UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

FORM 10-Q

 

 

3D MakerJet, Inc.

(Exact name of registrant as specified in its charter)

 

 

 

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 (§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, or 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

 

State the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 291,200,000 common shares as of March 23, 2015.

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	TABLE OF CONTENTS	Page
PART I – FINANCIAL INFORMATION
Item 1:	Financial Statements	3
Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12
Item 3:	Quantitative and Qualitative Disclosures About Market Risk	15
Item 4:	Controls and Procedures	16
PART II – OTHER INFORMATION
Item 1:	Legal Proceedings	17
Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	17
Item 3:	Defaults Upon Senior Securities	17
Item 4:	Mine Safety Disclosure	17
Item 5:	Other Information	17
Item 6:	Exhibits	17

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PART I - FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

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

 

4	Consolidated Balance Sheets as of January 31, 2015 and July 31, 2014 (unaudited)
5	Consolidated Statements of Operations for the three and six months ended January 31, 2015 and 2014 (unaudited)
6	Consolidated Statement of Stockholders’ Deficit for the six months ended January 31, 2015
7	Consolidated Statements of Cash Flows for the six months ended January 31, 2015 and 2014 (unaudited)
8	Notes to Consolidated Financial Statements

 

These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the SEC instructions to Form 10-Q. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the interim period ended January 31, 2015 are not necessarily indicative of the results that can be expected for the full year.

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3D MAKERJET, INC.

CONSOLIDATED BALANCE SHEETS

AS OF JANUARY 31, 2015 AND JULY 31, 2014

(UNAUDITED)

ASSETS		January 31, 2015		July 31, 2014
Current Assets
Cash	$	6,443	$	19,923
Inventory		54,743		62,000
Total current assets		61,186		81,923
Property, plant and equipment, net of accumulated depreciation of $10,259 and $6,815, respectively		17,074		23,963
Prepaid expenses and other current assets		7,234		7,234
Total Assets	$	85,494	$	113,120
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities
Accounts payable and accrued liabilities	$	98,959	$	54,751
Convertible notes payable, net of discount of $270,169, and $223,435, respectively		218,509		15,743
Due to related parties		-		62,000
Total liabilities		317,468		132,494
Stockholders’ Deficit
Preferred stock; $0.001 par value; 10,000,000 shares authorized; none issued or outstanding		-		-
Common stock $0.001 par value; 300,000,000 shares authorized; 291,200,000 and 265,200,000 shares issued and outstanding at January 31, 2015 and July 31, 2014, respectively		291,200		265,200
Additional paid in capital		226,942		25,285
Accumulated deficit		(750,116)		(309,859)
Total Stockholders’ Deficit		(231,974)		(19,374)
Total Liabilities and Stockholders’ Deficit	$	85,494	$	113,120

See accompanying notes to the financial statements.

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3D MAKERJET, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE AND SIX MONTH PERIODS ENDED JANUARY 31, 2015 AND 2014

(UNAUDITED)

		Three Months Ended January 31,				Six Months Ended January 31,
		2015		2014		2015		2014
REVENUES	$	25,868	$	-	$	31,863	$	-
COST OF REVENUES		(10,642)		-		(10,642)		-
GROSS PROFIT		15,226		-		21,221		-
OPERATING EXPENSES
General and administrative		17,278		2		50,481		502
Compensation		34,689		-		90,573		-
Professional fees		76,118		-		108,673		-
TOTAL OPERATING EXPENSES		128,085		2		249,727		502
LOSS FROM OPERATIONS		(112,859)		(2)		(228,506)		(502)
OTHER EXPENSE
Interest expense		(129,798)		(262)		(211,751)		(524)
TOTAL OTHER EXPENSE		(129,798)		(262)		(211,751)		(524)
PROVISION FOR INCOME TAXES		-		-		-		-
NET LOSS	$	(242,657)	$	(264)	$	(440,257)	$	(1,026)
NET LOSS PER SHARE: BASIC AND DILUTED	$	(0.00)	$	(0.00)	$	(0.00)	$	(0.00)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: BASIC AND DILUTED		289,787,049		265,200,000		277,493,662		265,200,000

See accompanying notes to the financial statements.

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3D MAKERJET, INC.

