CGS INTERNATIONAL, INC. - Quarter Report: 2022 July (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

For the quarterly period ended: July 31, 2022

Commission File Number: 333-182566

1111 South Roop Street, #100, Carson City, NV 89702

(Address of principal executive offices) (Zip Code)

+63-28-4412-083

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) 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 ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 36,690,013 common shares issued and outstanding as of September 7, 2022.

CGS INTERNATIONAL, INC.

QUARTERLY REPORT

TABLE OF CONTENTS

CGS INTERNATIONAL, INC.

CONDENSED FINANCIAL STATEMENTS

July 31, 2022

Unaudited

CGS INTERNATIONAL, INC.

(formerly Tactical Services Inc.)

BALANCE SHEETS

(UNAUDITED)

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

CGS INTERNATIONAL, INC.

(formerly Tactical Services Inc.)

STATEMENTS OF OPERATIONS

(UNAUDITED)

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

CGS INTERNATIONAL, INC.

(formerly Tactical Services Inc.)

STATEMENTS OF STOCKHOLDERS’ DEFICIT

(UNAUDITED)

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

CGS INTERNATIONAL, INC.

(formerly Tactical Services Inc.)

STATEMENTS OF CASH FLOWS

(UNAUDITED)

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

CGS INTERNATIONAL, INC.

(formerly Tactical Services Inc.)

Notes to the Financial Statements

CGS INTERNATIONAL, INC.

(formerly Tactical Services Inc.)

Notes to the Financial Statements

CGS INTERNATIONAL, INC.

(formerly Tactical Services Inc.)

Notes to the Financial Statements

CGS INTERNATIONAL, INC.

(formerly Tactical Services Inc.)

Notes to the Financial Statements

On February 8, 2019, the Company issued a $30,000 note payable to a non related party. The note is unsecured bears interest at 10% per annum, and is due on demand. Interest expense on the note was $756 and $756 for the three months ended July 31, 2022 and 2021, respectively.

On July 14, 2020, the Company issued a $500 note payable to a non related party. The note is unsecured bears interest at 10% per annum, and is due on demand. Interest expense on the note was $13 and $13 for the three months ended July 31, 2022 and 2021, respectively.

On November 4, 2020, the Company received $15,000 as a loan for payment of expenses from an unrelated party. The amount owing is unsecured, the note is interest bearing. Interest rate is 10% and due on demand. Interest expense on the note was $378 and $378 for the three months ended July 31, 2022 and 2021, respectively.

On November 10, 2020, the Company received $2,250 as a loan for payment of expenses from an unrelated party. The amount owing is unsecured, the note is interest bearing. Interest rate is 10% and due on demand. Interest expense on the note was $57 and $56 for the three months ended July 31, 2022 and 2021, respectively.

On November 17, 2020, the Company received $7,500 as a loan for payment of expenses from an unrelated party. The amount owing is unsecured, the note is interest bearing. Interest rate is 10% and due on demand. Interest expense on the note was $189 and $189 for the three months ended July 31, 2022 and 2021, respectively.

On February 15, 2021, the Company received $16,000 as a loan for payment of expenses from an unrelated party. The amount owing is unsecured, the note is interest bearing. Interest rate is 10% and due on demand. Interest expense on the note was $403 and $403 for the three months ended July 31, 2022 and 2021, respectively.

On February 15, 2021, the Company received $7,500 as a loan for payment of expenses from an unrelated party. The amount owing is unsecured, the note is interest bearing. Interest rate is 10% and due on demand. Interest expense on the note was $189 and $892 for the three months ended July 31, 2022 and 2021, respectively.

On June 2, 2021, the Company received $4,500 as a loan for payment of expenses from an unrelated party. The amount owing is unsecured carries and interest rate of 10% and is due within 10 days of demand. Interest expense on the note was $113 and $73 for the three months ended July 31, 2022 and 2021, respectively.

CGS INTERNATIONAL, INC.

(formerly Tactical Services Inc.)

Notes to the Financial Statements

On June 3, 2021, the Company received $9,000 as a loan for payment of expenses from an unrelated party. The amount owing is unsecured carries and interest rate of 10% and is due within 10 days of demand. Interest expense on the note was $227 and $143 for the three months ended July 31, 2022 and 2021, respectively.

