VIRTUAL INTERACTIVE TECHNOLOGIES CORP. - Quarter Report: 2017 February (Form 10-Q)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒ Quarterly Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act Of 1934
For the quarterly period ended February 28, 2017
☐ Transition Report Under Section 13 or 15(d) of the Securities Exchange Act Of 1934
For the transition period from __________ to __________
Commission File Number: 0-23726
MASCOTA RESOURCES CORP.
(Exact name of registrant as specified in its charter)
| NEVADA | 36-4752858 |
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(State or other jurisdiction
of incorporation or organization)
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(I.R.S. Employer
Identification No.)
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29409 232nd Ave. SE
Black Diamond, WA 98010
(Address of principal executive offices, including Zip Code)
(206)-818-4799
(Issuer's telephone number, including area code)
_____________________________________________
(Former name or former address if changed since last report)
Check whether the issuer (1) has filed all reports required to be filed by section 13 or 15(d) of the Exchange Act during the past 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 ☐ 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 small reporting company. See the definitions of "large accelerated filer," "accelerated filer," "non-accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act.
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Large accelerated filer
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☐
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Accelerated filer
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☐
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Non-accelerated filer
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☐
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Smaller reporting company
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☒
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [x] No ☐
State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 3,890,750 shares of common stock as of July 24, 2017.
1
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MASCOTA RESOURCES CORP.
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CONDENSED CONSOLIDATED BALANCE SHEETS
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(Stated in US Dollars)
(Unaudtied)
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February 28,
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November 30,
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|||||||
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2017
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2016
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||||||
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ASSETS
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||||||||
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Current Assets
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||||||||
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Cash
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$
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1,243
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$
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1,172
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||||
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Total Current Assets
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1,243
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1,172
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||||||
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Total Assets
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$
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1,243
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$
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1,172
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LIABILITIES AND STOCKHOLDERS' DEFICIT
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LIABILITIES
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Current Liabilities
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||||||||
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Accounts Payable
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$
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4,041
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$
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9,016
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Accrued Interest, Related Parties
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125
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-
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Note Payable, Related Parties
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10,000
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-
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Total Current Liabilities
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14,166
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9,016
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Total Liabilities
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14,166
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9,016
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STOCKHOLDERS' DEFICIT
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Preferred Stock, $0.01 par value, 10,000,000 shares authorized
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500
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500
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50,000, issued and outstanding as of February 28, 2017 and November 30, 2016
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-
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-
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Common Stock, $0.001 par value, 90,000,000 shares authorized,
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||||||||
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3,890,750 shares issued and outstanding, as of February 28, 2017
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(unaudited) and November 30, 2016
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3,891
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3,891
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Additional paidin capital
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156,003
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156,003
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Accumulated deficit
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(173,317
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)
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(168,238
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)
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Total Stockholders' Deficit
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(12,923
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)
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(7,844
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)
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Total Liabilities and Stockholders' Deficit
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$
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1,243
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$
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1,172
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The accompanying notes are an integral part of these financial statements.
2
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MASCOTA RESOURCES CORP.
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Condensed Consolidated Statements of Operations
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(Stated in US Dollars)
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(Unaudited)
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Three Months Ended
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February, 28
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2017
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2016
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Revenue
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$
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-
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$
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-
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Operating Expenses
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General and administrative
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4,954
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59
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Total Expenses
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$
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4,954
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$
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59
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Operating loss
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(4,954
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)
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(59
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)
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Interest expense, related parties
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125
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902
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Net loss
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$
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(5,079
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)
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$
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(961
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)
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Loss per share, basic and fully diluted
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$
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(0.00
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)
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$
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(0.00
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)
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Weighted average number of shares outstanding - basic and fully diluted
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3,890,750
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3,100,000
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The accompanying notes are an integral part of these financial statements.
3
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MASCOTA RESOURCES CORP.
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CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
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(Stated in US Dollars)
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(Unaudited)
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Three Months Ended
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February, 28
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2017
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2016
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Cash Flows from Operating Activities
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Net loss
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$
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(5,079
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)
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$
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(961
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)
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Change in operating assets and liabilities:
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||||||||||||
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Decrease in accounts payable
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(4,975
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)
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(2,501
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)
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Increase in accrued interest, related parties
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125
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902
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Net Cash used by Operating Activities
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(9,929
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)
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(2,560
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)
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Cash Flows from Investing Activities
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||||||||||||
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Net Cash provided by (used by) Investing Activities
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-
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-
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Cash Flows from Financing Activities
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Proceeds from notes payable, related parties
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10,000
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20,152
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Net Cash provided by Financing Activities
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10,000
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20,152
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Net increase in cash
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71
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17,592
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Cash at beginning of period
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1,172
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3,600
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Cash at end of period
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$
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1,243
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$
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21,192
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SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
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Cash paid for:
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Interest
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$
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-
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$
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-
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||||||||
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Income taxes
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$
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-
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$
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-
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||||||||
The accompanying notes are an integral part of these financial statements.
