Bioquest Corp - Quarter Report: 2014 October (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

__________________

FORM 10-Q

__________________

For the quarterly period ended October 31, 2014

OR

For the transition period from ______ to ______.

Commission File Number: 333-186461

 _______________________________________

SELECT-TV SOLUTIONS, INC.

(Exact name of registrant as specified in its charter)

_______________________________________

(418) 264-7134

(Registrant’s telephone number, including area code)

____________________________________

(Former name and address of registrant)

_________________________________________

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 o  

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 o  

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:

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

As of December 10, 2014, the registrant had 156,720,845 shares of its Common Stock, $0.001 par value, outstanding.  

SELECT-TV SOLUTIONS INC.

FORM 10-Q

OCTOBER 31, 2014

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION

Item 1.    Financial Statements

Select-TV Solutions, Inc.

Consolidated Balance Sheets

See accompanying notes to consolidated financial statements.

Select-TV Solutions, Inc.

Consolidated Statements of Operations

(Unaudited)

See accompanying notes to consolidated financial statements.

Select-TV Solutions, Inc.

Consolidated Statements of Cash Flows

(unaudited)

Continued

Select-TV Solutions, Inc.

Consolidated Statements of Cash Flows (Continued)

(unaudited)

See accompanying notes to consolidated financial statements.

Select-TV Solutions, Inc.

Notes to Consolidated Financial Statements

October 31, 2014

(Unaudited)

Note 1 – Organization, Presentation and Going Concern

Organization

Select-TV Solutions, Inc. (the "Company" or “SELT”) was incorporated in Nevada on May 17, 2011 under the name of Renaissance Films Inc. (“RFI”) and intended to produce documentary films. On September 26, 2011, the Company changed its name to Sedition Films Inc.

On April 7, 2014, the Company experienced a change in control.  Conseil Plumage Blanc Ltd. (“CPB”) acquired a majority of the issued and outstanding common stock of the Company in accordance with a stock purchase agreement by and between CPB and Jesse Lawrence, the Company’s former director and majority shareholder.  On the closing date, April 7, 2014, pursuant to the terms of the Stock Purchase Agreement, CPB purchased from Jesse Lawrence 40,000,000 shares of the Company’s outstanding common stock for $375,000.  As a result of the change in control, CPB owned a total of 40,000,000 shares of the Company’s common stock representing 74% of the outstanding common stock.

On May 1, 2014, the Company filed an amendment to its Articles of Incorporation in the State of Nevada to change its name to Select-TV Solutions, Inc.

On July 18, 2014, the Company entered into a Merger Agreement with Select-TV Solutions (USA), Inc. (“STVU”), a Florida corporation. Pursuant to the terms of the Agreement, the Company issued 1.25 shares of common stock for each share STVU, or 49,678,443 shares. As a result of the merger, the Company, as the surviving entity, acquired the license rights to Select-TV HITV (Hospitality Interactive TV, software and hardware), and EMAGINE (home IPTV software and hardware), thus enabling the Company to provide end-to-end IPTV (Internet Protocol Television) solutions to the Hospitality, Residential and Hospital subscribers in North America. The Closing of the transaction was effective on the close of business July 31, 2014.

Stock Split

On May 1, 2014, the Company's Board of Directors declared a ten-to-one forward stock split of all outstanding shares of common stock. The effect of the stock split increased the number of shares of common stock outstanding from 5,413,400 to 54,134,000 as of May 1, 2014. All common share and per common share data in these financial statements and related notes hereto have been retroactively adjusted to account for the effect of the stock split for all periods presented prior to May 1, 2014. The total number of authorized common shares and the par value thereof was not changed by the split.

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial statement presentation and in accordance with Form 10-Q. Accordingly, they do not include all of the information and footnotes required in annual financial statements. In the opinion of management, the unaudited consolidated financial statements contain all adjustments (consisting only of normal recurring accruals) necessary to present fairly the financial position and results of operations and cash flows for the interim periods reported in this Form 10-Q. The results of operations presented are not necessarily indicative of the results to be expected for any other interim period or for the entire year.

These unaudited consolidated financial statements should be read in conjunction with the 2014 audited annual financial statements included in the Annual Report on Form 10-K/A, filed with the U.S. Securities and Exchange Commission (“SEC”) on September 10, 2014.

