DUESENBERG TECHNOLOGIES INC. - Quarter Report: 2020 April (Form 10-Q)

VGRAB COMMUNICATIONS INC.

(EXPRESSED IN US DOLLARS)

(UNAUDITED)

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

F-1

VGRAB COMMUNICATIONS INC.

(EXPRESSED IN US DOLLARS)

(UNAUDITED)

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

F-2

VGRAB COMMUNICATIONS INC.

(EXPRESSED IN US DOLLARS)

(UNAUDITED)

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

F-3

VGRAB COMMUNICATIONS INC.

(EXPRESSED IN US DOLLARS)

(UNAUDITED)

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

F-4

VGRAB COMMUNICATIONS INC.

APRIL 30, 2020

NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION

Nature of Operations

On January 8, 2015, the Company entered into a software purchase agreement with Hampshire Capital Limited (the “Vendor”) to acquire the Vgrab Software Application (“Vgrab Application”). The Vgrab Application is developed for use with smartphones using the Android and Apple iOS operating systems allowing users to redeem vouchers on their smartphones at a number of retailers and merchants.

Following the acquisition of the Vgrab Application, the Company developed Vgrab Smart Systems (“SMART Systems”), which integrate leading-edge information technologies with existing or new products and processes across multiple operating platforms, and developed a prototype vending machine with SMART Systems at its core.

As of the date of these consolidated condensed financial statements, the Company has the following subsidiaries:

Basis of Presentation

The unaudited interim condensed consolidated financial statements of the Company are presented in United States dollars and have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission (“SEC”). They do not include all information and footnotes required by GAAP for complete financial statements. Except as disclosed herein, there have been no material changes in the information disclosed in the notes to the consolidated financial statements for the year ended October 31, 2019, included in the Company’s Annual Report on Form 10-K, filed with the SEC on January 29, 2020. The unaudited interim condensed consolidated financial statements of the Company should be read in conjunction with those financial statements for the year ended October 31, 2019, included in the Company’s Annual Report on Form 10-K. In the opinion of management, all adjustments considered necessary for fair presentation, consisting solely of normal recurring adjustments, have been made. Operating results for the three and six months ended April 30, 2020, are not necessarily indicative of the results that may be expected for the year ending October 31, 2020.

Going Concern

The accompanying unaudited interim condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern. Continuation as a going concern is dependent upon the ability of the Company to obtain the necessary financing to meet its obligations and pay its liabilities arising from normal business operations when they come due and ultimately upon its ability to achieve profitable operations. The outcome of these matters cannot be predicted with any certainty and raises substantial doubt that the Company will be able to continue as a going concern. These unaudited interim condensed consolidated financial statements do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary should the Company be unable to continue as a going concern. Management intends to obtain additional funding by borrowing funds from its directors and officers, issuing promissory notes and/or a private placement of common stock.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The unaudited interim condensed consolidated financial statements include the accounts of the Company and its subsidiaries. On consolidation, all intercompany balances and transactions are eliminated.

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NOTE 3 - RELATED PARTY TRANSACTIONS

The following amounts were due to related parties as at:

(a) Amounts are unsecured, due on demand and bear no interest.

(b) Amounts are unsecured, due on demand and bear interest at 4% per annum.

During the six-month period ended April 30, 2020, the Company recorded $3,609 (2019 - $4,243) in interest expense associated with its liabilities under the notes payable issued to the major shareholder.

During the six-month period ended April 30, 2020, the Company incurred $60,137 (2019 - $ 60,516) in wages and salaries to Mr. Lim Hun Beng, the Company’s CEO, President, and director. In addition, the Company incurred $14,456 (2019 - $14,547) in reimbursable expenses with Mr. Lim.

During the six-month period ended April 30, 2020, the Company incurred $48,110 (2019 - $ 48,413) in wages and salaries to Mr. Liong Fook Weng, the Company’s CFO, and director. In addition, the Company incurred $1,403 (2019 - $ 3,141) in reimbursable expenses with Mr. Liong.

During the six-month period ended April 30, 2020, the Company incurred $12,000 (2019 - $Nil) in management fees to its director, Mr. Ong See-Ming.

NOTE 4 - EQUIPMENT

Changes in the net book value of the equipment at April 30, 2020 and at October 31, 2019 are as follows:

NOTE 5 - LONG-TERM DEBT

On July 31, 2019, one of the vendors of the Company agreed to defer repayment of CAD$83,309 the Company owed to the vendor. The deferred amount accrues interest at 6% per annuum compounded monthly and is payable on or after August 31, 2021 (as amended subsequent to April 30, 2020).

