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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

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

 

For the quarter ended October 31, 2014

 

¨ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from _______ to _______

 

Commission file number: 333-176969

 

DARKSTAR VENTURES, INC.

(Exact name of registrant as specified in its charter)

 

Nevada

 

26-0299456

(State or other jurisdiction of incorporation or organization)

 

(I.R.S. Employer Identification No.)

  

410 Park Avenue

15th Floor

New York, NY 10022

(Address of principal executive offices)

 

(866) 360-7565

(Registrant’s telephone number, including area code)

 

________________________________________________________________

(Former name, former address and former fiscal year, if changed since last report)

 

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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 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 (§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 x

 

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

 

Large accelerated filer

¨

Accelerated filer

¨

Non-accelerated filer

¨

Smaller reporting company

x

(Do not check if a smaller reporting company)

     

  

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

 

As of December 9, 2014, 107,145,000 shares of common stock, par value $0.0001 per share, were issued and outstanding.

 

 

 

 

 

TABLE OF CONTENTS

 

    PAGE  

PART I. FINANCIAL INFORMATION

   

Item 1.

Financial Statements

    F-1  
       

Item 2.

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

    3  
       

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

    5  
       

Item 4.

Controls and Procedures

    5  
       

PART II. OTHER INFORMATION

       

Item 1.

Legal Proceedings

    6  
       

Item IA.

Risk Factors

    6  
       

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

    6  
       

Item 3.

Defaults Upon Senior Securities

    6  
       

Item 4.

Mine Safety Disclosures

    6  
       

Item 5.

Other Information

    6  
       

Item 6.

Exhibits

    7  

  

 
2

  

PART I. FINANCIAL INFORMATION

 

Item 1. Financial Statements.

 

DARKSTAR VENTURES, INC. 

(A DEVELOPMENT STAGE COMPANY) 

CONDENSED BALANCE SHEET

 

    October 31, 2014     July 31, 2014  

 

  (Unaudited)    

ASSETS

Current Assets:

       

Cash and Cash Equivalents

 

$

494

   

$

556

 
               

Total Current Assets

   

494

     

556

 
               

Total Assets

 

$

494

   

$

556

 
               

LIABILITIES AND STOCKHOLDERS’ DEFICIENCY

Current Liabilities:

               

Accounts Payable

 

$

62,911

   

$

51,070

 

Note Payable

   

96,170

     

90,690

 
               

Total Current Liabilities

   

159,081

     

141,760

 
               

Commitments and Contingencies

               
               

Stockholders’ Deficiency:

               

Preferred Stock, $.0001 par value 5,000,000 shares authorized, none issued and outstanding

   

-

     

-

 

Common Stock, $.0001 par value 500,000,000 shares authorized, 107,145,000 shares issued and outstanding at October 31, 2014 and July 31, 2014

   

10,714

     

10,714

 

Additional Paid-In Capital

   

24,936

      24,936  

Deficit Accumulated During the Development Stage

 

(194,237

)

 

(176,854

)

               

Total Stockholders’ Deficiency  

 

(158,587

)

 

(141,204

)

               

Total Liabilities and Stockholders’ Deficiency

 

$

494

   

$

556

 

  

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

 

 
F-1

  

DARKSTAR VENTURES, INC. 

(A DEVELOPMENT STAGE COMPANY) 

CONDENSED STATEMENT OF OPERATIONS 

(UNAUDITED)

 

 

          For the Period  

  For the Quarter Ended
October 31,
    May 8, 2007 (Inception) to  
  2014     2013     October 31, 2014  
             

Net Revenues

 

$

-

   

$

-

   

$

-

 
                       

Costs and Expenses:

                       

Professional Fees

   

11,810

     

13,570

     

121,084

 

Consulting Fees

   

2,500

     

2,500

     

31,667

 

Web Site Development

   

-

     

-

     

5,000

 

General and Administrative Expenses

   

1,191

     

1,219

     

20,811

 
                       

Total Costs and Expenses

   

15,501

     

17,289

     

178,562

 
                       

Operating Loss

 

(15,501

)

 

(17,289

)

 

(178,562

)

Other Income (Expense)

                       

Interest Expense

 

(1,882

)

 

(2,538

)

 

(15,675

)

Total Other Income (Expense)

 

(1,882

)

 

(2,538

)

 

(15,675

)

                       

Net Loss

 

$

(17,383

)

 

$

(19,827

)

 

$

(194,237

)

                       

Basic and Diluted Loss Per Common Share 

 

$

(0.00

)

 

$

(0.00

)

       
                       

Weighted Average Common Shares Outstanding

   

107,145,000

     

107,145,000

         

 

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

 

 
F-2

   

DARKSTAR VENTURES, INC. 

