BOTS, Inc./PR - Quarter Report: 2013 July (Form 10-Q)

Lifetech Industries, Inc.

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the Registrant (1) has filed all reports required 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, or a non–accelerated filer. See definition of “accelerated filer and large accelerated filer” and “smaller reporting company” in Rule 12b–2 of the Exchange Act. (Check one):

Large accelerated filer ¨      Accelerated filer ¨

Non–Accelerated filer ¨    Smaller reporting Company x

Indicate by check mark whether the registrant is a shell company

(as defined in Rule 12b-2 of the Exchange Act)  Yes ¨ No x

Indicate the number of shares outstanding of each of the registrant’s classes of common stock as of the latest practicable date. 500,000,000 common shares issued and outstanding as of July 31, 2013

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INDEX TO FORM 10-Q FILING

FOR THE THREE MONTHS ENDED JULY 31, 2013

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION
Item 1.		Financial Statements (unaudited) (u((unaudited)……………………………………………………………………
		Balance Sheets	4
		Statements of Operations	5
		Statements of Cash Flows	6
		Notes to Financial Statements	7
Item 2.		Management Discussion & Analysis of Financial Condition and Results of Operations	11
Item 3		Quantitative and Qualitative Disclosures About Market Risk	13
Item 4.		Controls and Procedures	13
PART II - OTHER INFORMATION
Item 1.		Legal Proceedings	14
Item 1A		Risk Factors	14
Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds	14
Item 3.		Defaults Upon Senior Securities	14
Item 4.		Removed and Reserved	14
Item 5.		Other information	14
Item 6.		Exhibits	14

 

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The accompanying reviewed interim financial statements have been prepared in accordance with the instructions to Form 10-Q. Therefore, they do not include all information and footnotes necessary for a complete presentation of financial position, results of operations, cash flows, and stockholders' equity in conformity with generally accepted accounting principles. Except as disclosed herein, there has been no material change in the information disclosed in the notes to the financial statements included in the Company's annual report on Form 10-K for the year ended April 30, 2013. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature. Operating results for the three months ended July 31, 2013 are not necessarily indicative of the results that can be expected for the year ending.

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MCIG, INC.

(A Development Stage Company)

BALANCE SHEETS

			July 31,				April 30,
			2013				2013
			(unaudited)				(audited)
ASSETS
Current assets:
Cash and cash equivalents		$	3,874			$	3,600
Total current assets			3,874				3,600
Intangible asset, net			15,805				13,366
Total assets		$	19,679			$	16,966
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable		$	2,375			$	4,375
Deferred revenue			37,500				50,000
Due to related party			24,300				172,678
Total liabilities			64,175				227,053
STOCKHOLDERS’ DEFICIT
Common stock, $0.0001 par value per share, 1,000,000,000 shares authorized, 500,000,000 shares issued and outstanding			50,000				50,000
Additional Paid in Capital			172,678				-
Accumulated deficit during development stage			(267,174)				(260,087)
Total stockholders' deficit			(44,496)				(210,087)
Total liabilities and stockholders' deficit		$	19,679			$	16,966

The accompanying notes are an integral part of the financial statements

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MCIG, INC.

(A Development Stage Company)

STATEMENTS OF OPERATIONS

(Unaudited)

The accompanying notes are an integral part of the financial statements

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MCIG, INC.

 (A Development Stage Company)

STATEMENTS OF CASH FLOWS

(Unaudited)

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MCIG, INC.

(A Development Stage Company)

Notes To Financial Statements

(Unaudited)

1. BUSINESS DESCRIPTION AND BASIS OF PRESENTATION

MCIG, INC. (MCIG) (fka Lifetech Industries) was incorporated in the State of Nevada on December 30, 2010 to develop a new day spa business in the affluent area of Montrose, California, surrounded by La Crescenta, La Canada, and Glendale.

On April 30, 2012, the company entered into a Joint Venture Agreement, a Distribution Agreement, and a Technology License Agreement (the “Agreements”) with Leadwill Corporation, a Japanese corporation (the “Manufacturer” and the “Licensor”).