During the six-month period ended April 30, 2020, the Company accrued $1,907 in interest on the long-term debt (2019 - $Nil). As at April 30, 2020, the Company owed a total of $62,643 under its long-term debt obligation to the vendor (2019 - $64,259).

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NOTE 6 - COMMON STOCK

On October 31, 2019, the Company’s board of directors resolved to grant 133,333 shares of its common stock to Mr. Ong See-Ming for services provided to the Company. The fair value of these shares was calculated to be $29,333 and was recorded as management fees for the year ended October 31, 2019. The shares were issued on November 4, 2019.

During the Company’s fourth fiscal quarter of 2019, the Company’s debt holders agreed to convert a total of $923,798, representing a part or all of the debt owed to them by the Company into shares of the Company’s common stock.

The conversion of debt to shares was as follows:

(1)  The gain on conversion of debt to shares with related party was recorded as part of additional paid-in capital for the year ended October 31, 2019. The $115,000 loss on conversion of third-party debt was recorded during the year ended October 31, 2019.

(2)  The above shares were issued on January 8, 2020.

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Forward-Looking Statements

This Quarterly Report on Form 10-Q filed by Vgrab Communications Inc. contains forward-looking statements. These are statements regarding financial and operating performance and results and other statements that are not historical facts. The words “expect,” “project,” “estimate,” “believe,” “anticipate,” “intend,” “plan,” “forecast,” and similar expressions are intended to identify forward-looking statements. Certain important risks could cause results to differ materially from those anticipated by some of the forward-looking statements. These risks include, among other things: general economic conditions; our ability to raise enough money to continue our operations; changes in regulatory requirements that may adversely affect our business; customer acceptance of our proprietary software application; and other risks and uncertainties as set forth in “Part II - Item 1A - Risk Factors.”

Forward-looking statements are based on a number of material factors and assumptions, including, but not limited to:

the economic conditions will continue to show modest improvement in the near to medium future;  

no material change to the competitive environment;  

we will be able to access sufficient qualified staff; and  

there will be no material changes to the tax and other regulatory requirements governing us.  

While we consider these assumptions as reasonable, based on information currently available to us, these assumptions may prove to be incorrect. Actual results may vary from such forward-looking information for a variety of reasons, including but not limited to risks and uncertainties disclosed in the section titled "Part II - Item 1A - Risk Factors.”

We caution you not to place undue reliance on these forward-looking statements, which reflect our management’s view only as of the date of this report.  We are not obligated to update these statements or publicly release the results of any revisions to them to reflect events or circumstances after the date of this report or to reflect the occurrence of unanticipated events unless required by applicable securities laws. You should refer to, and carefully review, the information in the future documents we file with the United States Securities and Exchange Commission (the “SEC”).

General

You should read this discussion and analysis in conjunction with our unaudited interim condensed consolidated financial statements and related notes included in this Quarterly Report on Form 10-Q and the audited financial statements and related notes for the fiscal year ended October 31, 2019, included in our Annual Report on Form 10-K. The inclusion of supplementary analytical and related information may require us to make estimates and assumptions to enable us to fairly present, in all material respects, our analysis of trends and expectations with respect to our results of operations and the financial position taken as a whole. Actual results may vary from the estimates and assumptions we make.

We were incorporated on August 4, 2010, under the laws of the State of Nevada under the name “SOS Link Corporation.”  On April 15, 2011, we changed our place of incorporation from the State of Nevada to the Province of British Columbia, Canada and concurrently changed our name to Venza Gold Corp. The change from Nevada to British Columbia was approved by our shareholders on April 14, 2011.  On January 6, 2014, we changed our name to CoreComm Solutions Inc., and on February 11, 2015, we changed our name to VGrab Communications Inc. to reflect our current business.

On February 10, 2015, we completed an acquisition of the VGrab software application (the “VGrab Application”) pursuant to the terms of a software purchase agreement dated January 8, 2015 (the “Software Purchase Agreement”) between us and Hampshire Capital Limited (“Hampshire”). The VGrab Application is a free mobile voucher application developed for smartphones using the Android and Apple iOS operating systems and allows users to redeem vouchers on their smartphones at a number of retailers and merchants.

