T-REX Acquisition Corp. - Quarter Report: 2014 September (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC. 20549

FORM 10-Q

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

For the quarterly period ended September 30, 2014

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

For the transition period from ___________ to ____________

Commission File Number: 333-152551

Securities registered under Section 12(b) of the Act:

Securities registered under Section 12(g) of the Act:

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ¨ Yes     x 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 (§ 229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ¨ Yes     x No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-Q or any amendment to this Form 10-Q. x

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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

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

As of date of filing December 4, 2019 there were 103,073 shares of the issuer’s $.001 par value common stock issued and outstanding.

TABLE OF CONTENTS

PART I

TABLE OF CONTENTS

TREX ACQUISITION CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

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

TREX ACQUISITION CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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

TREX ACQUISITION CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

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

TREX ACQUISITION CORP.

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

July 1, 2013 to September 30, 2014

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

TREX ACQUISITION CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

September 30, 2014

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

T-REX Acquisition Corp. (The “Company”) was formed on January 16, 2008 in the state of Nevada under the name Plethora Resources, Inc. as a development stage enterprise. The Company later changed its name to Sync2 Networks Corp. then on March 20, 2014 to T-REX Acquisition Corp. The Company was originally organized to engage in the business of consulting to oil and gas exploration companies interested in obtaining exploration and production licenses at auction for oil and gas properties in Russia.

The Company consists of itself and its 100% owned subsidiary Sync2 Networks International.

On April 7, 2014, our Board of Directors deemed it in the best interests of the Company and its shareholders to domesticate our subsidiary, Sync2 International Ltd., as a corporation formed under the laws of Malta to a corporation formed under the laws of the State of Nevada (the “Domestication”), which under Nevada statutory law involves the transfer of an existing corporation from one jurisdiction to another whereby Sync2 International Ltd. shall cease all operations in Malta. On May 1, 2014, we filed Articles of Domestication with the Nevada Secretary of State effecting the domestication of Sync2 International Ltd. as a corporate entity formed under the laws of the State of Nevada, which domestication provides that Sync2 International Ltd. as domesticated in the State of Nevada shall be the same entity as Sync2 International Ltd. organized under the laws of Malta.

The Company’s business plan is to find a merger candidate and become an operating company or to be a corporate governance and management company.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

Certain information and note disclosures normally included in our annual financial statements prepared in accordance with generally accepted account principles have been condensed or omitted. These consolidated financial statement should be read in conjunction with a reading of the financial statements and notes there included in our annual report on form 10k for the fiscal year end June 30, 2014, as filed with the US Securities and Exchange Commission.”

The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 period. Actual results could differ from those estimates.

Management further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control and preventing and detecting fraud. The Company’s system of internal accounting control is designed to assure, among other items, that 1) recorded transactions are valid; 2) valid transactions are recorded; and 3) transactions are recorded in the proper period in a timely manner to produce financial statements which present fairly the financial condition, results of operations and cash flows of the Company for the respective periods being presented

Determination of Bad Debts

The Company’s policy is to analyze the collectability of Accounts and Notes Receivable on a monthly basis to determine whether any allowance for doubtful accounts is necessary.

Principles of Consolidation

The accounts include those of the Company and its 100% owned subsidiary. All intercompany transactions have been eliminated. At this time, SYNC2 International LTD has no operations, assets or liabilities.

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 revenues and expenses during the reporting period. Significant estimates include the estimated useful lives of property and equipment. Actual results could differ from those estimates.

Cash equivalents

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

Fair value of financial instruments

The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (U.S.) GAAP, and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:

The carrying amount of the Company’s financial assets and liabilities, such as cash, and accrued expenses approximate their fair value because of the short maturity of those instruments. The Company’s notes payable approximate the fair value of such instruments based upon management’s best estimate of interest rates that would be available to the Company for similar financial arrangements at September 30, 2014.

The Company does not have any assets or liabilities measured at fair value on a recurring or a non-recurring basis.

Equipment

Equipment is recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation of equipment is computed by the straight-line method (after taking into account their respective estimated residual values) over the assets estimated useful life of three (3) or seven (7) years. Upon sale or retirement of equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in statements of operations.

Impairment of long-lived assets

The Company follows paragraph 360-10-05-4 of the FASB Accounting Standards Codification for its long-lived assets. The Company’s long-lived assets, which includes computer equipment is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable.

