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EX-32.2 - EX-32.2 - MAGICSTEM GROUP CORP.ex-32_2.htm
EX-31.2 - EX-31.2 - MAGICSTEM GROUP CORP.ex-31_2.htm
EX-31.1 - EX-31.1 - MAGICSTEM GROUP CORP.ex-31_1.htm
EX-32.1 - EX-32.1 - MAGICSTEM GROUP CORP.ex-32_1.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
[X]
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
 
For the quarterly period ended
  January 31, 2016
 
[  ]
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
 
For the transition period from   
 
to
   
 
Commission File Number
  001-36128
 
Magicstem Group Corp.
(Exact name of registrant as specified in its charter)
 
Nevada
 
46-1504799
(State or other jurisdiction of incorporation or organization)
 
(IRS Employer Identification No.)
 
Room 803, 8th Floor, Lippo Sun Plaza
28Canton Road, Tsim Sha Tsui, Hong Kong
   
(Address of principal executive offices)
 
(Zip Code)
 
852 2871 8000
(Registrant’s telephone number, including area code)
 
N/A
(Former name, former address and former fiscal year, if changed since last report)
 
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.
[X]
YES
[  ]
NO
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
 
[X]
YES
[  ]
NO
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company.  See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
[  ]
Accelerated filer
[  ]
Non-accelerated filer
[  ]
(Do not check if a smaller reporting company)
Smaller reporting company
[X]
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)
                               
[X]
YES
[  ]
NO
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court.
                               
[  ]
YES
[  ]
NO
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
10,206,000 common shares issued and outstanding as of March 10, 2016.
 
 

 
TABLE OF CONTENTS
 
 
   
Item 1.                          Financial Statements
 3
Item 2.                          Management’s Discussion and Analysis of Financial Condition and Results of Operations
 10
Item 3.                          Quantitative and Qualitative Disclosures about Market Risk
 15
Item 4.                          Controls and Procedures
 16
   
 
   
Item 1.                          Legal Proceedings
 16
Item 1A.                          Risk Factors
 16
Item 2.                          Unregistered Sales of Equity Securities and Use of Proceeds
 16
Item 3.                          Defaults Upon Senior Securities
 16
Item 4.                          Mining Safety Disclosures
 16
Item 5.                          Other Information
 16
Item 6.                          Exhibits
 17
   
 18
   
 
 
 
PART I – FINANCIAL INFORMATION


Item 1                  Financial Statements
The condensed unaudited financial statements of our Company have been prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”) and are expressed in U.S. dollars.
 
 
 
 
 
 
 
 
 
 
Magicstem Group Corp.,
CONDENSED BALANCE SHEETS
(Unaudited)

   
January 31,
   
October 31,
 
   
2016
   
2015
 
         
ASSETS
       
         
CURRENT ASSETS
       
Cash and cash equivalents
 
$
14,434
   
$
17,528
 
Prepaid expense
   
3,732
     
5,833
 
TOTAL CURRENT ASSETS
   
18,166
     
23,361
 
                 
TOTAL ASSETS
 
$
18,166
   
$
23,361
 
                 
LIABILITIES AND STOCKHOLDERS' DEFICIT
               
                 
CURRENT LIABILITIES
               
                 
Loans from related party
 
$
72,572
   
$
64,817
 
TOTAL CURRENT LIABILITIES
   
72,572
     
64,817
 
                 
Commitments and Contingencies
   
-
     
-
 
                 
STOCKHOLDERS' DEFICIT
               
Common stock, $0.001 par value, 75,000,000 shares authorized; 10,206,000 shares issued and outstanding
   
10,206
     
10,206
 
Additional paid in capital
   
37,563
     
37,563
 
Accumulated deficit
   
(102,175
)
   
(89,225
)
TOTAL STOCKHOLDERS' DEFICIT
   
(54,406
)
   
(41,456
)
                 
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT
 
$
18,166
   
$
23,361
 


The accompanying notes are an integral part of these condensed unaudited financial statements.
 