(A DEVELOPMENT STAGE COMPANY) 

CONDENSED STATEMENT OF STOCKHOLDERS’ DEFICIENCY 

FOR THE QUARTER ENDED OCTOBER 31, 2014 

(UNAUDITED)

 

 

  Common Stock    

Additional
Paid-In

    Deficit
Accumulated
During the Development
     

 

  Shares     Amount     Capital     Stage     Total  
                     

Balance, August 1, 2014

 

107,145,000

   

$

10,714

   

$

24,936

   

$

(176,854

)

 

$

(141,204

)

Net Loss for the Quarter Ended October 31, 2014

   

-

     

-

     

-

   

(17,383

)

 

(17,383

)

                                       

Balance, October 31, 2014

   

107,145,000

   

$

10,714

   

$

24,936

   

$

(194,237

)

 

$

(158,587

)

 

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

 

 
F-3

  

DARKSTAR VENTURES, INC. 

 (A DEVELOPMENT STAGE COMPANY) 

CONDENSED STATEMENT OF CASH FLOWS 

(UNAUDITED)

 

 

  For the Quarter Ended     For the Period
May 8, 2007
 

 

  October 31,     (Inception) to  

 

  2014     2013     October 31,2014  
             

Cash Flows from Operating Activities:

           

Net Loss

 

$

(17,383

)

 

$

(19,827

)

$

(194,237

)

Adjustments to Reconcile Net Loss to Net Cash (Used) in Operating Activities:

                       

Changes in Assets and Liabilities:

                       

Increase in Accounts Payable

   

11,841

     

6,571

     

62,911

 
                       

Net Cash (Used) in Operating Activities

 

(5,542

)

 

(13,256

)

 

(131,326

)

                       

Cash Flows from Investing Activities:

   

-

     

-

     

-

 
                       

Cash Flows from Financing Activities:

                       

Proceeds from Borrowings

   

5,480

     

14,200

     

96,170

 

Proceeds from Sale of Common Stock

   

-

     

-

     

35,650

 
                       

Net Cash Provided by Financing Activities

   

5,480

     

14,200

     

131,820

 
                       

Increase (Decrease) in Cash and Cash Equivalents

(62

)

   

944

     

494

 
                       

Cash and Cash Equivalents – Beginning of Period

   

556

     

776

     

-

 
                       

Cash and Cash Equivalents – End of Period

 

$

494

   

$

1,720

   

$

494

 
                       

Supplemental Disclosures of Cash Flow Information:

                       

Interest Paid

 

$

-

   

$

-

   

$

-

 

Income Taxes Paid

 

$

-

   

$

-

   

$

-

 

 

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

 

 
F-4

  

DARKSTAR VENTURES, INC. 

(A DEVELOPMENT STAGE COMPANY) 

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

 

NOTE 1 - Organization and Basis of Presentation

 

Darkstar Ventures, Inc. (“the Company” or “we”) was incorporated on May 8, 2007 under the laws of the State of Nevada.

 

The Company has not generated revenues from planned principal operations and is considered a development stage company. The Company originally intended to market and sell eco-friendly health and wellness products to the general public via the internet. The Company has been dormant from its inception to May 1, 2011. The Company has since abandoned its business plan and is now seeking an operating company with which to merge or to acquire. There can be no assurance that we will be able to identify a company and successfully effect such a business combination or merger.

 

In the opinion of the Company’s management, the accompanying unaudited condensed financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the information set forth therein. These financial statements are condensed and therefore do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. These condensed financial statements should be read in conjunction with the Company’s July 31, 2014 audited financial statements and notes thereto included in the Company’s annual report on Form 10-K filed on October 24, 2014.