4
MASCOTA RESOURCES CORP.
Notes to Consolidated Financial Statements
For the Three Months ended February 28, 2017
(Unaudited)
Note 1 Basis of presentation
While the information presented in the accompanying February 28, 2017 financial statements is unaudited, it includes all adjustments which are, in the opinion of management, necessary to present fairly the financial position, results of operations and cash flows for the period presented in accordance with the accounting principles generally accepted in the United State of America. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustment are of a normal recurring nature. These financial statements should be read in conjunction with the Company's November 30, 2016 financial statements (and notes thereto). Operating results for the three months ended February 28, 2017 are not necessarily indicative of the results that can be expected for the year ending November 30, 2017.
Note 2 Nature of Operations
Mascota Resources Corp. ("the Company," "we," "us," or "our") was incorporated in the state of Nevada on November 3, 2011. The Company is an exploration stage company and was formed for the purpose of acquiring exploration and development stage mineral properties.
On November 9, 2011, the Company incorporated a wholly-owned subsidiary, MRC Exploration LLC ("MRC"), in the State of Nevada for the purpose of mineral exploration.
During May 2013, MRC acquired a Uranium mineral claim located in the Athabasca Basin, within the Province of Saskatchewan, Canada (the "Claim"). Subsequently, the required exploration and development expenditures were not made and the ownership interest in the Claim lapsed on May 3, 2015, as of which date, the Company no longer held a beneficial interest in the Claim.
The Company's business plan is to proceed with the acquisition and exploration of feasible mineral claims to determine whether there are commercially exploitable reserves of gold, silver, and uranium. The Company's geological consulting firm is well-experienced in the mineral exploration business and will provide us with the expected costs of exploration to determine the commercial viability of the prospect.
Note 3 Going Concern
These financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which assumes that the Company will be able to meet its obligations and continue its operations in the ordinary course of business. Realization values may be substantially different from carrying values as shown and these financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern. The Company has not yet achieved profitable operations, has accumulated losses of $(173,317), since its inception through February 28, 2017 and expects to incur further losses in the development of its business, all of which casts substantial doubt about the Company's ability to continue as a going concern.
The Company's ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing from shareholders or other sources to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management has no formal plan in place to address this concern but considers that the Company may be able to obtain additional funds by equity financing and/or related party advances, however there is no assurance of additional funding being available or on acceptable terms, if at all.
5
The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.
Note 4 Summary of Significant Accounting Policies
Basis of Presentation
The consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") and are stated in US dollars. The Company has adopted a November 30 year end.
Consolidated Statements
These consolidated financial statements include the accounts of the Company and MRC Exploration LLC., a wholly owned subsidiary incorporated in Nevada, USA on November 9, 2011. All significant inter-company transactions and balances have been eliminated.
Foreign Currency Translation
The Company's functional currency is the United States dollar as substantially all of the Company's operations are in the USA. The Company uses the United States dollar as its reporting currency for consistency with registrants of the Securities and Exchange Commission ("SEC").
Assets and Liabilities
Assets and liabilities denominated in a foreign currency are translated at the exchange rate in effect at the balance sheet date and capital accounts are translated at historical rates. Income statement accounts are translated at the average rates of exchange prevailing during the period, if applicable.
Translation adjustments from the use of different exchange rates from period to period are included in the Accumulated Other Comprehensive Income account in Stockholders' Equity, if applicable.
Transactions undertaken in currencies other than the functional currency of the entity are translated using the exchange rate in effect as of the transaction date. Any exchange gains and losses are included in the Statement of Operations (no comprehensive loss shown in Statement of Operations).
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimated.
Exploration Stage Accounting
The Company is an exploration stage company, as defined in pronouncements of the Financial Accounting Standards Board (FASB) and Industry Guide #7 of the Securities and Exchange Commission. Generally accepted accounting principles govern the recognition of revenue by an exploration stage enterprise and the accounting for costs and expenses.
Cash Equivalents
The Company considers all short term investments purchased with an original maturity of three months or less to be cash equivalents.
6
Income Taxes
We account for income taxes under the liability method, 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 determined based on the difference between the financial statements and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Current tax benefits are offset by a valuation reserve as they are considered not likely to be realized in the foreseeable future.
