LEGACY VENTURES INTERNATIONAL INC. - Quarter Report: 2016 March (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the Quarterly Period Ended March 31, 2016

or

☐     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 333-199040

LEGACY VENTURES INTERNATIONAL INC.

(Exact name of registrant as specified in its charter)

2215-B Renaissance Drive

Las Vegas, Nevada  89119 

(Address of principal executive offices)(Zip Code)

1-800-918-3362

(Registrant’s telephone number, including area code)

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 periods 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 and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes ☒    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 filer. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in rule 12b-2 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 ☒

As of May 20, 2016, the registrant had 29,527,000 shares of its common stock issued and outstanding.

LEGACY VENTURES INTERNATIONAL INC.

QUARTERLY REPORT ON FORM 10-Q

March 31, 2016

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements. 

Condensed Consolidated Interim Financial Statements

LEGACY VENTURES INTERNATIONAL INC.

For the Quarterly Period Ended March 31, 2016 (unaudited)

LEGACY VENTURES INTERNATIONAL INC.

For the Quarterly Period Ended March 31, 2016 (unaudited)

Financial Statements

LEGACY VENTURES INTERNATIONAL INC.

CONDENSED CONSOLIDATED INTERIM BALANCE SHEETS

As at March 31, 2016 and June 30, 2015

Going concern [Note 2]

Subsequent events [Note 11]

See accompanying notes to the condensed interim consolidated financial statements

LEGACY VENTURES INTERNATIONAL INC.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED)

See accompanying notes to the condensed interim consolidated financial statements

LEGACY VENTURES INTERNATIONAL INC.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS (UNAUDITED)

See accompanying notes to the condensed interim consolidated financial statements

LEGACY VENTURES INTERNATIONAL INC.

Notes to the Condensed Interim Consolidated Financial Statements

As at March 31, 2016 (unaudited)

1.   NATURE OF OPERATIONS

Legacy Ventures International Inc. (the “Company”) is a management Company incorporated on March 4, 2014 in the State of Nevada. Upon its recent acquisition of RM Fresh Brands Inc. (formerly Influx Global Media Inc.) [“RM Fresh”], it is engaged in the food and beverage distribution business whose principal place of business is located at

2215-B Renaissance Drive, Las Vegas, Nevada, 89119 USA.

As explained in Note 5, on September 30, 2015 (the “Closing”), the Company entered into a Share Exchange Agreement (the “Agreement”) with and among RM Fresh and its shareholders. Pursuant to the Agreement, the Company acquired 100% of the issued and outstanding shares of RM Fresh in exchange for the issuance of 2,000,000 shares of the Company’s common stock. As a result of this transaction, RM Fresh became a wholly owned subsidiary of the Company and the former shareholders of RM Fresh owned approximately 7% of the Company’s shares of common stock.

RM Fresh was incorporated on July 29, 2008 under the laws of the Province of Ontario, Canada. RM Fresh is engaged in the business of trading and distribution of food, beverages and body care products.

2.   GOING CONCERN

The Company’s unaudited condensed interim consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company has incurred recurring losses from operations and as at March 31, 2016 has accumulated deficit of $2,804,024 which has primarily arisen from a non-cash goodwill impairment charge in the previous period. Management anticipates the Company will attain profitable status and improve its liquidity through the acquisition of RM Fresh as explained in Note 5 and continued business development and additional debt or equity investment in the Company. The Company’s continued existence is dependent upon its ability to continue to execute its operating plan and to obtain additional debt or equity financing. There can be no assurance that the necessary debt or equity financing will be available, or will be available on terms acceptable to the Company, in which case the Company may be unable to meet its obligations. Should the Company be unable to realize its assets and discharge its liabilities in the normal course of business, the net realizable value of its assets may be materially less than the amounts recorded in the financial statements. The financial statements do not include any adjustments relating to the recoverability of recorded asset amounts that might be necessary should the Company be unable to continue in existence.

3.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Consolidation

The unaudited condensed interim consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for interim financial information and the rules and regulations of the SEC and are expressed in United States dollars (“USD”). Accordingly, the unaudited condensed interim consolidated financial statements do not include all information and footnotes required by US GAAP for complete annual financial statements. In the opinion of management, the accompanying unaudited condensed interim consolidated financial statements reflect all adjustments, consisting of only normal recurring adjustments, considered necessary for a fair presentation. Interim operating results are not necessarily indicative of results that may be expected for the year ending June 30, 2016 or for any other interim period. The unaudited condensed interim consolidated financial statements should be read in conjunction with the audited financial statements of the Company and the notes thereto as of and for the year ended June 30, 2015.

LEGACY VENTURES INTERNATIONAL INC.

Notes to the Condensed Interim Consolidated Financial Statements

As at March 31, 2016 (unaudited)

3.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

The Company’s fiscal year-end is June 30. The parent Company’s functional currency is US dollar and for its subsidiary it is Canadian (“CDN”) dollar. The Company’s reporting currency is U.S. dollar.

