operations. In some cases,
accounting standards allow more than one alternative accounting method for
reporting. Such is the case with accounting for oil and gas activities described
below. In those cases, our reported results of operations would be different
should we employ an alternative accounting method.
Management does not believe that any other recently issued, but not yet
effective accounting pronouncements, if adopted, would have a material effect on
the accompanying consolidated financial statements.
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