On July 8, 2021, the Company received $4,000 as a loan for payment of expenses from an unrelated party. The amount owing is unsecured carries and interest rate of 10% and is due within 10 days of demand. Interest expense on the note was $101 and $25 for the three months ended January 31, 2022 and 2021, respectively.

On July 9, 2021, the Company received $6,000 as a loan for payment of expenses from an unrelated party. The amount owing is unsecured carries and interest rate of 10% and is due within 10 days of demand. Interest expense on the note was $151 and $36 for the three months ended July 31, 2022 and 2021, respectively.

On July 21, 2021, the Company received $5,000 as a loan for payment of expenses from an unrelated party. The amount owing is unsecured carries and interest rate of 10% and is due within 10 days of demand. Interest expense on the note was $126 and $14 for the three months ended July 31, 2022 and 2021, respectively.

On October 31, 2021, the Company received $24,420 as a loan for payment of expenses from an unrelated party. The amount owing is unsecured carries and interest rate of 10% and is due within 10 days of demand. Interest expense on the note was $615 and $0 for the three months ended July 31, 2022 and 2021, respectively.

On December 31, 2021, the Company received $20,600 as a loan for payment of expenses from an unrelated party. The amount owing is unsecured carries and interest rate of 10% and is due within 10 days of demand. The note payable balance as of July 31, 2022 is $20,600. Interest expense on the note was $519 and $0 for the three months ended July 31, 2022 and 2021, respectively.

On January 31, 2022, the Company received $53,284 as a loan for payment of expenses from an unrelated party. The amount owing is unsecured carries and interest rate of 10% and is due within 10 days of demand. The note payable balance as of July 31, 2022 is $53,284. Interest expense on the note was $1,343 and $0 for the three months ended July 31, 2022 and 2021, respectively.

On February 16, 2022, the Company received $60,000 as a loan for payment of expenses from an unrelated party. The amount owing is unsecured carries and interest rate of 10% and is due within 10 days of demand. The note payable balance as of July 31, 2022 is $60,000. Interest expense on the note was $1,512 and $0 for the three months ended July 31, 2022 and 2021, respectively.

On February 19, 2022, the Company entered into an agreement to purchase a 2108 Mitsubishi Montero Sport Wagon for $25,692. The Company paid $12,846 as a down payment and financed the additional $12,846 with a note payable.  The amount owing is secured by the vehicle, carries an interest rate of 9%, and is due January 25, 2026. The Company made payments of $741 during the three months ended July 31, 2022, and the note payable balance was $11,067. Interest expense on the note was $430 and $0 for the years ended July 31, 2022 and 2021, respectively.

On March 31, 2022, the Company received $25,000 as a loan for payment of expenses from an unrelated party. The amount owing is unsecured carries and interest rate of 10% and is due within 10 days of demand. Interest expense on the note was $631 and $0 for the years ended July 31, 2022 and 2021, respectively.

On April 08, 2022, the Company received $21,000 as a loan for payment of expenses from an unrelated party. The amount owing is unsecured carries and interest rate of 10% and is due within 10 days of demand. Interest expense on the note was $529 and $0 for the three months ended July 31, 2022 and 2021, respectively.

On April 11, 2022, the Company received $9,000 as a loan for payment of expenses from an unrelated party. The amount owing is unsecured carries and interest rate of 10% and is due within 10 days of demand. Interest expense on the note was $227 and $0 for the three months ended July 31, 2022 and 2021, respectively.

On May 11, 2022, the Company received $30,000 as a loan for payment of expenses from an unrelated party. The amount owing is unsecured carries and interest rate of 10% and is due within 10 days of demand. Interest expense on the note was $666 and $0 for the three months ended July 31, 2022 and 2021, respectively.

On April 11, 2022, the Company received $16,200 as a loan for payment of expenses from an unrelated party. The amount owing is unsecured carries and interest rate of 10% and is due within 10 days of demand. Interest expense on the note was $133 and $0 for the three months ended July 31, 2022 and 2021, respectively.

CGS INTERNATIONAL, INC.

(formerly Tactical Services Inc.)

