3D PIONEER SYSTEMS, INC. - Quarter Report: 2013 October (Form 10-Q)

 UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10–Q

 

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended October 31, 2013

 

or

 

[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ____________ to ________________

 

Commission file number: 333-184026

 

 

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.  Yes [X]  No [  ] 

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes [X] 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 definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (Check one).

 

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [X ] No [  ]

 

As of December 20, 2013 there were 76,032,000 shares of the issuer’s common stock, par value $0.01, outstanding.

 

 

3D PIONEER SYSTEMS, INC.

 

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED OCTOBER 31, 2013

TABLE OF CONTENTS

 

 

 

PART I – FINANCIAL INFORMATION

 

Item 1.      Financial Statements.

 

The accompanying unaudited condensed 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 ("SEC"), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company's Form 10K filed with the SEC on October 29, 2013. 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 periods presented have been reflected herein. The results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year ending July 31, 2014.

3D PIONEER SYSTEMS, INC.

(A Development Stage Company)

 

 

INDEX TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

 

 

From Inception on April 22, 2008 through October 31, 2013

 

                                                                                                             

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these condensed financial statements.

 

 

 

 

 

 

The accompanying notes are an integral part of these condensed financial statements.

 

 

 

                                                 

 

 

3D PIONEER SYSTEMS, INC.

 (A Development Stage Company)

Notes to Condensed Financial Statements

October 31, 2013

(Unaudited)

 

NOTE 1 -  CONDENSED FINANCIAL STATEMENTS

 

The accompanying financial statements have been prepared by the Company without audit.  In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at October 31, 2013, and for all periods presented herein, have been made.

 

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted.  It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company's July 31, 2013 audited financial statements.  The results of operations for the period ended October 31, 2013 are not necessarily indicative of the operating results for the full years.

 

NOTE 2 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Development Stage Company

 

The Company is considered to be in the development stage as defined in Accounting Standards Codification (ASC) 915 “Development Stage Entities.”  The Company is devoting substantially all of its efforts to development of business plans.

 

Use of Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 amount of revenues and expenses during the reporting period.  Actual results could differ from those estimates. The Company’s periodic filings with the Securities and Exchange Commission include, where applicable, disclosures of estimates, assumptions, uncertainties and markets that could affect the financial statements and future operations of the Company.

Cash and Cash Equivalents

 

Cash and cash equivalents include cash in banks, money market funds, and certificates of term deposits with maturities of less than three months from inception, which are readily convertible to known amounts of cash and which, in the opinion of management, are subject to an insignificant risk of loss in value.  The Company had $34,982 and $2,231 in cash and cash equivalents at October 31, 2013 and July 31, 2013, respectively.

 

Fair value of financial instruments

 

The carrying amounts reported in the balance sheet for accounts payable approximate fair value because of their immediate or short term maturity.

 

 

 

 

Start-Up Costs

 

In accordance with ASC 720, “Start-up Activities”, the Company expenses all costs incurred in connection with the start-up and organization of the Company.

 

Basic and Diluted Net Loss Per Share of Common Stock

 

The Company has adopted ASC 260, “Earnings per Share,” (“EPS”) which requires presentation of basic and diluted EPS on the face of the income statement for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation.  In the accompanying financial statements, basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period.   As at October 31, 2013 the convertible debenture represents approximately 95,383 shares.

 

 

Concentrations of Credit Risk

 

The Company’s financial instruments that are exposed to concentrations of credit risk primarily consist of its cash and cash equivalents and related party payables it will likely incur in the near future.  The Company places its cash and cash equivalents with financial institutions of high credit worthiness.  At times, its cash and cash equivalents with a particular financial institution may exceed any applicable government insurance limits.  The Company’s management plans to assess the financial strength and credit worthiness of any parties to which it extends funds, and as such, it believes that any associated credit risk exposures are limited.

 

Revenue Recognition

 

The Company recognizes revenue from the sale of services in accordance with ASC 605, “Revenue Recognition.”  Revenue will consist of smartphone application monthly subscription fees and advertising and will be recognized only when all of the following criteria have been met:

 

i)         Persuasive evidence for an agreement exists;

ii)        Service has been provided;

iii)       The fee is fixed or determinable; and

iv)       Revenue is reasonably assured.

