IONIX TECHNOLOGY, INC. - Quarter Report: 2014 December (Form 10-Q)

cambridge12312014xbrl1.htm - Generated by SEC Publisher for SEC Filing

FORM 10-Q

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2014

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

Commission file number 000-54485

Cambridge Projects, Inc.

(Exact name of registrant as specified in its charter)

Nevada		45-0713638
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

245 East Liberty Street, Suite 200, Reno, Nevada, 89501

(Address of principal executive offices)

(702)-666-4298

(Registrant’s telephone number, including area code)

No change

(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 to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [x] No [ ].

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, 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, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer,” “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]

(Do not check if a smaller reporting company)

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

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING

THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes [ ] No [ ].

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 33,001,000 shares of common stock, par value $.0001 per share, outstanding as of February 11, 2015.

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CAMBRIDGE PROJECTS, INC.

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	PART I – FINANCIAL INFORMATION:	Page:

Item 1.	Financial Statements:

	Condensed Balance Sheets as of December 31, 2014 (unaudited) and June 30, 2014 (audited)	5

	Condensed Statements of Operations for the Three and Six Month Periods Ended December 31, 2014 and 2013 (unaudited)	6

	Condensed Statements of Cash Flows for the Six Month Periods Ended December 31, 2014 and 2013 (unaudited)	7

	Notes to Condensed Financial Statements (unaudited)	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	15

Item 4.	Controls and Procedures	15

	PART II – OTHER INFORMATION:

Item 1.	Legal Proceedings	15

Item 1A.	Risk Factors	15

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	15

Item 3.	Defaults Upon Senior Securities	16

Item 4.	Mine Safety Disclosures	16

Item 5.	Other Information	16

Item 6.	Exhibits	16

	Signatures	17

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PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

CAMBRIDGE PROJECTS, INC.

CONDENSED FINANCIAL STATEMENTS

DECEMBER 31, 2014

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CAMBRIDGE PROJECTS, INC.

CONDENSED BALANCE SHEETS

(Unaudited)

	December 31, 2014	June 30, 2014

ASSETS

CURRENT ASSETS
Cash	$ 775	$ 81
License fee receivable	73,000	48,000
Less : allowance for doubtful accounts	(18,000)	(18,000)
Total current assets	55,775	30,081

OTHER ASSET
Intangible asset – License	110,000	110,000
Less: Accumulated amortization	(16,436)	(10,938)
Less: Impairment	(25,000)	(15,000)
Total other assets	68,564	84,062

TOTAL ASSETS	$ 124,339	$ 114,143

LIABILITIES AND SHAREHOLDERS' DEFICIT

CURRENT LIABILITIES

Accounts payable	$ 31,520	$ 32,291
Assessment payable	10,000	-
Royalty fees payable	3,500	3,500
Due to shareholder	123,294	108,981
Deferred revenue	60,000	30,000
Total current liabilities	228,314	174,772

COMMITMENT AND CONTINGENCIES – Note 2	-	-

SHAREHOLDERS’ DEFICIT

Preferred stock, 5,000,000 shares authorized of $.0001 par value; none issued and outstanding	-	-
Common stock, 195,000,000 and 200,000,000 shares authorized, respectively of $.0001 par value; 33,001,000 issued and outstanding	3,300	3,300
Capital in excess of par value	10,261	10,261
Accumulated deficit	(117,536)	(74,190)
Total shareholders’ deficit	(103,975)	(60,629)

TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT	$ 124,339	$ 114,143

The accompanying notes are an integral part of these condensed financial statements.

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CAMBRIDGE PROJECTS, INC.

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)

	Six Months Ended December 31,		Three Months Ended December 31,
	2014	2013	2014	2013


Revenues	$ -	$ 18,750	$ -	$ 9,375

General and Administrative Expenses:
Professional fees	16,542	8,700	7,542	3,700
Extension fee	-	20,000	-	20,000
Impairment	10,000	5,000	5,000	5,000
Assessment	10,000	-	10,000	-
Amortization	5,498	1,998	2,749	999
Office and miscellaneous	1,306	1,188	542	591
Allowance for bad debt	-	4,000	-	4,000

Total expenses	43,346	40,886	25,833	34,290

Net loss	$ (43,346)	$ (22,136)	$ (25,833)	$ (24,915)


Net loss per common share - basic and diluted	$ -	$ -	$ -	$ -

Weighted average number of common shares outstanding	33,001,000	33,001,000	33,001,000	33,001,000

The accompanying notes are an integral part of these condensed financial statements.