The unaudited condensed interim consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary RM Fresh, Inc. All inter-company transactions and balances have been eliminated in preparing the consolidated financial statements.

Use of Significant Estimates

The preparation of the financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts 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 periods. Areas involving significant estimates and assumptions include inventory valuation reserves, allowance for doubtful account, intangible assets, goodwill, income taxes, accruals and going concern assessment. These estimates are reviewed periodically, and, as adjustments become necessary, they are reported in earnings in the period in which they become known. Actual results could materially differ from those estimates.

Reclassification of comparative figures

Certain of the prior period figures have been reclassified to align with Management’s current view of the Company’s operations.

Inventories

Inventories which comprise of finished goods, is valued at the lower of cost and market value, with cost being determined on a first-in, first-out basis. The cost of finished goods consists of purchase price, freight, custom duties and other delivery expenses. Net realizable value is the estimated selling price in the ordinary course of business, less any applicable selling costs. The Company evaluate the carrying value of inventory on a regular basis, taking into account such factors as historical and anticipated future sales compared with quantities on hand and the price the Company expects to obtain for products in market compared with historical cost.

Revenue Recognition

The Company recognizes revenues when they are earned, specifically when all of the following conditions are met:

LEGACY VENTURES INTERNATIONAL INC.

Notes to the Condensed Interim Consolidated Financial Statements

As at March 31, 2016 (unaudited)

3.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Accounts Receivable 

Accounts receivable are stated at outstanding balances, net of an allowance for doubtful accounts. The allowance for doubtful accounts is established through provisions charged against income. Accounts deemed to be uncollectible are charged against the allowance and subsequent recoveries, if any, are credited to the allowance. Management’s periodic evaluation of the adequacy of the allowance is based on past experience, aging of the receivables, adverse situations that may affect a customer’s ability to pay, current economic conditions and other relevant factors. This evaluation is inherently subjective as it requires estimates that may be susceptible to significant change. Unpaid balances remaining after the stated payment terms are considered past due. The Company routinely assesses the financial strength of its customers and, therefore, believes that its accounts receivable credit risk exposure is limited.

Shipping and Handling Costs

The Company accounts for shipping and handling fees in accordance with FASB ASC Topic 705 “Cost of Sales and Services”. Costs related to raw materials purchased, are included in inventory or cost of goods sold, as appropriate. While amounts charged to customers for shipping product are included in revenues, the related outbound freight costs are included in expenses as incurred.

Segment Reporting

The Company operates in one operating segment based on the activities for the Company in accordance with ASC Topic 280-10.  Operating segments are defined as components of an enterprise for which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision making group, in deciding how to allocate resources and in assessing performance.

Goodwill and Identifiable Intangible Assets

Goodwill and other identifiable intangible assets with indefinite lives that are not being amortized, such as trade names, are tested at least annually for impairment and are written down if impaired. Identifiable intangible assets with finite lives are amortized over their estimated useful lives and are reviewed for impairment whenever facts and circumstances indicate that their carrying values may not be fully recoverable. The identifiable intangible assets are being amortized over its estimated useful lives of 5 years using the straight-line method.

Foreign Currency Translation

The parent Company’s functional currency is US dollar and for subsidiary Canadian (“CDN”) dollar. The Company’s reporting currency is U.S. dollar. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Non-monetary assets and liabilities are translated using the historical rate on the date of the transaction. All exchange gains or losses arising from translation of these foreign currency transactions are included in net income (loss) for the year. The translation gains and losses resulting from the changes in exchange rates are reported in accumulated other comprehensive gain (loss).

LEGACY VENTURES INTERNATIONAL INC.

Notes to the Condensed Interim Consolidated Financial Statements

As at March 31, 2016 (unaudited)

3.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Fair Value of Financial Instruments

ASC Topic 820 “Fair Value Measurements and Disclosures” defines fair value, establishes a framework for measuring fair value and expands required disclosure about fair value measurements of assets and liabilities. ASC 820-10 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820-10 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:

In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments or interest rates that are comparable to market rates. These financial instruments include due from a shareholder, accounts receivable, accounts payable, accrued expenses, due to shareholders and note payable. The Company's cash, which is carried at fair value, is classified as a Level 1 financial instruments. Bank accounts are maintained with financial institutions of reputable credit, therefore, bear minimal credit risk.

Impairment of Long-Lived Assets

The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amounts of the assets may not be recoverable through undiscounted future cash flows. If impairment exists based on expected future undiscounted cash flows, a loss is recognized in income. The amount of the impairment loss is the excess of the carrying amount of the impaired asset over the fair value of the asset, typically based on discounted future cash flows. The Company has assessed its long-lived assets and has determined that there is an impairment of goodwill amounting to $1,394,135 as explained in Note 5.