Notes to the Financial Statements

On August 24, 2021 the holder of $101,697 of the Company’s related party debt assigned the debt to an unrelated party, who then on September 13, 2021 assigned the debt to six note holders. The debt was then modified to include the term in the notes below

On September 13, 2021, the Company issued a $10,000 10% unsecured convertible note. The note is due on September 13, 2023 and is convertible into shares of the company’s common stock at a price of $0.002 per share. The Company has determined the value associated with the beneficial conversion feature in connection with the notes to be $10,000. On September 14, 2021 $2,800 of the note principal was converted into 1,400,000 shares of the Company’s common stock, valued at $1,428,000, and recorded a loss on settlement of debt of $1,425,200. On October 5, 2021 $4,400 of the note principal was converted into 2,200,000 shares of the Company’s common stock, valued at $7,656,000, and recorded a loss on settlement of debt of $7,651,600. On June 1, 2022 $2,800 of the note principal was converted into 1,400,000 shares of the Company’s common stock, valued at $189,000, and recorded a loss on settlement of debt of $186,200.  The convertible note payable balance as of July 31, 2022 is $0. 

On September 13, 2021, the Company issued a $10,000 10% unsecured convertible note. The note is due on September 13, 2023 and is convertible into shares of the company’s common stock at a price of $0.002 per share. The Company has determined the value associated with the beneficial conversion feature in connection with the notes to be $10,000.  On September 22, 2021 $3,200 of the note principal was converted into 1,600,000 shares of the Company’s common stock valued at $1,632,000 and recorded a loss on settlement of debt of $1,628,800. On October 5, 2021 $4,400 of the note principal was converted into 2,200,000 shares of the Company’s common stock valued at 7,656,000 and recorded a loss on settlement of debt of $7,651,600. On May 5, 2022 $2,400 of the note principal was converted into 1,200,000 shares of the Company’s common stock valued at 252,000, and recorded a loss on settlement of debt of $249,600. The convertible note payable balance as of July 31, 2022 is $0. 

CGS INTERNATIONAL, INC.

(formerly Tactical Services Inc.)

Notes to the Financial Statements

Under the Certificate of Designation, holders of the Series B Preferred Stock are entitled at their option to convert their preferred shares into common stock at a conversion rate of five (5) shares of common stock for every one (1) share of Series B Preferred Stock. The holders of Series B Preferred stock are not entitled to voting rights. The holders are entitled to equal rights with our Preferred Series A stockholders as it relates to liquidation preference.

As of July 31, 2022, and April 30, 2022 the Company had 36,690,013 and 23,690,000 shares of common shares issued and outstanding, respectively.

As of July 31, 2022, and April 30, 2022 the Company had 3,000,000 and 3,000,000 shares of Series A Preferred Stock issued and outstanding, respectively.

As of July 31, 2022, and April 30, 2022 the Company had 3,869,696 and 5,689,696 shares of Series B Preferred Stock issued and outstanding, respectively.

As of July 31, 2022, and April 30, 2022 the Company had 0 and 0 shares of Series C Preferred Stock issued and outstanding, respectively.

On May 5, 2022 the Company issued 1,300,000 shares of common stock valued at $585,000 for debt settled in a prior period.

On May 5, 2022, a convertible note holder converted $2,400 in principal into 1,200,000 shares of common stock at a conversion price of $0.002 per share. The shares were valued at $252,000, and a loss on settlement of debt of $249,600 was recorded.

On June 1, 2022, a convertible note holder converted $2,800 in principal into 1,400,000 shares of common stock at a conversion price of $0.002 per share. The shares were valued at $189,000, and a loss on settlement of debt of $186,200 was recorded.

On May 16, 2022 a Preferred Series B stockholder converted 400,000 shares of Preferred Series B Stock into 2,000,000 shares of the Company’s common stock.

On June 30, 2022 a Preferred Series B stockholder converted 420,000 shares of Preferred Series B Stock into 2,100,000 shares of the Company’s common stock.

On June 30, 2022 a Preferred Series B stockholder converted 480,000 shares of Preferred Series B Stock into 2,400,000 shares of the Company’s common stock.

On June 30, 2022 a Preferred Series B stockholder converted 520,000 shares of Preferred Series B Stock into 2,600,000 shares of the Company’s common stock.