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CAMBRIDGE PROJECTS, INC.

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

	Six Months Ended December 31,
	2014	2013
CASH FLOWS FROM OPERATING ACTIVITIES

Net loss	$ (43,346)	$ (22,136)
Adjustments to reconcile net income to net cash provided by (used for) operating activities:

Charges not requiring outlay of cash:
Amortization	5,498	1,998
Impairment	10,000	5,000
Allowance for bad debt	-	4,000

Changes in assets and liabilities:
Increase in license fee receivable	(25,000)	(8,000)
Increases (decrease) in accounts payable	(771)	3,090
Increase in penalty payable	10,000	-
Increase in deferred revenue	30,000	11,250

Net cash used for operating activities	(13,619)	(4,798)

CASH FLOWS FROM INVESTING ACTIVITIES	-	-

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from shareholder loan	14,313	2,610

Net cash provided by financing activities	14,313	2,610

Net increase (decrease) in cash	694	(2,188)

Cash, at beginning of period	81	2,825

Cash, at end of period	$ 775	$ 637

The accompanying notes are an integral part of these condensed financial statements.

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CAMBRIDGE PROJECTS, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

DECEMBER 31, 2014

(Unaudited)

NOTE 1- BASIS OF PRESENTATION

The unaudited interim financial statements of Cambridge Projects, Inc. for the three and six month periods ended December 31, 2014 and 2013 have been prepared in accordance with United States generally accepted accounting principles (“GAAP”). In the opinion of management, such information contains all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results of such comparable periods. The results of operations for the three and six month periods ended December 31, 2014 are not necessarily indicative of the results to be expected for the full fiscal year ending June 30, 2015.

Certain information and disclosures normally included in the notes to financial statements have been condensed or omitted as permitted by the rules and regulations of the Securities and Exchange Commission, although the Company believes the disclosure is adequate to make the information presented not misleading. The accompanying unaudited financial statements should be read in conjunction with the financial statements for year ended June 30, 2014.

Preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the Condensed Financial Statements and accompanying disclosures.

NOTE 2 – COMMITMENT AND CONTINGENCIES

The Company is obligated to purchase the QI System at a fixed price of $400,000 by December 31, 2016 under various extension agreements mentioned below. There is reliance on a single project, and also a concentration in customer base and geographic area.

NOTE 3 - RELATED PARTY TRANSACTIONS

During the quarter ended December 31, 2014, the Company President advanced a total of $ 14,313 to fund working capital needs. The balance due to the President at December 31, 2014 was $ 123,294. There is no interest bearing or stated terms of repayment for these advances.

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CAMBRIDGE PROJECTS, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

DECEMBER 31, 2014

(Unaudited)

NOTE 4 - LICENSE AGREEMENTS

The Company entered into a license agreement on February 8, 2012 with Quadra International Inc. ("Quadra") to license, market and operate a pyrolic waste disposal system (“Q1 System”) in the states of Johore and Selangor, Malaysia. This license is for a period of twenty-five years and cost $40,000. This was capitalized as an intangible asset and is being amortized by the straight line method over a 10 year period. Under the terms of the licensing agreement, the Company is committed to purchase and install a QI System at a cost of $400,000 by December 31, 2016 under addendum agreements dated April 24, 2013, November 18, 2013 and April 7, 2014. Consideration for such extensions has been paid in full. The license agreement calls for royalty fees of 5% of the fees received from sub licensors and 3% of sales of by products generated from use of the system.

The April 7, 2014 the addendum agreement with Quadra also amended terms to include the granting of additional territories to all states in Malaysia for consideration of $ 70,000, payable on or before April 30, 2014. Full payment has been made.

The Company entered into a sub-license agreement on February 15, 2012 with Zhunger Capital Partners Inc. ("Zhunger”), a licensee domiciled in Taiwan to operate the QI System in the territory of Johore. The license rights were sold for $70,000 payable. The Company has entered into an extension agreement with Zhunger dated April 26, 2013, November 19, 2013 and April 10, 2014 to extend the purchase date of the QI Pyrolic System until December 31, 2015 for compensation of $ 25,000, $ 30,000, and $ 30,000, respectively.

