ARTELO BIOSCIENCES, INC. - Quarter Report: 2015 February (Form 10-Q)

Nevada		33-1220924
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

Large accelerated filer [  ]		Accelerated filer [  ]
Non-accelerated filer [  ] (Do not check if a smaller reporting company)		Smaller reporting company [X]

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	Page
Balance Sheets	4
Statements of Operations	5
Statements of Stockholders' Equity	6
Statements of Cash Flows	7
Notes to the Interim Financial Statements	8

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

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

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

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

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		February 28,
		2015				2014
Income tax expense at statutory rate		$	(2,771	)		$	(2,242	)
Change in valuation allowance			2,771				2,242
Income tax expense per books		$	-			$	-

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Net deferred tax assets consist of the following components as of:

NOTE 6 – RELATED PARTY TRANSACTIONS

On February 26, 2014, the company issued 6,000,000 shares of common stock to an officer and director at $0.005 per share for $30,000 cash.

The Company does not own or lease property or lease office space. The office space used by the Company was arranged by the founder of the Company to use at no charge.

The Company does not have employment contracts with its key employees, including the controlling shareholder who is an officer of the Company.

The amounts and terms of the above transactions may not necessarily be indicative of the amounts and terms that would have been incurred had comparable transactions been entered into with independent third parties.

NOTE 7 – COMMITMENTS AND CONTINGENCIES

The Company has no commitments or contingencies as at February 28, 2015 and August 31, 2014.

From time to time the Company may become a party to litigation matters involving claims against the Company.  Management believes that there are no current matters that would have a material effect on the Company's financial position or results of operations.

NOTE 8 -SUBSEQUENT EVENTS

Management has evaluated subsequent events through the date these financial statements were available to be issued, the date of filing with the Securities and Exchange Commission.  Based on our evaluation no events have occurred that require disclosure.

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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 "Risk Factors" section in our Registration Statement on Form S-1/A-2, as filed on January 23, 2015. You should carefully review the risks described in our Registration Statement 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.

 

 

Our unaudited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.

 

Overview

Knight Knox Development Corp. (the "Company"), was incorporated in the State of Nevada on May 2, 2011.  Knight Knox is an e-commerce development stage company that intends to operate a fully functional auction site where customers can register for an account and sell and purchase goods and services. The Company owns and will utilize the domain www.offeritnow.com to offer these services.  The site will also contain a classified section where customers can advertise items for sale.

Our business and corporate address is Kemp House, City Road, London, England EC1V 2NX.  Our telephone number is 800-902-278 and our registered agent for service of process is Robert C. Harris, 564 Wedge Lane, Fernley, NV 89408.  Our fiscal year end is August 31.

We are a development stage company and have commenced only minimal business operations and have not generated any revenues. We have been issued a "going concern" opinion by our auditor, based upon our reliance on the sale of our common stock as the sole source of funds for our current operations.

To meet our need for cash, on October 8, 2014, the Company filed a Prospectus as part of its Registration Statement on Form S-1 which the Company registered a total of 8,000,000 shares of our common stock and sought to raise $80,000 under the Offering. All of the shares being registered for sale by the Company will be sold at a price per share of $0.01 for the duration of the Offering.

We will be selling the 8,000,000 shares of common stock we are offering as a self-underwritten offering. There is no minimum amount we are required to raise in this Offering, and any funds received will be immediately available to us.  This Offering will terminate on the earlier of the sale of all of the shares offered or 270 days after the date of the Prospectus, unless extended an additional 90 days by our board of directors.

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Results of Operations

The following summary of our results of operations, for the three and six months ended February 28, 2015 and 2014, should be read in conjunction with our interim financial statements, as included in this Form 10-Q and our audited financial statements for the year ended August 31, 2014, as included in our Registration Statement S-1/A-2 filed with the SEC on January 23, 2015.

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, but we cannot guarantee that we will be able to achieve same.

 

The following table provides selected financial data about our company as of February 28, 2015 and August 31, 2014.

 

Balance Sheet Data

		February 28,				August 31,
		2015				2014
Cash		$	8,081			$	14,731
Total Assets		$	8,081			$	14,731
Total Liabilities		$	1,500			$	-
Stockholders' Equity		$	6,581			$	14,731

We have not generated any revenues since inception through February 28, 2015. The decrease in cash was primarily due to cash used in operation expenses.

