BOTS, Inc./PR - Quarter Report: 2014 January (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: Yesx 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.

270,135,000 common shares issued and outstanding as of January 31, 2014.

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INDEX TO FORM 10-Q FILING

FOR THE NINE MONTHS ENDED JANUARY 31, 2014

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION
Item 1.		Financial Statements (unaudited)	3
		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	12
Item 3		Quantitative and Qualitative Disclosures About Market Risk	13
Item 4.		Controls and Procedures	14
PART II - OTHER INFORMATION
Item1.		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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PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

The accompanying reviewed interim consolidated 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 (deficit) 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 nine months ended January 31, 2014 are not necessarily indicative of the results that can be expected for the year ending.

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MCIG, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

			January 31,			April 30,
			2014			2013
ASSETS
Current assets:
Cash and cash equivalents		$	37,190			3,600
Accounts receivable			6,309			-
Inventory			21,124			-
Prepaid expense			26,492			-
Total current assets			91,115			3,600
Intangible asset, net			19,440			13,366
Goodwill			1,233,672			-
Total assets		$	1,344,227			16,966
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable and other current liabilities		$	9,991			4,375
Deferred revenue			12,500			50,000
Due to related party			-			172,678
Total current liabilities			22,491			227,053
Total liabilities			22,491			227,053
STOCKHOLDERS’ EQUITY (DEFICIT)
Preferred stock, $0.0001 par value per share, 50,000,000 shares authorized, 23,000,000 and zero shares issued and outstanding			2,300			-
Common stock, $0.0001 par value per share, 560,000,000 shares authorized, 270,135,000 and 500,000,000 shares issued and outstanding			27,014			50,000
Additional paid in capital			1,568,965			-
Accumulated deficit during development stage			(276,543)			(260,087)
Total stockholders' equity (deficit)			1,321,736			(210,087)
Total liabilities and stockholders' equity (deficit)		$	1,344,227			16,966

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

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MCIG, INC.

CONDOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

The accompanying notes are an integral part of the financial statements

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MCIG, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

The Company does not feel goodwill should be impaired at this time as revenues are being generated and will be generated.

4. STOCKHOLDERS’ EQUITY

Common Stock

The authorized capital of the Company is 560,000,000 common shares with a par value of $0.0001 per share.  

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MCIG, INC.

 Notes To Consolidated Financial Statements

(Unaudited)

4. STOCKHOLDERS’ EQUITY (CONT.)

On September 17, 2013, the company issued 60,000 restricted shares of common stock at $0.21 per share for professional services rendered. These shares were valued at $12,600 based on the price on the date of grant.

On October 18, 2013, the company issued 30,000 restricted shares of common stock at $0.11 per share for professional services rendered. These shares were valued at $3,300 based on the price on the date of grant.

On November 15, 2013, the company issued 45,000 restricted shares of common stock at $0.07 per share for professional services rendered. These shares were valued at $3,150 based on the price on the date of grant.

On November 26, 2013, the company issued 500,000 shares of common stock at $0.083 per share for services of Chief Operating Officer by transferring these shares of common stock held by Paul Rosenberg. These shares were valued at $41,500 based on the price on the date of grant. It was considered as capital contribution.

On January 23, 2014. mCig, Inc. and Vapolution, Inc. entered into a Stock Purchase Agreement pursuant to which mCig issued 5,000,000 shares of common stock representing 1% of mCig's fully diluted capital structure to shareholders of Vapolution.  

Paul Rosenberg, CEO of mCig, Inc. has cancelled an equal amount (5,000,000 shares) of common shares owned by him resulting in a net non-dilutive transaction to existing mCig, Inc. shareholders.

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.

On December 12, 2013, the company made an amendment of Certificate of Incorporation to decrease the number of authorized shares of Common stock, $0.0001 par value per share, from 1,000,000,000 shares to 560,000,000 shares.

Preferred Stock

On September 14, 2013, the company entered into a Share Cancellation / Exchange / Return to Treasury Agreement with Paul Rosenberg, the chief executive officer of our company, for the cancellation of 230,000,000 shares of our common stock held by Mr. Rosenberg in exchange for 23,000,000 shares of our company’s Series A Preferred Stock. The Series A Preferred Stock has 10 votes for every share. The preferred shares are convertible and can be exchanged for a stated number of shares of the company's common stock, but not earlier than one year after the date of signature of the agreement.

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.

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MCIG, INC.

 Notes To Consolidated Financial Statements

(Unaudited)

5. RELATED PARTY TRANSACTIONS (CONT.)

As of October 31, 2013, the President of the Company, Mr. Paul Rosenberg advanced the Company the amount of $65,050 for operating purposes.

On November 26, 2014, Mr. Paul Rosenberg has transferred 500,000 shares of common stock owned by him, to Mark Linkhorst for services rendered as COO of the Company. These shares were valued at $41,500 based on the price on the date of grant. It was considered as capital contribution.