Going Concern

The accompanying unaudited consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred a net loss of $2,035,291 for the six months ended October 31, 2014 and has incurred cumulative losses since inception of $2,533,780. These conditions raise substantial doubt about the ability of the Company to continue as a going concern.

Select-TV Solutions, Inc.

Notes to Consolidated Financial Statements

October 31, 2014

(Unaudited)

Note 1 – Organization, Presentation and Going Concern (Continued)

Going Concern (Continued)

The ability of the Company to continue as a going concern is dependent upon its abilities to generate revenues, to continue to raise investment capital, and develop and implement its business plan. No assurance can be given that the Company will be successful in these efforts.

The unaudited financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. Management believes that actions presently being taken to obtain additional funding and implement its strategic plans provide the opportunity for the Company to continue as a going concern. No assurance can be given that the Company will be successful in these efforts.

Significant Accounting Policies

Revenue Recognition

Revenue is recognized upon delivery when the following conditions are met:

These conditions occur when the goods or services have been delivered to the contractually agreed location of the customer.

Inventory

Inventories are stated at the lower of cost or market (“LCM”). The Company uses the first-in-first-out (“FIFO”) method of valuing inventory. Inventory consists primarily of finished goods and accessories for use in the delivery of media content to its customers.

Principles of Consolidation

The consolidated financial statements include the accounts of Select-TV Solutions, Inc. and its wholly-owned subsidiaries, Oriana Technologies Canada Inc. and Select-TV Solutions (Canada), Inc. All significant inter-company balances and transactions have been eliminated in consolidation.

Note 2 – Prepaid Expenses

Prepaid expenses consist of the following at October 31, 2014 and April 30, 2014:

Select-TV Solutions, Inc.

Notes to Consolidated Financial Statements

October 31, 2014

(Unaudited)

Note 2 – Prepaid Expenses (continued)

During the six months ended October 31, 2014, the Company issued an aggregate of 7,677,366 shares of its restricted common stock to nine consultants for services to be provided pursuant to consulting agreements. The shares were valued at an average price of $0.064 per share based on the most recent sales of stock subscriptions to investors as of the dates of obligation for a total of $492,736. Based on the terms of the agreements, $259,927 has been included in general and administrative expenses for the six months ended October 31, 2014 and $232,810 is included in prepaid expenses at October 31, 2014. (See Note 5 – Stockholders’ Equity).

On May 1, 2014, STVU (which was merged into the Company on July 31, 2014) entered into a Hotel Deployment Partnership Agreement with AACSA Partners LLC (“AACSA”) whereby AACSA is to provide the Company with up to 1,000 hotel customers through three distinct phases. The agreement has an initial term of seven years and renews annually for each subsequent year unless terminated as permitted in the agreement.

The three Phases are as follows:

Phase 1 – Includes a commitment by AACSA for contracting of 100 hotels nationwide by December 31, 2014. The Company has paid a $100,000 fee for Phase 1 as of July 31, 2014. Two hotels have been deployed as of October 31, 2014 and $2,000 is included in cost of revenues for the three and six months ended October 31, 2014. $98,000 is included in prepaid expenses at October 31, 2014.

Phase 2 – Includes a commitment by AACSA for contracting an additional 150 hotels nationwide between January 1, 2015 and June 30, 2015. Fees of $150,000 will be payable in installments of $75,000 due on January 15, 2015 and $75,000 due on April 15, 2015 for the Phase 2 implementation.

Phase 3 – Includes a commitment by AACSA for contracting an additional 750 hotels nationwide between July 1, 2015 and June 30, 2016. Fees of $750,000 will be payable in three equal quarterly installments of $250,000 each starting on July 1, 2015 for the Phase 3 implementation.

As of October 31, 2014, the Company has prepaid $69,500 on a purchase order for inventory from a supplier.

Note 3 – Equipment, net

Equipment, net, is recorded at cost and consisted of the following at October 31, 2014 and April 30, 2014:

Depreciation expense was $2,634 and $324 for the six months ended October 31, 2014 and 2013, respectively. The balance of equipment at October 31, 2014 was a result of the merger with STVU on July 31, 2014 and equipment purchases of $10,373 during the six months ended October 31, 2014. In April 2014, in conjunction with the Company’s change in control, the total amount of film equipment was disposed of at a loss of $498.

Select-TV Solutions, Inc.