 

Results of operations for interim periods are not necessarily indicative of the results of operations for a full year.

 

The Company is a development stage company and has not commenced planned principal operations. The Company had no revenues and incurred a net loss of $17,383 for the quarter ended October 31, 2014, and a net loss of $ 194,237 for the period May 8, 2007 (inception) to October 31, 2014. In addition, the Company has a working capital and stockholders’ deficiency of $158,587 at October 31, 2014. These factors raise substantial doubt about the Company's ability to continue as a going concern.

 

There can be no assurance that sufficient funds required during the next year or thereafter will be generated from operations or that funds will be available from external sources such as debt or equity financings or other potential sources. The lack of additional capital resulting from the inability to generate cash flow from operations or to raise capital from external sources would force the Company to substantially curtail or cease operations and would, therefore, have a material adverse effect on its business. Furthermore, there can be no assurance that any such required funds, if available, will be available on attractive terms or that they will not have a significant dilutive effect on the Company’s existing stockholders.

 

The accompanying condensed financial statements do not include any adjustments related to the recoverability or classification of asset-carrying amounts or the amounts and classification of liabilities that may result should the Company be unable to continue as a going concern.

 

The Company is attempting to address its lack of liquidity by raising additional funds, either in the form of debt or equity or some combination thereof. During the quarter ended October 31, 2014 the Company borrowed an additional $5,480 on the Note Payable to First Line (see Note 3). There can be no assurances that the Company will be able to generate revenues or raise the additional funds it requires.

 

 
F-5

  

DARKSTAR VENTURES, INC. 

(A DEVELOPMENT STAGE COMPANY) 

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

 

NOTE 2 - Summary of Significant Accounting Policies

 

Recent Accounting Pronouncements

 

On June 10, 2014, the Financial Accounting Standards Board (FASB) issued a new accounting standard that reduces some of the disclosure and reporting requirements for development stage entities. The change will be effective for interim and annual reporting periods beginning after December 15, 2014. As of such date, among other things, development stage entities will no longer be required to report inception-to-date information.

 

NOTE 3 - Note Payable

 

Note payable, First Line Capital, LLC, bears interest at 8% per annum and is due March 31, 2015. The note allows the Company to borrow any amount in increments of up to $50,000. Accrued interest on this note included in Accounts Payable was $15,675 and $13,793 as of October 31, 2014 and July 31, 2014, respectively.

 

For the period April 1, 2014 to June 9, 2014, the Note was in default and interest was accrued at the default rate of 15%. On June 10, 2014, the Note Payable to First Line Capital LLC was extended to March 31, 2015. As of such date, it is no longer in default.

 

NOTE 4 - Preferred Stock

 

The Company’s Board of Directors may issue authorized but unissued shares of preferred stock in series and at the time of issuance, determine the rights, preferences and limitation of each series. The holders of preferred stock may be entitled to receive a preference payment in the event of any liquidation, dissolution or winding-up of the Company before any payment is made to the holders of the common stock. Furthermore, the board of directors could issue preferred stock with voting and other rights that could adversely affect the voting power of the holders of the common stock.

 

NOTE 5 - Common Stock

 

In May 1, 2011 the Company sold 97,500,000 shares of common stock for $650 to the Founder of the Company.

 

On June 28, 2011 the Company sold 52,500,000 shares of common stock for $35,000 to private investors.

 

On May 23, 2013 the Company’s CEO returned 42,855,000 shares of common stock as additional paid in capital.

 

On June 28, 2013 FINRA confirmed a 15 for 1 forward split of the Company’s common stock to stockholders of record on July 8, 2013 as authorized by the Company’s Board of Directors. All share and per share data have been retroactively restated to reflect this recapitalization.

 

 
F-6

  

DARKSTAR VENTURES, INC. 