Magicstem Group Corp.,
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)

   
Three Months Ended
 
   
January 31,
 
   
2016
   
2015
 
         
REVENUE
 
$
-
   
$
-
 
                 
OPERATING EXPENSES
               
Office and general
   
2,500
     
11
 
Professional fees
   
10,450
     
6,750
 
Total Operating Expenses
   
12,950
     
6,761
 
                 
LOSS BEFORE TAXES
   
(12,950
)
   
(6,761
)
Provision for taxes
   
-
     
-
 
                 
NET LOSS
 
$
(12,950
)
 
$
(6,761
)
                 
LOSS PER COMMON SHARE - BASIC AND DILUTED
 
$
(0.00
)*
 
$
(0.00
)*
                 
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING – BASIC AND DILUTED
   
10,206,000
     
10,206,000
 

* denotes a loss of less than $(0.01) per share.

The accompanying notes are an integral part of these condensed unaudited financial statements.
 
Magicstem Group Corp.,
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)

   
Three Months Ended
 
   
January 31,
 
   
2016
   
2015
 
         
OPERATING ACTIVITIES
       
Net loss
 
$
(12,950
)
 
$
(6,761
)
Adjustment to reconcile net loss to net cash used in operating activities
               
Changes in operating assets and liabilities:
               
    Prepaid expense
   
2,101
     
-
 
   Accounts payable and accrued liabilities
   
-
     
(3,905
)
NET CASH USED IN OPERATING ACTIVITIES
   
(10,849
)
   
(10,666
)
                 
INVESTING ACTIVITIES
               
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES
   
-
     
-
 
                 
FINANCING ACTIVITIES
               
Loans from related party
   
7,755
     
10,666
 
NET CASH PROVIDED BY FINANCING ACTIVITIES
   
7,755
     
10,666
 
                 
NET DECREASE IN CASH AND CASH EQUIVALENTS
   
(3,094
)
   
-
 
                 
CASH AND CASH EQUIVALNTS, BEGINNING OF PERIOD
   
17,528
     
-
 
                 
CASH AND CASH EQUIVALENTS, END OF PERIOD
 
$
14,434
   
$
-
 
                 
                 
Supplemental cash flow information and noncash financing activities:
               
Cash paid for interest
 
$
-
   
$
-
 
Cash paid for income taxes
 
$
-
   
$
-
 
Loan forgiveness by previous shareholder
 
$
-
   
$
33,649-
 

 
The accompanying notes are an integral part of these condensed unaudited financial statements.
Magicstem Group Corp.,
NOTES TO THE CONDENSED UNAUDITED FINANCIAL STATEMENTS
 AS OF JANUARY 31, 2016, AND OCTOBER 31, 2015
AND FOR THE THREE MONTHS ENDED JANUARY 31, 2016 AND 2015


NOTE 1 – NATURE OF OPERATIONS

Magicstem Group Corp. ("Magicstem", the "Company") was incorporated in the State of Nevada under the name Cold Cam, Inc. (“Cold Cam”) on October 25, 2012 ("Inception") and originally intended to develop a camera system to be placed on the inside of refrigerator doors. On January 31, 2015, the Company's former sole officer, who owned 98% of the Company's outstanding common shares, sold all his common shares to un-related investors. After this change of control, the Company now intends to develop stem cell cryo-preserved banking and anticipates that the primary customers will be from China.

On April 1, 2015, the Company merged with its wholly-owned subsidiary Magicstem Group Corp., a Nevada corporation, and changed its name from Cold Cam, Inc. to Magicstem Group Corp. The Company’s trading symbol is "MGGI".

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation
The accompanying consolidated financial statements include the accounts of the Company and have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") and the instructions to Form 10-K, Form 10 –Q and Regulation S-X and are presented in US dollars. The Company has adopted an October 31 fiscal year end.

Unaudited Interim Financial Statements
The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America for interim financial information and with the instructions to Form 10-Q.  Accordingly, the financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

In the opinion of management, all adjustments consisting of normal recurring entries necessary for a fair statement of the periods presented for: (a) the financial position; (b) the result of operations; and (c) cash flows, have been made in order to make the financial statements presented not misleading.  The results of operations for such interim periods are not necessarily indicative of operations for a full year.

While management of the Company believes that the disclosures presented herein are adequate and not misleading, these condensed interim financial statements should be read in conjunction with the audited combined financial statements and the footnotes thereto for the year ended October 31, 2015 filed on Form 10-K on January 29, 2015.