Notes to Consolidated Financial Statements

October 31, 2014

(Unaudited)

Note 4 – Licenses, net

As a result of the merger with STVU, the Company acquired the license rights to Select-TV HITV (Hospitality Interactive TV, software and hardware), and EMAGINE (home IPTV software and hardware), thus enabling the Company to provide end-to-end IPTV (Internet Protocol Television) solutions to the Hospitality, Residential and Hospital subscribers in North America. Licenses, net, consisted of the following at October 31, 2014 and April 30, 2014:

Amortization expense was $13,150 and $-0- for the six months ended October 31, 2014 and 2013, respectively.

Note 5 – Stockholders’ Equity

The Company has authorized 500,000,000 shares of Common Stock, $0.001 par value. 

On May 1, 2014, the Company's Board of Directors declared a ten-to-one forward stock split of all outstanding shares of common stock. The effect of the stock split increased the number of shares of common stock outstanding from 5,413,400 to 54,134,000 as of May 1, 2014. All common share and per common share data in these consolidated financial statements and related notes hereto have been retroactively adjusted to account for the effect of the stock split for all periods presented prior to May 1, 2014. The total number of authorized common shares and the par value thereof was not changed by the split.

During the six months ended October 31, 2014, the Company issued 29,647,316 shares of its restricted common stock for stock subscriptions received as of April 30, 2014 of $1,482,366. These shares were included in common stock issuable at April 30, 2014. $128,194 of issuance costs were charged to paid in capital relating to these shares during the six months ended October 31, 2014.

During the six months ended October 31, 2014, the Company issued 14,683,720 shares of its restricted common stock for cash of $1,001,932 (net of issuance costs of $171,440).

Pursuant to the merger with STVU, the Company issued 1.25 shares of its restricted common stock for each share of STVU, or 49,678,443 shares. These shares have been valued at a fair value of $2,980,707 based on the average value of stock subscriptions sold to investors at the date of merger.

During the six months ended October 31, 2014, the Company issued an aggregate of 8,000,000 shares of its restricted common stock to its then two directors. The shares were valued at $0.10 per share based on the most recent sales of stock subscriptions to investors at the date of issuance for a total of $800,000, which is included in general and administrative expenses for the six months ended October 31, 2014.

During the six months ended October 31, 2014, the Company issued an aggregate of 1,000,000 shares of its restricted common stock to a consultant for services pursuant to a consulting agreement. The shares were valued at $0.05 per share based on the most recent sales of stock subscriptions to investors at the date of obligation for a total of $50,000, which is included in general and administrative expenses for the six months ended October 31, 2014.

During the six months ended October 31, 2014, the Company issued an aggregate of 7,677,366 shares of its restricted common stock to nine consultants for services to be provided pursuant to consulting agreements. The shares were valued at an average price of $0.064 per share based on the most recent sales of stock subscriptions to investors as of the dates of obligation for a total of $492,736. Based on the terms of the agreements, $259,927 is included in general and administrative expenses for the six months ended October 31, 2014 and $232,810 is included in prepaid expenses at October 31, 2014.

During the six months ended October 31, 2014, the Company received stock subscriptions of $414,873 for 6,976,230 shares of common stock. These shares are included in common stock issuable at October 31, 2014.

Select-TV Solutions, Inc.

Notes to Consolidated Financial Statements

October 31, 2014

(Unaudited)

Note 5 – Stockholders’ Equity (Continued)

Pursuant to a consulting agreement, the Company is obligated to issue 500,000 shares of its restricted common stock to a consultant for services at October 31, 2014. The shares were valued at a total of $45,000 based on the most recent sales of stock subscriptions to investors at the dates of the obligation, which is included in general and administrative expenses for the six months ended October 31, 2014. These shares are included in common stock issuable at October 31, 2014.

During the six months ended October 31, 2014, three shareholders returned an aggregate of 8,100,000 common shares to treasury as a capital contribution. These shares were cancelled by the Company.

Note 6 – Related Party Transactions

As of April 30, 2013, the Company owed a shareholder and officer $101 which was repaid during the year ended April 30, 2014.

During the three months ended July 31, 2014 and the year ended April 30, 2014, the Company advanced $371,350 and $346,050, respectively, to STVU for working capital purposes of STVU. As of July 31, 2014, due to the merger with STVU, the amounts are eliminated in consolidation.

During the six months ended October 31, 2014, the Company advanced $195,877 to Cannoco PLC, a U.K corporation for its services and expenses related to possible future acquisitions. Philippe Germain, the Company’s Chairman and director, is the sole shareholder of Cannoco PLC.