The April 10, 2014 addendum agreement with Zhunger also amended the term to grant the Company the option of acquiring 50% of waste conversion operations derived from the QI System by investing $150,000. This option will expire on or before September 30, 2015.

Impairment of License Value

The Company has determined that it is more likely than not that the value of the license has diminished. There is no open market for this type of asset and no comparables. Therefore we have reduced the value of the asset by

$ 25,000 to a net value of $ 68,564 based on probable future cash flows.

NOTE 5 - ACCOUNTS RECEIVABLE

Based on payment patterns the allowance for bad debts is $ 18,000. The reserve remains unchanged since June 30, 2014 as management has determined that there is substantial doubt as to the collectability of extension payments from Zhunger and will recognized revenue on extension agreements dated November 19, 2013 and April 10, 2014 based upon receipt as opposed to amortizing such amounts over the term of the agreement.

NOTE 6 - BUSINESS CONCENTRATIONS

The Company currently has concentrations in supplier, customer, product and geographic area. As noted above the Company has an agreement allowing it to license the disposal technology. It has entered into a sub-license agreement granting those rights to a single licensee. The Company is not, however, limited to this activity.

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CAMBRIDGE PROJECTS, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

DECEMBER 31, 2014

(Unaudited)

NOTE 7 - INCOME TAXES

The Company files federal income taxes on a cash basis. There is a tax loss carryforward and a loss is anticipated for the current year, therefore, no tax is accrued. No corresponding tax asset is recorded due to a valuation allowance.

On August 11, 2014, the Company received a penalty assessment from the IRS in the amount of $ 10,000 for failure to provide information with respect to certain foreign owned US Corporations on Form 5472 - Information Return of a 25% Foreign Owned US Corporation for the tax period December 31, 2012. The Company’s fiscal year end is June 30 and for the fiscal years ended June 30, 2013 and 2012, the Company has filed in its tax returns Form 5472. The Company is disputing this claim and has replied to the IRS in the required time frame stating these facts. The Company has provided all information required to reverse the assessment and has accrued the $ 10,000 amount until the matter is fully resolved with the IRS. As of the report date, the matter is still pending.

NOTE 8 – COMMON AND PREFERRED STOCK

On August 7, 2014, the shareholders of the Company approved an amendment to the Articles of Incorporation and Bylaws to change the number of the authorized capital of common stock from Two Hundred Million (200,000,000) to One Hundred Ninety Five Million (195,000,000), par value of $ 0.0001. Each common stock has one (1) vote. The shareholders also approved the establishment of a Preferred Stock class with an authorized capital of Five Million (5,000,000), par value of $ 0.0001. Each Preferred Stock has one hundred (100) votes.

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

Forward Looking Statement Notice

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

Description of Business

The Company was incorporated in the State of Nevada on March 11, 2011 (inception) and maintains its principal executive office at 245 East Liberty Street, Suite 200, Reno, Nevada, 89501. Since inception, the Company has been engaged in organizational efforts and obtaining initial financing. The Company was formed as a vehicle to pursue a business combination through the acquisition of, or merger with, an operating business. The Company filed a registration statement on Form 10 with the U.S. Securities and Exchange Commission (the “SEC”) on August 23, 2011, and since its effectiveness the Company has focused its efforts to identify a possible business combination.

On February 8, 2012 we entered into a Licensing Agreement (the “Agreement”) with Quadra International Inc. (“Quadra”), a manufacturer of the QI System. The QI System processes organic waste into marketable by-products and is proprietary technology. We obtained exclusive licensing rights in the states of Johore and Selangor, Malaysia for a period of 25 years. We have exclusive rights to sub-license, establish joint ventures to commercialize, use and process organic waste, and sell related by-products. The license fee was $ 40,000 and was paid May 8, 2012. We were required to purchase and install a QI System at a fixed price of $ 400,000 before April 30, 2013. We are subject to a royalty of 5% on licensee fees received from appointed sub-licensees as well as 3% on gross sales from by-product generated from any operated QI System in Johore. We were assured that an option would be available to us to obtain exclusive license rights in other states and federal territories in Malaysia with license fees varying with each state and territory.

On April 24, 2013, we signed an addendum to the February 8, 2012 Agreement with Quadra whereby we were granted an extension of the purchase date for one QI System from April 30, 2013 to December 31, 2013 for an extension fee of $ 15,000 payable on or before May 15, 2013. The addendum also provides that although the purchase deadline is extended to December 31, 2013, the installation of the QI System would be decided at a later date as approved by Quadra’s technical team.