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For the Three Months Ended February 28, 2015 Compared to the Three Months Ended February 28, 2014

		Three months ended
		February 28,
		2015				2014
Revenue		$	-			$	-
Operating Expenses
General and administrative			-				95
Professional fees			6,150				6,500
Total Operating Expenses			6,150				6,595
Loss from Operations			(6,150	)			(6,595	)
Provision for income taxes			-				-
Net Loss		$	(6,150	)		$	(6,595	)

Our operating expenses, for the three months ended February 28, 2015 were $6,150 compared to $6,595, the same period in 2014. Our operating expenses were primarily composed of professional fees related to the S-1 registration.

 

For the Six Months Ended February 28, 2015 Compared to the Six Months Ended February 28, 2014

		Six Months Ended
		February 28,
		2015				2014
Revenue		$	-			$	-
Operating Expenses
General and administrative			-				95
Professional fees			8,150				6,500
Total Operating Expenses			8,150				6,595
Loss from Operations			(8,150	)			(6,595	)
Provision for income taxes			-				-
Net Loss		$	(8,150	)		$	(6,595	)

Our operating expenses, for the six months ended February 28, 2015 were $8,150 compared to $6,595, the same period in 2014. Our operating expenses were primarily composed of professional fees related to the S-1 registration.

Our operating expenses, for the six months ended February 28, 2014 were lower due to less activities during September 1, 2013 to November 30, 2013.

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Liquidity and Capital Resources

		February 28,				August 31,
		2015				2014
Current Assets		$	8,081			$	14,731
Current Liabilities			1,500				-
Working Capital		$	6,581			$	14,731

		Six Months Ended
		February 28,
		2015				2014
Cash Flows used in Operating Activities		$	(6,650	)		$	(95	)
Cash Flows used in Investing Activities			-				-
Cash Flows provided by Financing Activities			-				30,000
Net (decrease) increase in Cash During Period		$	(6,650	)		$	29,905

Cash Flow from Operating Activities

 

During the six month period ended February 28, 2015, cash used in operating activities was $6,650 compared to cash used in operating activities of $95 during the period ended February 28, 2014. The cash used from operating activities was primarily attributed to professional fees related to its recent prospectus offering.

Cash Flow from Investing Activities

The company did not use any funds for investing activities in the six months ended February 28, 2015 & 2014.

Cash Flow from Financing Activities

During the six months ended February 28, 2015, the company received $0 in cash in financing, compare to $30,000 cash received from James Manley, an officer of the Company, for subscription of 6,000,000 shares of the Company's common stock.

Going Concern

Our auditors issued a going concern opinion on our financial statements as of and for the period ended August 31, 2014.  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 sufficient revenues to cover operating costs or raised enough funds.  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 investment by our sole director and officer.  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, other than pursuant to our current Offering.

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.

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Critical Accounting Policies and Estimates

We prepare our financial statements in conformity with GAAP, which requires management to make certain estimates and apply judgments. We base our estimates and judgments on historical experience, current trends and other factors that management believes to be important at the time the consolidated financial statements are prepared. On a regular basis, we review our accounting policies and how they are applied and disclosed in our consolidated financial statements.

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. Control and Procedures.

 

Evaluation of Disclosure Controls and Procedures

 

Our management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures as defined in Rule 13a-15(e) under the Exchange Act as of the end of the period covered by this Quarterly Report on Form 10-Q.  In designing and evaluating the disclosure controls and procedures, our management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.  In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.  The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Based on that evaluation, our chief executive officer and chief financial officer concluded that, as of August 31, 2014 and February 28, 2015, our disclosure controls and procedures were not effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules, regulations and forms, and (ii) that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

 

Changes in Internal Controls Over Financial Reporting

 

There were no changes in the Company's internal controls over financial reporting that occurred during the period covered by this Report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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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.

None.

Item 4.  Mine Safety Disclosures.

Not applicable.

Item 5.  Other Information.

 

None.

 

Item 6. Exhibits.

 

Exhibit Number		Description of Exhibit
3.1		Articles of Incorporation (incorporated by reference to our Registration Statement on Form S-1 filed on October 8, 2014)
3.2		Bylaws (incorporated by reference to our Registration Statement on Form S-1 filed on October 8, 2014)
31.1*		Rule 13a-14(a) / 15d-14(a) Certification of Chief Executive Officer and Chief Financial Officer.
32.1*		Section 1350 Certification of Chief Executive Officer and Chief Financial Officer.
101.INS 101.SCH 101.CAL 101.DEF 101.LAB 101.PRE		XBRL Instance Document XBRL Taxonomy Extension Schema Document XBRL Taxonomy Extension Calculation Linkbase Document XBRL Taxonomy Extension Definition Linkbase Document XBRL Taxonomy Extension Label Linkbase Document XBRL Taxonomy Extension Presentation Linkbase Document

 

*Filed herewith

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SIGNATURES

 

 

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