Loop Media, Inc. - Quarter Report: 2019 March (Form 10-Q)

3

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Our financial statements included in this Form 10-Q are as follows:

These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the SEC instructions to Form 10-Q. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the interim period ended March 31, 2019 are not necessarily indicative of the results that can be expected for the full year.

4

INTERLINK PLUS, INC.

CONDENSED BALANCE SHEETS

See accompanying condensed notes to financial statements.

F-1

INTERLINK PLUS, INC.

CONDENSED STATEMENTS OF OPERATIONS

(unaudited)

See accompanying condensed notes to financial statements.

F-2

INTERLINK PLUS, INC.

CONDENSED STATEMENT OF STOCKHOLDERS' DEFICIT

For the nine months ended March 31, 2019

(unaudited)

See accompanying condensed notes to financial statements.

F-3

INTERLINK PLUS, INC.

CONDENSED STATEMENT OF STOCKHOLDERS' DEFICIT

For the nine months ended March 31, 2018

(unaudited)

See accompanying condensed notes to financial statements.

F-4

INTERLINK PLUS, INC.

CONDENSED STATEMENTS OF CASH FLOWS

(unaudited)

See accompanying condensed notes to financial statements.

F-5

INTERLINK PLUS, INC.

NOTES TO FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

The interim financial statements included herein, presented in accordance with United States generally accepted accounting principles and stated in US dollars, have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading.

These statements reflect all adjustments, consisting of normal recurring adjustments, which in the opinion of management, are necessary for fair presentation of the information contained therein. It is suggested that these interim financial statements be read in conjunction with the financial statements of the Company for the year ended June 30, 2018 and notes thereto included in the Company’s annual report. The Company follows the same accounting policies in the preparation of interim reports.

Results of operations for the interim period are not indicative of annual results.

Organization

The Company was incorporated on May 11, 2015 under the laws of the State of Nevada, as Interlink Plus, Inc.

Nature of operations

The Company provides services for overseas travel agents on hotel price quotation and negotiation, contract reviewing, detailed guests’ arrangements, hotel check-in assistance, as well as tradeshow services to domestic and international businesses. Additionally, the Company offers marketing materials and other products for the tradeshows.

Year end

The Company’s year-end is June 30.

Cash and cash equivalents

For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. The carrying value of these investments approximates fair value. As of March 31, 2019, the Company had no cash equivalents.

Accounts receivable

The allowance for uncollectible accounts receivables is determined principally on the basis of past collection experience as well as consideration of current economic conditions and changes in our customer collection trends.  Since the inception of the Company through today, the Company has had no material bad debt write offs and believes its current policy is reasonable.

Fixed assets

The Company records all property and equipment at cost less accumulated depreciation. Improvements are capitalized while repairs and maintenance costs are expensed as incurred. Depreciation is calculated using the straight-line method over the estimated useful life of the assets or the lease term, whichever is shorter. Leasehold improvements include the cost of the Company’s internal development and construction department. Depreciation periods are as follows:

Computer equipment

3 years

F-6

INTERLINK PLUS, INC.

NOTES TO FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Website

The Company capitalizes the costs associated with the development of the Company’s website pursuant to ASC Topic 350. Other costs related to the maintenance of the website are expensed as incurred. Amortization is provided over the estimated useful lives of 3 years using the straight-line method for financial statement purposes. The Company commenced amortization upon completion and release of the Company’s fully operational website.

Revenue recognition

The Company recognizes revenue in accordance with generally accepted accounting principles as outlined in the Financial Accounting Standard Board’s (“FASB”) Accounting Standards Codification (“ASC”) 606, Revenue From Contracts with Customers, which requires that five steps to evaluate revenue recognition: (i) identify the contract with the customer; (ii) identity the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price; and (v) recognize revenue when or as the entity satisfied a performance obligation.

Revenue recognition occurs as the services are rendered to customers and upon completion of the hotel stay, when control transfers to customers, provided there are no material remaining performance obligations required of the Company or any matters of customer acceptance. We only record revenue when collectability is reasonably assured.

The Company provides travelers access to book hotel room reservations through our contracts with lodging suppliers, which provide the Company with rates and availability information for rooms but for which we have no control over the rooms and do not bear inventory risk. The customers pay the Company for merchant hotel transactions prior to departing on their trip, generally when they book the reservation. The payment is recorded in customer deposits until the stayed night occurs, at which point the Company recognize the revenue, net of amounts paid to suppliers, as this is when our performance obligation is satisfied.