Note 7 – Business Combinations

On July 18, 2014, the Company entered into a Merger Agreement with Select-TV Solutions (USA), Inc. (“STVU”), a Florida corporation. Pursuant to the terms of the Agreement, the Company issued 1.25 shares of its common stock for each share of STVU, or 49,678,443 shares.

The following table summarizes the consideration given for the net assets of STVU and the fair values of the assets acquired and liabilities assumed recognized at the merger date. Management is in the process of valuing any identifiable tangible and intangible assets. Until the valuation is complete and values are assigned to tangible or intangible assets, if any, the entire amount of the excess of the consideration given over the net liabilities acquired is allocated to goodwill.

Note 8 – Subsequent Events

From November 1, 2014 through December 12, 2014, the Company received $572,000 for subscriptions to purchase 5,720,000 shares of common stock. The Company has evaluated subsequent events through the date the financial statements were issued and filed with the SEC. The Company has determined that there are no other events that warrant disclosure or recognition in the consolidated financial statements.

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

SPECIAL NOTE CONCERNING FORWARD-LOOKING STATEMENTS

Certain statements made in this Form 10-Q are "forward-looking statements" (within the meaning of the Private Securities Litigation Reform Act of 1995) regarding the plans and objectives of management for future operations. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking statements included herein are based on current expectations that involve numerous risks and uncertainties. The Company's plans and objectives are based, in part, on assumptions involving the continued expansion of business. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of the Company. Although the Company believes its assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove to be inaccurate and, therefore, there can be no assurance the forward-looking statements included in this report will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Company or any other person that the objectives and plans of the Company will be achieved.

The forward-looking statements included in this Form 10-Q and referred to elsewhere are related to future events or our strategies or future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may," "should," "believe," "anticipate," "future," "potential," "estimate," "encourage," "opportunity," "growth," "leader," "expect," "intend," "plan," "expand," "focus," "through," "strategy," "provide," "offer," "allow," commitment," "implement," "result," "increase," "establish," "perform," "make," "continue," "can," "ongoing," "include" or the negative of such terms or comparable terminology. All forward-looking statements included in this Form 10-Q are based on information available to us as of the filing date of this report, and the Company assumes no obligation to update any such forward-looking statements, except as required by law. Our actual results could differ materially from the forward-looking statements.

Important factors that might cause our actual results to differ materially from the results contemplated by the forward-looking statements are contained in the “Risk Factors” section of our Annual Report on Form 10-K for the fiscal year ended April 30, 2014 and in our subsequent filings with the Securities and Exchange Commission.  The following discussion of our results of operations should be read together with our financial statements and related notes included elsewhere in this report.

Company Overview

Select-TV Solutions, Inc. (the "Company", “SELT”, “we”, “us” or “our”) was incorporated in Nevada on May 17, 2011 under the name of Renaissance Films Inc. (“RFI”) and intended to produce documentary films. On September 26, 2011, the Company changed its name to Sedition Films Inc.

On April 7, 2014, the Company experienced a change in control.  Conseil Plumage Blanc Ltd. (“CPB”) acquired a majority of the issued and outstanding common stock of the Company in accordance with a stock purchase agreement by and between CPB and Jesse Lawrence, the Company’s former director and majority shareholder.  On the closing date, April 7, 2014, pursuant to the terms of the Stock Purchase Agreement, CPB purchased from Jesse Lawrence 4,000,000 (40,000,000 post-split) shares of the Company’s outstanding common stock for $375,000.  As a result of the change in control, CPB owned a total of 4,000,000 (40,000,000 post-split) shares of the Company’s common stock representing 74% of the outstanding shares at the time.

In conjunction with the change in control, Mr. Jesse Lawrence resigned as the Company's director, and any other positions held by him on April 9, 2014. The resignation was not the result of any disagreement with the Company or any matter relating to the Company's operations, policies or practices. On the same date, Mr. Philippe Germain and Mr. Antonio Treminio were appointed as directors.

On May 1, 2014, the Company filed an amendment to its Articles of Incorporation in the State of Nevada to change its name to Select-TV Solutions, Inc. The Company intends to pursue significant opportunities available within the entertainment sector and online interactive niche.

On May 1, 2014, the Company's Board of Directors declared a ten-to-one forward stock split of all outstanding shares of common stock. The effect of the stock split increased the number of shares of common stock outstanding from 5,413,400 to 54,134,000 at May 1, 2014. The total number of authorized common shares and the par value thereof was not changed by the split.

