Tianci International, Inc. - FORM 10-Q

Attached files

file	filename
EX-31.1 - Tianci International, Inc.	ex31-1.htm
EX-31.2 - Tianci International, Inc.	ex31-2.htm
EX-32.2 - Tianci International, Inc.	ex32-2.htm
EX-32.1 - Tianci International, Inc.	ex32-1.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 PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ________________

Commission file number: 333-184061

STEAMPUNK WIZARDS, INC.

(Exact name of registrant as specified in its charter)

Nevada		45-5540446
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

11620 Wilshire Blvd, Office 43, Suite 900,

West Wilshire Center, West Los Angeles, CA 90025

(Address of principal executive offices)

1-310-582-5939

(Registrant’s telephone number, including area code)

(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. 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 [ ]

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 the 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 [ ] (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). Yes [ ] No [X]

As of March 18, 2016, there were 27,623,630 shares of the issuer’s common stock, par value per share $0.0001, issued and outstanding.

STEAMPUNK WIZARDS, INC.

Form 10-Q

Part I	FINANCIAL INFORMATION

Item 1.	Unaudited Condensed Consolidated Financial Statements	3
	Balance Sheets	3
	Statements of Operations and Comprehensive Loss	4
	Statement of Stockholders’ Deficit	5
	Statements of Cash Flows	6
	Notes to unaudited Financial Statements	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13

Item 4.	Controls and Procedures	18

Part II.	OTHER INFORMATION

Item 1	Legal Proceedings	19

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	19

Item 3	Defaults Upon Senior Securities	19

Item 4	Mine Safety Disclosures	19

Item 5.	Other Information	19

Item 6.	Exhibits	20

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

Steampunk Wizards, Inc.

Condensed Consolidated Balance Sheets

	January 31, 2016			July 31, 2015
	(Unaudited)
ASSETS

Current Assets
Cash and cash equivalents	$	15,663		$	53,472
Accounts receivable		1,083			-
Prepaid expenses and other deposits		29,097			12,670
Other current assets		10,570			7,282
Total Current Assets		56,413			73,424
Property and equipment, net		13,181			4,807
TOTAL ASSETS	$	69,594		$	78,231

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current Liabilities
Accounts payable and accrued liabilities	$	67,588		$	47,773
Due to related parties		153,514			22,114
Short-term loans		118,258			228,756
TOTAL LIABILITIES		339,360			298,643

STOCKHOLDERS' DEFICIT
Preferred stock, $0.0001 par value; 20,000,000 shares authorized,
0 shares issued and outstanding		-			-
Common stock, $0.0001 par value, 100,000,000 shares authorized;
27,616,096 and 14,908,438 shares issued and outstanding, respectively		2,762			1,491
Additional paid-in capital		712,632			269,246
Accumulated deficit		(966,314	)		(474,037	)
Accumulated other comprehensive loss		(18,846	)		(17,112	)
TOTAL STOCKHOLDERS' DEFICIT		(269,766	)		(220,412	)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	69,594		$	78,231

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

Steampunk Wizards, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)

										October 27, 2014
	Three Months Ended						Six Months Ended			(Inception) to
	January 31,						January 31,			January 31,
	2016			2015			2016			2015

REVENUES	$	-		$	-		$	-		$	-

OPERATING EXPENSES
Development costs		71,083			-			98,931			-
Office and miscellaneous		109,510			51,731			254,851			51,731
Professional fees		80,444			16,468			140,891			16,468
Total Operating Expenses		261,037			68,199			494,673			68,199

LOSS FROM OPERATIONS		(261,037	)		(68,199	)		(494,673	)		(68,199	)

OTHER INCOME (EXPENSE)
Interest expenses		(1,296	)		-			(2,514	)		-
Other income (expense)		(8,180	)		-			4,910			-
Total Other Income (Expense)		(9,476	)		-			2,396			-

LOSS BEFORE INCOME TAXES		(270,513	)		(68,199	)		(492,277	)		(68,199	)
Provision for income taxes		-			-			-			-

NET LOSS	$	(270,513	)	$	(68,199	)	$	(492,277	)	$	(68,199	)

STATEMENTS OF COMPREHENSIVE LOSS
Net loss	$	(270,513	)	$	(68,199	)	$	(492,277	)	$	(68,199	)
Other Comprehensive loss:
Foreign currency translation adjustments		13,989			406			(1,734	)		406
TOTAL COMPREHENSIVE LOSS	$	(256,524	)	$	(67,793	)	$	(494,011	)	$	(67,793	)

Basic and Diluted Income per Common Share	$	(0.01	)	$	(0.00	)	$	(0.02	)	$	(0.01	)
Basic and Diluted Weighted Average Common Shares Outstanding		27,536,815			14,908,438			26,045,792			12,044,955

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

Steampunk Wizards, Inc.