Fair value of financial instruments

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of March 31, 2019. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash, prepaid expenses and accounts payable. Fair values were assumed to approximate carrying values for cash and payables because they are short term in nature and their carrying amounts approximate fair values or they are payable on demand.

Level 1: The preferred inputs to valuation efforts are “quoted prices in active markets for identical assets or liabilities,” with the caveat that the reporting entity must have access to that market.  Information at this level is based on direct observations of transactions involving the same assets and liabilities, not assumptions, and thus offers superior reliability. However, relatively few items, especially physical assets, actually trade in active markets.

Level 2: FASB acknowledged that active markets for identical assets and liabilities are relatively uncommon and, even when they do exist, they may be too thin to provide reliable information. To deal with this shortage of direct data, the board provided a second level of inputs that can be applied in three situations.

Level 3: If inputs from levels 1 and 2 are not available, FASB acknowledges that fair value measures of many assets and liabilities are less precise. The board describes Level 3 inputs as “unobservable,” and limits their use by saying they “shall be used to measure fair value to the extent that observable inputs are not available.” This category allows “for situations in which there is little, if any, market activity for the asset or liability at the measurement date”. Earlier in the standard, FASB explains that “observable inputs” are gathered from sources other than the reporting company and that they are expected to reflect assumptions made by market participants.

F-7

INTERLINK PLUS, INC.

NOTES TO FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Earnings per share

The Company follows ASC Topic 260 to account for the earnings per share. Basic earning per common share (“EPS”) calculations are determined by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the year. Diluted earning per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. During periods when common stock equivalents, if any, are anti-dilutive they are not considered in the computation. As of March 31, 2019 and 2018, 274,927,462 and 274,563,239 dilutive shares were excluded from the calculation of diluted loss per common share.

Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles 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 revenue and expenses during the reporting period. Actual results could differ significantly from those estimates.

Recent pronouncements

ASU 2016-02 - In February 2016, the FASB issued ASU No. 2016-02, "Leases", ("ASC 842") which amended the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. ASC 842 is effective for public companies during interim and annual reporting periods beginning after December 15, 2018, with early adoption permitted. In July 2018, the FASB issued ASU No. 2018-11, which permits entities to record the right-of-use asset and lease liability on the date of adoption, with no requirement to recast comparative periods.

We adopted ASC 842 effective January 1, 2019 using the optional transition method of recognizing a cumulative-effect adjustment to the opening balance of retained earnings on January 1, 2019. Therefore, comparative financial information was not adjusted and continues to be reported under the prior lease accounting guidance in ASC 840. We elected the transition relief package of practical expedients, and as a result, we did not assess 1) whether existing or expired contracts contain embedded leases, 2) lease classification for any existing or expired leases, and 3) whether lease origination costs qualified as initial direct costs. We elected the short-term lease practical expedient by establishing an accounting policy to exclude leases with a term of 12 months or less, as well as the land easement practical expedient for maintaining our current accounting policy for existing or expired land easements. No material impact to the condensed financial statements as we do not have and leases greater than one year.

NOTE 2 - GOING CONCERN

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business. Since its inception, the Company has been engaged substantially in financing activities and developing its business plan and incurring start up costs and expenses. As a result, the Company had an accumulated deficit as of March 31, 2019 of $298,826. In addition, the Company’s activities since inception have been financially sustained through debt and equity financing.  The Company plans to raise capital through debt and equity financing and to continue to generate additional revenue to continue operations.

The ability of the Company to continue as a going concern is dependent upon its ability to raise additional capital from the sale of common stock and, ultimately, the achievement of significant operating revenues. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty.

F-8

INTERLINK PLUS, INC.

NOTES TO FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 3 - PREPAID EXPENSES

As of March 31, 2019, the Company had prepaid transfer agent expenses totaling $563.  The prepaid professional fees will be expensed on a straight-line basis over the remaining life of the service period.  During the nine months ended March 31, 2019 the Company incurred an additional $750 of prepaid transfer agent fees and amortized transfer agent expenses of $1,125.

Additionally, the Company had prepaid expense related to deposits at hotels totaling $4,448.  The prepaid expenses will be reclassified against revenue when our clients complete their stay at the hotel.