On July 7, 2014, the company’s shareholders appointed Mr. Geoffrey P. Mott as the Company’s Chief Executive Officer.

On July 18, 2014, the Company entered into a Merger Agreement with Select-TV Solutions (USA), Inc. (“STVU”), a Florida corporation. Pursuant to the terms of the Agreement, the Company issued 1.25 shares of common stock for each share STVU, or 49,678,443 shares. As a result of the merger, the Company, as the surviving entity, acquired the license rights to Select-TV HITV (Hospitality Interactive TV, software and hardware), and EMAGINE (home IPTV software and hardware), thus enabling the Company to provide end-to-end IPTV (Internet Protocol Television) solutions to the Hospitality, Residential and Hospital subscribers in North America. The Closing of the transaction was effective on the close of business July 31, 2014.

On August 29, 2014, the shareholders of the Company voted to add Eric Gareau and Christian Trudeau to the Board of Directors, joining Mr. Germain. On the same date, Mr. Antonio Treminio resigned his position as Director.

Plan of Operations

The Company, through its sublicense, has the right to carry on the Select-TV Business, Intellectual Property, Trademarks, trade Names, Copyrights and Trade Secrets. The Company believes it has a strong technology platform, proven market validation in some of the best hotels in the world and a great opportunity to become a leader in the North American hospitality market over the next few years. At a time when consumer expectations for entertainment quality and service value-added are on the rise, hotel owners and brands know they need to redefine what they should expect from in-room entertainment systems and their vendors.

Management continues to explore new investment opportunities with a focus on technology and the hospitality market.

Results of Operations

For the three months ended October 31, 2014 compared to the three months ended October 31, 2013

Revenues

The Company had revenue of $29,825 for the three months ended October 31, 2014 compared to no revenue for the three months ended October 31, 2013. The increase in revenue is due to the merger with Select-TV Solutions (USA), Inc.

Operating Expenses

For the three months ended October 31, 2014, total operating expenses were $919,868 compared to $3,254 for the three months ended October 31, 2013 resulting in an increase of $916,614.

Cost of revenues increased $169,581 and is directly attributable to the initial costs associated with bringing new customers on-line to receive the Company’s products and services.

Selling and marketing expenses increased $20,653 and is primarily due to the merger with Select-TV Solutions (USA), Inc.

General and administrative expenses increased by $726,380 and was primarily due to $354,927 of stock based consulting fees and $128,948 of consulting fees. The remaining increase is related to general and overhead costs due to the merger with Select-TV Solutions (USA), Inc.

Net loss for the three months ended October 31, 2014 was $892,227 compared to $3,254 for the three months ended October 31, 2013.

For the six months ended October 31, 2014 compared to the six months ended October 31, 2013

Revenues

The Company had revenue of $29,825 for the six months ended October 31, 2014 compared to no revenue for the six months ended October 31, 2013. The increase in revenue is due to the merger with Select-TV Solutions (USA), Inc.

Operating Expenses

For the six months ended October 31, 2014, total operating expenses were $2,062,932 compared to $8,298 for the six months ended October 31, 2013 resulting in an increase of $2,054,634.

Cost of revenues increased $169,581 and is directly attributable to the initial costs associated with bringing new customers on-line to receive the Company’s products and services.

Selling and marketing expenses increased $20,653 and is primarily due to the merger with Select-TV Solutions (USA), Inc.

General and administrative expenses increased by $1,864,400 and was primarily due to 8,000,000 shares issued for stock based compensation of in the amount of $800,000, $354,927 of stock based consulting fees, and $276,928 of consulting fees. The remaining increase is related to general and overhead costs due to the merger with Select-TV Solutions (USA), Inc.

Net loss for the six months ended October 31, 2014 was $2,035,291 compared to $8,298 for the six months ended October 31, 2013.

Liquidity and Capital Resources

As of October 31, 2014, we had cash of $401,185 and working capital of $1,079,017. Cash used in operating activities was $1,084,999 and $7,974 for the six months ended October 31, 2014, and 2013, respectively.  The principal elements of cash flow used in operations for the six months ended October 31, 2014 included a net loss of $2,035,291, offset by depreciation and amortization of $15,784 and stock issued and issuable for services of $895,000; and increased by changes in operating assets and liabilities of $39,508. The principal elements of cash flow used in operations for the six months ended July 31, 2013 included a net loss of $8,298, offset by depreciation expense of $324.