Pursuant to the Joint Venture Agreement, we acquired the global exclusive right (excluding Japan) to make, use, sell and otherwise distribute all of the Manufacturer’s AWG products and technologies. In addition, we have the exclusive right to assign, sublicense, or otherwise subcontract our distribution and marketing rights to third parties. We were also granted an exclusive license to any and all of the Manufacturer’s patents, trademarks, and all other intellectual property related to AWG products and have the exclusive right to assign, sublicense, or otherwise transfer these rights to third parties. We will receive the Manufacturer’s AWG products at the price of twelve percent (12%) above wholesale costs for such products.

Pursuant to the Distribution Agreement, we were appointed as the Manufacturer’s sole and exclusive Distributor. As such, we were given the exclusive right to: (1) market, promote, sell, and distribute all of the Manufacturer’s current and future AWG products and technology; and (2) assign, sublicense, or otherwise subcontract these distribution and marketing rights to third parties worldwide (excluding Japan). The Manufacturer will receive ten percent (10%) of the net profits generated from our distribution of the AWG technology, less related costs and expenses.

Pursuant to the Technology License Agreement, we were granted an exclusive, perpetual license to make, manufacture, use, sell or otherwise distribute all of the Licensor’s AWG related technology. We were also granted the right to sublicense these rights to third parties at our sole discretion. We will pay the Licensor a royalty equal to ten percent (10%) of the Net Sales Revenue received from our sales of the licensed technology on a quarterly basis.

Upon execution of the Agreements, Leadwill Corporation has agreed to (A) file all necessary “doing business as” (“d/b/a”) documents in Japan so that Leadwill shall d/b/a “Lifetech Japan,” (B) change its corporate name from “Leadwill Corporation” to “Lifetech Japan,” or (C) transfer or “spinoff” all and not less than all of its AWG business into a new, separate corporate entity in Japan, to be called “Lifetech Japan”. All of our rights set forth in the Agreements shall apply equally to the new, separate corporate entity.

On September 1, 2012, the company entered into a Joint Venture Agreement, a Distribution Agreement, and a Technology License Agreement (the “New Agreements”) with Lifetech Japan Corporation (the “New Manufacturer”), a Japanese corporation. The New Agreements were executed pursuant to the transfer of the AWG business from Leadwill to Lifetech Japan.  The Lifetech AirWell System is a highly advanced air to water generator that produces high quality water by promoting and filtering the condensation of moisture from air. The Air Well System uses an advance triple step gathering system and 12-step purification process to produce water that is free of chemicals, pollutants, contaminants and hormones.

Effective December 2012 the company has signed an exclusive ten-country distribution agreement with SunPlex Limited. Parties have agreed to a 5 year distribution plan which involves three phases. The first phase is to obtain government approvals and endorsements for Airwell products. The second phase of SunPlex's plan is to distribute Airwell products to hospitals, schools and government offices throughout the designated countries in Africa, and work with government agencies to set up water depots in areas where accessing clean and fresh water is extremely difficult. The final phase of SunPlex's proposal aims to partner with commercial and residential developers-incorporating the Airwell machines in their developmental plans-to which early discussions have suggested strong interest.

As of July 31, 2013 no revenue has been realized from the said distribution agreement.

On May 23, 2013, the Company received a resignation notice from Benjamin Chung from all of his positions with the Company, including President, CEO, Principal Executive Officer, CFO, Principal Accounting Officer, Secretary, Treasurer and as Director.  

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MCIG, INC.

 (A Development Stage Company)

Notes To Financial Statements

(Unaudited)

1. BUSINESS DESCRIPTION AND BASIS OF PRESENTATION (CONT.)

On May 23, 2013, the Company appointed Paul Rosenberg as its new President, CEO, Principal Executive Officer, CFO, Principal Accounting Officer, Secretary, Treasurer and as Director.  

Effective August 2, 2013, we have changed our name from "Lifetech Industries, Inc." to "mCig, Inc.".