The Company assesses the recoverability of its long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or group of long-lived assets over their remaining estimated useful lives against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives.

The Company determined that there were no impairments of long-lived assets as of September 30, 2014 and 2013.

Commitments and contingencies

The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. Since September 30, 2014 and through the date of filing, there have been no intervening lawsuits, claims or judgments filed.

Revenue recognition

The Company follows paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company will recognize revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured.

Income taxes

The Company follows Section 740-10-30 of the FASB Accounting Standards Codification, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the fiscal year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the fiscal years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the Statements of Income and Comprehensive Income in the period that includes the enactment date.

The Company adopted section 740-10-25 of the FASB Accounting Standards Codification (“Section 740-10-25”) with regards to uncertainty income taxes. Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. The Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions of Section 740-10-25.

Net income (loss) per common share

Net income (loss) per common share is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock and potentially outstanding shares of common stock during the period. The weighted average number of common shares outstanding and potentially outstanding common shares assumes that the Company incorporated as of the beginning of the first period presented.

There were 1,835,835 potentially dilutive shares outstanding as of September 30, 2014 resulting from shares to be issued per the conversion of related party debt (see Note 4). At the end of both periods the potentially dilutive shares were excluded because the effect would have anti-dilutive.

Cash flows reporting

The Company adopted paragraph 230-10-45-24 of the FASB Accounting Standards Codification for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (“Indirect method”) as defined by paragraph 230-10-45-25 of the FASB Accounting Standards Codification to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments. The Company reports the reporting currency equivalent of foreign currency cash flows, using the current exchange rate at the time of the cash flows and the effect of exchange rate changes on cash held in foreign currencies is reported as a separate item in the reconciliation of beginning and ending balances of cash and cash equivalents and separately provides information about investing and financing activities not resulting in cash receipts or payments in the period pursuant to paragraph 830-230-45-1 of the FASB Accounting Standards Codification.

Advertising Costs

The Company expenses the cost of advertising and promotional materials when incurred. Total Advertising costs were zero for all periods.

Subsequent events

The Company follows the guidance in Section 855-10-50 of the FASB Accounting Standards Codification for the disclosure of subsequent events. The Company will evaluate subsequent events through the date when the financial statements were issued. Pursuant to ASU 2010-09 of the FASB Accounting Standards Codification, the Company as an SEC filer, considers its financial statements issued when they are widely distributed to users, such as through filing them on EDGAR.

Reverse Stock Split

On October 9, 2013 the Company’s board of directors approved a 1 for 1000 reverse stock split effective in the first quarter 2014.

NOTE 3 – GOING CONCERN

As reflected in the accompanying financial statements, the Company had an accumulated deficit of $1,638,538 and negative equity of $234,265 at September 30, 2014.

While the Company is attempting to commence operations and generate revenues, the Company’s cash position may not be significant enough to support the Company’s daily operations. Management intends to raise additional funds by way of a public or private offering. Management believes that the actions presently being taken to further implement its business plan and generate revenues provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy to generate revenues and in its ability to raise additional funds, there can be no assurances to that effect and there is substantial doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate revenues.

The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

NOTE 4 – RELATED PARTY TRANSACTIONS

Free office space

The Company has been provided office space by its Chief Executive Officer at no cost. The management determined that such cost is nominal and did not recognize the rent expense in its financial statements.

Due to Related Parties

NOTE 5 – PROPOSED MERGER WITH KERR TECHNOLOGIES, INC.

On May 30, 2014, our Board of Directors approved the execution of a non-binding indication of interest in the form of a Term Sheet (the “Term Sheet”) with Kerr Utility Technologies Inc. (“Kerr”) regarding a tax-free stock-for-stock exchange reverse merger transaction with Kerr (the “Merger”). In connection with the Merger, we intended to incorporate and establish T-REX Acquisitions, Inc. as a Nevada corporation and our wholly owned subsidiary (the “Merger Sub”) and T-REX Merger, Inc., a Nevada corporation (“Newco”) to accommodate the Kerr acquisition. Our Board of Directors has also approved a private placement offering to raise on an “all or none” basis an aggregate of $500,000 for Kerr’s benefit prior to consummation of the Merger.