On November 18, 2013, we signed an addendum to the February 8, 2012 Agreement with Quadra whereby we were granted an extension of the purchase date for one QI System from December 31, 2013 to December 31, 2014 for an extension fee of $ 20,000 payable on or before November 30, 2013. Full payment has been made.

On April 7, 2014, we entered into an addendum agreement with Quadra to amend certain terms of the original agreement dated February 8, 2012 and November 18, 2013. Terms amended include the granting of additional territories to all states in Malaysia and a requirement to purchase a QI System on or before December 31, 2016 for

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consideration of $ 70,000, payable on or before April 30, 2014. On April 17, 2014, we obtained a shareholder loan in the amount of $ 70,000 and such funds were remitted to Quadra for full payment.

The QI System is designed to handle commonly generated waste streams, whether liquid, solid, mixed or unmixed (including whole tires, all types of plastics, e-waste, shredder residues, sewage sludge, animal wastes, biomass, ligneous and infectious biohazard medical waste) and represents an environmentally friendly and commercially viable alternative to traditional methods of processing waste. The solutions are commercially viable ecological recycling models based on zero-waste philosophy. We will initially be focused on using the application for processing waste tires for conversion to biochar and fuel oil.

On February 15, 2012, we entered into a Sub-License Agreement with Zhunger Capital Partners Inc. (“Zhunger”), to grant exclusive rights to sub-license, establish joint ventures to commercialize, use and process organic waste, and sell related by-products for a period of 25 years in the state of Johore, Malaysia. Zhunger was subject to a sub-license fee of $ 70,000 payable in monthly installments of $ 5,000 commencing March 1, 2012 and ending April 1, 2013. As of December 31, 2014, the sub license fee has been paid in full. As per our Agreement with Quadra, 5% of any sub license fees received are payable to Quadra on a quarterly basis. As additional consideration under the agreement with Quadra or the agreement with Zhunger, gross sales on by-products generated from the QI System will be subject to a 3% royalty fee. Zhunger was required to purchase the QI System (one treatment application – used tires) for a fixed price of $ 400,000 by April 30, 2013. We have entered into discussions to establish waste conversion operations with Zhunger through a joint venture however an agreement has not materialized. There can be no assurance that any agreements will materialize.

On April 26, 2013, we entered into an addendum to our February 15, 2012 Sub License Agreement with Zhunger whereby we granted Zhunger an extension of the purchase date for one QI System from April 30, 2013 to December 31, 2013 for an extension fee of $ 20,000 payable in lump sum on or before April 30, 2013 or payable in 5 monthly installments of $ 5,000 per month commencing from May 1 through September 1, totalling $ 25,000. Zhunger has opted to pay the extension fee through installments. As of December 31, 2014, a total of $ 18,000 is currently owed. The addendum also provides that although the purchase deadline is extended to December 31, 2013, the installation of the QI System shall be determined at a later date as approved by Quadra’s technical team.

The Sub License Agreement was also amended to increase the royalty fee on gross sales of by-products generated from the QI System from 3% to 5%. In addition, we will have the sole option to participate in joint venture operations with Zhunger for a $ 150,000 investment for 50% equity of the joint venture. This option was to expire on December 31, 2013.

On November 19, 2013, we entered into an addendum to our February 15, 2012 Sub License Agreement with Zhunger whereby we granted Zhunger an extension of the purchase date for one QI System from December 31, 2013 to December 31, 2014 for an extension fee of $ 30,000 payable in 6 monthly installments of $ 5,000 per month commencing from December 1, 2013 through May 1, 2014.

On April 10, 2014, we entered into an addendum agreement with Zhunger to amend certain terms of the original agreement dated February 15, 2012 and November 18, 2013. Terms amended include the requirement to purchase a QI System by December 31, 2015 and for the extension in time, Zhunger shall pay a fee of $ 30,000 payable in monthly instalments of $5,000 per month, commencing August 1, 2014 to January 1, 2015 ( 6 payments in all). The Company also obtained the option of acquiring 50% of waste conversion operations derived from the QI System by investing $150,000. This option will expire on or before September 30, 2015.

We are under negotiations with Zhunger to reduce the amounts Zhunger owes to us under the Sub License Agreement and addendum agreements for the reasons that Zhunger has expended considerable amounts on marketing and other related costs pertaining to establishing an operational QI System in the Territory. We expect to finalize such negotiations by the next quarter end.