On January 23, 2014, Mr. Paul Rosenberg has cancelled 5,000,000 shares of common stock owned by him as part of a Stock Purchase Agreement between mCig and Vapolution, Inc. resulting in a net non-dilutive transaction to existing mCig, Inc. shareholders.

On January 31, 2014, Mr. Paul Rosenberg, President and CEO, agreed to forgive all debts (the sum of $65,050) owed to him by the Company and recorded as Additional Paid in Capital.

6. SUBSEQUENT EVENTS

On February 24, 2014 the company entered into a Contribution Agreement with VitaCig, Inc., a wholly-owned subsidiary. In accordance with this agreement VitaCig, Inc accepted the contribution by mCig, Inc. of certain assets consisting of intellectual property, cash, and web development services as contribution in exchange for 500,135,000 shares of common capital stock representing 100% of the shares outstanding of VitaCig, Inc. The result is that mCig, Inc. holds 500,135,000 shares of VitaCig, Inc.  Mr. Paul Rosenberg, CEO of mCig, Inc. signed the Contribution on behalf of mCig, Inc. and is not receiving the shares personally.

The company plans to dividend a portion of these shares pro-rata, based on a one for one (1:1) to only the holders of vested common stock of mCig, Inc. at the record date of the dividend. No other class of security shall be affected by the dividend.  This will result in VitaCig, Inc. shares being held for investment on mCig, Inc.’s balance sheet. The purpose is to develop a subsidiary interest related to the VitaCig brand separate from mCig.

 

 

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 originally under the name Lifetech Industries, Inc. Effective August 2, 2013, our name was changed from "Lifetech Industries, Inc." to "mCig, Inc." reflecting our new business model. Since October 2013, mCig, Inc. has positioned itself as a technology company focused on two long-term secular trends sweeping the globe: (1) The decriminalization and legalization of marijuana for medicinal or recreational purposes (2) The adoption of electronic vaporizing cigarettes (commonly known as “eCigs”) by the world’s 1.2 Billion smokers.  We manufacture and retail the mCig — the world’s most affordable loose-leaf eCig priced at only $10. Designed in the USA — the mCig provides a superior smoking experience by heating plant material, waxes, and oils delivering a smoother inhalation experience. The company also owns Vapolution, Inc. which manufactures and retails home-use vaporizers such as the Vapolution 2.0. Through its wholly owned subsidiary, VitaCig, Inc. the company is preparing to launch the VitaCig, a $2 nicotine-free eCig that delivers a

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water-vapor mixed with vitamins and natural flavors.

On January 23, 2014, the company signed a Stock Purchase Agreement with Vapolution, Inc. which manufactures and retails home-use vaporizers. In accordance with this agreement mCig, Inc. acquired 100% of Vapolution, Inc.; as part of this transaction mCig, Inc. issued 5,000,000 shares to shareholders of Vapolution, Inc. Paul Rosenberg, President & CEO of mCig, Inc. canceled an equal amount (5,000,000 shares) of common shares owned by him resulting in a net non-dilutive transaction to existing mCig, Inc. Shareholders.

An agreement with Epik Investments Limited will be closed at the expiration of the 2-year period, ended April 30, 2014.

Liquidity and Capital Resources

Results of Operations for the Nine Months Ended January 31, 2014 and 2013

Revenues

Revenues for the nine months ended January 31, 2014 and January 31, 2013 were $110,789 and $37,500 respectively as the result of our new business model and strategy and partly 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 nine months ended January 31, 2014 and January 31, 2013 were $30,635 and $7,106 respectively.

Net Loss

For the nine months ended January 31, 2014 and January 31, 2013 we incurred net loss of $16,456 and $102,131, respectively.

Expenses

Our total operation expenses for the nine months ended January 31, 2014 were $96,610, which consisted of $22,411 of professional fees, $3,881 of amortization, $33,720 of general and administrative expenses and $34,058 of share-based compensation. Our general and administrative expenses consist of bank charges, advertising and promotion, rent, computer and internet expenses, postage and delivery and other miscellaneous expenses. For the nine months ended January 31, 2013 we incurred total expenses of $132,525, which consisted of $17,441 of professional fees, $88,064 of travel expenses, $862 of amortization, and $26,158 of general and administrative expenses.

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 January 31, 2014, 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.

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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.

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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 January 31, 2014. Based on the evaluation of these disclosure controls and procedures, our sole officer concluded that our disclosure controls and procedures are ineffective.

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 January 31, 2014 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

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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.

Dated: March 17, 2014		/s/ Paul Rosenberg
		Paul Rosenberg
		President, Chief Executive Officer, Chief Financial Officer, Treasurer, and Director
		(Principal Executive Officer)

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