In July 2014 and in anticipation of the closing of the transaction, a related party advanced, on behalf of the Company, $100,000 to Kerr This $100,000 amount was subsequently deemed uncollectible and written off during the quarter ended September 30, 2014. This amount is in addition to the $100,000 advanced by the same related party in May 2014 and written off during the year ended June 30, 2014.

The Kerr Merger was ultimately not concluded, and the Company will not recover any of the funds advanced to Kerr.

NOTE 6 – SUBSEQUENT EVENTS

The Company has evaluated all events that occurred after the balance sheet date through the date when the financial statements were issued to determine if they must be reported. The Management of the Company determined that there was one reportable subsequent events to be disclosed

During 2018 the Company sold 350,000 shares to a related party for $47,500. The amount was subsequently invested in a potential merger candidate. This potential merger candidate also advanced approximately $20,000 to the Company in anticipation of this merger. As the date of filing (March 25, 2019) this merger has not been completed and the amounts are still outstanding.

Forward-Looking Information

This Quarterly Report of T-REX Acquisition Corp. on Form 10-Q contains forward-looking statements, particularly those identified with the words, “anticipates,” “believes,” “expects,” “plans,” “intends,” “objectives,” and similar expressions. These statements reflect management’s best judgment based on factors known at the time of such statements. The reader may find discussions containing such forward-looking statements in the material set forth under “Management’s Discussion and Analysis and Plan of Operations,” generally, and specifically therein under the captions “Liquidity and Capital Resources” as well as elsewhere in this Quarterly Report Form 10-Q. Actual events or results may differ materially from those discussed herein. The forward-looking statements specified in the following information have been compiled by our management on the basis of assumptions made by management and considered by management to be reasonable. Our future operating results, however, are impossible to predict and no representation, guaranty, or warranty is to be inferred from those forward-looking statements. The assumptions used for purposes of the forward-looking statements specified in the following information represent estimates of future events and are subject to uncertainty as to possible changes in economic, legislative, industry, and other circumstances. As a result, the identification and interpretation of data and other information and their use in developing and selecting assumptions from and among reasonable alternatives require the exercise of judgment. To the extent that the assumed events do not occur, the outcome may vary substantially from anticipated or projected results, and, accordingly, no opinion is expressed on the achievability of those forward-looking statements. No assurance can be given that any of the assumptions relating to the forward-looking statements specified in the following information are accurate, and we assume no obligation to update any such forward-looking statements.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

T-REX Acquisition Corp. (The “Company”) was formed on January 16, 2008 in the state of Nevada under the name Plethora Resources, Inc. as a development stage enterprise. The Company later changed its name to Sync2 Networks Corp. then on March 20, 2014 to T-REX Acquisition Corp. The Company was originally organized to engage in the business of consulting to oil and gas exploration companies interested in obtaining exploration and production licenses at auction for oil and gas properties in Russia.

The Company consists of itself and its 100% owned subsidiary Sync2 Networks International.

On April 7, 2014, our Board of Directors deemed it in the best interests of the Company and its shareholders to domesticate our subsidiary, Sync2 International Ltd., as a corporation formed under the laws of Malta to a corporation formed under the laws of the State of Nevada (the “Domestication”), which under Nevada statutory law involves the transfer of an existing corporation from one jurisdiction to another whereby Sync2 International Ltd. shall cease all operations in Malta. On May 1, 2014, we filed Articles of Domestication with the Nevada Secretary of State effecting the domestication of Sync2 International Ltd. as a corporate entity formed under the laws of the State of Nevada, which domestication provides that Sync2 International Ltd. as domesticated in the State of Nevada shall be the same entity as Sync2 International Ltd. organized under the laws of Malta.

The Company’s business plan is to find a merger candidate and become an operating company or to be a corporate governance and management company.

The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements for the quarters ended September 30, 2014 and September 30, 2013, together with notes thereto as included in this Quarterly Report on Form 10-Q. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements. Factors that could cause or contribute to such differences include, but are not limited to those discussed below and elsewhere in this Quarterly Report, particularly in the section entitled “Risk Factors.” Our audited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.

We have no current operations, are currently pursuing options to find suitable merger candidates and have not generated any significant revenue to date. We have incurred recurring losses to date. Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation.

We expect we will require additional capital to meet our long term operating requirements. We expect to raise additional capital through, among other things, the sale of equity or debt securities.