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

The Company’s accounting policies used in the preparation of the accompanying financial statements conform to accounting principles generally accepted in the United States of America ("US GAAP") and have been consistently applied.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. The most significant estimates include: revenue recognition; sales returns and other allowances; allowance for doubtful accounts; valuation of inventory; valuation and recoverability of long-lived assets; property and equipment; contingencies; and income taxes.  

On a regular basis, management reviews its estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such reviews, and if deemed appropriate, those estimates are adjusted accordingly. Actual results could differ from those estimates.

Development Stage Company

The Company is a development stage company as defined in FASB ASC 915 “Development Stage Entities.”  The Company is devoting substantially all of its present efforts to establish a new business and none of its planned principal operations have commenced.  All losses accumulated since inception has been considered as part of the Company’s development stage activities.  

Cash and cash equivalents

The Company includes in cash and cash equivalents all short-term, highly liquid investments that mature within three months of their acquisition date. Cash equivalents consist principally of investments in interest-bearing demand deposit accounts and liquidity funds with financial institutions and are stated at cost, which approximates fair value. For cash management purposes the company concentrates its cash holdings in a new account at Bank of America and an old account at JP Morgan Chase Bank.

Foreign currency translation

The Company’s functional currency and its reporting currency is the United States Dollar.

Financial Instruments

Fair Value of Financial Instruments

The carrying amounts reflected in the balance sheets for cash, accounts payable and accrued expenses approximate the respective fair values due to the short maturities of these items. The Company does not hold any investments that are available-for-sale.

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MCIG, INC.

 (A Development Stage Company)

Notes To Financial Statements

(Unaudited)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)

As required by the Fair Value Measurements and Disclosures Topic of the FASB ASC, fair value is measured based on a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted prices in active markets; (Level 2) inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and (Level 3) unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

The three levels of the fair value hierarchy are described below:

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2: Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability;

Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).

Website development costs

Under the provisions of FASB-ASC Topic 350, the Company previously capitalized costs of design, configuration, coding, installation, and testing of the Company’s website up to its initial implementation. Costs will be amortized

to expense over an estimated useful life of three years using the straight-line method. Ongoing website post- implementation cost of operations, including training and application, are expensed as incurred. The Company evaluates the recoverability of website development costs in accordance with FASB-ASC Topic 350. As of the quarter ended July 31, 2013, management does not believe that there is a need for the impairment of costs incurred toward the development of its website.

	July, 31           2013	April 30,          2013
Website development cost	$         19,255	$         15,522
Accumulated  amortization	(3,450)	(2,156)
Total intangible assets	$         15,805	$         13,366

Income Taxes

Income taxes are accounted for under the assets and liability method.  Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards.  Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.  Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled.  

Basic and Diluted Loss per Share

The Company follows ASC Topic 260 to account for earnings per share.  Basic earnings per share (“EPS”) calculations are determined by dividing net loss by the weighted average number of shares of common stock outstanding during the year.  Diluted earnings per share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding.  During periods when common stock equivalents, if any, are anti-dilutive they are not considered in the computation.  

Revenue recognition

Our revenue recognition policy is in accordance with generally accepted accounting principles, which requires the recognition of sales when there is evidence of a sales agreement, the delivery of goods has occurred, the sales price is fixed or determinable and the collectability of revenue is reasonably assured.

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MCIG, INC.

 (A Development Stage Company)

Notes To Financial Statements

(Unaudited)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)

In May 2012, we signed an agreement with Epik Investments Limited, a Limited Liability Corporation incorporated under the laws of the Hong Kong Special Administrative Region, assigning them the exclusive rights to sell and distribute all of our products in Hong Kong and the People’s Republic of China. These exclusive distribution rights are for a period of 2 years. We received consideration of $100,000 under the terms of the agreement. As of July 31, 2013, the company earned a total of $62,500 in revenue and accrued deferred revenue of $37,500 related to this agreement.