Recently Issued Accounting Standards

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

4. DUE TO STOCKHOLDERS

Amount due to stockholders is unsecured, interest free and is repayable on demand.

LEGACY VENTURES INTERNATIONAL INC.

Notes to the Condensed Interim Consolidated Financial Statements

As at March 31, 2016 (unaudited)

5. GOODWILL AND INTANGIBLE ASSETS

Business Acquisition

ASC Topic 805, “Business Combinations” requires that all business combinations be accounted for using the acquisition method and that certain identifiable intangible assets acquired in a business combination be recognized as assets apart from goodwill. ASC Topic 350, “Intangibles-Goodwill and Other” (“ASC 350”) requires goodwill and other identifiable intangible assets with indefinite useful lives not be amortized, such as trade names, but instead tested at least annually for impairment (which the Company tests each year end, absent any impairment indicators) and be written down if impaired. ASC 350 requires that goodwill be allocated to its respective reporting unit and that identifiable intangible assets with finite lives be amortized over their useful lives.

On September 30, 2015 (the “Closing”), the Company entered into a Share Exchange Agreement (the “Agreement”) with and among RM Fresh and its shareholders. Pursuant to the Agreement, the Company acquired 100% of the issued and outstanding shares of RM Fresh in exchange for the issuance of 2,000,000 shares of the Company’s common stock. As a result of this transaction, RM Fresh became a wholly owned subsidiary of the Company and the former shareholders of RM Fresh owned approximately 7% of the Company’s shares of common stock.

This acquisition was accounted for using the acquisition method of accounting. The fair value of assets, liabilities and intangible assets and the purchase price allocation as of the valuation date, which is September 30, 2015 is as follows:

LEGACY VENTURES INTERNATIONAL INC.

Notes to the Condensed Interim Consolidated Financial Statements

As at March 31, 2016 (unaudited)

5. GOODWILL AND INTANGIBLE ASSETS (continued)

Business Acquisition (continued)

The purchase consideration of 2,000,000 shares of the Company’s common stock valued as detailed below:

Goodwill

Goodwill of $309,000 represents the excess of cost over fair value of net assets of RM Fresh acquired, less impairment. Key factors that make up the goodwill created by the transaction include knowledge and experience of the acquired customer base, vendor relationship, workforce and expected synergies from the combination of operations as it pertains to the business of RM Fresh.

The Company test for impairment of goodwill at the reporting unit level. In assessing whether goodwill is impaired, the Company utilize the two-step process as prescribed by ASC 350. The first step of this test compares the fair value of the reporting unit, determined based upon discounted estimated future cash flows, to the carrying amount, including goodwill. If the fair value exceeds the carrying amount, no further work is required and no impairment loss is recognized. If the carrying amount of the reporting unit exceeds the fair value, the goodwill of the reporting unit is potentially impaired and step two of the goodwill impairment test would need to be performed to measure the amount of an impairment loss, if any. In the second step, the impairment is computed by comparing the implied fair value of the reporting unit’s goodwill with the carrying amount of the goodwill. If the carrying amount of the reporting unit’s goodwill is greater than the implied fair value of its goodwill, an impairment loss in the amount of the excess is recognized and charged to statement of operations.

Goodwill amounting to $1,394,135 was immediately impaired based on the implied fair value of goodwill determined based on the enterprise value of the acquiree of approximately $786,000. The discounted cash flow method was used to arrive at the value of the enterprise using following major assumptions:

Ø  Weighted average cost of capital (discount rate) of 22%;

Ø  Beta 1.23 (risk associated with benefit streams); and

Ø  Long term growth rate of 2.75%.

Intangible assets

Identifiable intangible assets having gross values of $469,000 ($422,100 net of amortization charge of $46,900) comprise of gross fair values of trade-name of $236,000 and customer base/distribution rights of $233,000. Relief from royalty approach was used to arrive at the fair value of trade-name using major assumptions a) 2% royalty rate; b) 10 year life; c) cost to maintain trade name at $2,000 increasing 2.75% annually; and d) discount rate of 22%. Multi-Period Excess Earnings Method was used to arrive at the fair value of customer base/distribution rights using major assumptions a) net sales base from years 2015 to 2025; b) retention rate of 85% and c) discount rate of 22%.

LEGACY VENTURES INTERNATIONAL INC.

Notes to the Condensed Interim Consolidated Financial Statements

As at March 31, 2016 (unaudited)

5. GOODWILL AND INTANGIBLE ASSETS (continued)

Intangible Assets (continued)

Amortization expense of $23,450 on these intangible assets were recorded for the three months ended March 31, 2016. The following table presents the estimated future amortization expense of these identifiable intangible assets:

6.   ACCOUNTS AND OTHER RECEIVABLES

During the three months ended March 31, 2016, RM Fresh entered into a simultaneous arrangement with a customer and a supplier, whereby RM Fresh would act as an intermediary between the two parties. As a result of this arrangement, RM Fresh has booked a receivable from the supplier and a payable to the customer, amounting to CAD160,000 each.