(A DEVELOPMENT STAGE COMPANY) 

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

 

NOTE 6 - Commitments and Contingencies

 

On September 1, 2011 the Company entered into a one-year consulting agreement with First Line Capital, LLC ("First Line") under which First Line will provide certain business and corporate development services to the Company for an annual consulting fee of $10,000 payable on each August 31 during the term of the agreement beginning on August 31, 2012. The agreement will automatically renew for successive one-year terms unless terminated by either party at least 10 days prior to the end of the then current term. As of October 31, 2014 and July 31, 2014, accrued consulting fees included in Accounts Payable amounted to $31,667 and $29,167, respectively. On October 14, 2014, the parties entered into an amendment to the consulting agreement providing that the agreement will terminate July 31, 2015. Compensation terms under the amended agreement remained the same.

 

NOTE 7 - Subsequent Events

 

The Company has evaluated subsequent events through the date the financial statements were issued and up to the time of filing of the financial statements with the Securities and Exchange Commission.

  

 
F-7

 

Item 2. Management’s Discussion and Analysis or Plan of Operations.

 

As used in this Quarterly Report on Form 10-Q, references to the “Company,” “Darkstar”, “we,” “our” or “us” refer to Darkstar Ventures, Inc. unless the context otherwise indicates.

 

Forward-Looking Statements

 

The following discussion should be read in conjunction with the financial statements of the Company which are included elsewhere in this Form 10-Q. Certain statements contained in this report, including statements regarding our anticipated business, our intent, belief or current expectations, primarily with respect to the future operating performance of the Company and other statements contained herein regarding matters that are not historical facts, are "forward-looking" statements. Future filings with the Securities and Exchange Commission, future press releases and future oral or written statements made by us or with our approval, which are not statements of historical fact, may contain forward-looking statements. Because such statements include risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. For a more detailed listing of some of the risks and uncertainties facing the Company, please see the Company’s Registration Statement on Form S-1 filed by the Company with the Securities and Exchange Commission on January 19, 2012.

 

All forward-looking statements speak only as of the date on which they are made. We undertake no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they are made, except as required by federal securities and any other applicable law.

 

History

 

We are a development stage company that was originally established to offer eco-friendly health and wellness products to the general public via the internet. We are currently a shell company seeking an acquisition candidate.

 

Plan of Operation

 

Given our limited resources and the fact that we have never generated any revenues from the sale of our products, we are no longer focused on operating a business and have abandoned our business plan. We are attempting to identify and negotiate with another company for the business combination or merger of that entity with and into DarkStar. We would seek, investigate and, if such investigation warrants, acquire an interest in one or more business opportunities presented to it by persons or firms who or which desire to seek the perceived advantages of a publicly held corporation. At this time, DarkStar has no plan, proposal, agreement, understanding or arrangement to acquire or merge with any specific business or company, and the Company has not identified any specific business or company for investigation and evaluation. No member of management or promoter of the Company has had any material discussions with any other company with respect to any acquisition of that company.

 

We will not restrict our search for another target company to any specific business, industry or geographical location, and the Company may participate in a business venture of virtually any kind or nature. The discussion of the proposed plan of operation under this caption and throughout this Quarterly Report is purposefully general and is not meant to be restrictive of the Company's virtually unlimited discretion to search for and enter into potential business opportunities.

 

 
3

  

For the three months ended October 31, 2014 and October 31, 2013

 

Revenues

 

The Company is in its development stage and did not generate any revenues during the three months ended October 31, 2014 and October 31, 2013.

 

Total operating expenses

 

For the three months ended October 31, 2014, total operating expenses were $15,501, which included professional fees in the amount of $11,810, consulting fees of $2,500 and general and administrative expenses of $1,191.For the three months ended October 31, 2013, total operating expenses were $17,289, which included professional fees in the amount of $13,570, consulting fees of $2,500 and general and administrative expenses of $1,219.

 

Net loss

 

For the three months ended October 31, 2014, the Company had a net loss of $17,383, as compared to a net loss for the three months ended October 31, 2013 of $19,827. For the period May 8, 2007 (inception) to October 31, 2014 the Company incurred a net loss of $194,237.