CONSOLIDATED STATEMENT OF STOCKHOLDER’S DEFICIT

THE PERIOD FROM JULY 31, 2014 TO JANUARY 31, 2015

(UNAUDITED)

									Additional
	Preferred Stock				Common Stock				Paid in		Accumulated Deficit		Total
	Shares		Amount		Shares		Amount		Capital
Balance, July 31, 2014	-	$	-		265,200,000	$	265,200	$	25,285	$	(309,859)	$	(19,374)
Beneficial conversion feature related to convertible promissory notes	-		-		-		-		187,500		-		187,500
Share Exchange Agreement with 3D MakerJet Asia Ltd.	-		-		26,000,000		26,000		14,157		-		40,157
Net loss for the six months ended January 31, 2015	-		-		-		-		-		(440,257)		(440,257)
Balance, January 31, 2015	-	$	-		291,200,000	$	291,200	$	226,942	$	(750,116)	$	(231,974)

See accompanying notes to the financial statements.

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3D MAKERJET, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED JANUARY 31, 2015 AND 2014

(UNAUDITED)

		Six Months Ended January 31,
		2015		2014
Operating Activities
Net loss	$	(440,257)	$	(1,026)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of debt discount		181,277		-
Depreciation & amortization expense		6,889		-
Changes in operating assets and liabilities:
Inventory		8,168		-
Accounts payable and accrued liabilities		40,801		1,024
Net Cash Used in Operating Activities		(203,122)		(2)
Investing Activities
Cash received from acquisition of 3D Makerjet Asia		1,156		-
Net Cash Used in Investing Activities		1,156		-
Financing Activities
Proceeds from related party		986		-
Proceeds from convertible debt		187,500		-
Net Cash Provided by Financing Activities		188,486		-
Net Increase (Decrease) in Cash		(13,480)		(2)
Cash at Beginning of Period		19,923		2
Cash at End of Period	$	6,443	$	-
Supplemental Cash Flow Information:
Interest paid	$	-	$	-
Income taxes paid	$	-	$	-
Non-Cash Financing Transactions:
Acquisition of 3D Makerjet Asia with common stock, net of cash received	$	40,157	$	-
Discount on convertible promissory notes due to beneficial conversion feature	$	187,500	$	-

See accompanying notes to the financial statements.

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3D MAKERJET, INC.

NOTES TO THE FINANCIAL STATEMENTS

JANUARY 31, 2015

(UNAUDITED)

NOTE 1 – ORGANIZATION, BASIS OF ACCOUNTING AND SIGNFICANT ACCOUNTING POLICIES

3D MakerJet, Inc. (the Company), formerly, known as American Business Change Agents, Inc. was incorporated under the laws of the State of Nevada on January 12, 2009.  The Company is developing a business plan focused on the sale of 3D printers, scanners and ancillary equipment.

The accompanying unaudited interim financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and with the rules and regulations of the United States Securities and Exchange Commission set forth in Article 8 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements.  The unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented.  Unaudited interim results are not necessarily indicative of the results for the full fiscal year.  These financial statements should be read in conjunction with the financial statements of the Company for the fiscal year ended July 31, 2014 and notes thereto contained in the Company’s Annual Report on Form 10-K.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. GAAP 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.

Inventory

Inventory is comprised of 3D printers and is recorded at lower of cost or market on a first-in, first-out (“FIFO”) method. The Company establishes inventory reserves for estimated obsolete or unmarketable inventory equal to the differences between the cost of inventory and the estimated realizable value based upon assumptions about future and market conditions. If obsolete or unmarketable inventory are identified and there are no alternate uses for the inventory, the Company will record a write-down to net realizable value in the period that the impairment is first recognized. At January 31, 2015 and July 31, 2014, the allowance for obsolete or unmarketable inventory was $0, and during the three and six month periods ended January 31, 2015 and 2014, the Company recognized no inventory impairments.

Net Loss Per Common Share

Net loss per common share is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by dividing net loss by the weighted average number of shares of common stock and potentially outstanding shares of common stock during each period. There were no potentially dilutive shares outstanding as of January 31, 2015 or July 31, 2014. As the Company has incurred losses for all periods, the impact of the common stock equivalents would be antidilutive and therefore are not included in the calculation.

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 evaluates subsequent events from the date of the balance sheet through the date when the financial statements are 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 with the SEC on the EDGAR system.

Recently Issued Accounting Standards

The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

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NOTE 2 – GOING CONCERN

The Company was formed in January 2009. It has incurred cumulative losses since inception, has negative working capital and a net stockholders’ deficit of $231,974 at January 31, 2015 and recurring negative cash flows from operations. While the Company is attempting to raise both debt and equity capital, expand operations and produce revenues, the Company’s cash position may not be significant enough to support the Company’s daily operations. Management intends to seek funds from outside business contacts as needed. There can be no assurances to that its business plan will succeed. Accordingly, there is doubt that the Company will be able to realize its assets and liquidate its liabilities in the normal course of business operations.