7.   NOTE PAYABLE

Outstanding note payable of $53,363 represents unsecured promissory notes amounting to $26,000 and $27,363 issued on April 1, 2015 and March 4, 2016, respectively bearing interest at 20% and 12% per annum, respectively repayable within a year from issuance date. Interest accrued on these notes during the three months ended March 31, 2016 amounted to $1,528 ($nil for three months ended March 31, 2015).

Further, on August 21, 2015 the Company issued $180,000 convertible notes payable bearing interest at 10% p.a. repayable on February 21, 2017. The principal amount and accrued interest were convertible into common stock of the Company at the option of the holder at any time from the date of issuance $1. The Company concluded that there is no beneficial conversion feature determined in accordance with the guidance provided in ASC 470. Accordingly, these notes were recognized as liability at the time of issuance. On September 30, 2015 all the Holders exercised their right to convert the outstanding principal amount of these notes, into shares of the Company’s common stock at a price of $1.00 per share (Note 9).

8.   FORGIVENESS OF LOAN

Loan amounting to $17,974 provided by a related party to RM Fresh before acquisition to meet the working capital requirements and was unsecured, interest free and was repayable on demand. During nine months ended March 31, 2016, the related party agreed to forgive the loan in favour of the Company.

9.   STOCKHOLDERS’ EQUITY

COMMON STOCK - AUTHORIZED

As at March 31, 2016, the Company authorized to issue 10,000,000 shares of preferred stock, with a par value of $0.0001 and 100,000,000 shares of common stock, with a par value of $0.0001.

COMMON STOCK - ISSUED AND OUTSTANDING

On September 9, 2015, the Board of Directors and Shareholders of the Company approved a Certificate of Amendment to its Articles of Incorporation to increase the par value of Company’s common stock and preferred stock from no par value to $0.0001 per share and approved a 1:7 forward split upon the increase of the par value. As a result, the issued and outstanding shares of common stock of the Company increased from 7,400,000 shares prior to the Forward Split to 51,800,000 shares following the Forward Split.

LEGACY VENTURES INTERNATIONAL INC.

Notes to the Condensed Interim Consolidated Financial Statements

As at March 31, 2016 (unaudited)

9.   STOCKHOLDERS’ EQUITY (continued)

On September 30, 2015 the Company issued 2,000,000 shares of common stock to the former shareholders of RM Fresh pursuant to Share Exchange Agreement as explained in Note 5. Further, the Principal shareholder of the Company agreed to cancel 25,800,000 shares of common stock in accordance with the Cancellation Agreement.

As explained in Note 7, on September 30, 2015 the holders of convertible notes payable exercised their option to convert the notes payable into shares at a price of $1 per share with the resultant issuance of 180,000 shares.

During October and December 2015, the Company issued 92,000 shares of common stock to three investors at a price of $1.25 per common stock and received gross proceeds of $115,000.

On October 1, 2015, the Company issued 250,000 shares of common stock to a director in connection with joining the board of directors. These shares were fair valued at $337,500, determined based on the market price on the date of issuance, and recorded as expense under professional fees in the statement of operations.

During October and December 2015, the Company issued 335,000 shares of common stock to various third parties in connection with providing consulting services. These shares were fair valued at $452,350, determined based on the market price on the date of issuance, to be expensed over the term of the respective agreements. Accordingly, the Company initially recorded $452,350 as prepaid expense and during the nine months ended March 31, 2016, $289,244 were expensed and included in professional fees in the statement of operations.

During February 2016, the Company issued 70,000 shares of common stock to one investor at a price of $0.50 per common stock and received gross proceeds of $35,000.

On January 8, 2016 and March 31, 2016, the Company issued 250,000 shares and 250,000 shares respectively of common stock to two directors in connection with joining the board of directors. These shares were fair valued at $290,000 and $22,500 respectively, determined based on the market price on the date of issuance, and recorded as expense under professional fees in the statement of operations.

On January 26, 2016, the Company issued 100,000 shares of common stock to one third parties in connection with providing consulting services. These shares were fair valued at $89,000, determined based on the market price on the date of issuance, to be expensed over the term of the respective agreements. Accordingly, the Company initially recorded $89,000 as prepaid expense and during the three months ended March 31, 2016, $14,833 was expensed and included in professional fees in the statement of operations.

At March 31, 2016, there were 29,527,000 shares of common stock issued and outstanding (June 30, 2015 – 51,800,000 shares of common stock) of which 15,247,000 shares are restricted while 14,280,000 are unrestricted.

The restricted shares have been issued to various parties through private placements, as start up capital or as consideration for professional services. These restricted shares will be available for sale under Rule 144 of the Securities Act of 1933, as amended, when the conditions of Rule 144 have been met.