Use of Estimates and Assumptions
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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.
Recent Accounting Pronouncements
The Company reviewed all the recently issued, but not yet effective, accounting pronouncements and we do not believe any of these pronouncements will have a material impact on the Company.

NOTE 3 – GOING CONCERN

The Company’s financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. As at January 31, 2016, the Company had working capital deficiency of $54,406 and an accumulated deficit of $102,175. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

NOTE 4 - STOCKHOLDERS’ DEFICIT

Preferred Stock

No preferred shares have been authorized or issued since Inception (October 25, 2012).

Common Stock

The Company’s capitalization is 75,000,000 common shares authorized with a par value of $0.001 per share.

As at January 31, 2016 and October 31, 2015, the Company had 10,206,000 shares of common stock issued and outstanding.
 
Stock Options or Stock Based Compensation

As at January 31, 2016 and October 31, 2015, the Company has not granted any stock options and has not recorded any stock-based compensation.

NOTE 5 – RELATED PARTY TRANSACTIONS

In support of the Company’s efforts and cash requirements, it may rely on advances from related parties until such time that the Company can support its operations or attains adequate financing through sales of its equity or traditional debt financing. There is no formal written commitment for continued support by shareholders or directors. Amounts represent advances or amounts paid in satisfaction of liabilities. The advances were considered temporary in nature and were not formalized by a promissory note.
During the period ended January 31, 2016, the Company’s current president, chief executive officer and director advanced $7,755 by the way of loan to cover the Company’s operating expenses. As at January 31, 2016 and October 31, 2015, the Company owned this director amount of $72,572 and $64,817, respectively. The loan is non-interest bearing, due upon demand and unsecured.

NOTE 7– COMMITMENTS AND CONTINGENCIES

Contractual

The Company neither owns nor leases any real or personal property. An officer has provided office services without charge.  There is no obligation for the officer to continue this arrangement.  Such costs are immaterial to the financial statements and accordingly are not reflected herein.  The officers and directors are involved in other business activities and most likely will become involved in other business activities in the future.
 
Litigation

The Company was not subject to any legal proceedings as at January 31, 2016 and no legal proceedings are currently pending or threatened to the best of our knowledge.

NOTE 8 - SUBSEQUENT EVENTS

Management has evaluated subsequent events through the date these financial statements were available to be issued.  Based on our evaluation no events have occurred that require disclosure.
 
 
 
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
FORWARD-LOOKING STATEMENTS
This quarterly report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
Our condensed unaudited financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles. The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this quarterly report.
Unless otherwise specified in this quarterly report, all dollar amounts are expressed in United States dollars and all references to "common stock" refer to shares of our common stock.
As used in this quarterly report, the terms "we", "us", "our" and "our company" mean Magicstem Group Corp., unless otherwise indicated.
Company History
Our company was incorporated in the State of Nevada on October 25, 2012 under the name Cold Cam, Inc. and originally intended to develop a camera system to be placed on the inside of refrigerator doors.
On January 31, 2015, Yonekatsu Kato, formerly our company's sole officer and director, entered into a stock purchase agreement, pursuant to which he sold all of his 10,000,000 shares of our company's common stock (98% of our company's total outstanding common shares) to Magicstem Development Limited, a Seychelles corporation ("Magicstem Development") ultimately owned by Chi Man Ng, in a private transaction, for an aggregate purchase price of $50,000. The funds used for this share purchase were Magicstem Development's funds. Magicstem Development now owns 98% of our company's issued and outstanding shares of common stock. The closing of the share purchase agreement created a change of control of our company. As a result of the change of control, and the change in our management as noted herein, our company now intends to investigate additional opportunities in an effort to enhance shareholder value. Those efforts are initially anticipated to focus on the development of stem cell cryo-preserved banking in Asia, with the expectation that primary customers would come from China.
On January 31, 2015, our board of directors accepted the resignation of Yonekatsu Kato as our president, chief executive officer, chief financial officer, treasurer, secretary and director.
The resignation of Yonekatsu Kato was not the result of any disagreements with our company regarding our operations, policies, practices or otherwise.
On January 31, 2015, we appointed Chi Man Ng as president, chief executive officer and director; Ka Sing Edmund Yeung as chief financial officer, treasurer, secretary and director; and Guosheng Hu as chief technology officer and director of our company.
On April 1, 2015, our company's board of directors approved an agreement and plan of merger to merge with our wholly-owned subsidiary Magicstem Group Corp., a Nevada corporation, to effect a name change from Cold Cam, Inc. to Magicstem Group Corp.  Our company remained as the surviving company. Magicstem Group Corp. was formed on October 25, 2012.
The name change was approved by the Financial Industry Regulatory Authority (FINRA) for filing with an effective date of May 4, 2015 and became effective with the OTC Markets at the opening of trading on May 4, 2015 under the symbol "MGGI".
On July 21, 2015, our company appointed Chun-han (Peter) Lin as a director and Chun-heng (Kevin) Lin as Group Senior Manager of our company.
At this time, we have not developed our product or contacted any possible client or developer. Our company has not yet implemented its business model and to date, has generated no revenues.
Results of Operations for the Three Months Ended January 31, 2016 Compared to the Three Months Ended January 31, 2015
Our operating results for the three month periods ended January 31, 2016 and 2015 are summarized as follows:
 