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

NOTE 3 – ACQUISITION

On November 5, 2014, the Company entered into a Share Exchange Agreement (the “Exchange Agreement”) with 3D MakerJet Asia Limited, a company formed under the Laws of Hong Kong (“3D MakerJet Asia”) and the shareholder of 3D MakerJet Asia. As a result of the transaction (the “Exchange”), 3D MakerJet Asia became a wholly-owned subsidiary of the Company. In accordance with the terms of the Exchange Agreement, at the closing an aggregate of 26,000,000 shares of the Company’s common stock were issued to the holder of 3D MakerJet Asia’s common stock in exchange for his shares of 3D MakerJet Asia.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition for the above referenced transaction:

Category
Cash	$	1,156
Inventory		911
Due from related party		62,986
Total assets acquired		65,053
Accrued interest		3,407
Convertible notes, net		21,489
Total liabilities assumed		24,896
Net assets acquired	$	40,157

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Proforma operating results if the acquisition had taken place on August 1, 2013, the beginning of the earliest period presented, would be as follows:

		Three Months Ended January 31,				Six Months Ended January 31,
		2015		2014		2015		2014
REVENUES	$	25,868	$	-	$	31,863	$	-
COST OF REVENUES		(10,642)		-		(10,642)		-
GROSS PROFIT		15,226		-		21,221		-
OPERATING EXPENSES
General and administrative		17,278		2		50,683		502
Compensation		34,689		-		90,573		-
Professional fees		76,118		-		108,673		-
TOTAL OPERATING EXPENSES		128,085		2		249,929		502
LOSS FROM OPERATIONS		(112,859)		(2)		(228,708)		(502)
OTHER EXPENSE
Interest expense		(129,798)		(262)		(228,962)		(524)
TOTAL OTHER EXPENSE		(129,798)		(262)		(228,962)		(524)
PROVISION FOR INCOME TAXES		-		-		-		-
NET LOSS	$	(242,657)	$	(264)	$	(457,670)	$	(1,026)

NOTE 4 – CONVERTIBLE PROMISSORY NOTES

On various dates from June 16, 2014 through January 20, 2015, the Company issued convertible promissory notes totaling $488,678, including $170,131 to an employee. Of this amount, $239,178 was recorded during the year ended July 31, 2014, and $249,500, including $62,000 from the acquisition of 3D MakerJet Asia, LTD, was recorded during the six months ended January 31, 2015. At the time of issuance, the notes were evaluated and were determined to contain a beneficial conversion feature. As a result, a discount on convertible promissory notes totaling $488,678, including $170,131 to the employee, was recorded with a corresponding credit to additional paid-in capital. Discount amortization for the six month period ended January 31, 2015 amounted to $181,277.  Discount amortization totaling $21,489 was recorded on the books of 3D MakerJet Asia, LTD through the date of acquisition of November 5, 2014.  The net convertible note balance of $21,489 was included in the acquisition described in Note 3.

Description		Balance  January 31, 2015		Balance  July 31, 2014
19 Convertible promissory notes in amounts ranging from $7,000 to $131,631, all maturing within one year, bearing interest at 15% per annum, convertible into common stock at the conversion price of $0.001 per share	$	488,678	$	239,178
Less original beneficial conversion feature discount		(488,678)		(239,178)
Discount amortization		218,509		15,743
Unamortized discount		(270,169)		(223,435)
Net	$	218,509	$	15,743

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NOTE 5 – STOCKHOLDERS’ DEFICIT

On September 30, 2014, our board of directors and majority shareholder approved a twenty-six for one (26/1) forward split of our issued and outstanding common stock. The total number of authorized shares was not changed. All share and per share information has been retroactively adjusted to reflect the reverse stock split in the financial statements and in the notes to financial statements for all periods presented, to reflect the reverse stock split as if it occurred at beginning of the comparable year.

On various dates during the six month period ended January 31, 2015, the Company recorded increases totaling $187,500 to additional paid-in capital related to beneficial conversion features on convertible promissory notes.

On November 5, 2014, 26,000,000 shares of the Company’s common stock were issued to the holder of 3D MakerJet Asia’s common stock in exchange for his shares of 3D MakerJet Asia (see Note 3).