10.   RELATED PARTY TRANSACTIONS AND BALANCES

The Company’s transactions with related parties were, in the opinion of the directors, carried out on normal commercial terms and in the ordinary course of the Company’s business.

Other than disclosed elsewhere in the consolidated financial statements, the other related party transaction is management fees of $47,626 in the three months ended March 31, 2016 and $101,541 in the nine months ended March 31, 2016, charged from the entities owned by the stockholders of the Company for providing warehousing and other logistic services. Amounts owed to entities owned by the stockholders in respect of these services was $41,487 as at March 31, 2016 (June 30, 2015: $nil).

11.   SUBSEQUENT EVENTS

The Company’s management has evaluated subsequent events up to May 20, 2016, the date the unaudited condensed interim consolidated financial statements were issued, pursuant to the requirements of ASC Topic 855 and has determined that there no significant subsequent events to report.

LEGACY VENTURES INTERNATIONAL INC.

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

As at March 31, 2016 (unaudited)

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

The information set forth in this Management's Discussion and Analysis of Financial Condition and Results of  Operations (“MD&A”) contains certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, including, among others (i) expected changes in our revenue and profitability, (ii) prospective business opportunities and (iii) our strategy for financing our business. Forward-looking statements are statements other than historical information or statements of current condition. Some forward-looking statements may be identified by use of terms such as “believes”, “anticipates”, “intends” or “expects”. These forward-looking statements relate to our plans, liquidity, ability to complete financing and purchase capital expenditures, growth of our business including entering into future agreements with companies, and plans to successfully develop and obtain approval to market our product. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs.

Although we believe that our expectations with respect to the forward-looking statements are based upon reasonable assumptions within the bounds of our knowledge of our business and operations, in light of the risks and uncertainties inherent in all future projections, the inclusion of forward-looking statements in this Quarterly Report should not be regarded as a representation by us or any other person that our objectives or plans will be achieved.

We assume no obligation to update these forward-looking statements to reflect actual results or changes in factors or assumptions affecting forward-looking statements.

Our revenues and results of operations could differ materially from those projected in the forward-looking statements as a result of numerous factors, including, but not limited to, the following: the risk of significant natural disaster, the inability of the our company to insure against certain risks, inflationary and deflationary conditions and cycles, currency exchange rates, and changing government regulations domestically and internationally affecting our products and businesses.

You should read the following discussion and analysis in conjunction with the Financial Statements and Notes attached hereto, and the other financial data appearing elsewhere in this Quarterly Report.

US Dollars are denoted herein by “USD”, "$" and "dollars".

Overview

We were incorporated on March 4, 2014 under the laws of the State of Nevada. We offered management and consulting services to residential and commercial real estate property owners prior to the acquisition of RM Fresh.

We now operate through our wholly-owned subsidiary RM Fresh, who services food and beverage retailers and distributors who are looking for innovative, trend-setting products across North America and in international markets. With a focus on sustainable, category changing consumables, RM Fresh acquired the rights to distribute an extensive portfolio of highly desirable brands, including Boxed Water, Cleansify, Uncle Si’s Iced Tea, Chef 5-Minute Meals, Gurkha Cigars, Shimla Foods, Aloe Gloe and Arriba Horchata. We are headquartered in Mississauga, Ontario, Canada and offers logistic and warehouse services out of our principal warehouse facility in Mississauga, servicing the greater Toronto area. Through a network of sub-distribution partners across Canada, RM Fresh provides national product distribution and brokerage services. The Company has an emerging focus on the United States and Middle East through the establishment of sub-distribution partners.

LEGACY VENTURES INTERNATIONAL INC.

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

As at March 31, 2016 (unaudited)

On September 30, 2015, we entered into a share exchange agreement with Rehan Saeed, RM Fresh Brands Inc. (“RM Fresh”), and the RM Fresh shareholders, Ron Patel and Mirwan Ferris. Pursuant to the terms of the agreement, the Company issued an aggregate of 2,000,000 shares of its common stock to the RM Fresh shareholders in exchange for all the issued and outstanding shares of RM Fresh. The principals of RM Fresh, Ron Patel and Mirwan Ferris, remain as officers and directors of RM Fresh.

In connection with the share exchange agreement, the Company entered into a share cancellation agreement with Rehan Saeed whereby Mr. Saeed, owning an aggregate of 37,800,000 shares of the Company’s common stock, agreed to cancel 25,800,000 shares, and to transfer an aggregate of 10,000,000 shares of common stock to the RM Fresh executives and their affiliates.