Condensed Consolidated Statements of Stockholders' Deficit

(Unaudited)

										Accumulated
					Additional					Other			Total
	Common Stock				Paid-in		Accumulated			Comprehensive			Stockholders'
	Number of Shares		Amount		Capital		Deficit			Loss			Deficit

Balance - October 27, 2014 (Inception)		-	$	-	$	-	$	-		$	-		$	-
Issuance of common stock		14,908,438		1,491		269,246		-			-			270,737
Net loss		-		-		-		(474,037	)		-			(474,037	)
Foreign currency translation adjustments		-		-		-		-			(17,112	)		(17,112	)
Balance - July 31, 2015		14,908,438		1,491		269,246		(474,037	)		(17,112	)		(220,412	)
Recapitalization		12,245,238		1,225		37,853		-			-			39,078
Common stock issued for cash		462,420		46		405,533					-			405,579
Net loss for the period		-		-		-		(492,277	)		-			(492,277	)
Foreign currency translation adjustments		-		-		-		-			(1,734	)		(1,734	)
Balance - January 31, 2016		27,616,096	$	2,762	$	712,632	$	(966,314	)	$	(18,846	)	$	(269,766	)

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

Steampunk Wizards, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

				October 27, 2014
	Six Months Ended			(Inception) to
	January 31,			January 31,
	2016			2015
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(492,277	)	$	(68,199	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		1,502			-
Other income adjusted with short-term loan		(12,139	)
Management fees accrued as due to related parties		60,000
Changes in operating assets and liabilities:
Accounts receivable		(1,083	)		-
Prepaid expenses and other deposits		(117	)		(1,145	)
Other assets		(3,288	)		(5,580	)
Accounts payable and accrued liabilities		(23,566	)		47,145
Accrued interest		2,514			-
Net cash used in operating activities		(468,454	)		(27,779	)

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of equipment		(9,905	)		(3,768	)
Purchase of intangible assets		-			(31,343	)
Net cash used in investing activities		(9,905	)		(35,111	)

CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock for cash		405,579			124,639
Proceeds from related parties		16,822			-
Proceeds from short-term loans		67,097			-
Repayment to related parties		(46,267	)		-
Net cash provided by financing activities		443,231			124,639

Effects on changes in foreign exchange rate		(2,681	)		406

Net (decrease) increase in cash and cash equivalents		(37,809	)		62,155
Cash and cash equivalents - beginning of period		53,472			-
Cash and cash equivalents - end of period	$	15,663		$	62,155

Supplemental Cash Flow Disclosures
Cash paid for interest	$	-		$	-
Cash paid for income taxes	$	-		$	-

Non-cash financing and investing activities
Short-term loans reclassified as inter-company loans	$	164,730		$	-
Related party loans assumed in reverse acquisition	$	101,095		$	-
Loan from related party	$	-		$	22,114
Common shares issued for intangible assets and receivables	$	-		$	144,898
Prepaid asset assumed in reverse acquisition	$	16,310		$	-
Accounts payable assumed in reverse acquisition	$	40,867		$	-

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

Steampunk Wizards, Inc.

Notes to the Condensed Consolidated Financial Statements

January 31, 2016

(Unaudited)

NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

Steampunk Wizards, Inc. (“the Company”) was incorporated under the laws of the State of Nevada, U.S. as Freedom Petroleum, Inc. on June 13, 2012. In May 2015, the Company changed its name to Steampunk Wizards, Inc. and changed its trading symbol to SPWZ. The Company’s fiscal year end is July 31.

Share Exchange and Recapitalization

On July 16, 2015, the Company entered into a share exchange agreement (the “Exchange Agreement”), which was consummated on August 21, 2015, with Steampunk Wizards Ltd., a company incorporated pursuant to the laws of Malta (“Malta Co.”) on October 27, 2014, the Company’s sole officer and director (the “Officer”), being the owner of record of 11,451,541 common shares of the Company and the persons (the “Shareholders”), being the owners of record of all of the issued share capital of Malta Co. (the “Steampunk Stock”) on July 15, 2015. Pursuant to the Exchange Agreement, upon surrender by the Shareholders and the cancellation by Malta Co. of the certificates evidencing the Steampunk Stock as registered in the name of each Shareholder, and pursuant to the registration of the Company in the register of members maintained by Malta Co. as the new holder of the Steampunk Stock and the issuance of the certificates evidencing the aforementioned registration of the Steampunk Stock in the name of the Company, the Company will issue 4,812,209 shares (the “New Shares”) of the Company’s common stock to the Shareholders (or their designees), and the Officer will cause 10,096,229 shares of the Company’s common stock that he owns (the “Officer Stock,” together with the New Shares, the “Acquisition Stock”) to be transferred to the Shareholders (or their designees), which collectively shall represent 55% of the issued and outstanding common stock of the Company immediately after the Closing, in exchange for the Steampunk Stock, representing 100% of the issued share capital of Malta Co. As a result of the exchange of the Steampunk Stock for the Acquisition Stock (the “Share Exchange”), Malta Co. will become a wholly owned subsidiary (the “Subsidiary”) of the Company and there will be a change of control of the Company following the closing. There were no warrants, options or other equity instruments issued in connection with the Exchange Agreement.