 

Recent Accounting Pronouncements

 

Except for rules and interpretive releases of the SEC under authority of federal securities laws and a limited number of grandfathered standards, the FASB Accounting Standards Codification™ (“ASC”) is the sole source of authoritative GAAP literature recognized by the FASB and applicable to the Company.  Management has reviewed the aforementioned rules and releases and believes any effect will not have a material impact on the Company's present or future consolidated financial statements.

 

NOTE 3 -  GOING CONCERN AND LIQUIDITY CONSIDERATIONS 

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business.  As of October 31, 2013, the Company has a loss from operations of $48,707 an accumulated deficit of $97,331 and has earned no revenues since inception.  The Company intends to fund operations through equity financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements for the year ending July 31, 2014.

 

 

The ability of the Company to emerge from the development stage is dependent upon, among other things, obtaining additional financing to continue operations, and development of its business plan.  In response to these problems, management intends to raise additional funds through public or private placement offerings.

 

These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern.  The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

NOTE 4 -   CAPITAL STOCK

Authorized Stock

 

At inception, the Company authorized 75,000,000 common shares with a par value of $0.001 per share. Each common share entitles the holder to one vote, in person or proxy, on any matter on which action of the stockholders of the corporation is sought.

 

Effective October 14, 2013, the Company increased the number of authorized common shares to 200,000,000 shares, with par value $0.01 per share.

 

Share Issuance

 

Effective October 14, 2013, the Company affected a 16 for 1 forward split of its common stock, under which each shareholder of record received sixteen (16) new shares of the Corporation’s common stock for every one (1) old share outstanding.

 

Since inception (April 22, 2008) to October 31, 2013, and retroactively adjusted to give effect to the 16 for 1 forward split, the Company has issued the following amount of shares:

 

·         During the period ended July 31, 2008, the Company issued 32,000 common shares to an officer and director at $0.000625 per share for $20.

·         During the year ended July 31, 2012, the Company issued 32,000,000 common shares to officers and a director at $0.000625 per share for $20,000. 

·         During the year ended July 31, 2013, the Company issued 44,000,000 common shares to unaffiliated investors at $0.000625 per share for $27,500.

 

There were 76,032,000 common shares issued and outstanding at October 31, 2013 and July 31, 2013.  Of these shares, 32,032,000 were issued to officers and a director of the Company.  

 

The Company has no stock option plan, warrants or other dilutive securities.

 

NOTE 5 – CONVERTIBLE NOTE PAYABLE

 

On September 26, 2013, the Company issued a note payable to an unrelated party for $50,000. The note bears interest at 12%, is unsecured, and matures on September 26, 2016. The note holder has the right to immediately convert the Note at any time and from time-to-time, in whole or in part, before the maturity date.  The note is convertible into shares of the Company’s common stock at 65% of the average closing prices for the previous five trading days prior to the conversion.

 

Since the note is convertible into a variable number of shares based on a fixed monetary value, the Company followed guidance in ASC 480-10-25-14.  This guidance requires the note and accrued interest to be classified as a liability and reported at its full fair value, which is the fixed monetary value of shares into which the note and accrued interest is convertible.  The excess of the amount recognized as a liability for the convertible debt over the proceeds received upon issuance was recognized as interest expense on the dates of issuance.

 

 

Convertible note payable at October 31, 2013 and July 31, 2013 is summarized as follows:

 

 

NOTE 6 – DUE TO RELATED PARTY

 

As at October 31, 2013 and July 31, 2013, the Company was obligated to an officer, who is also a stockholder, for expenses paid for on behalf of and amounts advanced to the Company in exchange for a non-interest bearing demand loan with a balance of $7,295 and $3,235, respectively. 

 

NOTE 7 -  SUBSEQUENT EVENTS

 

In accordance with ASC 855-10, Company management reviewed all material events through the date of this report and determined that there are no additional material subsequent events to report.

 

 

 

 

 

 

 

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

Forward-Looking Statements

 

Except for historical information, this report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.  Such forward-looking statements involve risks and uncertainties, including, among other things, statements regarding our business strategy, future revenues and anticipated costs and expenses.  Such forward-looking statements include, among others, those statements including the words “expects,” “anticipates,” “intends,” “believes” and similar language.  Our actual results may differ significantly from those projected in the forward-looking statements.   Factors that might cause or contribute to such differences include, but are not limited to, those discussed herein as well as in the “Description of Business – Risk Factors” section in our Prospectus, Form 424(B)(2), as filed on December 10, 2012.  You should carefully review the risks described in our Prospectus and in other documents we file from time to time with the Securities and Exchange Commission.  You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this report.  We undertake no obligation to publicly release any revisions to the forward-looking statements or reflect events or circumstances after the date of this document.