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It is our intention to establish joint venture operations in Johore for the operation of a QI System for waste tire treatment. Establishing such operations will largely be dependent on our and Zhunger’s ability to raise sufficient working capital. We are currently negotiating the terms of the joint venture with Zhunger. There can be no assurance that such operations will materialize.

During the next twelve months we anticipate that a significant portion of our costs will relate to filing Exchange Act reports and professional fees for audit and legal costs.

There are no assurances that we will be able to secure any additional funding as needed. Currently, however our ability to continue as a going concern is dependent upon our ability to generate future profitable operations and/or to obtain the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they come due.

Impairment of License Value

IRS Assessment

The Company has provided all information required to reverse the assessment and has accrued the $ 10,000 amount until the matter is fully resolved with the IRS. As of the report date, the matter is still pending.

Resignation of Independent Accountant

Effective May 12, 2014, the Company’s independent accountant, Mr. Robert Jeffrey of Jeffrey and Company resigned. His resignation was as a result of notification that Jeffery and Company is no longer registered with the Public Company Accounting Oversight Board.

On May 12, 2014, the Company appointed Michael F. Albanese, C.P.A as our independent accountant. Mr. Albanese is registered with the Public Company Accounting Oversight Board.

Liquidity and Capital Resources

As of December 31, 2014, we had a negative working capital of $ 172,539. Our current assets consist primarily of

$ 73,000 in license fees (extension fees) receivable from Zhunger and such fees have not been received on a timely basis. The $ 73,000 is comprised of $ 13,000 in fees owing under the April 26, 2013 agreement, and $ 30,000 each for agreements dated November 19, 2013 and April 10, 2014. Management has substantial doubt as to the collectability of these amounts as therefore will recognize revenue on extension agreements dated November 19, 2013 and April 10, 2014 in the amount of $ 60,000 upon receipt as opposed to amortizing such amounts over the term of the agreement.

Our current liabilities consist primarily of amounts due to our company President and shareholder in the amount of

$ 123,294 and deferred revenue of $ 60,000 relating to extension fees receivable from Zhunger as discussed above. The amounts due to our shareholder are due on demand with no interest. Our company President is committed to providing for our minimum working capital needs for the next 12 months and we do not expect previous loan amounts to be payable for the next 12 months. However we do not have a formal agreement that states any of these facts. The remaining balance of our current liabilities relates to audit and consulting fees and such payments are due

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on demand and we expect to settle such amounts on a timely basis based upon shareholder loans to be granted to us in the next 12 months. The penalty payable relateS to the IRS assessment as discussed above.

We will require approximately $ 71,000 to fund our working capital needs as follows:

Settlement of account payable	33,000
Audit and accounting	17,000
Consulting fees – Periodic reports and Edgar/XBRL filing	15,000
Office and miscellaneous	6,000
Total	$ 71,000

We will not consider taking on any long-term or short-term debt from financial institutions in the immediate future.

We are dependent upon certain related parties to provide continued funding and capital resources. If continued funding and capital resources are unavailable at reasonable terms, we may not be able to implement our plan of operations. We are also anticipating fees receivable from Zhunger for payment of their extension fee as per our agreements dated April 26, 2013, November 19, 2013 and April 10, 2014 however there can be no assurance that such payments will be made on a timely basis. The majority shareholder has stated intent to continue funding current expenditures, but there is no guarantee of this shareholder funding. The financial statements do not include any adjustments related to the recoverability of assets and classification of liabilities that might be necessary should the Company be unable to continue in operation.

Results of Operations

For the three and six month periods ended December 31, 2014, we did not generate any revenues based upon management’s decision to recognize revenue upon receipt as opposed to amortizing amounts over the term of the agreement. For the three and six month periods ended December 31, 2013, our revenues were $ 9,375 and $ 18,750, respectively, relating to the extension agreements dated April 26, 2013 and November 19, 2013.

For the six month period ended December 31, 2014, our expenses totalled $ 43,346 as follows:

	2014	2013
General and Administrative Expenses:
Professional fees	$ 16,542	$ 8,700
Extension fee	-	20,000
Impairment	10,000	5,000
Assessment	10,000	-
Amortization	5,498	1,998
Office and miscellaneous	1,306	1,188
Allowance for bad debt	-	4,000

Total expenses	$ 43,346	$ 40,886

Our professional fees increased as a result of an increase in audit fees and also a charge relating to the re-audit of our 2013 financial statements. We do not anticipate this charge in the future. Additional fees were incurred for related quality reviews.