NOTE 6 – SUBSEQUENT EVENTS

The Company has evaluated all events that occurred after the balance sheet date of January 31, 2015 through March 23, 2015, the date when the financial statements were issued, and identified the following reportable subsequent event:

Subsequent to the end of the period, the Company issued convertible promissory notes totaling $31,000.  The notes mature within one year, carry interest at 15%, and are convertible into the common stock of the Company at a conversion price of $0.001 per share.

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

 

Forward-Looking Statements

 

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

 

Company Overview

We are a Nevada corporation based out of Orlando, Florida. We import and sell state of the art 3D printers, scanners, and ancillary equipment. Our mission is to provide individual and corporate customers with the most advanced and reliable cutting edge 3D printing technology in the most cost effective packages available in the marketplace at whatever level is appropriate for their needs. We want our business to be the “go to” vendor of 3D printers for individuals and businesses.

The 3D printing industry is in its very early stages but is already getting more press and generating more excitement than almost any other technological development of recent years. It is not often that a new idea is constantly described as moving the goalposts for the way we actually live our lives. Amidst all the press and the hype, the reality of what the technology is capable of and the speed of its improvement is breathtaking.

We are committed to supplying the best plastic, medical, culinary, and powderless metal 3D printers in the industry, and we are supplied by one of the largest and most experienced 3D printing research, development and manufacturing entities in the world. 3D MakerJet’s research and development partner and manufacturer, ZBOT / Guangzhou DNSPOWER Design Co. LTD, was founded in 2000, and we believe is a leader in the 3D printing industry. A cutting-edge developer in the plastics and manufacturing sector, ZBOT won the coveted CDA National Design Award for its ZBOT 3D Printer, which is the platform of the 3D MakerJet printer line, making their 3D printer the only CDA winner at the Civilian level, reflecting the product’s superior quality, as well as the manufacturer's comprehensive strength, commitment and capabilities.

Our 3D Printers

The 3D Makerjet Originator i1 is a state-of-the-art 3D printer that can utilize almost any of the currently manufactured plastic filaments supplied to the industry. It does, however, come with its own proprietary filament that we believe is head and shoulders above the rest in terms of quality and ease of use. The Originator’s power feed system ensures smooth and continuous function and accurate and detailed reproduction. We believe the Originator outperforms almost any printer not only at its price point but those that cost twice as much. It is an advanced machine at an entry level price. The Originator i1 has print dimensions of 150x150x140mm and weighs only 8 kg. Three larger models capable of building bigger objects are currently available to be special ordered. The Originator i2 will handle print dimensions of 250x150x140mm. The Originator 20 will handle a whopping 250x250x200mm. The Originator 35 has print dimensions of 250x250x350 mm.  The Originator 46 does 350x350x460mm in PLA only. The Originator 50 will print 500x500x600mm. A smaller, even less expensive model designed for school and institutional use is expected to be available in the near future.

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Model	Originator i1	Originator i2	Originator 20	Originator 35	Originator 46	Originator 50
Print Dimensions	150 x 150 y 140 z mm	250 x 150 y 140 z mm	250 x 250 y 200 z mm	250 x 250 y 350 z mm	350 x 350 y 460 z mm	500 x 500 y 600 z mm
Overall Dimensions	L) 375 mm W) 370mm H) 380mm	L) 475 mm W) 270 mm  H) 380 mm	L) 590 mm W) 522 mm H) 710 mm	L) 590 mm W) 522 mm H) 710 mm	L) 490 mm W) 420 mm H) 820 mm	L) 640 mm W) 570 mm H) 760 mm
Weight	16.7 kg	18 kg	30 kg	50 kg	50 kg	70 kg
Layer Thickness	0.1 - 0.4 m (Adjustable)	0.1 - 0.4 m (Adjustable)	0.1 - 0.4 m (Adjustable)	0.1 - 0.4 m (Adjustable)	0.1 - 0.4 m (Adjustable)	0.1 - 0.4 m (Adjustable)
Precision	±0.1mm - 100mm	±0.1mm - 100mm	±0.1mm - 100mm	±0.1mm – 100mm	±0.1mm – 100mm	±0.1mm – 100mm
Speed	30 - 100mm/s	30 - 100mm/s	30 - 100mm/s	25 - 250mm/s	25 - 250mm/s	25 - 250mm/s
Wattage	250 W	250 W	250 W	250 W	250 W	250 W
Nozzle Temperature	180℃ - 250℃	180℃ - 250℃	250℃	250℃	210℃	180℃ - 250℃
Power Supply	VAC 50/60hz 110V-220V	VAC 50/60hz 110V-220V	VAC 50/60hz 110V-220V	VAC 50/60hz 110V-220V	VAC 50/60hz 110V-220V	VAC 50/60hz 110V-220V
Material	ABS / PLA	ABS / PLA	ABS	ABS	PLA	ABS / PLA

Originator i1 will retail for $799 plus tax and shipping. All orders will be fulfilled out of our warehouse facility at our corporate offices, located in Orlando, Florida. Shipping times and charges vary depending upon carrier chosen, but normal ground is 10-14 days.