 

Although we believe that the expectations reflected in these forward-looking statements are based on reasonable assumptions, there are a number of risks and uncertainties that could cause actual results to differ materially from such forward-looking statements.

 

All references in this Form 10-Q to the “Company,” “3D Pioneer Systems,” “we,” “us,” or “our” are to 3D Pioneer Systems, Inc.

 

Corporate Overview

 

We were incorporated in the State of Nevada on April 22, 2008 and our fiscal year end is July 31. Effective October 14, 2013 we changed our name from Mobile Gaming International Corp. to 3D Pioneer Systems, Inc. The Company's administrative address is 22, Hanover Square, West Central, London, United Kingdom, W1S 1JP. The telephone number is 0044-203-700-8925.

 

3D Pioneer Systems, Inc. has no revenues, and has only limited cash on hand.  We have sustained losses since inception and have relied solely upon the sale of our securities and loans from our corporate officers and directors for funding.

 

3D Pioneer has never declared bankruptcy, been in receivership, or involved in any kind of legal proceeding.

 

Effective October 14, 2013, the Company increased the number of authorized common shares to 200,000,000 shares, with par value $0.01 per share.

  

Effective October 14, 2013, the Company affected a 16 for 1 forward split of its common stock, under which each shareholder of record received sixteen (16) new shares of the Corporation’s common stock for every one (1) old share outstanding.

 

Results of Operations

 

We have generated no revenues since inception and have incurred $97,331 in expenses through October 31, 2013.

 

 

The following table provides selected financial data about our company for the period ended October 31, 2013 and the year ended July 31, 2013. 

 

 

Three Month Period Ended October 31, 2013 Compared to the Three Months Ended October 31, 2012.

 

 

 

Our net loss for the three months ended October 31, 2013 was $48,707 compared to a net loss of $10,359 during the three months ended October 31, 2012.  Our increase in net loss was due primarily to an increase in professional fees of $10,638 and $27,498 in interest expense from convertible feature.

 

Plan of Operation

 

Our auditors have issued a going concern opinion on our audited financial statements for the year ended October 31, 2013.  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 for our expenses.  This is because we have not generated any revenues and no sales are yet possible.  There is no assurance we will ever reach this point.  Accordingly, we must raise sufficient capital from sources.  Our only other source for cash at this time is investments by others.  We must raise cash to stay in business.  In response to these problems, management intends to raise additional funds through public or private placement offerings.  At this time, however, the Company does not have plans or intentions to raise additional funds by way of the sale of additional securities. 

 

We sold 2,750,000 shares, to thirty one unaffiliated investors, for $27,500 under a prospectus offering which became effective December 7, 2012.  This offering was closed on February 28, 2013. 

 

On September 26, 2013, the Company issued a note payable to an unrelated party for $50,000. The note bears interest at 12%, is unsecured, and matures on September 26, 2016. The note holder has the right to immediately convert the Note at any time and from time-to-time, in whole or in part, before the maturity date.  The note is convertible into shares of the Company’s common stock at 65% of the average closing prices for the previous five trading days prior to the conversion.

 

As of October 31, 2013, the Company had $34,982 in cash on hand.

 

 

3D Pioneer Systems is a development stage company that has limited active operations, no revenue, no financial backing and limited assets.  The company will turn its business scope in the field of 3D printing. Since their first introduction in the 1970's, 3D printers have gone through significant improvement in the last decade to the point where industrial application is well established and pricing is within the reach of the general public.  

 

What is missing is an effective means of commercialization.  At the present time there exists an ad hoc, fragmented array of web sites offering designs for free or pre-developed items for sale by printing shops.  Neither is conducive to the full commercialization of the technology.

 

3D Pioneer Systems, Inc. is aiming, in its first stage, to develop a one stop web portal where designers, end-users and print shops can effortlessly communicate and transact business that adds value to all the stakeholders.  This is the service that will move the technology into a mature product attractive to high-growth adoption to the benefit of the company and its shareholders, by exploiting the missing of effective means of commercialization of that technology and the current fragmentation that appears in the world wide market.

 

We anticipate hiring staff during the next 12 months of operation.