RESULTS OF OPERATION

Quarter Ended September 30, 2014 Compared to Quarter Ended September 30, 2013

Our net loss for the quarter ended September 30, 2014 was ($130,959) compared to a net loss of $9,461 during the quarter ended September 30, 2013, an increase in net loss of $121,498. During the quarters ended September 30, 2014 and September 30, 2013, we did not generate any revenue.

During the quarter ended September 30, 2014, we incurred operating expenses of $130,959 compared to $9,461 incurred during the quarter ended September 30, 2013, an increase of $121,498. During the quarter ended September 30, 2014, operating expenses consisted of: (i) $4,370 in transfer agent and filing fees (2013: $2,795); (ii) $11,500 in professional fees (2013: $6,600); (iii) $89 in general and administrative (2013: $66); and (iv) $100,000 in bad debts (2013: $-0) (v) $15,000 in Management Fees compared to $0 in 2013. General and administrative expenses generally include corporate overhead, financial and administrative contracted services, marketing, and consulting costs. The increase in operating expenses was primarily attributable to the $100,000 of bad debts compared to $-0- incurred during the quarter ended September 30, 2013. We had advanced $100,000 to Kerr in May 2014 and a further $100,000 to Kerr in July 2014. Kerr subsequently ceased business operations. Therefore, at June 30, 2014, the original $100,000 was determined to be a bad debt and, therefore, was recorded as bad debt for the year ended June 30, 2014. The remaining $100,000 was reflected as a bad debt during the quarter ended September 30, 2014.

We did not incur any management fees to our officers and directors during the quarter ended September 30, 2014 and September 30, 2013. We did incur management fees of $15,000 to outside consultants during the quarter ended September 30, 2014 to locate and vet potential acquisition candidates.

Therefore, our net loss and loss per share during the quarter ended September 30, 2014 was ($130,959) or ($1.27) per share compared to a net loss per share during the quarter ended September 30, 2013 of ($9,461) or ($.09) per share. The weighted average number of shares outstanding was 103,073 for both the quarters ended September 30, 2014 and September 30, 2013.

LIQUIDITY AND CAPITAL RESOURCES

Quarter Ended September 30, 2014

As of September 30, 2014, our current assets were $102 and our current liabilities were $234,367, which resulted in a working capital deficit of $234,265. As of September 30, 2014, current assets were comprised of $102 in cash and cash equivalents. As of September 30, 2014, current liabilities were comprised of $228,497 due to related parties and $5,870 in trade accounts payable and accrued expenses. As of June 30, 2014, our current assets were $63 and our current liabilities were $795,295, which resulted in a working capital deficit of $795,232. As of June 30, 2014, current assets were comprised of $63 in cash and cash equivalents. As of June 30, 2014, current liabilities were comprised of $791,923 due to related parties and $3,372 in trade accounts payable and accrued expenses.

As of September 30, 2014, our total assets were $102. The increase in assets from the quarter ended September 30, 2013 was due to the increase in cash and cash equivalents.

As of September 30, 2014, our total liabilities were $234,367 comprised entirely of current liabilities. The decrease in liabilities during the quarter ended September 30, 2014 from the year ended June 30, 2014 was primarily due to the reclassification of $691,926 in related party debt to stock to be issued and the increase in amounts due to other related parties and Management Fees.

Stockholders’ deficit decreased from ($795,232) for the year ended June 30, 2014 to ($234,265), for the quarter ended September 30, 2014.

Cash Flows from Operating Activities

For the quarter ended September 30, 2014, net cash flows provided by operating activities was $39. Net cash flows used in operating activities during the quarter ended September 30, 2014 consisted primarily of a net loss of ($130,959), (including the $100,000 bad debt charge which was a non-cash expense), which was adjusted by an increases of $28,500 in due to related parties and $2,498 in accounts payable for the quarter ended September 30, 2014. Net cash flows used in operating activities during the quarter ended September 30, 2013 consisted primarily of ($9,461) in net loss, which was adjusted by an increases in due to related parties of $3,000 and $6,461, of accounts payable and accrued expenses.

Cash Flows from Investing Activities

For the quarters ended September 30, 2014 and September 30, 2013, net cash flows used in investing activities was $0.

Cash Flows from Financing Activities

For the quarter ended September 30, 2014, net cash flows from financing activities was $-0-. For the quarter ended September 30, 2013, net cash flows used in financing activities was $-0-.