In addition, RM Fresh entered into executive management agreements with (1) Shadon Global Inc., for the services of Ron Patel and (2) Ferris Brand Management Inc., for the services of Mirwan Ferris. Pursuant to the agreements, the RM Fresh executives will be responsible for the day-to-day operations of RM Fresh and shall direct the business of RM Fresh in its sole discretion and in the best interests of RM Fresh, including but not limited to with respect to selection of products for distribution, employment or engagement of personnel, engagement of professional assistance, including without limitation legal and accounting professionals. In exchange, the RM Fresh executives shall be entitled to receive an annual base salary of one hundred thousand dollars ($100,000) and an annual bonus equal to 2.5% of the annual gross sales of RM Fresh.

Results of Operations 

For the Three and Nine Months Ended March 31, 2016 and 2015

As of March 31, 2016, the Company conducted limited operations since inception. $116,492 in revenue represents sales made by RM Fresh from the date of acquisition to March 31, 2016. The Company's consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The financial statements do not include any adjustment relating to recoverability and classification of recorded amounts of assets and liabilities that might be necessary should the Company be unable to continue as a going concern.

The Company has a minimum cash balance available for payment of ongoing operating expenses, has experienced losses from operations, and it does not have a source of revenue. Its continued existence is dependent upon its ability to continue to execute its operating plan and to obtain additional debt or equity financing. There can be no assurance the necessary debt or equity financing will be available, or will be available on terms acceptable to the Company.

Revenue and gross profit

Revenue of $79,074 and $116,492 during the three and nine months ended March 31, 2016, represents sales made by RM Fresh from the date of acquisition (September 30, 2015) to March 31, 2016. The Company made a gross profit of $47,772 and $32,363 during the three and nine months ended March 31, 2016, mainly through increased sales and a relatively favorable exchange rate.

Operating Expenses

Our total operating expenses for the three months and nine months ended March 31, 2016 were $586,776 and $1,299,949 as compared to $3,082 and $71,306 for the three months and nine months ended March 31, 2015, respectively. The overall significant increase during three and nine months ended March 31, 2016 as compared to 2015 is mainly due to increase in activities as a result of acquisition of RM Fresh on September 30, 2015. The overall increase in operating expenses was attributable to the following factors:

LEGACY VENTURES INTERNATIONAL INC.

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

As at March 31, 2016 (unaudited)

Other (Income) Expenses

Other (income) expenses for the three and nine months ended March 31, 2016 mainly included the following:

Net Loss

We reported a net loss of $564,193 and $2,696,251 for the three and nine months ended March 31, 2016 as compared to a net loss of $3,132 and $71,466 for the three and nine months ended March 31, 2015, respectively. The increase in losses for the three and nine months ended March 31, 2016 as compared to 2015 is due to increase in expenses as explained above under operating and other (income) expense section.

Translation Adjustment

Translation adjustment as a result of the currency exchange rate between U.S. Dollar and Canadian Dollar was $7,025 and $21,128 for the three and nine months ended March 31, 2016 as compared to $316 and $289 for the three and nine months ended March 31, 2015, respectively.

Liquidity and Capital Resources

As of March 31, 2016, we had cash balance of $16,327. As of June 30, 2015, we had cash balance of $3,380. Increase in cash is mainly due to proceeds from issuance of convertible notes of $180,000 and proceeds of $150,000 from issuance of shares during the nine months ended March 31, 2016.

The following is a summary of the Company's cash flows provided by (used in) operating, investing, and financing activities for the nine months ended March 31, 2016 and 2015 respectively:

LEGACY VENTURES INTERNATIONAL INC.

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

As at March 31, 2016 (unaudited)

Net Cash Used in Operating Activities

For the nine months ended March 31, 2016, net cash used in operating activities was $308,454, primarily attributable to our net loss of $2,696,251 adjusted by impairment of goodwill of $1,394,135, issuance of shares for services valued at $954,077, amortization expense of $46,900, forgiveness of loan of $(17,974) and working capital changes of $10,659.

For the nine months ended March 31, 2015, net cash used in operating activities was $16,931, primarily attributable to our net loss of $71,466 adjusted by issuance of shares for services valued at of $53,360 and increase in working capital changes of $1,175.

Net Cash Provided by Investing Activities

For the nine months ended March 31, 2016, net cash provided by investing activities was $3,671, compared to $nil for the nine months ended March 31, 2015. The increase represents cash acquired as a result of the acquisition of RM Fresh.

Net Cash Provided by Financing Activities

For the nine months ended March 31, 2016, net cash provided by financing activities was $302,736, compared to $23,223 for the nine months ended March 31, 2015. The increase is mainly attributable to the proceeds from the issuance of convertible notes amounting to $180,000 and proceeds of $150,000 from the issuance of shares.

We have limited assets and have generated insignificant revenues since inception. We are also dependent upon the receipt of capital investment or other financing to fund our ongoing operations and to execute our business plan of seeking a combination with a private operating company. In addition, we are dependent upon certain related parties to provide continued funding and capital resources.