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

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties. All statements other than statements of historical or current facts included in this Quarterly Report on Form 10-Q are forward-looking statements. Forward looking statements refer to our current expectations and projections relating to our financial condition, results of operations, plans, objectives, strategies, future performance, and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as “anticipate,” “could,” “estimate,” “expect,” “project,” “plan,” “potential,” “intend,” “believe,” “may,” “might,” “will,” “objective,” “should,” “would,” “can have,” “likely,” and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events. For example, all statements we make relating to our estimated and projected earnings, revenue, costs, expenditures, cash flows, growth rates and financial results, our plans and objectives for future operations, growth initiatives, or strategies are forward-looking statements. All forward-looking statements are subject to risks and uncertainties, including the risks and uncertainties described in our Form 8-K dated October 20, 2021, filed with the Securities and Exchange Commission (the “SEC”) on the same date, as well as our other SEC filings, as applicable, which factors are incorporated by reference herein. We operate in an evolving environment, new risk factors and uncertainties emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statement. We qualify all of our forward-looking statements by these cautionary statements.

We undertake no obligation to update or revise these forward-looking statements, except as required under the federal securities laws.

Corporate History

On April 17, 2012, Mr. Vagner Gomes Tome, our former president, and sole director, incorporated the Company in the State of Nevada under the name Line Up Advertisement, Inc. On May 23, 2013, the Company accepted the resignation of Vagner Gomes Tome as the sole director and officer of the Company and appointed Joelyn Alcantara to serve in his stead. Thereafter, on April 25, 2017, Ms. Joelyn Alcantara resigned from all positions with the Company, including those of President, Chief Executive Officer, Chief Financial Officer, Treasurer, Secretary and Sole-Director. The resignation was not the result of any disagreement with the Company on any matter relating to the Company’s operations, policies, or practices.

On April 25, 2017, Mr. Francisco Ariel Acosta was appointed as the sole member of the Company’s Board of Directors and as the Company’s President, Chief Executive Officer, Chief Financial Officer, Treasurer, and Secretary.

On October 23, 2017, the Company closed on an Asset Acquisition Agreement (the “Original Agreement”) with Thomas Li, an individual and Nathan Xian, an individual (collectively Mr. Li and Mr. Xian are refereed to hereinafter as the “Inventors”). The Company purchased those assets owned by Inventors relating to Inventor’s development, sales, marketing, and distribution of Unmanned Ariel Vehicles (“UAV” or “Drones”) including but not limited to patents, trademarks, know-how, trade secrets, supply lists and other assets and intellectual property of any kind, relating directly or indirectly to the manufacturing, sales, and distribution of the Drones (the “Acquired Assets”). The Company was to acquire one hundred percent (100%) of the Acquired Assets in exchange for the issuance of an aggregate of 60,000,000 restricted shares of the Company’s common stock (“TACC Shares”) to the Inventors (the “Purchase Price”).

Additionally, pursuant to the terms and conditions of the Original Agreement, the following changes to the Management of the Company occurred:

On October 4, 2017, the Company changed its name from Line Up Advertisement, Inc. to Tactical Services, Inc. to reflect the new business direction of the Company.

However, on August 24, 2018, the Company and the Inventors entered into a Termination Agreement (the “Termination Agreement”), terminating the Original Agreement. The Termination Agreement was the direct result of a material breach of the terms and conditions of the Original Agreement. Specifically, the Inventors, pursuant to Section 2.01 of the Original Agreement, were to “sell, transfer, convey, assign and deliver…” various assets to the Company. As of the date thereof, the Inventors were unsuccessful in fulfilling their obligations under the terms and conditions of the Original Agreement. The effect of the Termination Agreement was that the Original Agreement was rendered null and void and of no legal effect whatsoever, without any liability or obligation on the part of the parties to the Original Agreement.

Accordingly, Mr. Li and Mr. Xian resigned from all positions with the Company effective as of August 24, 2018, and Mr. Francisco Ariel Acosta was re-appointed as the sole member of the Company’s Board of Directors and as the Company’s President, Chief Executive Officer, Chief Financial Officer, Treasurer, and Secretary.