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On June 24, 2015, we formed a subsidiary, VGrab International Ltd., (“VGrab International”) under the Labuan Companies Act 1990 in Federal Territory of Labuan, Malaysia. The initial focus of the VGrab International was to continue development of the VGrab Application and continue its market penetration in Southeast Asia.  As of the date of this Quarterly Report on Form 10-Q, VGrab International is used as a holding company as all the business operations were moved to VGrab Communications Malaysia Sdn Bhd (“VGrab Malaysia”), which we incorporated on May 17, 2018, under the Malaysia Companies Act 2016 in Malaysia. The main business objective of Vgrab Malaysia is to facilitate online promotions, advertising, and e-commerce.

Since its incorporation, VGrab Malaysia has been working on the development of Vgrab Smart Systems (“SMART Systems”). VGrab's SMART Systems consist of several modules, including VGrab Memberships system, which allow its users to sign up via internet or quick response code, also known as "QR Code", VGrab Cloud Management System ("VCMS"), and VGrab Database Management System ("VDMS"). VCMS and VDMS form the backbone of VGrab's SMART Systems, integrating each future developed VGrab SMART Systems’ module into the platform.

On February 18, 2019, we formed another subsidiary, VGrab Asia Limited (“Vgrab Asia”). The main business objective of Vgrab Asia is to facilitate online promotions, advertising and e-commerce to its potential customer based in P.R.China.

On March 5, 2019, VGrab Asia entered into a mobile application development agreement with a group of private software developers from China (the “Vendor”) to develop a mobile software application (“VGrab WeChat Application”). VGrab WeChat Application is developed for use with smartphones in P.R.China using the WeChat Android and Apple iOS operating systems allowing users to sign up for memberships, deposit money, purchase products, redeem vouchers, upload media promotions onto the smartphones, etc... On August 14, 2019, the VGrab WeChat Application was tested and completed for client usage.

In March of 2020, the World Health Organization declared an outbreak of COVID-19 Global pandemic. The COVID-19 has impacted vast array of businesses through the restrictions put in place by most governments internationally, including the federal, provincial, and municipal governments, regarding travel, business operations and isolation/quarantine orders. At this time, the extent of the impact of the COVID-19 outbreak on the Company and its operations is unknown and will greatly depend on future developments that are highly uncertain and that cannot be predicted with confidence. These uncertainties arise from the inability to predict the ultimate geographic spread of the disease, and the duration of the outbreak, including the duration of travel restrictions, business closures or disruptions, and quarantine/isolation measures that are currently, or may be put, in place world-wide to fight the virus. While the extent of the impact is unknown, the COVID-19 outbreak may hinder the Company’s ability to raise financing for its research and development initiatives or operating costs due to uncertain capital markets, supply chain disruptions, increased government regulations and other unanticipated factors, all of which may also negatively impact the Company’s business and financial condition.

Recent Corporate Developments

The following corporate developments occurred during the quarter ended April 30, 2020, and up to the date of the filing of this report:

In March of 2020 we completed development of the prototype VGrab vending machine (the “Vending Machine”) and were attempting to organize the first test run before starting a large-scale production and commercialization of the Vending Machines. Prior to COVID-19 measures,  we were expecting to have the first prototype of the Vending Machine installed and operational at a local university by the end of April with further units to be placed across the university’s campus and other universities across Malaysia. However, due to COVID-19 measures, we were required to postpone the roll-out until the restrictions set to prevent the spread of virus are lifted and businesses are allowed to resume their normal operations.

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The newly developed Vending Machine will be customizable to sell variety of consumer products ranging from traditional snacks, soft drinks, and coffee, to prepaid mobile cards and other goods, while simultaneously displaying advertisements and other various promotional content. Each Vending Machine will be supplied with a credit card reader and a QR Code reader, which will facilitate not only payments with credit cards, but will also enable payments via eWallet and other membership-based payments.

The Vending Machines are based on the operating system developed by us, and include VGrab Membership System (described above), and newly developed VGrab Online Transactions Management System (“VOTMS”), and VGrab Advertising Rotational Management System (“VARMS”). VOTMS is a software that supports transaction-oriented applications on the Internet by integrating various existing online banks and e-Wallet systems. The VARMS software allows multiple advertisements in a single location either online or offline. Our clients will be able to promote their businesses, products, or services, through rotating their marketing material with each new page load or advertising space allotted.

Once COVID-19 restrictions are lifted we intend to resume our negotiations for a three-year distribution agreement to distribute our Vending Machines in Malaysia and Indonesia. At the same time, we are considering commercialization of the Vending Machines through creating franchising opportunities.

Summary of Financial Condition

Results of Operation

Our operating results for the three and six months ended April 30, 2020 and 2019, and the changes in the operating results between those periods are summarized in the table below.