   
Three months ended
 
   
January 31,
 
   
2016
   
2015
 
         
REVENUE
  $ Nil     $ Nil  
OPERATING EXPENSES
               
Office and general
 
$
2,500
   
$
11
 
Professional fees
   
10,450
     
6,750
 
                 
NET LOSS
 
$
(12,950
)
 
$
(6,761
)
Revenue
We recognized no revenues for the three month periods ended January 31, 2016and January 31, 2015 as we have not yet commenced operations.
Operating Expenses
During the three months ended January 31, 2016, we incurred operating expenses of $12,950 compared to $6,761 in the three months ended January 31, 2015, an increase of $6,189. The majority of our operating expenses were related to ongoing regulatory costs.
Net Losses 
During the three months ended January 31, 2016, we incurred losses of $12,950 compared to losses of $6,761 incurred during the three months ended January 31, 2015, an increase of $6,189 due to the factors discussed above.
Liquidity and Capital Resources
Working Capital
 
 
As at
January 31,
2016
   
As at
October 31,
2015
 
Current Assets
 
$
18,166
   
$
23,361
 
Current Liabilities
   
72,572
     
64,817
 
Working Capital (Deficiency)
 
$
(54,406
)
 
$
(41,456
)

Cash Flows
 
 
 
ThreeMonths
Ended
January 31,
2016
   
ThreeMonths
Ended
January 31,
2015
 
Net cash used in operating activities
 
$
10,849
   
$
10,666
 
Net cash provided by (used in) investing activities
               
Net cash provided by financing activities
   
7,755
     
10,666
 
Net increase (decrease) in cash
 
$
(3,094
)
 