Pipeline Products

Our research and development partner and manufacturer, ZBOT, has created two additional printers: the chocolate 3D printer and the powderless metal 3D printer.

The chocolate 3D printer is already at the prototype stage and will have an expected U.S. retail price of under $500. The new chocolate 3D printers works just the opposite of the traditional plastic printers. Instead of heating the culinary media - it actually cools it as it is placed instead. We will find out more about the production timeline, and market introduction by end of May 2015.

The powderless metal 3D printer is expected to be available for delivery by April 2015 and will be able to use various metal stocks and won’t depend on the powdered alloys that so limit the effectiveness and scope of current metal printers. The preliminary size specifications for this new printer are expected to be approximately 3 feet tall, by 2 foot 6 inches wide.

The 3D MakerJet full size scanner is available too. This is a scanner capable of creating an image of a full grown human being or an object of equivalent size. Work on a hand sized small scanner is almost complete.

Recent Developments

Our Website

We launched a new interactive website complete with social media integration and daily live chat product support. We use two platforms currently — Facebook and Twitter — because it gives us the opportunity to share in the excitement and joy our customers are feeling when their ideas are made real. The same goes for support, so our customers get the most out of their 3D printing experience.

Our Showroom

We have opened a new showroom and corporate offices in Orlando, Florida, in the center of the popular “imagine” capital of the United States. Located in the Quorum Center, our new showroom is strategically located in the exciting nexus of neighboring stalwarts such as Universal Studios® and Disney Resorts®.

The new 3D showroom fronts the home offices, warehousing and fulfillment center for the company, including the new Originator 3D printer series — the i1, i2, 20 and 35 models.

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Operations

We have not generated significant revenues from our planned principal operations. However, we cannot take advantage of being an emerging growth company under the JOBS Act because we had gone public prior to December 8, 2011.

   

We are developing a business plan focused on the sale of 3D printers, scanners and ancillary equipment.  

For the three and six months ended January 31, 2015 and 2014, our operations were as follows:

		Three Months Ended January 31,				Six Months Ended January 31,
		2015		2014		2015		2014
REVENUES	$	25,868	$	-	$	31,863	$	-
COST OF REVENUES		(10,642)		-		(10,642)		-
GROSS PROFIT		15,226		-		21,221		-
OPERATING EXPENSES
General and administrative		17,278		2		50,481		502
Compensation		34,689		-		90,573		-
Professional fees		76,118		-		108,673		-
TOTAL OPERATING EXPENSES		128,085		2		249,727		502
LOSS FROM OPERATIONS		(112,859)		(2)		(228,506)		(502)
OTHER EXPENSE
Interest expense		(129,798)		(262)		(211,751)		(524)
TOTAL OTHER EXPENSE		(129,798)		(262)		(211,751)		(524)
PROVISION FOR INCOME TAXES		-		-		-		-
NET LOSS	$	(242,657)	$	(264)	$	(440,257)	$	(1,026)

Results of Operations for the three and six month periods ended January 31, 2015 and 2014

Revenues

We have generated limited revenue since our inception. We have incurred losses since our inception. We do not expect to generate significant revenues until we successfully market and sell our 3D printers.

Operating Expenses

Operating expenses increased to $128,085 for the three months ended January 31, 2015 from $2 for the three months ended January 31, 2014.

Operating expenses increased to $249,727 for the six months ended January 31, 2015 from $502 for the six months ended January 31, 2014.

We anticipate our operating expenses will increase as we undertake our plan of operations. The increase will be attributable to administrative and operating costs associated with our 3D printer related activities and the professional fees associated with our reporting obligations under the Securities Exchange Act of 1934.

Other Expenses

Other expenses increased to $129,798 for the three months ended January 31, 2015 from $262 for the three months ended January 31, 2014. Other expenses increased to $211,751 for the six months ended January 31, 2015 from $524 for the six months ended January 31, 2014. Other expenses consisted entirely of interest expenses for both periods. The increase is due to a number of convertible promissory notes issued in June 2014 through January 2015.