NOTE 4 - FIXED ASSETS

The following is a summary of fixed asset costs:

Depreciation expense for the nine months ended March 31, 2019 was $294.

NOTE 5 - WEBSITE

The following is a summary of website costs:

Amortization expense for the nine months ended March 31, 2019 was $667.

NOTE 6 - NOTES PAYABLE

On June 15, 2018, the Company executed a promissory note with an entity for $150,000. The unsecured note bears interest at 10% per annum and is due in two business days after demand for payment. As of March 31, 2019, the principal balance is $150,000 and accrued interest is $12,041. The interest expense for the nine months ended March 31, 2019 was $11,384.

F-9

INTERLINK PLUS, INC.

NOTES TO FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 7 - CONVERTIBLE DEBT

On May 22, 2015, the Company executed a convertible promissory note with a related party for $4,000. The unsecured note bears interest at 10% per annum and is due on May 22, 2017. This note is convertible at $0.005 per share and can be converted on or before the maturity date of May 22, 2017. During July 2017, the party agreed to extend the maturity date to July 31, 2018. On December 22, 2017, the note was sold to an unrelated third party. On March 14, 2018, the note was sold to another unrelated third party.

On April 25, 2016, the Company executed a convertible promissory note with an entity for $5,000. The unsecured note bears interest at 10% per annum and is due on April 25, 2017. This note is convertible at $0.005 per share and can be converted on or before the maturity date of April 25, 2017. During July 2017, the party agreed to extend the maturity date to July 31, 2018.  On December 22, 2017, the note was sold to an unrelated third party.  On March 14, 2018, the note was sold to another unrelated third party.

On July 15, 2016, the Company executed a convertible promissory note with an entity for $5,000.  The unsecured note bears interest at 10% per annum and is due on July 15, 2017. This note is convertible at $0.005 per share and can be converted on or before the maturity date of July 15, 2017. During July 2017, the party agreed to extend the maturity date to July 31, 2018. On December 22, 2017, the note was sold to an unrelated third party. On March 14, 2018, the note was sold to another unrelated third party.

On August 18, 2016, the Company executed a convertible promissory note with an entity for $5,000. The unsecured note bears interest at 10% per annum and is due on August 18, 2017. This note is convertible at $0.005 per share and can be converted on or before the maturity date of September 27, 2018. On December 22, 2017, the note was sold to an unrelated third party. On March 14, 2018, the note was sold to another unrelated third party.

As of March 31, 2019, all of the convertible debt is in default and the Company is renegotiating to extend the maturity date of the convertible promissory notes.

As of March 31, 2019, the balance of accrued interest was $5,737. The interest expense for the nine months ended March 31, 2019 was $1,442.

NOTE 8 - STOCKHOLDERS’ DEFICIT

The Company is authorized to issue 475,000,000 shares of its $0.0001 par value common stock and 25,000,000 shares of its $0.0001 par value preferred stock.  The Series A convertible preferred stock have a liquidation preference of $0.10 per share, have super voting rights of 100 votes per share, and each share of Series A may be converted into 100 shares of common stock.

Preferred stock

During the nine months ended March 31, 2019 there have been no other issuances of preferred stock.

Common stock

During the nine months ended March 31, 2019, there have been no other issuances of common stock.

NOTE 9 - WARRANTS AND OPTIONS

As of March 31, 2019, there were no warrants or options outstanding to acquire any additional shares of common stock.

F-10

INTERLINK PLUS, INC.

NOTES TO FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 10 - REVENUE

During the three months ended March 31, 2019, we recorded $4,360 of costs that were charged by a supplier, which exceeded the amount of our revenue recognized during the period. The costs are related to the hotel fees related to a customer stay in December 2018. As a result, the revenue for the three months ended March 31, 2019 was ($892). There is no material impact on the nine months ended March 31, 2019.

NOTE 11 - RELATED PARTY TRANSACTIONS

On July 1, 2017, the Company executed a consulting agreement with a company owned and controlled with a former officer and director and current shareholder at a rate of $3,000 per month. The Company or entity may terminate with 30 days written notice. During the nine months ended March 31, 2019 and 2018, the Company had professional fees - related party totaling $27,000 and $27,000, respectively. As of March 31, 2019, there was prepaid expense - related party of $0 and accounts payable - related party balance was $17,500.