 

Liquidity and Capital Resources

 

As of October 31, 2014, the Company had a cash balance of $494. We have paid for our expenses by borrowing from our consultant First Line Capital, LLC, with all such borrowings along with accrued interest on the outstanding balance at 8% per annum, due March 31, 2015. From March 2012 through October 31, 2014 the Company borrowed $96,170. During the quarter ended October 31, 2014 the Company borrowed an additional $5,480 from First Line Capital. Accrued interest on this note included in Accounts Payable was $15,675 as of October 31, 2014. There can be no assurances that the Company will be able to generate revenues or raise the additional funds it requires.

 

The Company believes that its current cash is insufficient to fund its expenses over the next twelve months. Other than our note with First Line, there can be no assurance that additional capital will be available to the Company. The Company currently has no agreements, arrangements or understandings with any person to obtain funds through bank loans, lines of credit or any other sources. Since the Company has no such arrangements or plans currently in effect, its inability to raise funds for the above purposes will have a severe negative impact on its ability to remain a viable company.

 

Going Concern Consideration

 

The Company is a development stage company and has not commenced planned principal operations. The Company had no revenues and incurred a net loss of $17,383 for the quarter ended October 31, 2014, and a net loss of $ 194,237 for the period May 8, 2007 (inception) to October 31, 2014. In addition, the Company has a working capital and stockholders’ deficiency of $158,587 at October 31, 2014. These factors raise substantial doubt about the Company's ability to continue as a going concern. Our ability to continue as a going concern is dependent on our ability to raise additional capital and consummate a potential acquisition. Our financial statements do not include any adjustments that may be necessary if we are unable to continue as a going concern.

  

 
4

 

Off-Balance Sheet Arrangements

 

We have no off-balance sheet arrangements.

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

 

A smaller reporting company, as defined by Item 10 of Regulation S-K, is not required to provide the information required by this item.

 

Item 4. Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures

 

 Our principal executive officer and principal financial officer conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (“Exchange Act”), as of October 31, 2014. Based on this evaluation, our principal executive officer and principal financial officer have concluded that the Company’s disclosure controls and procedures were effective as of October 31, 2014 to ensure that information required to be disclosed by the Company in the reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that the Company’s disclosure and controls are designed to ensure that information required to be disclosed by the Company in the reports that we file or submit under the Exchange Act is accumulated and communicated to management, including our principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

 

Changes in Internal Controls over Financial Reporting

 

There were no changes in our internal controls over financial reporting that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

 
5

  

PART II. OTHER INFORMATION

 

Item 1. Legal Proceedings.

 

There are no pending legal proceedings to which the Company is a party or in which any director, officer or affiliate of the Company, any owner of record or beneficially of more than 5% of any class of voting securities of the Company, or security holder is a party adverse to the Company or has a material interest adverse to the Company. The Company’s property is not the subject of any pending legal proceedings.

 

Item 1A. Risk Factors

 

A smaller reporting company, as defined by Item 10 of Regulation S-K, is not required to provide the information required by this item.

 

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

 

Unregistered Sales of Equity Securities

 

None

 

Purchases of equity securities by the issuer and affiliated purchasers

 

None.

 

Item 3. Defaults Upon Senior Securities.

 

None.

 

Item 4. Mine Safety Disclosures

 

Not Applicable

 

Item 5. Other Information

 

None. 

 

 
6

 

Item 6. Exhibits

 

Exhibit No.

 

Description

 

 

 

31

 

Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act 

 

 

 

32

 

Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act

  

101.INS 

 

XBRL Instance Document

     

101.SCH 

 

XBRL Taxonomy Extension Schema Document

     

101.CAL 

 

XBRL Taxonomy Extension Calculation Linkbase Document

     

101.DEF 

 

XBRL Taxonomy Extension Definition Linkbase Document

     

101.LAB

 

XBRL Taxonomy Extension Label Linkbase Document

     

101.PRE 

 

XBRL Taxonomy Extension Presentation Linkbase Document

  

 
7

  

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.

 

 

DARKSTAR VENTURES, INC.

 
       

Dated: December 12, 2014

By:

/s/ Chizkyau Lapin

 
   

Name: Chizkyau Lapin

 
   

Title: Chairman, President, Chief Executive Officer, Chief Financial Officer and director (Principal Executive Officer and Principal Financial and Accounting Officer) 

 

 

 

8