  

We have no plans to undertake any product research and development during the next 12 months.

 

Limited Operating History; Need for Additional Capital

 

There is no historical financial information about us on which to base an evaluation of our performance.  We are a development stage company and have not generated revenues from operations.  We cannot guarantee we will be successful in our business operations.  Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources, possible delays in developing our products or services and possible cost overruns due to the price and cost increases in supplies and services.

 

We will require additional funds to operate for the next year and to develop our planned business development. We feel we will need at least $25,000 for professional fees for the next 12-months related to your regulatory filing requirements. 

 

We have no assurance that future financing will be available to us on acceptable terms.  If financing is not available on satisfactory terms, we may be unable to continue, develop or expand our operations.  Equity financing could result in additional dilution to existing shareholders.

 

We have no plans to undertake any product research and development during the next twelve months.  There are also no plans or expectations to acquire or sell any plant or plant equipment in the first year of operations.

 

Liquidity and Capital Resources

 

To meet our need for cash, we raised money from our public offering.  We raised $27,500 from the sale of 2,750,000 registered shares pursuant to our S-1 Registration Statement filed with the SEC under file number 333-184026, which became effective on December 7, 2012.  The offering was closed on February 28, 2013.

 

On September 26, 2013, the Company issued a note payable to an unrelated party for $50,000. The note bears interest at 12%, is unsecured, and matures on September 26, 2016. The note holder has the right to immediately convert the Note at any time and from time-to-time, in whole or in part, before the maturity date.  The note is convertible into shares of the Company’s common stock at 65% of the average closing prices for the previous five trading days prior to the conversion.

 

    

As of October 31, 2013, we owe the past sole officer and director who resigned on November 1, 2013, $7,295.

 

We received our initial funding of $20,020 through the sale of common stock to Francis Ciganek, who purchased 2,000 and 1,000,000 shares of common stock at $0.01 on April 25, 2008 and May 15, 2012 respectively; and, Iris Hill, who purchased 1,000,000 shares of common stock on June 22, 2012 at $0.01.  Our financial statements from inception (April 22, 2008) through the period ended October 31, 2013, reported no revenues and a net loss of $49,811. 

 

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.

 

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.

 

As a “smaller reporting company”, we are not required to provide the information required by this Item.

 

Item 4.  Controls and Procedures.

 

Management’s Report on Disclosure Controls and Procedures

 

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our president (our principal executive officer, principal financial officer and principle accounting officer) to allow for timely decisions regarding required disclosure.

 

As of the end of the quarter covered by this report, we carried out an evaluation, under the supervision and with the participation of our president (our principal executive officer, principal financial officer and principle accounting officer), of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our president (our principal executive officer, principal financial officer and principle accounting officer) concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this quarterly report.

 

Changes in Internal Control over Financial Reporting

 

There have been no changes in our internal controls over financial reporting that occurred during the quarter ended October 31, 2013, that have materially or are reasonably likely to materially affect, our internal controls over financial reporting.

 

 

 

 

 

PART II – OTHER INFORMATION

 

Item 1.  Legal Proceedings.

 

We know of no material, existing or pending legal proceedings against our Company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered beneficial shareholder, is an adverse party or has a material interest adverse to our interest.

 

Item 1A.  Risk Factors.

 

As a “smaller reporting company”, we are not required to provide the information required by this Item.

 

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.

 

We did not issue unregistered equity securities during the quarter ended October 31, 2013.

 

Item 3.  Defaults Upon Senior Securities.

 

None.

 

Item 4.  Mine Safety Disclosures.

 

Not applicable.

 

Item 5.  Other Information.

 

None.

 

Item 6.  Exhibits.

 

The following exhibits are included as part of this report:

 

Exhibit No.      Description

 

31.1                 Rule 13(a)-14(a)/15(d)-14(a) Certification of Principal Executive and Financial Officer

32.1                 Rule 1350 Certification of Principal Executive and Financial Officer

101.INS*         XBRL Instance

101.SCH*        XBRL Taxonomy Extension Schema

101.CAL*        XBRL Taxonomy Extension Calculations

101.DEF*        XBRL Taxonomy Extension Definitions

101.LAB*        XBRL Taxonomy Extension Labels

101.PRE*        XBRL Taxonomy Extension Presentation

 

*  XBRL Information is furnished and not filed or a part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

 

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.