As of March 31, 2019, the Company owed a former officer and director and current shareholder a total of $19,556.

NOTE 12 - SUBSEQUENT EVENTS

On April 4, 2019, a noteholder of our company elected to convert its convertible promissory notes, dated May 22, 2015 and August 14, 2016 in the principal amounts of $4,000 and $5,000, respectively, into an aggregate of 2,380,389 shares of our common stock.

F-11

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

Forward-Looking Statements

Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements generally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. We intend such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and are including this statement for purposes of complying with those safe-harbor provisions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse affect on our operations and future prospects on a consolidated basis include, but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Further information concerning our business, including additional factors that could materially affect our financial results, is included herein and in our other filings with the SEC.

Company Overview

Our business is divided into two major segments: travel agency assistance services and convention services.

We have signed services contracts with multiple travel agents to assist with hotel room price quotation and negotiation and communicating with hotels to ensure that accurate reservations are made with Chinese clientele. Through March 31, 2019, we have generated some revenue from our agreement with our clients. We earned ($892) and $25,329 in net revenues for the three months ended March 31, 2019 and 2018, respectively. We are also hopeful that we will engage in other contracts for the services outlined below.

We require additional capital necessary for us to grow our business. Our initial plans include: hiring necessary personnel, marketing our business, completing our website, purchasing equipment and software and further developing the service offering. Our business plan calls for capital of approximately $250,000 in the next twelve months. There is no assurance that we will be successful in these endeavors or that if we accomplish all of these steps we will be able to operate profitably. We intend to fulfill the service needs of our potential customers by utilizing resources and employees in the United States, but, as we grow, we believe we can reduce costs and increase margins by utilizing personnel in foreign countries, such as China, to fulfill the services on behalf of our customers.

Through our services, we believe that clients will be able to gain the advantage of maintaining their growth goals without the need to sacrifice precious resources to address standard business bottlenecks. Our goal is to allow firms to retain their entrepreneurial speed and agility, advantages they would otherwise sacrifice in dealing with logistics rather than the specific focus of the client’s business. We plan to allow clients to grow at a faster pace as they will be less constrained by large capital expenditures for people, training, equipment, or mistakes made from lack of experience in areas which are unrelated to the client’s specific business purpose.

Since our inception, we have been attempting to raise money to implement our business plan, and we have raised some funds lately, mostly through the sale of convertible debt, but have not been able to secure the funds necessary to fully implement our business plan. The lack of funds have prevented us from growing the business as we had hoped. As we have been unable to raise the capital necessary to develop and market our services, we have recently been engaged in a search for other business opportunities which may benefit our shareholders and allow us to raise capital and operate. Recent negotiations with what we believe is a more viable business opportunity leads us to believe that we will be revising our business plan and focus over the next quarter. If this opportunity does not develop, however, we will continue to both seek new opportunities and look for capital to further our existing business plan.

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Travel Agency Assistance

We provide services for overseas travel agents on hotel price quotation and negotiation, contract reviewing, detailed guests’ arrangements, hotel check-in assistance and tradeshow assistance. Overseas travel agents often encounter language barriers and time differences on office hours when dealing with U.S. based hotels and U.S. based conventions. We believe that our bilingual language services, flexible office hours, and reasonable fee structure will help our clients to increase accuracy and efficiency levels, and reduce costs.

Currently, we service 8 overseas and domestic travel agencies. These travel agencies work with exhibition service agents or travel groups in China to coordinate the travel plans of tour groups that plan on attending exhibitions in the U.S.  Depending on the event, these tour groups can range from 20 to over 700 people. It is vital for the travel agents and exhibition services agents to provide their clients - Chinese businesses who exhibit in the trade show, a seamless and worry-free trip.

Our role is to help the travel agencies communicate with hotels and convention staff timely and accurately, including finding and negotiating hotel rate, reviewing and updating contracts, submitting and revising guest lists, group check-in (pick up and sorting the room keys for different groups), communicating on bill differences, etc.  We currently have bilinguals that are fluent in English and Chinese. We plan to expand our staff of bilinguals to cater to other languages and countries other than China. Our main focus at the present time is to establish a presence in China and we intend to branch out to other Asian countries from there as resources permit.

In November 2016, we became a certified travel agency. Additionally, we became an affiliate partner with booking.com and the Expedia TAAP program. We hope these recent events will help us increase revenue in the future.

