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FORWARD-LOOKING STATEMENTS

 

This Quarterly Report on Form 10-Q, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 2 of Part I of this report includes forward-looking statements. These forward looking statements are based on our management’s current expectations and beliefs and involve numerous risks and uncertainties that could cause actual results to differ materially from expectations. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “proposed,” “intended,” or “continue” or the negative of these terms or other comparable terminology. You should read statements that contain these words carefully, because they discuss our expectations about our future operating results or our future financial condition or state other “forward-looking” information. Many factors could cause our actual results to differ materially from those projected in these forward-looking statements, including but not limited to: variability of our future revenues and financial performance; risks associated with product development and technological changes; the acceptance of our products in the marketplace by potential future customers; general economic conditions. You should be aware that the occurrence of any of the events described in this Quarterly Report could substantially harm our business, results of operations and financial condition, and that upon the occurrence of any of these events, the trading price of our securities could decline. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, growth rates, levels of activity, performance or achievements. We are under no duty to update any of the forward-looking statements after the date of this Quarterly Report to conform these statements to actual result 

 

 

		November 30,				February 28,
		2015				2015
		(Unaudited)
ASSETS
Current Assets
Cash		$	6,777			$	27,114
Prepaid expenses			5,833				-
Total current assets			12,610				27,114
Total Assets		$	12,610			$	27,114
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Accounts payable and accrued liabilities		$	5,422			$	10,294
Total Liabilities			5,422				10,294
Stockholders' Equity (Deficit)
Preferred stock, $0.001 par value; 10,000,000 shares authorized;
0 shares issued and outstanding			-				-
Common stock, $0.001 par value; 100,000,000 shares authorized;
7,475,000 and 7,475,000 issued and outstanding, respectively			7,475				7,475
Additional paid-in capital			79,525				52,025
Accumulated deficit			(79,812	)			(42,680	)
Total stockholders' equity (Deficit)			7,188				16,820
Total Liabilities and Stockholders' Equity (Deficit)		$	12,610			$	27,114

		Three Months Ended								Nine Months Ended
		November 30,								November 30,
		2015				2014				2015				2014
Revenue		$	3,180			$	19,846			$	10,630			$	47,486
Cost of Goods Sold			2,862				18,928				10,121				42,913
Gross Profit			318				918				509				4,573
Operating Expenses
General and administrative			6,814				104				11,365				2,231
Professional fees			10,787				5,815				26,276				20,908
Total Operating Expenses			17,601				5,919				37,641				23,139
Loss before income taxes			(17,283	)			(5,001	)			(37,132	)			(18,566	)
Provision for income taxes			-				-				-				-
Net Loss		$	(17,283	)		$	(5,001	)		$	(37,132	)		$	(18,566	)
Basic and diluted net loss per common share		$	(0.00	)		$	(0.00	)		$	(0.00	)		$	(0.00	)
Basic and diluted weighted-average common shares outstanding			7,475,000				6,436,538				7,475,000				5,903,909

The designations, rights and preferences of the Series A Preferred include:

 

F-8

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Merger Financing and Private Placements

As of the Effective Date and pursuant to a Securities Purchase Agreement, entered into among the Company and five investors who are unrelated parties (the “Preferred Stock SPA”), we issued an aggregate of 807,568 shares of our Series A Preferred stock, par value $0.001 per share (“Series A Preferred”) in exchange for a $500,000 aggregate principal amount 8% convertible promissory note previously issued by Insight to five investors. The 8% Convertible Notes were cancelled upon issuance of the Series A Preferred. The holders of the 8% Convertible Notes previously advanced $250,000 to Insight under those notes and agreed to advance an additional aggregate amount of $250,000 to us within 30 days of the Effective Date under the terms of the Preferred Stock SPA. In addition, we agreed to issue an aggregate of 256,388 shares (64,097 each) of our Series A Preferred to four investors in exchange for an aggregate of $307,802 in cash.  Of this amount, $111,802 had been previously been advanced on behalf of both Insight and us, and $196,000 was paid to us or on our behalf on the Effective Date. Each share of Series A Preferred is convertible at the option of the holder based upon a conversion price of $.1778 per share, subject to proportional adjustment in the event of stock splits, stock dividends and similar corporate events.

 

As of the Effective Date and pursuant to that certain Securities Purchase Agreement dated December 21, 2015 (the “Convertible Note SPA”) we entered into with an unrelated third party, we issued a $500,000 principal amount 10% convertible note (the “10% TXFX Convertible Note”) in exchange for a $500,000 principal amount 10% convertible note issued by Insight to that investor (the “10% Insight Convertible Note”). The holder of the 10% Insight Convertible Note previously advanced $300,000 to Insight under that note and advanced an additional $200,000 to us on the Effective Date under the terms of the Convertible Note SPA.  The holder of the 10% TXFX Convertible Note has the right to purchase another convertible note having the same features as the 10% TXFX Convertible Note if the holder exercises such right within 90 days of the Effective Date.  The holder of the 10% TXFX Convertible Note may at any time convert the amount due under the 10% TXFX Convertible Note into shares of our common stock at a conversion price equal to the product of 75% multiplied by volume weighted average price of our common stock for ten (10) trading days immediately prior to the applicable conversion date, subject to adjustment provided in the 10% TXFX Convertible Note, but in no event: (i) lower than $4,000,000 divided by the total number of shares of common stock outstanding immediately prior to the conversion date; or (ii) greater than $12,000,000 divided by the total number of shares of common stock outstanding immediately prior to the conversion date.  The 10% TXFX Convertible Note shall automatically convert into shares of our common stock at the Conversion Price without any action of the holder upon the occurrence of any of the following events after the closing date of the Share Exchange: (i) the completion of a public offering of our securities for gross proceeds of at least $5,000,000 pursuant to an effective registration statement under the Securities Act; or (ii) if we complete one or more financing transactions for gross proceeds of at least $5,000,000. The conversion price of the Series A Preferred is subject to proportional adjustment in the event of stock splits, stock dividends and similar corporate events.