$
Nil
 

As at January 31, 2016, we had $14,434 in cash and cash equivalents and prepaid expenses of $3,732, and liabilities of $75,572 compared to $17,528 cash and cash equivalents and prepaid expenses of $5,833 and $64,817 in liabilities as at October 31, 2015. The increase in our working capital deficiency arose due to increased advances from related party.
Cash Flow from Operating Activities
During the three months ended January 31, 2016, we used $10,849 in our operating activities compared to $10,666 used in operating activities during the three months ended January 31, 2015. During the three months ended January 31, 2016 we incurred losses of $12,950. By comparison, during the three months ended January 31, 2015 we incurred losses of $6,761.
Cash Flow from Investing Activities
We neither generated funds nor used funds in investing activities during the three month periods ended January 31, 2016 and 2015, respectively.
Cash Flow from Financing Activities
During the three months ended January 31, 2016, we received a $7,755  and during the three months ended January 31, 2015 a $10,666 loan from our current president, chief executive officer and director.  The increase in cash flow from financing activities in 2016 reflected our need to fund the increased cash flow used in operating activities in 2016 as compared to 2015 as described above.
Going Concern
Our financial statements for the three month period ended January 31, 2015 have been prepared on a going concern basis which contemplates the realization of assets and liquidation of liabilities in the normal course of business.
We not generated revenues, have achieved losses since our inception, and rely upon the sale of our common stock and proceeds from shareholder loans to fund our operations. If we are unable to raise equity or secure alternative financing, we may not be able to continue our operations and our business plan may fail.
If our operations and cash flow improve, management believes that we can continue to operate. However, no assurance can be given that management's actions will result in profitable operations or an improvement in our liquidity situation. The threat of our ability to continue as a going concern will cease to exist only when our revenues have reached a level able to sustain our business operations.
Our financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Future Financings
If our company is unsuccessful in raising the additional proceeds through a private placement offering it will then have to seek additional funds through debt financing, which would be highly difficult for a new development stage company to secure. Therefore, our company is highly dependent upon the success of the anticipated private placement offering and failure thereof would result in our company having to seek capital from other sources such as debt financing, which may be available. However, if such financing were available, because we have no operations to date, we would likely have to pay additional costs associated with high risk loans and be subject to an above market interest rate. At such time these funds are required, management would evaluate the terms of such debt financing and determine whether the business could sustain operations and growth and manage the debt load. If our company cannot raise additional proceeds via a private placement of its common stock or secure debt financing we would be required to cease business operations. As a result, investors in our company's common stock would lose all of their investment.
As of the date of this Report, the current funds available to our company will not be sufficient to continue operations. The cost to establish our company and begin operations is estimated to be approximately $100,000 over the next twelve months and the cost of maintaining our reporting status is estimated to be $8,000 over this same period, not taking into account any additional funds that may be required for the acquisition or commencement of a stem cell banking business. Our officers and directors have undertaken to provide our company with operating capital to sustain our business over the next twelve month period as the expenses are incurred in the form of a non-secured loan. However, there is no contract in place or written agreement securing this agreement.  Management believes that if our company cannot raise sufficient revenues or maintain its reporting status with the Securities and Exchange Commission ("SEC") we will have to cease all efforts directed towards our company.  As such, any investment previously made would be lost in its entirety.    
Plan of Operation
As a result of the change of control, and the change in our management as noted herein, our company now intends to investigate additional opportunities in an effort to enhance shareholder value.  Those efforts are initially anticipated to focus on the development of stem cell banking cryopreserved in Asia, with the expectation that primary customers would come from China.

In order to pursue this initiative, we anticipate that our cash requirements for the next twelve months shall consist of:

Description
 
Estimated Expenses
($)
 