PLAN OF OPERATION AND FUNDING

We expect that working capital requirements will continue to be funded through a combination of our proceeds from the sales of stock and generation of revenues from acquisitions. Our working capital requirements are expected to increase in line with the growth of our business.

Our principal demands for liquidity are to increase business operations and for general corporate purposes. We intend to meet our liquidity requirements, including capital expenditures related to future business operations, and the expansion of our business, through cash flow provided by funds raised through proceeds from the issuance of debt or equity.

MATERIAL COMMITMENTS

Convertible Debenture

As of September 30, 2014, we have a note payable dated June 30, 2010 in the principal amount of $1,253,095 of which $603,095 has been either converted to stock or paid. The note payable accrues interest at the rate of 5% per annum, however that interest has been forgiven each year by the note holders. As of September 14, 2014, the amounts due to related parties on notes was $920,423. $The Board of Directors approved convert $691,926 of these related party notes payable, however as of September 30, 2014, the Shares have yet to be issued.

PURCHASE OF SIGNIFICANT EQUIPMENT

We do not intend to purchase any significant equipment during the next twelve months.

OFF-BALANCE SHEET ARRANGEMENTS

As of the date of this Quarterly Report, 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, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

PART II

ITEM 1. LEGAL PROCEEDINGS

As of the date of this Quarterly Report, management is not aware of any legal proceedings contemplated by any governmental authority or any other party involving us or our properties. As of the date of this Quarterly Report, no director, officer or affiliate is (i) a party adverse to us in any legal proceeding, or (ii) has an adverse interest to us in any legal proceedings. Management is not aware of any other legal proceedings pending or that have been threatened against us or our properties.

ITEM 1A. RISK FACTORS

Item 1A is not applicable to the Company, since it qualifies as a smaller reporting company under SEC rules.

ITEM 2. UNREGISTERED SALE OF EQUITY SECURITIES AND USE OF PROCEEDS

During fiscal year ended June 30, 2014 and to date, we did not issued any shares of common stock other than shares issued for debt conversion as discussed below.

During 2010, we had received monies from Boardwalk Business Developments Inc. (“Boardwalk”) pursuant to an operating loan and other advances made by Boardwalk to us. Therefore, we evidenced the monies loaned by that certain convertible debenture dated June 30, 2010 (the “Convertible Debenture”), which Convertible Debenture was and has been evidenced on our audited financial statements. Subsequently, Boardwalk and certain assignees (collectively, the “Assignees”) entered into those certain assignments of convertible debenture dated July 15, 2012 (the “Assignments”) pursuant to which Boardwalk assigned and transferred to each of the Assignees a portion of its right, title and interest in and to the Debenture for payment of consideration from each of $8,000. The Assignees further assigned portions of their respective debt to others for consideration. We received those certain conversion notices dated September 21, 2014 from certain of the Assignees and others (collectively, the “Conversion Notices”) and desired to settle the debt evidenced by the Convertible Debenture in the aggregate amount of $691,926.00 by conversion into an aggregate post-Reverse Stock Split 1,835,834 shares of our restricted common stock at $0.3769 (which conversion price was changed based on the 1:1000 reverse stock split). Therefore, effective on September 21, 2014, our Board of Directors approved the issuance of an aggregate 1,835,834 shares of our restricted common stock to the Assignees and others in accordance with the terms and provisions of the respective Notices of Conversion. The shares of common stock were issued at $0.3769 per share. The shares of common stock were issued to United States residents in reliance on Section 4(2) promulgated under the United States Securities Act of 1933, as amended (the “Securities Act”). The securities have not been registered under the Securities Act or under any state securities laws and may not be offered or sold without registration with the United States Securities and Exchange Commission or an applicable exemption from the registration requirements. The Assignees and others acknowledged that the securities to be issued have not been registered under the Securities Act, that they understood the economic risk of an investment in the securities, and that they had the opportunity to ask questions of and receive answers from our management concerning any and all matters related to acquisition of the securities.

The shares are currently being issued and are deemed issued as of September 21, 2014. No Assignee or other subsequent assignee holds in the aggregate shares exceeding 4.99% of the total issued and outstanding shares of common stock.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

Not Applicable

ITEM 4. MINE SAFETY DISCLOSURE

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

_____________

* Filed herewith.

** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

PART III

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.

In accordance with the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.