Xenous Holdings, Inc. - Quarter Report: 2019 December (Form 10-Q)

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

For the quarterly period ended

¨ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT

For the transition period from ____________ to ______________

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Securities registered pursuant to Section 12(b) 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 every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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). Yes x No ¨

The number of shares of the issuer’s common stock outstanding as of February 4, 2020 was 760,250,000 shares, par value $0.001 per share.

FORM 10-Q

Quarterly Period Ended December 31, 2019

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

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

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

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

M101 Corp. (the Company) was incorporated on May 20, 1980 as Concept Holding Corp. under the laws of the State of Utah.

On December 19, 2014, the Company completed a change of domicile merger with Concept Holding Corp., a Nevada corporation which became the surviving entity and Concept Technologies, Inc., a Utah corporation ceased.

On July 21, 2017, the Board of Directors of the Company elected to file Articles of Merger with the Nevada SOS whereby it would enter into a statutory merger with its wholly-owned subsidiary, M101 Corp., a Nevada corporation, pursuant to Nevada Revised Statutes 92A.200, et seq. The effect of such merger is the Company is the surviving entity and changed its name to “M101 Corp.” The merger took effect on August 14, 2017. The Company currently has no business operations.

The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the nine months ended December 31, 2019 are not necessarily indicative of the results that may be expected for the year ending March 31, 2020. The notes to the unaudited financial statements are condensed, as disclosures that would substantially duplicate the disclosures contained in the audited financial statements for fiscal year 2019 have been omitted. This report should be read in conjunction with the audited financial statements and the footnotes thereto for the fiscal year ended March 31, 2019 included in the Company’s Form 10-K as filed with the Securities and Exchange Commission on July 9, 2019.

The Company prepares its financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) which require 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 reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

The Company’s financial instruments consist primarily of accounts payable and debts. The carrying amounts of such financial instruments approximate their respective estimated fair value due to the short-term maturities and approximate market interest rates of these instruments.

We follow ASC 850,for the identification of related parties and disclosure of related party transactions (see Note 4).

Prepaid expenses relate to prepayment made for future services in advance and will be expensed over time as the benefit of the services is received in the future, expected within one year.

Management has considered all recent accounting pronouncements issued and believes that these recent pronouncements will not have a material effect on the Company’s financial statements.

The Company computes basic and diluted earnings (loss) per share amounts in accordance with ASC Topic 260, “.” Basic earnings (loss) per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of common shares outstanding during the reporting period. Diluted earnings (loss) per share reflects the potential dilution that could occur if stock options and other commitments to issue common stock were exercised or equity awards vest resulting in the issuance of common stock that could share in the earnings of the Company.

For the nine months ended December 31, 2019 and December 31, 2018, respectively, the following common stock equivalents were excluded from the computation of diluted net loss per share as the result of the computation was anti-dilutive.

Diluted loss per share is the same as basic loss per share during periods where net losses are incurred since the inclusion of the potential common stock equivalents would be anti-dilutive as a result of the net loss.

The Company has not yet generated any revenue since its inception and has an operating loss of $56,182 for the nine months ended December 31, 2019. As of December 31, 2019, the Company has accumulated deficit of $866,260, and negative working capital of $555,460. The Company’s continuation as a going concern is dependent on its ability to execute its operation plan to generate sufficient cash flows from operations to meet its obligations and/or obtaining additional financing from its shareholders or other sources, as may be required. There can be no assurance that the necessary debt or equity financing will be available or will be available on terms acceptable to the Company. We estimate that based on current plans and assumptions, our available cash will not be sufficient to satisfy our cash requirements under our present operating expectations, without further financing, for up to 12 months.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern; however, the above conditions raise substantial doubt about the Company’s ability to do so. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern.

We are attempting to generate sufficient revenue; however, our cash position may not be sufficient to support our daily operations. While we believe in the viability of our strategy to generate sufficient revenues in the future and in our ability to raise additional funds, there can be no assurances to that effect. The ability of our company to continue as a going concern is dependent upon our ability to further implement our business plan, generate sufficient revenue to cover operating expenses and in our ability to raise additional funds.

During the nine months ended December 31, 2019 and 2018, the former director of the Company, who resigned on December 7, 2018, advanced $33,771 and $214,223, respectively, to the Company for operating expense payments on behalf of the Company. As of December 31, 2019 and March 31, 2019, the Company owed $408,877 and $375,106, respectively, to the former director of the Company.

As of December 31, 2019 and March 31, 2019, the Company owed $1,250 and $1,250, respectively, to a former shareholder for the payment of transfer agent termination fees on behalf of the Company.

The shareholder sold all his shareholdings to the new Director of the Company in December 2018.

Convertible notes payable consisted of the following at December 31, 2019 and March 31, 2019:

On July 5, 2017, the Company issued an 8% convertible note in the principal amount of $106,292 to a former shareholder for the payment of the Company’s promissory notes and accrued interest at $84,588 and accounts payable and accrued liabilities of $21,704. The convertible note is due on demand, bears interest of 8% per annum and is convertible at a conversion price of $0.01 per share. No beneficial conversion was recognized because the note conversion price of $0.01 per share exceeded the Company stock trading price of $0.0001 on July 5, 2017. As of December 31, 2019, and March 31, 2019, the accrued interest payable on the convertible note was $21,177 and $14,770, respectively.

The Company is authorized to issue an aggregate of 10,000,000 shares of preferred stock with a par value of $0.001 per share. As at December 31, 2019 and March 31, 2019, no preferred shares have been issued.

The Company is authorized to issue an aggregate of 10,000,000,000 shares of common stock with a par value of $0.001 per share.