Legal and accounting fees
   
30,000
 
Management and operating costs
   
30,000
 
Salaries and consulting fees
   
20,000
 
General and administrative expenses
   
20,000
 
Total
   
100,000
 
 
Off Balance Sheet Arrangement
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 investors.
Critical Accounting Policies
Basis of Presentation
The accompanying financial statements include the accounts of our company and have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") and the instructions to Form 10-K and Regulation S-X and are presented in US dollars. Our company has adopted an October 31 fiscal year end.
Unaudited Interim Financial Statements
The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America for interim financial information and with the instructions to Form 10-Q.  Accordingly, the financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments consisting of normal recurring entries necessary for a fair statement of the periods presented for: (a) the financial position; (b) the result of operations; and (c) cash flows, have been made in order to make the financial statements presented not misleading.  The results of operations for such interim periods are not necessarily indicative of operations for a full year.
While management of our company believes that the disclosures presented herein are adequate and not misleading, these condensed interim financial statements should be read in conjunction with the audited combined financial statements and the footnotes thereto for the year ended October 31, 2015 filed on Form 10-K on January 29, 2016.
Use of Estimates and Assumptions
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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.
Cash and Cash Equivalents
Our company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents.
Property
Our company does not own or rent any property.  Our office space is provided by our president at no charge.
Advertising
Advertising costs will be expensed as incurred. No advertising costs were incurred during the three months ended January 31, 2016 or 2015.
Income Taxes
Deferred tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. A valuation allowance is established when necessary to reduce deferred tax assets to the amounts expected to be realized.
Our company accounts for income taxes under the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 740, “Accounting for Income Taxes”.  It prescribes a recognition threshold and measurement attributes for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.  As a result, our company has applied a more-likely-than-not recognition threshold for all tax uncertainties.  The guidance only allows the recognition of those tax benefits that have a greater than 50% likelihood of being sustained upon examination by the various taxing authorities. Our company is subject to taxation in the United States.   All of our company’s tax years are subject to examination by Federal and state jurisdictions.
Our company classifies penalties and interest related to income taxes as income tax expense in the Statements of Operations.
Basic and Diluted Net Loss per Share
Our company computes loss per share in accordance with “ASC-260”, “Earnings per Share” which requires presentation of both basic and diluted earnings per share on the face of the statement of operations. Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted loss per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive. Our company had no potentially dilutive debt or equity instruments issued and outstanding during the three months ended January 31, 2016 or 2015 and accordingly basic loss and diluted loss per share are the same.
Recent Accounting Pronouncements
Our company reviewed all the recently issued, but not yet effective, accounting pronouncements and we do not believe any of these pronouncements will have a material impact on our company.
Item 3.                  Quantitative and Qualitative Disclosures about Market Risk
As a "smaller reporting company", we are not required to provide the information required by this Item.
Item 4.                  Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer (our principal executive officer) and our chief financial officer (our principal financial officer and principal accounting officer) to allow for timely decisions regarding required disclosure.
As of the end of our quarter covered by this report, we carried out an evaluation, under the supervision and with the participation of our chief executive officer (our principal executive officer) and our chief financial officer (our principal financial officer and principal accounting officer), of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our chief executive officer (our principal executive officer) and our chief financial officer (our principal financial officer and principal accounting officer) concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this quarterly report.
Changes in Internal Controls over Financial Reporting
There have been no changes in our internal control over financial reporting that occurred during the period ended January 31, 2016 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting. 
PART II–OTHER INFORMATION
Item 1.                  Legal Proceedings
We know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.
Item 1A.                      Risk Factors
As a “smaller reporting company”, we are not required to provide the information required by this Item.
Item 2.                  Unregistered Sales of Equity Securities and Use of Proceeds
No sales of unregistered equity securities were completed during the three month periods ended January 31, 2016 and January 31, 2015.
Item 3.                  Defaults Upon Senior Securities
No senior debt was issued or outstanding during the three month periods ended January 31, 2016and 2015.
Item 4.                  Mining Safety Disclosures
Not applicable to our company
Item 5.                  Other Information
None.

Item 6.                  Exhibits

Exhibit No.
 
Document Description
(3)
 
(i) Articles of Incorporation; (ii) By-laws
3.1
 
Articles of Incorporation ( Incorporated by reference to our Registration Statement on Form S-1 filed on January 25, 2013)
3.2
 
By-Laws  ( Incorporated by reference to our Registration Statement on Form S-1 filed on January 25, 2013)
3.3
 
Articles of Merger filed with the Nevada Secretary of State on April 17, 2015 with an effective date of July 31, 2015. (Incorporated by reference to our Current Report on Form 8-K filed May 5, 2015)
(31)
 
Rule 13a-14(a) / 15d-14(a) Certifications
31.1*
 
31.2*
 
(32)
 
Section 1350 Certifications
32.1*
 
32.2*
 
101*
 
Interactive Data File
10.1 LAB
 
XBRL Taxonomy Extension Label Linkbase
10.1 PRE
 
XBRL Taxonomy Extension Presentation Linkbase
10.1 INS
 
XBRL Instance Document
10.1 SCH
 
XBRL Taxonomy Extension Schem
10.1 CAL
 
XBRL Taxonomy Extension Calculation Linkbase
10.1 DEF
 
XBRL Taxonomy Extension Definition Linkbase

*Filed herewith.
 
 
 
 
SIGNATURES

Pursuant to the requirements 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.

 
 
MAGICSTEM GROUP CORP.
 
 
(Registrant)
     
Date: March 10, 2016
By:
/s/ Chi Man Ng
 
 
Chi Man Ng
 
 
President, Chief Executive Officer, and Director
(Principal Executive Officer)
     
Date: March 10, 2016
  /s/ Ka Sing Edmund Yeung
   
Ka Sing Edmund Yeung
   
Chief Financial Officer, Treasurer, Secretary and Director
   
(Principal Financial Officer and Principal Accounting Officer)
 
 
 
 
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