Three and Six Months Summary

Revenue

During the three and six months ended April 30, 2020 and 2019, we did not have any revenue generating operations; as such we can provide no assurances that we will be able to generate enough cash flow from our operations to support our ongoing operations.

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Operating Expenses

Our operating expenses for the three and six months ended April 30, 2020 and 2019, consisted of the following:

During the six-month period ended April 30, 2020, our operating expenses decreased by $12,017 or 5% from $232,300, for the six months ended April 30, 2019, to $220,283 for the six months ended April 30, 2020. The most significant change in our operating expenses was associated with decrease in salaries and wages we incurred through our subsidiary, Vgrab Malaysia, which decreased by $14,709 from $167,358 we incurred during the six-month period ended April 30, 2019, to $152,649 we incurred during the six-month period ended April 30, 2020, the salaries and wages were mainly associated with salaries and reimbursable expenses we accrued to our CEO and CFO, which were mainly effected by the foreign exchange rates between Malaysian ringgit and the US dollar. Our travel and entertainment costs decreased by $6,253, from $15,160 we incurred during the six-month period ended April 30, 2019, to $8,907 during the period ended April 30, 2020. The decrease in professional fees of $1,671 to $3,715, regulatory fees of $731 to $11,499, and general and administrative fees of $1,307 to $24,214 further contributed to reduction in our operating expenses during the six-month period ended April 30, 2020. The above decreases were in part offset by increased management fees, which during the six-month period ended April 30, 2020 were $12,000, and to a smaller extent by $1,072 increase in our accounting fees, which increased to $4,928 for the six-month period ended April 30, 2020, as compared to $3,856 we incurred during the six months ended April 30, 2019.

Other Items

During the three-month period ended April 30, 2020, we recorded $2,996 (2019 - $2,395) in interest associated with our liabilities under the notes payable we issued to our major shareholder and for long-term debt, and $2,896 (2019 - $Nil) in realized foreign exchange gain associated with the fluctuation in the foreign exchange between the US, Canadian, Malaysian, and Hong Kong currencies.

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During the six-month period ended April 30, 2020, we recorded a $22,801 impairment on deposit paid by our subsidiary, VGrab Asia, to a vendor, as underlying agreement to supply certain commodities the Company acquired for trading fell through (2019 - $Nil); $5,516 (2019 - $4,243) in interest associated with our liabilities under the notes payable we issued to our major shareholder and for long-term debt, and $56 (2019 - $Nil) in realized foreign exchange gain associated with the fluctuation in the foreign exchange between the US, Canadian, Malaysian, and Hong Kong currencies.

Translation to Reporting Currency

Changes in translation to reporting currency result from differences between our functional currency, being the Canadian dollar for the parent Company, Hong Kong Dollar for VGrab Asia, and Malaysian Ringgit for VGrab Malaysia, and our reporting currency, being the United States dollar. These differences are caused by fluctuation in the foreign exchange between the four currencies as well as different accounting treatments between various financial instruments.

Liquidity and Capital Resources

GOING CONCERN

The unaudited interim condensed consolidated financial statements included in this Quarterly Report have been prepared on a going concern basis, which implies that we will continue to realize our assets and discharge our liabilities in the normal course of business. We have not generated any revenues from operations since inception, have never paid any dividends and are unlikely to pay dividends or generate significant earnings in the immediate or foreseeable future. Our continuation as a going concern depends upon the continued financial support of our shareholders, our ability to obtain necessary debt or equity financing to continue operations, and the attainment of profitable operations.

Based on our current plans, we expect to incur operating losses in future periods. At April 30, 2020, we had a working capital deficit of $830,256 and accumulated losses of $7,512,708 since inception. These factors raise substantial doubt about our ability to continue as a going concern. We cannot assure you that we will be able to generate significant revenues in the future. These unaudited interim consolidated financial statements do not give effect to any adjustments that would be necessary should we be unable to continue as a going concern. Therefore, we may be required to realize our assets and discharge our liabilities in other than the normal course of business and at amounts different from those reflected in our financial statements.

Working Capital Deficit

During the six-month period ended April 30, 2020, our working capital deficit increased by $221,732, from $608,524 as at October 31, 2019, to $830,256 as at April 30, 2020. The increase in the working capital deficit was primarily related to a $205,619 increase in amounts payable to our related parties, mainly on account of accrued salaries to our CEO and CFO, and for the advances we received from our major shareholder to support our ongoing operations. The decrease in our cash balance from $19,806 we held in our banks at October 31, 2019, to $13,729 we held in our banks at April 30, 2020, and decrease in our prepaids and advances from $27,920 at October 31, 2019, to $9,337 at  April 30, 2020, also negatively affected our working capital.