Cash used in investing activities for the six months ended October 31, 2014 consisted of $10,373 for the acquisition of equipment offset by $912 of cash received in the merger with STVU. No cash was used in investing activities during the six months ended October 31, 2013.

Cash provided by financing activities was $952,105 for the six months ended October 31, 2014 compared to no cash provided by financing activities for the six months ended October 31, 2013. Financing activities for the six months ended October 31, 2014 included $1,001,932 from the sale of common stock, $414,873 received for stock subscriptions offset by payments on loan payable of $93,350 and advances to related parties of $371,350.

Going Concern

Due to the uncertainty of our ability to meet our current operating and capital expenses, our independent auditors included an explanatory paragraph in their report on the financial statements for the year ended April 30, 2014 regarding concerns about our ability to continue as a going concern. Our consolidated financial statements contain additional note disclosures describing the circumstances that lead to this conclusion by our independent auditors.

Our unaudited consolidated financial statements have been prepared on a going concern basis, which assumes the realization of assets and settlement of liabilities in the normal course of business. Our ability to continue as a going concern is dependent upon our ability to generate profitable operations in the future and/or to obtain the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they become due. The outcome of these matters cannot be predicted with any certainty at this time and raise substantial doubt that we will be able to continue as a going concern. Our unaudited consolidated financial statements do not include any adjustments to the amount and classification of assets and liabilities that may be necessary should we be unable to continue as a going concern.

There is no assurance that our operations will be profitable. Our continued existence and plans for future growth depend on our ability to obtain the additional capital necessary to operate either through the generation of revenue or the issuance of additional debt or equity.

Off-Balance Sheet Arrangements

We currently have no off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Critical Accounting Policies

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make a number of 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. Such estimates and assumptions affect the reported amounts of revenues and expenses during the reporting period. We base our estimates on historical experiences and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions and conditions. We continue to monitor significant estimates made during the preparation of our financial statements. On an ongoing basis, we evaluate estimates and assumptions based upon historical experience and various other factors and circumstances. We believe our estimates and assumptions are reasonable in the circumstances; however, actual results may differ from these estimates under different future conditions.

See Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 2, “Summary of Significant Accounting Policies” in our audited financial statements as of and for the year ended April 30, 2014, included in our Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (“SEC”) on August 13, 2014.

Item 3.    Quantitative and Qualitative Disclosures About Market Risk.

The disclosure required under this item is not required to be reported by smaller reporting companies.

Item 4.    Controls and Procedures.

In connection with the preparation of this Quarterly Report on Form 10-Q, an evaluation was carried out by the Company's management, with the participation of the principal executive officer and the principal financial officer, of the effectiveness of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 ("Exchange Act")) as of October 31, 2014. Disclosure controls and procedures are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act 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 management, including the chief executive officer and the chief financial officer, to allow timely decisions regarding required disclosures.

Based on that evaluation, the Company's management concluded, as of the end of the period covered by this report, that the Company's disclosure controls and procedures were not effective in recording, processing, summarizing, and reporting information required to be disclosed, within the time periods specified in the Commission's rules and forms, and that such information was accumulated and communicated to management, including the principal executive officer and the principal financial officer, to allow timely decisions regarding required disclosures.

There were no changes in our internal control 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.

PART II – OTHER INFORMATION

Item 1.    Legal Proceedings.

We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

Item 1A.  Risk Factors.

The disclosure required under this item is not required to be reported by smaller reporting companies.

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

On August 18, 2014, pursuant to consulting agreements, the Company issued 8,677,366 shares of the Company’s common stock to ten consultants at a fair value of $542,736.  

On August 20, 2014, pursuant to stock subscription agreements, the Company issued 44,331,036 shares of the Company’s common stock to 71 investors for $2,655,738.

On August 20, 2014, pursuant to a Merger Agreement with Select-TV Solutions (USA), Inc. (“STVU”), the Company issued 49,678,443 shares of the Company’s common stock to the former shareholders of STVU at a fair value of $2,980,707.

These securities were not registered under the Securities Act of 1933, as amended (the “Securities Act”), but were issued in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act as a transaction by an issuer not involving a public offering.

Item 3.    Defaults Upon Senior Securities.

None.

Item 4.    Mine Safety Disclosures.

Not applicable.

Item 5.    Other Information.

None.

Item 6.    Exhibits

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.

Select-TV Solutions, Inc.