Convention Services

Our second business division is catering to the individual exhibitors at the exhibitions. Exhibitors/ attendees often have temporary assistance needs at conventions and trade shows. We assist these clients on booth set up, tradeshow promotion material preparing, entourage interpreter and/or exhibitor booth personnel arrangements, including bilingual spokespersons, sales associates, narrators and demonstrators, hostesses/hosts, promoters and models.

We are also able to provide custom and pre-made booths, booth graphic design, and exhibit booth setup services to our clients. For clients looking for complete tradeshow exhibit booths, we provide turnkey solutions for sale. We offer top of the range Tablets, TV screens with stands, tables, and chairs, storage bins among others, to ensure that your tradeshow booth is highly inviting. We are able to work with clients on their required specifications and our staff is capable of delivery and assembly of attractive booth designs.

We have limited clients in this business segment. We plan to utilize our travel agency and exhibition service agent contacts to reach out to these exhibitors and establish direct connections for our exhibition services. We may also work though these vital contacts as an extension of their services to these clientele. Furthermore, because we have a U.S. presence, we plan to reach out to the U.S. exhibitions to offer our services to these clientele.

Results of operations for the three and nine months ended March 31, 2019 and 2018

We have negative revenues of ($892) for the three months ended March 31, 2019, as compared with $25,329 for the same period ended 2018.  We have negative revenue for the three months ended March 31, 2019 due to a timing difference for hotel fees related to the quarter ended December 31, 2018.  We have earned revenues of $39,790 for the nine months ended March 31, 2019, as compared with $77,141 for the same period ended 2018.

We expect to continue to achieve steadily increasing revenues within the coming months. However, as we are a start-up, we have limited operating history to rely upon and we cannot guarantee that our business plan will be successful.  To date, we only have 8 travel agencies as our main clients that we contracted to assist with hotel room price quotation and negotiation and communicating with hotels to ensure that accurate reservations are made with Chinese clientele. Our management is actively working to secure additional contracts to grow the business. We are also looking at other business opportunities that would better serve our shareholders.

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Operating expenses were $16,619 for the three months ended March 31, 2019, as compared with $51,055 for the same period ended 2018. Operating expenses were $66,063 for the nine months ended March 31, 2019, as compared with $120,644 for the same period ended 2018. Our operating expenses for the three and nine months ended March 31, 2019 and 2018 mainly consisted of professional fees and related party professional fees.  The decrease was primarily from a decrease in consulting fees.

We expect our operating expenses to increase as a result of increased operating activity to implement our business plan and the added expenses associated with reporting with the Securities and Exchange Commission although we had a decrease during this period.

We incurred other expense of $4,214 for the three months ended March 31, 2019, compared with other expense of $4,311 for the same period ended March 31, 2018.  We incurred other expense of $12,826 for the nine months ended March 31, 2019, compared with other expense of $11,695 for the same period ended March 31, 2018.

Our other expenses for all periods consisted of interest expense and related party interest expense.  We expect that our other expenses will increase in 2019 as a result of our outstanding debt, and any additional debt we take on in our financing efforts.

We recorded a net loss of $21,725 for the three months ended March 31, 2019, as compared with a net loss of $30,037 for the same period ended 2018 We recorded a net loss of $39,099 for the nine months ended March 31, 2019, as compared with a net loss of $55,198 for the same period ended 2018.

Liquidity and Capital Resources

As of March 31, 2019, we had current assets of $13,939. Our total current liabilities as of March 31, 2019 were $236,702. As a result, we had working capital deficit of $222,763 as of March 31, 2019.

Operating activities used $6,124 in cash for the nine months ended March 31, 2019, as compared with cash used of $83,145 for the same period ended 2018. Our negative operating cash flow for the nine months ended March 31, 2019 was mainly the result if an increase in customer deposits and related party accounts payable, offset mainly by our net loss for the period, and a decrease in prepaid expenses. Our negative operating cash flow for the nine months ended March 31, 2018 was mainly the result if a decrease in customer deposits, our net loss for the period, and an increase in related party accounts payable.

Investing activities used $0 in cash for the nine months ended March 31, 2019, as compared with $1,176 for the same period ended 2018.  Our negative investing cash flow for the nine months ended March 31, 2018 was a result of the purchase of fixed assets.