Net Income (Loss) Per Share
In accordance with FASB ASC Topic 260, "Earnings per Share," basic earnings per share ("EPS") is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted EPS gives effect to all dilutive potential of shares of common stock outstanding during the period including stock options or warrants, using the treasury stock method (by using the average stock price for the period to determine the number of shares assumed to be purchased from the exercise of stock options or warrants), and convertible debt or convertible preferred stock, using the if-converted method. Diluted EPS excludes all dilutive potential of shares of common stock if their effect is anti-dilutive. No potentially dilutive debt or equity instruments were issued or outstanding during the period ended February 28, 2017
New Accounting Pronouncements
The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations.
Note 5 Investment in Mining Rights
On May 3, 2013, the Company's consulting geologist acquired a 100% legal and beneficial ownership interest in a Uranium mineral claim for $10,000, paid by the Company and expensed immediately upon acquisition, which he held in trust for the Company pursuant to a Mineral Claim Trust Agreement, dated May 3, 2013. The Mineral Claim was located in the Northeast Athabasca Basin, in the Province of Saskatchewan, Canada. The required exploration and development expenditures to keep the Claim active were not made as required by the Agreement. The ownership interest lapsed on May 3, 2015 and as of that date the Company no longer held a beneficial interest in the Claim.
Note 6 Related Party Transactions
In support of the Company's efforts and cash requirements, it may rely on advances from related parties until such time that the Company can support its operations or attains adequate financing through sales of its equity or traditional debt financing.
On December 14, 2016, the Company's Secretary, Mark Rodenbeck, advanced the Company $10,000 pursuant to an unsecured, 6% promissory note due on December 14, 2018. The note and accrued interest are convertible at Mr. Rodenbeck's option into the Company's common stock in $100 increments at a fixed rate of $.02 per share. Interest expense on the loan was $125 and $902 during the three months ended February 28, 2017 and February 29, 2016, respectively, and accrued interest totaled $125 and $0 at February 28, 2017 and November 30, 2016, respectively.
Note 7 Stockholders' Deficit
Authorized Share Capital
The authorized share capital of the Company consists of 90,000,000 shares of common stock with par value of $0.001 and 10,000,000 shares of preferred stock with a par value of $0.001.
7
Preferred Stock
No preferred stock had been issued or outstanding since November 3, 2011 (Inception) through November 30, 2015. On June 28, 2016, the Company issued 50,000 shares of its preferred stock to Dale Rasmussen in satisfaction of his $15,436 loan made to the Company.
As of February 28, 2017 and November 30, 2016 the Company had 50,000 shares of preferred stock issued and outstanding.
Common Stock
On June 21, 2016, 2,000,000 shares of common stock owned by Maria Ponce, the Company's former President, were canceled and returned to treasury.
On June 28, 2016, the Company issued 50,000 common shares to Dale Rasmussen in satisfaction of $1,000 in loans made to the Company. Also on June 28, 2016, the Company issued 2,740,750 common shares to Mark Rodenbeck in satisfaction of loans totaling $54,818 made to the Company. Mr. Rasmussen and Mr. Rodenbeck also agreed to forgive the accrued interest totaling $4,708 due on those loans, which is reflected as an addition to paid-in capital.
As of February 28, 2017 and November 30, 2016, the Company had 3,890,750 shares of common stock issued and outstanding.
Note 8 Subsequent Events
The Company evaluated subsequent events through the date these financial statements were issued. There have been no subsequent events after February 28, 2017 for which disclosure is required.
8
| ITEM 2. |
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
We have relied on advances from related parties until such time that we can earn revenue to support our operations or obtain financing through sales of our equity or securities. There is no formal written commitment from any person to provide us with capital.
During the three months ended February 28, 2017, general and administrative expenses increased to $4,954 as compared to $59 during the prior period in 2016 due to professional fees incurred to bring our 10-K and 10-Q filings current with the Securities and Exchange Commission. We generated no cash flows from operations during the three months ended February 28, 2017 or 2016. We received $10,000 and $20,152 in loans from our officers and directors during the three months ended February 28, 2017 and 2016, respectively, which was used to pay professional fees.
| ITEM 4. |
CONTROLS AND PROCEDURES
|
We carried out an evaluation of the effectiveness of our disclosure controls and procedures as of February 28, 2017. This evaluation was carried out under the supervision and with the participation of our management, including our Chief Executive and Financial Officer.
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our company's reports filed under the Securities Exchange Act of 1934 is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.
Based upon that evaluation, our Chief Executive and Financial Officer concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this report.
There have been no changes in our internal control over financial reporting that occurred during the period ended February 28, 2017 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II
Item 6. Exhibits
Exhibits
9
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.
| MASCOTA RESOURCES CORP. | |||
|
August 22, 2017
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By:
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/s/ Dale Rasmussen | |
| Dale Rasmussen, Principal Executive and Financial Officer | |||
10