On June 1, 2021, our board of directors approved changing our corporate name from Tactical Services, Inc. to CGS International, Inc. Additionally, on June 1, 2021, our Board of Directors approved a reverse stock split of our issued and authorized shares of common stock on the basis of 400 old shares for one (1) new share. When approved, our issued and outstanding capital will decrease from 76,000,000 shares of common stock to 190,000 shares of common stock. The $0.001 par value of our common shares will remain unchanged.

The resolutions of our Board of Directors approving the above-described reverse stock split and name change are subject to the prior approval by the Financial Industry Regulatory Authority (FINRA). In anticipation of submitting to FINRA, on June 7, 2021, we filed with the Nevada Secretary of State (i) a Certificate of Change Pursuant to NRS 78.209 reflecting the reverse stock split and (ii) a Certificate for Reinstatement via which we also filed an Application for Reinstatement or Revival form changing our name to CGS International, Inc., thereby effectively amending our Articles of Incorporation.

The Reverse Stock Split and Name Change previously announced on June 30, 2021, by way of Current Report on Form 8-K, became effective with the Financial Industry Regulatory Authority (“FINRA”) and in the marketplace at the open of business on August 31, 2021, whereupon the shares of the Registrant’s common stock began trading on a split-adjusted basis. On August 31, 2021, the trading symbol for our common stock changed to “TTSID” for a period of 20 business days, after which our common stock began to trade under our new trading symbol “CGSI”. The new CUSIP number for our common stock is 125361105.

On September 29, 2021, CGS International, Inc., entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Ramon Mabanta, an individual (d.b.a. World Agri Minerals) (“WAM”), pursuant to which the Company would acquire all the assets of WAM. WAM holds the rights to the formulation, manufacturing, sales, marketing, and distribution of its premiere commercial agriproduct GENESIS 89™ and GENESIS 89™ Gold, which is a unique formulation and packaging of a commercial agriproduct using a natural processes whereby minerals are extracted from deep-ocean deposits and combined with additional organic ingredients resulting in the GENESIS 89™ and GENESIS 89™ Gold being: (i) properly balanced, readily bioavailable, formulas that are shipped as concentrate to commercial growers; (ii) ready-to-use products for the both the amateur and commercial retail market; and, (iii) Genesis 89™ Gold is being blended specifically for use and deployment in the cannabis industry. GENESIS 89™ and GENESIS 89™ Gold provide assurance and insurance to the end-user that crops do not require conventional pesticides, producing an eco-friendlier organic product for the consumer.

On October 11, 2021 (the “Closing Date”), CGS International, Inc. (the “Company”) and Ramon Mabanta, an individual (d.b.a. World Agri Minerals) (“WAM”) entered into a Bill of Sale and Assignment Agreement effectuating the Closing that certain Asset Purchase Agreement (the “Purchase Agreement”) by and among the Company and WAM, pursuant to which the Company acquired all the assets of WAM, (the “Acquisition”). The aggregate purchase price for the assets of WAM is 30,000,000 restricted shares (the “Shares”) of the Company’s common stock (the “Purchase Price”) which were paid upon the closing of the Purchase Agreement. Each of Company and WAM have made customary representations, warranties, covenants, and indemnities in connection with the Acquisition.

A description of the specific terms and conditions of the acquisition are set forth in the Purchase Agreement, which was originally disclosed on Form 8-K filed with the Commission on September 29, 2021, as Exhibit 10.01 and the Bill of Sale and Assignment Agreement which was originally disclosed on Form 8-K filed with the Commission on October 11, 2021, as Exhibit 10.01, both of which are incorporated herein by reference.

On November 23, 2021, the Company received certified documents from the Government of the Philippines confirming the formation on November 19, 2021, of our wholly owned subsidiary, World Agri Minerals Inc. We anticipate that the majority of our ongoing operations will be conducted by and through World Agri Minerals Inc. on a going forward basis.

On December 20, 2021, the “Company ratified and appointed Mr. Virgilio Acuna to serve as the Independent Chairman of the Company’s Board of Directors until the next annual meeting of the Corporation or until his respective successor is duly appointed. The Board has also determined that Mr. Acuna is an “independent director” as defined by Rule 4200(a)(15) of the Marketplace Rules of The Nasdaq Stock Market, Inc.