Net Loss

We incurred a net loss of $242,657 for the three months ended January 31, 2015, compared to a net loss of $264 for the three months ended January 31, 2014. We incurred a net loss of $440,257 for the six months ended January 31, 2015, compared to a net loss of $1,026 for the six months ended January 31, 2014.

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Liquidity and Capital Resources

As of January 31, 2015, we had $61,186 in total current assets. We had current liabilities of $317,468 as of January 31, 2015. Accordingly, we had a working capital deficit of $256,282 as of January 31, 2015.

Operating activities used $203,122 in cash for the six months ended January 31, 2015, as compared with $2 used for the six months ended January 31, 2014. Our negative operating cash flow for January 31, 2015 was mainly a result of our net loss for the period, offset by the effects of debt discount amortization and the increase in accounts payable and accrued liabilities.

Investing activities for the six months ended January 31, 2015 generated $1,156 in cash, as compared with cash flows provided by financing activities of $0 for the six months ended January 31, 2014.

Financing activities for the six months ended January 31, 2015 generated $188,486 in cash, as compared with cash flows provided by financing activities of $0 for the six months ended January 31, 2014. Proceeds from financing activities consisted primarily of proceeds from convertible debt.

The success of our business plan beyond the next 12 months is contingent upon us obtaining additional financing. We intend to fund operations through debt and/or equity financing arrangements, which may be insufficient to fund our capital expenditures, working capital, or other cash requirements. We do not have any formal commitments or arrangements for the sales of stock or the advancement or loan of funds at this time. There can be no assurance that such additional financing will be available to us on acceptable terms, or at all.

Going Concern

We were formed in January 2009. We have negative working capital and a net stockholders’ deficit of $231,974 at January 31, 2015 and have no sources of financing. While we are attempting to expand operations and produce revenues, our cash position may not be significant enough to support our daily operations. Management will seek funds from outside business contacts as needed. There can be no assurances to that our business plan will succeed.

Our ability to continue as a going concern is dependent upon our ability to further implement our business plan and generate revenues. The financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.

Critical Accounting Policies

In December 2001, the SEC requested that all registrants list their most “critical accounting polices” in the Management Discussion and Analysis. The SEC indicated that a “critical accounting policy” is one which is both important to the portrayal of a company’s financial condition and results, and requires management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.

Seasonality

We have not yet generated significant revenues. We are not yet aware as to whether there will be a significant seasonal impact in our business.

Recently Issued Accounting Pronouncements

We do not expect the adoption of recently issued accounting pronouncements to have a significant impact on our results of operations, financial position or cash flow.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of Regulation S-K, obligations under any guarantee contracts or contingent obligations. We also have no other commitments, other than the costs of being a public company that will increase our operating costs or cash requirements in the future.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

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

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Item 4. Controls and Procedures

Disclosure Controls and Procedures

We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of January 31, 2015. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of January 31, 2015, our disclosure controls and procedures were not effective due to the presence of material weaknesses in internal control over financial reporting.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. Management has identified the following material weaknesses which have caused management to conclude that, as of January 31, 2015, our disclosure controls and procedures were not effective: (i) inadequate segregation of duties and effective risk assessment; and (ii) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both US GAAP and SEC guidelines.

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

Our company plans to take steps to enhance and improve the design of our internal controls over financial reporting. During the period covered by this quarterly report on Form 10-Q, we have not been able to remediate the material weaknesses identified above. To remediate such weaknesses, we plan to implement the following changes during our fiscal year ending July 31, 2015: (i) appoint additional qualified personnel to address inadequate segregation of duties and ineffective risk management; and (ii) adopt sufficient written policies and procedures for accounting and financial reporting. The remediation efforts set out are largely dependent upon our securing additional financing to cover the costs of implementing the changes required. If we are unsuccessful in securing such funds, remediation efforts may be adversely affected in a material manner.

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

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the three months ended January 31, 2015 that have materially affected, or are reasonable likely to materially affect, our internal control over financial reporting.

Limitations on the Effectiveness of Internal Controls

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

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PART II – OTHER INFORMATION

 

Item 1. Legal Proceedings

 

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

 

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

 

None

 

Item 3. Defaults upon Senior Securities

 

None

 

Item 4. Mine Safety Disclosures

 

Not applicable.

 

Item 5. Other Information

 

None

 

Item 6. Exhibits

 

**Provided herewith

SIGNATURES

 

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

 

 

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