Going Concern

Our unaudited condensed interim consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company has incurred recurring losses from operations and as at March 31, 2016 has accumulated deficit of $2,804,024 which has primarily arisen from a non-cash goodwill impairment charge in the current period. Management anticipates the Company will attain profitable status and improve its liquidity through the acquisition of RM Fresh as explained in Note 5 to our condensed interim consolidated financial statements and continued business development and additional debt or equity investment in the Company. The Company’s continued existence is dependent upon its ability to continue to execute its operating plan and to obtain additional debt or equity financing. There can be no assurance that the necessary debt or equity financing will be available, or will be available on terms acceptable to the Company, in which case the Company may be unable to meet its obligations. Should the Company be unable to realize its assets and discharge its liabilities in the normal course of business, the net realizable value of its assets may be materially less than the amounts recorded in the financial statements. The financial statements do not include any adjustments relating to the recoverability of recorded asset amounts that might be necessary should the Company be unable to continue in existence.

LEGACY VENTURES INTERNATIONAL INC.

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

As at March 31, 2016 (unaudited)

Critical Accounting Policies and Estimates

Basis of Presentation and Consolidation

The financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and are expressed in United States dollars (“USD”).

The Company’s unaudited condensed interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for interim financial information and the rules and regulations of the SEC and are expressed in US dollars. Accordingly, the unaudited condensed interim consolidated financial statements do not include all information and footnotes required by US GAAP for complete annual financial statements. In the opinion of management, the accompanying unaudited condensed interim consolidated financial statements reflect all adjustments, consisting of only normal recurring adjustments, considered necessary for a fair presentation. Interim operating results are not necessarily indicative of results that may be expected for the year ending June 30, 2016 or for any other interim period. The unaudited condensed interim consolidated financial statements should be read in conjunction with the audited financial statements of the Company and the notes thereto as of and for the year ended June 30, 2015.

The Company’s fiscal year-end is June 30. The parent Company’s functional currency is the US dollar.  The subsidiary operates in Canadian dollars. The Company’s reporting currency is the U.S. dollar.

The condensed interim consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary RM Fresh, Inc. All inter-company transactions and balances have been eliminated in preparing the consolidated financial statements.

Use of Significant Estimates

The preparation of the financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts 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 periods. Areas involving significant estimates and assumptions include inventory valuation reserves, allowance for doubtful account, intangible assets, goodwill, impairment, income taxes, accruals and going concern assessment.  These estimates are reviewed periodically, and, as adjustments become necessary, they are reported in earnings in the period in which they become known. Actual results could materially differ from those estimates.

Revenue Recognition

The Company recognizes revenues when they are earned, specifically when all of the following conditions are met:

Cash

Cash includes cash on hand and balances with banks.

LEGACY VENTURES INTERNATIONAL INC.

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

As at March 31, 2016 (unaudited)

Inventories

Inventories which comprise of finished goods, is valued at the lower of cost and market value, with cost being determined on a first-in, first-out basis. The cost of finished goods consists of purchase price, freight, custom duties and other delivery expenses. Net realizable value is the estimated selling price in the ordinary course of business, less any applicable selling costs. The Company evaluate the carrying value of inventory on a regular basis, taking into account such factors as historical and anticipated future sales compared with quantities on hand and the price the Company expects to obtain for products in market compared with historical cost.

Accounts Receivable 

Accounts receivable are stated at outstanding balances, net of an allowance for doubtful accounts. The allowance for doubtful accounts is established through provisions charged against income. Accounts deemed to be uncollectible are charged against the allowance and subsequent recoveries, if any, are credited to the allowance. Management’s periodic evaluation of the adequacy of the allowance is based on past experience, aging of the receivables, adverse situations that may affect a customer’s ability to pay, current economic conditions and other relevant factors. This evaluation is inherently subjective as it requires estimates that may be susceptible to significant change. Unpaid balances remaining after the stated payment terms are considered past due. The Company routinely assesses the financial strength of its customers and, therefore, believes that its accounts receivable credit risk exposure is limited.

Shipping and Handling Costs

The Company accounts for shipping and handling fees in accordance with FASB ASC Topic 705 “Cost of Sales and Services”. Costs related to raw materials purchased, are included in inventory or cost of goods sold, as appropriate. While amounts charged to customers for shipping product are included in revenues, the related outbound freight costs are included in expenses as incurred.

Segment Reporting

The Company operates in one operating segment based on the activities for the Company in accordance with ASC Topic 280-10.  Operating segments are defined as components of an enterprise for which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision making group, in deciding how to allocate resources and in assessing performance.

Goodwill and Identifiable Intangible Assets

Goodwill and other identifiable intangible assets with indefinite lives that are not being amortized, such as trade names, are tested at least annually for impairment and are written down if impaired. Identifiable intangible assets with finite lives are amortized over their estimated useful lives and are reviewed for impairment whenever facts and circumstances indicate that their carrying values may not be fully recoverable. The intangible asset is being amortized over its estimated useful life of 5 years using the straight-line method.