Management has evaluated subsequent events through the date these financial statements were issued. Based on our evaluation no material events have occurred that require disclosure.

 

 

  

We had no operations during the three months ended December 31, 2019 or 2018, nor do we have operations as of the date of this filing. We had a net loss of $16,380 and $24,159 for the three months ended December 31, 2019 and 2018, respectively. The decrease was mainly attributable to the decrease in professional fees incurred during the three months ended December 31, 2019. Professional fees were $13,164 and $18,755 for the three months ended December 31, 2019 and 2018, respectively. The decrease in professional expenses was mainly attributable to the decrease in legal fees. General and administrative expenses were $1,072 and $3,260 for

 

We had no operations during the nine months ended December 31, 2019 or 2018, nor do we have operations as of the date of this filing. We had a net loss of $56,182 and $177,827 for the nine months ended December 31, 2019 and 2018, respectively. The decrease was mainly attributable to the decrease in professional fees incurred during the nine months ended December 31, 2019. Professional fees were $42,414 and $151,621 for the nine months ended December 31, 2019 and 2018, respectively. The decrease in professional expenses was mainly attributable to the decrease in legal fees. General and administrative expenses were $7,361 and $19,799 for the nine months ended December 31, 2019 and 2018, respectively. The decrease in general and administrative expenses was mainly attributable to the decrease in filing, listing and transfer agent fees.

As of December 31, 2019, and March 31, 2019, our total assets were $0 and $7,000, respectively.

As of December 31, 2019, and March 31, 2019, our total liabilities were $555,460 and 506,278, respectively.

Stockholders’ deficit was at $555,460 as of December 31, 2019 compared to deficit of $499,278 as of March 31, 2019.

We had no cash on hand as of December 31, 2019 to meet ongoing expenses and debts that may accumulate. Accumulated deficit was at $866,260 as of December 31, 2019, compared to accumulated deficit of $810,078 as of March 31, 2019.

As at December 31, 2019, we had a working capital deficit of $555,460 compared with a working capital deficit of $499,278 as at March 31, 2019. The increase in working capital deficit was primarily attributed to the increase in amount due to related parties for advancement from directors paying off vendors on behalf of the Company.

We have not generated any positive cash flow from operating activities. For the nine months ended December 31, 2019, net cash flows used in operating activities was $45,361. The net cash used in operating activities for the nine months ended December 31, 2019 was attributed to a net loss of $56,182, increased by a decrease in accounts payable and accrued liabilities of $2,586 and was offset by a decrease in prepaid expenses of $7,000 and an increase in accrued interest from note payable of $6,407.

For the nine months ended December 31, 2018, net cash flows used in operating activities was $214,223. The net cash used in operating activities for the nine months ended December 31, 2018 was attributed to a net loss of $177,827, increased by a decrease in accounts payable and accrued liabilities of $38,635 and was offset by an increase in prepaid expenses of $4,167 and an increase in accrued interest from note payable of $6,406.

We have financed our operations primarily from either advances and loans from related and third parties or the issuance of equity instruments. For the nine months ended December 31, 2019, net cash from financing activities was $45,361 compared to $214,223 for the nine months ended December 31, 2018.

As of December 31, 2019 and March 31, 2019, the Company owed $11,590 and $0, respectively, to the director of the Company.

 

As of December 31, 2019 and March 31, 2019, the Company owed $408,877 and $375,106, respectively, to the former director of the Company.

  

As of December 31, 2019 and March 31, 2019, the Company owed $1,250 and $1,250, respectively, to a former shareholder for the payment of transfer agent termination fees on behalf of the Company.

 

On July 5, 2017, the Company issued an 8% convertible note in the principal amount of $106,292 to a former shareholder for the payment of the Company’s promissory notes and accrued interest at $84,588 and accounts payable and accrued liabilities of $21,704. The convertible note is due on demand, bears interest of 8% per annum and is convertible at a conversion price of $0.01 per share. No beneficial conversion was recognized because the note conversion price of $0.01 per share exceeded the Company stock trading price of $0.0001 on July 5, 2017. As of December 31, 2019, and March 31, 2019, the accrued interest payable on the convertible note was $21,177 and $14,770, respectively.

 

Our independent auditors have added an explanatory paragraph to their audit issued in connection with the financial statements for the period ended March 31, 2019, relative to our ability to continue as a going concern. The Company, which has not generated any revenues, has incurred net losses, has nominal assets and a stockholders’ deficit. These conditions, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s continuation as a going concern is dependent on its ability to meet its obligations, to obtain additional financing as may be required and ultimately to attain profitability. The financial statements do not include any adjustments that might result from the outcome of this uncertainty

 

The Company is dependent on advances from its principal shareholders or other affiliated parties for continued funding. There are no commitments or guarantees from any third party to provide such funding nor is there any guarantee that the Company will be able to access the funding it requires to continue its operations.

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 is material to an investor in our securities.

Pursuant to Item 305(e) of Regulation of S-K (§229.305(e)), the Company is not required to provide the information required by this Item as it is a “smaller reporting company,” as defined by Rule 229.10(f)(1).

  

Disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in rules and forms adopted by the Securities and Exchange Commission, and that such information is accumulated and communicated to management, including the President and Secretary, to allow timely decisions regarding required disclosures.

Under the supervision and with the participation of our management, including our President and Secretary, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this Quarterly Report. Based upon that evaluation, our President and Secretary concluded that, as of the end of the period covered by this Quarterly Report, our disclosure controls and procedures were not effective.

During the fiscal quarter covered by this Quarterly Report, there has been no change in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Management is not aware of any legal proceedings contemplated by any governmental authority or any other party involving us. 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.

Exhibits:

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.