Effective December 2012 LifeTech Industries Inc. has signed an exclusive ten-country distribution agreement with SunPlex Limited. LifeTech and SunPlex have agreed to a 5 year distribution plan which involves three phases. The first phase is to obtain government approvals and endorsements for Airwell products. The second phase of SunPlex's plan is to distribute Airwell products to hospitals, schools and government offices throughout the designated countries in Africa, and work with government agencies to set up water depots in areas where accessing clean and fresh water is extremely difficult. The final phase of SunPlex's proposal aims to partner with commercial and residential developers-incorporating the Airwell machines in their developmental plans-to which early discussions have suggested strong interest.

Under the terms of the agreement, the project has the potential to bring sales of up to $75 Million or more over the course of 5 years. As of July 31, 2013 no revenue has been realized from the said distribution agreement.

Recent accounting pronouncements

The Company evaluated all recent accounting pronouncements issued and determined that the adoption of these pronouncements would not have a material effect on the financial position, results of operations, or cash flows of the Company.  

3. GOING CONCERN

As of July 31, 2013, our company has accumulated losses of $267,174 since inception.  Our 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 April 30, 2014.  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 our 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. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty.

4. COMMON STOCK

The authorized capital of the Company is 200,000,000 common shares with a par value of $0.0001 per share.  On July 13, 2011, the Company authorized the issuance of 25,000,000 shares of common stock at $0.001 per share to Benjamin Chung, the former CEO.  The Company relied on Section 4(2) of the Securities Act for this issuance.

In January 2011, the Officer of the Company contributed an amount of $100 for stock which had not yet been issued. This amount was classified as Stock Payable on the balance sheet. On July 13, 2011, when 25,000,000 shares of common stock were issued, this amount was reclassified to additional paid in capital.    

On July 13, 2011, the Company issued 25,000,000 shares of common stock at $0.001 per share to Benjamin Chung, the former CEO for services of $5,000 and for cash of $20,000.  The Company relied on Section 4(2) of the Securities Act for this issuance.

During the period between January 2011 and February 2011, the Company issued 25,000,000 shares of common stock under private placement agreements to various investors at $0.001 per share. The Company received a total of $24,900, net of proceeds.

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MCIG, INC.

 (A Development Stage Company)

Notes To Financial Statements

(Unaudited)

4. COMMON STOCK (CONT.)

Stock split

Effective July 31, 2013, the company effected a 1 old for 10 new forward stock split of the Company’s common stock. As a result, our authorized capital increased from 200,000,000 to 1,000,000,000 shares of common stock and our issued and outstanding increased from 50,000,000 shares of common stock to 500,000,000 shares of common stock, all with a par value of $0.0001.

5. RELATED PARTY TRANSACTIONS

On July 13, 2011, the Officer of the Company contributed an amount of $100 towards additional paid in capital.

As of April 30, 2013 the company was obligated to Mr. Benjamin Chung for an unsecured and non-interest bearing demand loan with a balance of $172,678.

Effective April 19, 2013 Benjamin Chung and Paul Rosenberg signed the “Debt Assignment, Consent and Release Agreement”, according to which the Assignor (Benjamin Chung) grants, assign, transfer and set over unto the Assignee (Paul Rosenberg) his entire right, title and interest in and to the Debt upon the terms and conditions contained in the Agreement.

On July 30, 2013, Mr. Paul Rosenberg, President and CEO, agreed to forgive all the debts (the sum of $172,678) owed to him by the Company and recorded as Additional Paid in Capital.

As of July 31, 2013, the President of the Company, Mr. Paul Rosenberg loaned the Company in the amount of $24,300 for operating purposes.  The amount due to the related party is unsecured and non-interest-bearing and remains outstanding.

6. SUBSEQUENT EVENTS

Effective August 2, 2013, we changed our name from “LifeTech Industries, Inc.” to “mCig, Inc.

ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward Looking Statements

This report on Form 10-Q contains certain forward-looking statements.  All statements other than statements of historical fact are “forward-looking statements” for purposes of these provisions, including any projections of earnings, revenues, or other financial items; any statements of the plans, strategies, and objectives of management for future operation; any statements concerning proposed new products, services, or developments; any statements regarding future economic conditions or performance; statements of belief; and any statement of assumptions underlying any of the foregoing. Such forward-looking statements are subject to inherent risks and uncertainties, and actual results could differ materially from those anticipated by the forward-looking statements.

 

Business Overview

MCIG, INC. (MCIG) was incorporated in the State of Nevada on December 30, 2010 to develop a new day spa business in the affluent area of Montrose, California, surrounded by La Crescenta, La Canada, and Glendale.

On April 30, 2012, the company entered into a Joint Venture Agreement, a Distribution Agreement, and a Technology License Agreement (the “Agreements”) with Leadwill Corporation, a Japanese corporation (the “Manufacturer” and the “Licensor”).

Pursuant to the Joint Venture Agreement, we acquired the global exclusive right (excluding Japan) to make, use, sell and otherwise distribute all of the Manufacturer’s AWG products and technologies. In addition, we have the exclusive right to assign, sublicense, or otherwise subcontract our distribution and marketing rights to third parties. We were also granted an exclusive license to any and all of the Manufacturer’s patents, trademarks, and all other

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intellectual property related to AWG products and have the exclusive right to assign, sublicense, or otherwise transfer these rights to third parties. We will receive the Manufacturer’s AWG products at the price of twelve percent (12%) above wholesale costs for such products.

Pursuant to the Distribution Agreement, we were appointed as the Manufacturer’s sole and exclusive Distributor. As such, we were given the exclusive right to: (1) market, promote, sell, and distribute all of the Manufacturer’s current and future AWG products and technology; and (2) assign, sublicense, or otherwise subcontract these distribution and marketing rights to third parties worldwide (excluding Japan). The Manufacturer will receive ten percent (10%) of the net profits generated from our distribution of the AWG technology, less related costs and expenses.

Pursuant to the Technology License Agreement, we were granted an exclusive, perpetual license to make, manufacture, use, sell or otherwise distribute all of the Licensor’s AWG related technology. We were also granted the right to sublicense these rights to third parties at our sole discretion. We will pay the Licensor a royalty equal to ten percent (10%) of the Net Sales Revenue received from our sales of the licensed technology on a quarterly basis.

Upon execution of the Agreements, Leadwill Corporation has agreed to (A) file all necessary “doing business as” (“d/b/a”) documents in Japan so that Leadwill shall d/b/a “Lifetech Japan,” (B) change its corporate name from “Leadwill Corporation” to “Lifetech Japan,” or (C) transfer or “spinoff” all and not less than all of its AWG business into a new, separate corporate entity in Japan, to be called “Lifetech Japan”. All of our rights set forth in the Agreements shall apply equally to the new, separate corporate entity.

On September 1, 2012, the company entered into a Joint Venture Agreement, a Distribution Agreement, and a Technology License Agreement (the “New Agreements”) with Lifetech Japan Corporation (the “New Manufacturer”), a Japanese corporation. The New Agreements were executed pursuant to the transfer of the AWG business from Leadwill to Lifetech Japan.  The Lifetech AirWell System is a highly advanced air to water generator that produces high quality water by promoting and filtering the condensation of moisture from air. The Air Well System uses an advance triple step gathering system and 12-step purification process to produce water that is free of chemicals, pollutants, contaminants and hormones.

Effective December 2012 the company has signed an exclusive ten-country distribution agreement with SunPlex Limited. Parties have agreed to a 5 year distribution plan which involves three phases. The first phase is to obtain government approvals and endorsements for Airwell products. The second phase of SunPlex's plan is to distribute Airwell products to hospitals, schools and government offices throughout the designated countries in Africa, and work with government agencies to set up water depots in areas where accessing clean and fresh water is extremely difficult. The final phase of SunPlex's proposal aims to partner with commercial and residential developers-incorporating the Airwell machines in their developmental plans-to which early discussions have suggested strong interest.