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Cash Flows

Net cash used in operating activities

During the six-month period ended April 30, 2020, we used $93,129 to support our operating activities. This cash was used to cover our cash operating expenses of $218,955, to increase our prepaid expenses and GST recoverable by $4,500 and $88, respectively, and to decrease our accounts payable and accrued liabilities by $5,692. These uses of cash were offset by $27,859 increase in amounts due to related parties for reimbursable expenses, and by $108,247 increase to accrued salaries payable to our CEO and CFO.

During the six-month period ended April 30, 2019, we used $110,064 to support our operating activities. This cash was used to cover our cash operating expenses of $231,343, to increase our GST recoverable by $167, to pay $6,171 towards future expenses, and to decrease our accounts payable and accrued liabilities by $484. These uses of cash were offset by $19,172 increase in amounts due to related parties for reimbursable expenses, and by $108,929 increase to accrued salaries payable to our CEO and CFO.

Non-cash operating activities

During the six-month period ended April 30, 2020, we recorded $22,801 in impairment of our deposits, and $1,099 in foreign exchange fluctuation between the US, Canadian, Malaysian, and Hong Kong currencies. We recorded $3,609 in interest on our notes payable to Hampshire Avenue and $1,907 in interest on CAD$83,309 we reclassified from current debt to long-term debt. In addition, we recorded $2,371 in amortization of our office equipment.

During the six-month period ended April 30, 2019, we recorded $4,243 in interest associated with our liabilities under the notes payable we issued to our major shareholder and $2,559 in amortization of our office equipment. In addition, $1,602 was associated with foreign exchange fluctuation between the US, Canadian, and Malaysian currencies.

Net cash used in investing activities

During the six-month period ended April 30, 2019, we used $5,515 to acquire computers and other equipment for our operations in Malaysia. We did not have any investing activities during the six months ended April 30, 2020.

Net cash provided by financing activities

During the six-month period ended April 30, 2020, we received net $87,432 under loan agreements with Hampshire Avenue. The loans bear interest at 4% per annum, are unsecured and payable on demand.

During the six-month period ended April 30, 2019, we received $111,379 under loan agreements with Hampshire Avenue. The loans bear interest at 4% per annum, are unsecured and payable on demand.

Capital Resources

Our ability to continue the development and marketing of the VGrab Application, SMART Systems, and products based on our technology is subject to our ability to obtain the necessary funding. We expect to raise funds through sales of our debt or equity securities. We have no committed sources of capital.  If we are unable to raise funds as and when we need them, we may be required to curtail, or even to cease our operations.

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As of April 30, 2020, we had $13,729 in cash on hand and a working capital deficit of $830,256, which raises substantial doubt about our continuation as a going concern. We plan to mitigate our losses in future years by controlling our operating expenses and actively seeking new distribution channels for our Vgrab Applications, SMART Systems, and the related products and services. We cannot provide assurance that we will be successful in generating additional capital to support our development. The financial statements do not include any adjustments that might result from the outcome of these uncertainties.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements and no non-consolidated, special-purpose entities.

Critical Accounting Policies

The preparation of financial statements in conformity with the United States generally accepted accounting principles requires our management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Our management routinely makes judgments and estimates about the effects of matters that are inherently uncertain.

The JOBS Act contains provisions that, among other things, reduce certain reporting requirements for qualifying public companies. As an “emerging growth company,” we may, under Section 7(a)(2)(B) of the Securities Act, delay adoption of new or revised accounting standards applicable to public companies until such standards would otherwise apply to private companies. We may take advantage of this extended transition period until the first to occur of the date that we (i) are no longer an "emerging growth company" or (ii) affirmatively and irrevocably opt out of this extended transition period. We have elected to take advantage of the benefits of this extended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards. Until the date that we are no longer an "emerging growth company," affirmatively and irrevocably opt out of the exemption provided by Securities Act Section 7(a)(2)(B), or upon issuance of a new or revised accounting standard that applies to our financial statements and that has a different effective date for public and private companies, we will disclose the date on which adoption is required for non-emerging growth companies and the date on which we will adopt the recently issued accounting standard.