Foreign Currency Translation

The functional currency of the Company is the US dollar.  Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Non-monetary assets and liabilities are translated using the historical rate on the date of the transaction. All exchange gains or losses arising from translation of these foreign currency transactions are included in net income (loss) for the year.  The translation gains and losses resulting from the changes in exchange rates are reported in accumulated other comprehensive gain (loss).

LEGACY VENTURES INTERNATIONAL INC.

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

As at March 31, 2016 (unaudited)

Income Taxes 

The Company accounts for under ASC Topic 740 Accounting for Income Taxes.  The Company provides for federal and provincial income taxes payable, as well as for those deferred because of the timing differences between reporting income and expenses for financial statement purposes versus tax purposes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recoverable or settled. The effect of a change in tax rates is recognized as income or expense in the period of the change. A valuation allowance is established, when necessary, to reduce deferred income tax assets to the amount that is more likely than not to be realized.

Earnings (Loss) Per Share

The Company has adopted the Financial Accounting Standards Board’s (“FASB”) Topic 260-10 which provides for calculation of “basic” and “diluted” earnings per share. Basic earnings per share includes no dilution and is computed by dividing net income or loss available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of an entity. Diluted earnings per share exclude all potentially dilutive shares if their effect is anti-dilutive. There were no potentially dilutive shares outstanding as at December 31, 2015 and June 30, 2015.

Fair Value of Financial Instruments

ASC Topic 820 “Fair Value Measurements and Disclosures” defines fair value, establishes a framework for measuring fair value and expands required disclosure about fair value measurements of assets and liabilities. ASC 820-10 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820-10 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:

In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments or interest rates that are comparable to market rates. These financial instruments include due from a shareholder, accounts receivable, accounts payable, accrued expenses, due to shareholders and note payable. The Company's cash, which is carried at fair value, is classified as a Level 1 financial instruments. Bank accounts are maintained with financial institutions of reputable credit, therefore, bear minimal credit risk.

LEGACY VENTURES INTERNATIONAL INC.

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

As at March 31, 2016 (unaudited)

Impairment of Long-Lived Assets

The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amounts of the assets may not be recoverable through undiscounted future cash flows. If impairment exists based on expected future undiscounted cash flows, a loss is recognized in income. The amount of the impairment loss is the excess of the carrying amount of the impaired asset over the fair value of the asset, typically based on discounted future cash flows. The Company has assessed its long-lived assets and has determined that there is an impairment of goodwill amounting to $1,394,135 as explained in Note 5 to our financial statements.

Recently Issued Accounting Pronouncements

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

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 our financial condition, changes in financial condition, sales or expenses, results of operations, liquidity or capital expenditures, or capital resources that are material to an investment in our securities.

LEGACY VENTURES INTERNATIONAL INC.

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

As at March 31, 2016 (unaudited)

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Not applicable because we are a smaller reporting company.

Item 4. Controls and Procedures.

Disclosure Controls and Procedures

Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”), the Company carried out an evaluation, with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of March 31, 2016, for the material weakness describe below.

Because of our limited operations, we have limited number of employees which prohibits a segregation of duties. In addition, we lack a formal audit committee with a financial expert. As we grow and expand our operations we will engage additional employees and experts as needed. However, there can be no assurance that our operations will expand.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

LEGACY VENTURES INTERNATIONAL INC.

PART II – OTHER INFORMATION

As at March 31, 2016 (unaudited)

PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

From time to time, we may become involved in various lawsuits and legal proceedings, which arise, in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results.

Item 1A. Risk Factors.

Not required for smaller reporting companies.

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

During February 2016, the Company issued 70,000 shares of common stock to one investor at a price of $0.50 per common stock and received gross proceeds of $35,000.

On January 8, 2016 and March 31, 2016, the Company issued 250,000 shares and 250,000 shares respectively of common stock to two directors in connection with joining the board of directors. These shares were fair valued at $290,000 and $22,500 respectively, determined based on the market price on the date of issuance, and recorded as expense under professional fees in the statement of operations.

On January 26, 2016, the Company issued 100,000 shares of common stock to one third parties in connection with providing consulting services. These shares were fair valued at $89,000, determined based on the market price on the date of issuance, to be expensed over the term of the respective agreements. Accordingly, the Company initially recorded $89,000 as prepaid expense and during the three months ended March 31, 2016, $14,833 was expensed and included in professional fees in the statement of operations.

These securities were issued in reliance on the exemption under Section 4(2) of the Act.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

LEGACY VENTURES INTERNATIONAL INC.

PART II – OTHER INFORMATION

As at March 31, 2016 (unaudited)

Item 6. Exhibits.

+ In accordance with the SEC Release 33-8238, deemed being furnished and not filed.

LEGACY VENTURES INTERNATIONAL INC.

SIGNATURES

As at March 31, 2016 (unaudited)

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.

Date: May 20, 2016

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