Under the terms of the agreement, the project has the potential to bring sales of up to $75 Million or more over the course of 5 years. As of July 31, 2013 no revenue has been realized from the said distribution agreement.

Liquidity and Capital Resources

 

 

Through July 31, 2013, the Company had not carried on any significant operations and had not generated any significant revenues. The Company has incurred losses since inception aggregating $267,174.

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company has accumulated deficit since inception (December 30, 2010) to the quarter ended July 31, 2013 and is dependent on its ability to raise capital from shareholders or other sources to sustain operations. However, these conditions raise substantial doubt about the Company's ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

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Results of Operations for the Three Months Ended July 31, 2013 and 2012

Revenues

Revenues for the three months ended July 31, 2013 and July 31, 2012 were $12,500 as the result of the 2 year distribution contract signed with Epik Investments Limited in May 2012.

Cost of Goods Sold

Cost of goods sold for the three months ended July 31, 2013 and July 31, 2012 were $0.

Net Loss

For the three months ended July 31, 2013 and July 31, 2012 we incurred net loss of $7,087 and $56,815, respectively.

Expenses

Our total operation expenses for the three months ended July 31, 2013 were $19,587, which consisted of $9,225 of professional fees, $1,294 of amortization and $9,068 of general and administrative expenses.  Our general and administrative expenses consist of bank charges, advertising and promotion, rent, computer and internet expenses, and other miscellaneous expenses.  For the three months ended July 31, 2012 we incurred total expenses of $69,315, which consisted of $6,360 of professional fees, $50,880 of travel expenses and $12,075 of general and administrative expenses.

Since inception (December 30, 2010) to July 31, 2013, we incurred total expenses of $329,674, which consisted of $102,591 of professional fees, $114,299 of travel expenses, $3,450 of amortization and $109,334 of general and administrative expenses.

Thus far all our expenses have been financed via advances from our controlling shareholder Mr. Paul Rosenberg who has committed to fund the product development and marketing of the mCig into the launch date and the foreseeable future.

Inflation

The amounts presented in the financial statements do not provide for the effect of inflation on our operations or financial position.  The net operating losses shown would be greater than reported if the effects of inflation were reflected either by charging operations with amounts that represent replacement costs or by using other inflation adjustments.

Off-Balance Sheet Arrangements

 

As of July 31, 2013, we had no off balance sheet transactions that have or are reasonably likely to have a current or future effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

ITEM 3. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK

 

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

 

ITEM 4.  CONTROLS AND PROCEDURES

 

Evaluation of Disclosure Controls and Procedures

 

We maintain disclosure controls and procedures, as defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934 (the "Exchange Act"), that are designed to ensure that information required to be disclosed by us in the reports that we file or submit 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 our sole officer, as appropriate to allow timely decisions regarding required disclosure. We carried out an evaluation, under the supervision and with the participation of our sole officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of July 31, 2013. Based on the evaluation of these disclosure controls and procedures, our sole officer concluded that our disclosure controls and procedures are ineffective.

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Changes in internal controls

 

There were no changes in our internal control over financial reporting, as defined in Rule 13a-15(f) promulgated under the Exchange Act, during the quarter ended July 31, 2013 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

Management is not aware of any legal proceedings contemplated by any governmental authority or any other party against us.  None of our directors, officers or affiliates are (i) a party adverse to us in any legal proceedings, or (ii) have an adverse interest to us in any legal proceedings.  Management is not aware of any other legal proceedings that have been threatened against us.

ITEM 1A. RISK FACTORS

 

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.  MINE SAFETY DISCLOSURES

N/A.

ITEM 5.  OTHER INFORMATION

None.

ITEM 6. EXHIBITS

 

Exhibit	Exhibit
Number	Description
31.1	Certification of the Chief Executive Officer and Chief Financial Officer Pursuant to Rule 13a-14 or 15d-14 of the Exchange Act pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of the Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 

 

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act, the Registrant has duly caused this Quarterly Report to be signed on its behalf by the undersigned thereunto duly authorized.

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