Results of Operations for the three months Ended July 31, 2022 and 2021

The following summary of our results of operations should be read in conjunction with our audited financial statements for the three months ended July 31, 2022 and 2021 which are included herein.

Our operating results for the three months ended July 31, 2022 and 2021 are summarized as follows:

Operating Revenues

During the three months ended July 31, 2022 and 2021, our company did not record any revenues.

Operating Expenses

Operating expenses for the three months ended July 31, 2022 were $75,774 compared to $29,455 for the three months ended July 31, 2021. The increase in operating expenses of $29,455 was primarily attributed to an increase professional and filing fees.

Other Income

Other income consisting of interest expense and loss on settlement of debt for the three months ending July 31, 2022 was $448,678 and $2,276 for the three months ended in July 31, 2021. The increase in other in expense was the result of the Company issuing and settling notes payable.

Liquidity and Capital Resources

Working Capital

As of July 31, 2022 and April 30, 2021, we had 10,941 and 26,961 in cash and other current assets in the Company.

As of July 31, 2022, we had total current liabilities of $516,373 compared with $450,233 as of April 30, 2022.

Cash Flows

Cash flow from Operating Activities

During the three months ended July 31, 2022, we used $66,323 of cash for operating activities as compared to $500 during the three months ended July 31, 2021. The increase in cash used in operating activities was primarily the result of the increase in net loss attributed to increased operations during the quarter.

Cash flow from Financing Activities

During the nine months ended July 31, 2022, the Company received $50,729 of financing as compared to $28,500 during the three months ended July 31, 2021. The increase was attributed to increased financing during the year.

Going Concern

These financial statements have been prepared on a going concern basis, which implies that the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has a working capital deficit of $505,432 and has an accumulated deficit of $113,819,152. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability to raise equity or debt financing, and the attainment of profitable operations from the Company's future business. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. 

Management is currently looking at various options and investment opportunities. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available on acceptable terms, the Company may not be able to take advantage of prospective business endeavours or opportunities which could significantly and materially restrict the Company’s operations. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

Off-balance sheet arrangements

The Company has no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect or change on the Company’s financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors. The term “off-balance sheet arrangement” generally means any transaction, agreement or other contractual arrangement to which an entity unconsolidated with the Company is a party, under which the Company has (i) any obligation arising under a guarantee contract, derivative instrument or variable interest; or (ii) a retained or contingent interest in assets transferred to such entity or similar arrangement that serves as credit, liquidity or market risk support for such assets.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Not required.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer (who is our Principal Executive Officer) and our Chief Financial Officer (who is our Principal Financial Officer and Principal Accounting Officer), of the effectiveness of the design of our disclosure controls and procedures (as defined by Exchange Act Rules 13a-15(e) or 15d-15(e)) as of July 31, 2022, pursuant to Exchange Act Rule 13a-15. Based upon that evaluation, our Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were not effective as of July 31, 2022, in ensuring that information required to be disclosed by us in 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 (the “SEC”) rules and forms. This conclusion is based on findings that constituted material weaknesses. A material weakness is a deficiency, or a combination of control deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s interim financial statements will not be prevented or detected on a timely basis.

In performing the above-referenced assessment, our management identified the following material weaknesses:

Our management feels the weaknesses identified above have not had any material effect on our financial results. However, we are currently reviewing our disclosure controls and procedures related to these material weaknesses and expect to implement changes in the near term, including identifying specific areas within our governance, accounting, and financial reporting processes to add adequate resources to potentially mitigate these material weaknesses.

Our management team will continue to monitor and evaluate the effectiveness of our internal controls and procedures and our internal controls over financial reporting on an ongoing basis and is committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

Changes in Internal Controls Over Financial Reporting

There were no changes in our internal controls over financial reporting that occurred during the quarterly period ended July 31, 2022, that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting. We believe that a control system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the control system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within any company have been detected.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

The Company is not a party to any pending legal proceedings, and no such proceedings are known to be contemplated.

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

None.

Item 3. Defaults Upon Senior Securities

None

Item 4. (Removed and Reserved)

Item 5. Other Information

None

Item 6. Exhibits

* Included in Exhibit 31.1

** Included in Exhibit 32.1

SIGNATURES

Pursuant to the requirements of the Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.