Our significant accounting policies are disclosed in the notes to the audited financial statements for the year ended October 31, 2019. The following accounting policies have been determined by our management to be the most important to the portrayal of our financial condition and results of operation:

Principles of Consolidation

The Company’s interim consolidated financial statements include the accounts of the Company and its subsidiaries. On consolidation, the Company eliminates all intercompany balances and transactions.

Internal-Use Software

The Company incurs costs related to the development of its VGrab Applications, SMART Systems, and VGrab.com website. Costs incurred in the planning and evaluation stage of internally developed software and website, as well as development costs where economic benefit cannot be readily determined, are expensed as incurred. Costs incurred and accumulated during the development stage, where the economic benefit of the software can be readily determined, are capitalized and included as part of Intangible assets on the balance sheets. Additional improvements to the website and applications following the initial development stage are expensed as incurred. Capitalized internally developed software and website development costs will be amortized over their expected economic life using the straight-line method.

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Foreign Currency Translation and Transaction

The Parent Company’s functional currency is the Canadian dollar, VGrab Malaysia’s functional currency is Malaysian Ringgit, and Vgrab Asia’s functional currency is Hong Kong dollar, the Company’s reporting currency is the United States dollar. VGrab International’s functional and reporting currency is the United States dollar. The Company translates assets and liabilities to US dollars using year-end exchange rates, and translates revenues and expenses using average exchange rates during the period. Gains and losses arising on translation to the reporting currency are included in the other comprehensive income.

Foreign exchange gains and losses on the settlement of foreign currency transactions are included in foreign exchange expense. Except for translations of intercompany balances, all translations of monetary balances to the functional currency at the yearend exchange rate are included in foreign exchange expense. The translations of intercompany balances to the functional currency at the yearend exchange rate are included in accumulated other comprehensive income or loss.

Fair Value of Financial Instruments

Our financial instruments include cash, accounts payable and accruals as well as amounts due to related parties. We believe the fair value of these financial instruments approximates their carrying values due to their short-term nature.

Concentration of Credit Risk

Financial instruments that potentially subject us to significant concentrations of credit risk consist principally of cash and accounts receivable.

At April 30, 2020, we had $2,050 in cash on deposit with a large chartered Canadian bank, $10,875 in cash on deposits with a bank in Malaysia, and $804 in cash on deposits with a bank in Hong Kong. As part of our cash management process, we perform periodic evaluations of the relative credit standing of these financial institutions. We have not experienced any losses in cash balances and do not believe we are exposed to any significant credit risk on our cash.

Not Applicable.

We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report. The evaluation was undertaken in consultation with our accounting personnel. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, due to our current size and lack of segregation of duties, our disclosure controls and procedures are not effective in ensuring 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.

Changes in Internal Control over Financial Reporting

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None.

None.

None.

Not applicable.

Not applicable.

The following table sets out the exhibits either filed herewith or incorporated by reference.

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Notes:

(1)Filed with the SEC as an exhibit to our Registration Statement on Form S-1 filed on June 12, 2012. 

(2)Filed with the SEC as an exhibit to our Registration Statement on Form S-1/A2 filed on August 23, 2012. 

(3)Filed with the SEC as an exhibit to our Annual Report on Form 10-K filed on January 28, 2013. 

(4)Filed with the SEC as an exhibit to our Quarterly Report on Form 10-Q filed on March 8, 2013. 

(5)Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on December 4, 2013. 

(6)Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on January 9, 2014. 

(7)Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on January 14, 2015. 

(8)Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on February 17, 2015. 

(9)Filed with the SEC as an exhibit to our Annual Report on Form 10-K filed on February 9, 2016. 

(10)Filed with the SEC as an exhibit to our Quarterly Report on Form 10-Q filed on September 14, 2016. 

(11)Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on July 15, 2016. 

(12)Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on July 22, 2016. 

(13)Filed with the SEC as an exhibit to our Quarterly Report on Form 10-Q filed on September14, 2016. 

(14)Filed with the SEC as an exhibit to our Annual Report on Form 10-K filed on February 13, 2018. 

(15)Filed with the SEC as an exhibit to our Annual Report on Form 10-Q filed on March 16, 2018. 

(16)Filed with the SEC as an exhibit to our Annual Report on Form 10-Q filed on June 15, 2018. 

(17)Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on June 22, 2018. 

(18)Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on July 2, 2018. 

(19)Filed with the SEC as an exhibit to our Annual Report on Form 10-K filed on January 30, 2019. 

(20)Filed with the SEC as an exhibit to our Annual Report on Form 10-K filed on January 29, 2020. 

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In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated:  June 11, 2020

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