Management regularly assesses the value of our license and has determined that the value has more than likely, diminished. As a result, management believes it would be conservative to recognized impairment of $ 5,000 per quarter. As of December 31, 2014, we recognized $ 10,000 in impairment charges.

The $ 10,000 penalty assessment was accrued until the matter with the IRS, as described above, is resolved.

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Our amortization expense increased as the 2014 amount includes amortization for our 2^nd license granted on April 7, 2014 for all remaining territories in Malaysia. The 2^nd license was purchased for $ 70,000 and is amortized over a 10 year period.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Contractual Obligations

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, we are not required to provide this information.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, we are not required to provide information required by this Item.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed pursuant to the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules, regulations and related forms, and that such information is accumulated and communicated to our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

As of December 31, 2014, we carried out an evaluation, under the supervision and with the participation of our principal executive officer and our principal financial officer of the effectiveness of the design and operation of our disclosure controls and procedures. Based on this evaluation, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.

Changes in Internal Controls

There have been no changes in our internal controls over financial reporting during the quarter ended December 31, 2014 that have materially affected or are reasonably likely to materially affect our internal controls.

PART II — OTHER INFORMATION

Item 1. Legal Proceedings.

There are presently no material pending legal proceedings to which the Company, any executive officer, any owner of record or beneficially of more than five percent of any class of voting securities is a party or as to which any of its property is subject, and no such proceedings are known to the Company to be threatened or contemplated against it.

Item 1A. Risk Factors.

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.

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

None.

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Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

N/A

Item 5. Other Information.

On April 21, 2014, we filed a Form 8K, Item 1.01, announcing our agreement with Quadra dated April 7, 2014 and agreement with Zhunger dated April 10, 2014. The agreement with Quadra provided us with rights to additional territories in Malaysia and the agreement with Zhunger provided an extension in the purchase date requirement.

On May 20, 2014, we filed a Form 8K, Item 4.01 announcing the resignation of our independent accountant and the appointment of a successor effective May 12, 2014.

On June 17, 2014, we filed a Form 8K/A, Item 4.01 and 9.01 to amend the original Form 8K filed on May 20, 2014 to comply with Regulation SK Item 304 and to also include exhibit 16.1 containing the auditor consent letter.

On September 3, 2014, we filed a Form 8K, Item 5.03 and 9.01 to announce that on August 7, 2014, the shareholders approved an amendment to the Articles of Incorporation and Bylaws to change the number of the authorized capital of common stock from Two Hundred Million (200,000,000) to One Hundred Ninety Five Million (195,000,000), par value of $ 0.0001. Each common stock has one (1) vote. The shareholders also approved the establishment of a Preferred Stock class with an authorized capital of Five Million (5,000,000), par value of $ 0.0001. Each Preferred Stock has one hundred (100) votes.

Item 6. Exhibits.

(a) Exhibits required by Item 601 of Regulation S-K.

Exhibit No.	Description
3.1	Certificate of Incorporation, as filed with the Nevada Secretary of State on March 11, 2011*
3.1(a)	Amendment to Articles of Incorporation as filed with the Nevada Secretary of State on August 7, 2014**
3.2	By-laws*
3.2(a)	Amended Bylaws**
31.1	Certification of the Company’s Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with respect to the registrant’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2014.
32.1	Certification of the Company’s Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101	Financial statements from the quarterly report on Form 10-Q of the Company for the quarter ended December 31, 2014, formatted in Extensible Business Reporting Language (XBRL): (i) the Statements of Operations, (ii) the Balance Sheets, (iii) the Statements of Cash Flows (iv) the Statement of Shareholders’ Equity and (v) the Notes to Financial Statements.

*Filed as an exhibit to the Company's Registration Statement on Form 10, as filed with the SEC on August 23, 2011, and incorporated herein by this reference.

** Filed as and exhibits to the Company’s Form 8K, as filed with the SEC on September 3, 2014, and incorporated herein by this reference.

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SIGNATURES

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

	CAMBRIDGE PROJECTS INC.
Dated: February 11, 2015	By:	/s/ Locksley Samuels
		Locksley Samuels
		President and Director Principal Executive Officer Principal Financial Officer

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