We had cash provided of $0 in financing activities for the nine months ended March 31, 2019, as compared with $102,367 in cash provided in financing activities for the nine months ended March 31, 2018.  Our positive financing cash flow for the nine months ended March 31, 2018 was mainly from the result of proceeds from convertible debt.

We were incorporated on May 11, 2015. Our operations, to date, have been devoted primarily to startup, development activities and contracts. Because of our limited operating history, it is difficult to predict our capital needs on a monthly, quarterly or annual basis. We will have no capital available to us if we are unable to raise money from this offering or find alternate forms of financing, which we do not have in place at this time.

There can be no assurance that we will be successful in raising additional funding. If we are not able to secure additional funding, the implementation of our business plan will be impaired. There can be no assurance that such additional financing will be available to us on acceptable terms or at all.

Our plan specifies a minimum amount of $250,000 in additional operating capital to operate for the next twelve months. If we are unable to raise $250,000 from an offering, our business will be in jeopardy and we could be formed to suspend our operations or go out of business. As such, there can be no assurance that an offering will be successful. You may lose your entire investment.

7

Off Balance Sheet Arrangements

As of March 31, 2019, there were no off balance sheet arrangements.

Going Concern

The accompanying financial statements have been prepared assuming that we will continue as a going concern, which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business. As noted above, we are a start-up and, accordingly, have generated slight revenues from operations. Since our inception, we have been engaged substantially in financing activities and developing our business plan and incurring startup costs and expenses. As a result, we incurred accumulated net losses through the period ended March 31, 2019 of ($298,826). In addition, our development activities since inception have been financially sustained through debt and equity financing.

Our ability to continue as a going concern is dependent upon our ability to raise additional capital from the sale of common stock and debt financing and, ultimately, the achievement of significant operating revenues. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

A smaller reporting company is not required to provide the information required by this Item.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of March 31, 2019. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of March 31, 2019, our disclosure controls and procedures were not effective due to the presence of material weaknesses in internal control over financial reporting.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. Management has identified the following material weaknesses which have caused management to conclude that, as of March 31, 2019, our disclosure controls and procedures were not effective: (i) inadequate segregation of duties and effective risk assessment; and (ii) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both US GAAP and SEC guidelines.

Remediation Plan to Address the Material Weaknesses in Internal Control over Financial Reporting

Our company plans to take steps to enhance and improve the design of our internal controls over financial reporting. During the period covered by this quarterly report on Form 10-Q, we have not been able to remediate the material weaknesses identified above. To remediate such weaknesses, we plan to implement the following changes during our fiscal year ending June 30, 2019: (i) appoint additional qualified personnel to address inadequate segregation of duties and ineffective risk management; and (ii) adopt sufficient written policies and procedures for accounting and financial reporting. The remediation efforts set out are largely dependent upon our securing additional financing to cover the costs of implementing the changes required. If we are unsuccessful in securing such funds, remediation efforts may be adversely affected in a material manner.

We are unable to remedy our controls related to the inadequate segregation of duties and ineffective risk management until we receive financing to hire additional employees.

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Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the three months ended March 31, 2019 that have materially affected, or are reasonable likely to materially affect, our internal control over financial reporting.

Limitations on the Effectiveness of Internal Controls

Our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will necessarily prevent all fraud and material error.   Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the internal control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings

We are not a party to any pending legal proceeding. We are not aware of any pending legal proceeding to which any of our officers, directors, or any beneficial holders of 5% or more of our voting securities are adverse to us or have a material interest adverse to us.

Item 1A. Risk Factors

See risk factors included in our Annual Report on Form 10-K for 2018.

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

On April 4, 2019, a noteholder of our company elected to convert its convertible promissory notes, dated May 22, 2015 and August 14, 2016 in the principal amounts of $4,000 and $5,000, respectively, into an aggregate of 2,380,389 shares of our common stock.

These securities were issued pursuant to Section 4(2) of the Securities Act and/or Rule 506 promulgated thereunder. The holders represented their intention to acquire the securities for investment only and not with a view towards distribution. The investors were given adequate information about us to make an informed investment decision. We did not engage in any general solicitation or advertising. We directed our transfer agent to issue the stock certificates with the appropriate restrictive legend affixed to the restricted stock.

Item 3. Defaults upon Senior Securities

None

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None

Item 6. Exhibits

**Provided herewith

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

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