For financial accounting purposes, the Exchange Agreement has been accounted for as a reverse acquisition by the Malta Co., and resulted in a recapitalization, with Malta Co. being the accounting acquirer and the Company as the acquired entity. The assets acquired and liabilities assumed were $181,040 and $141,962, respectively. The consummation of this Exchange Agreement resulted in a change of control. Accordingly, the historical financial statements prior to the acquisition are those of the accounting acquirer, Malta Co., and have been prepared to give retroactive effect to the reverse acquisition completed on August 21, 2015, and represent the operations of Malta Co. The consolidated financial statements after the acquisition date include the balance sheets of both companies at historical cost, the historical results of Malta Co. and the results of the Company from the acquisition date. All share and per share information in the accompanying consolidated financial statements and footnotes has been retroactively restated to reflect the recapitalization.

Incorporated in 2014, Malta Co. was a games development and technology company specialized in developing enchanting games and gaming technology where the real and virtual worlds blur.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The interim financial information referred to above has been prepared and presented in conformity with accounting principles generally accepted in the United States applicable to interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. The interim financial information has been prepared on a basis consistent with prior interim periods and years and includes all disclosures that are necessary and required by applicable laws and regulations. This report on Form 10-Q should be read in conjunction with the Company’s financial statements and notes thereto included in the Company’s Form 8-K/A for the fiscal year ended July 31, 2015 filed on February 8, 2016.

The unaudited financial statement and notes are presented in accordance with accounting principles generally accepted in the United States of America (GAAP). These interim financial statements include all adjustments that, in the opinion of management, are necessary in order to make the financial statements not misleading.

Result of the six months ended January 31, 206 are not necessarily indicative of the results that may be expected for the year ended July 31, 2016 and any other future periods.

Going Concern Matters

At January 31, 2016, the Company had $15,663 in cash on hand, had incurred a net loss of $492,277 and used $468,454 in cash for operating activities for the period ended January 31, 2016. In addition, the Company had negative working capital (current liabilities exceeded current asset) of $282,947.

The Company’s cash balance and revenues generated are not currently sufficient and cannot be projected to cover operating expenses for the next twelve months from the date of this report. These matters raise substantial doubt about the Company’s ability to continue as a going concern. Management's plans include attempting to improve its business profitability, its ability to generate sufficient cash flow from its operations to meet its operating needs on a timely basis, obtain additional working capital funds through equity and debt financing arrangements, and restructure on-going operations to eliminate inefficiencies to raise cash balance in order to meet its anticipated cash requirements for the next twelve months from the date of this report. However, there can be no assurance that these plans and arrangements will be sufficient to fund the Company’s ongoing capital expenditures, working capital, and other requirements. Management intends to make every effort to identify and develop sources of funds. The outcome of these matters cannot be predicted at this time. There can be no assurance that any additional financings will be available to the Company on satisfactory terms and conditions, if at all.

The ability of the Company to continue as a going concern is dependent upon its ability to raise additional capital and continue profitable operations. The accompanying unaudited condensed consolidated 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.

Foreign Currency Translation and Re-measurement

The Company's functional and reporting currency is the U.S. dollar. All transactions initiated in EURO are translated into U.S. dollars in accordance with ASC 830-30, "Translation of Financial Statements," as follows:

i)	Assets and liabilities at the rate of exchange in effect at the balance sheet date.

ii)	Equities at historical rate

iii)	Revenue and expense items at the average rate of exchange prevailing during the period.

Adjustments arising from such translations are included in accumulated other comprehensive income (loss) in shareholders’ equity.

Basis of Consolidation

These financial statements include the accounts of the Company and its subsidiary. All material intercompany balances and transactions have been eliminated.

Use of Estimates

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. The estimates and judgments will also affect the reported amounts for certain revenues and expenses during the reporting period. Actual results could differ from these good faith estimates and judgments.

Basic and Diluted Earnings (Loss) Per Share

Basic income (loss) per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. There are no such common stock equivalents outstanding as of January 31, 2016 and July 31, 2015.

Recent Accounting Pronouncements

Management has considered all recent accounting pronouncements issued and their potential effect on our financial statements. The Company's management believes that these recent pronouncements will not have a material effect on the Company's condensed consolidated financial statements.

NOTE 3 – CASH AND CASH EQUIVALENTS

Cash and cash equivalents include cash in banks, money market funds, and certificates of term deposits with maturities of less than three months from inception, which are readily convertible to known amounts of cash and which, in the opinion of management, are subject to an insignificant risk of loss in value. As at January 31, 2016 and July 31, 2015, the Company has $15,663 and $53,472 cash and cash equivalent respectively.

NOTE 4 – OTHER CURRENT ASSETS

Other current assets consist only of value-added tax (“VAT”) held by the Company. As at January 31, 2016 and July 31, 2015, the Company has $10,570 and $7,282 VAT receivable from the Malta government, respectively.

NOTE 5 – PROPERTY AND EQUIPMENT

	January 31,			July 31,
	2016			2015
Cost
IT Equipment	$	10,556		$	6,593
Furniture		5,866			-
		16,422			6,593
Depreciation		(3,241	)		(1,786	)
Balance	$	13,181		$	4,807

The equipment comprised of IT and other equipment with an estimated average useful life of 4 years. The Company recorded $1,502 and $0 as depreciation expenses for the six months ended January 31, 2016 and 2015, respectively. The Company recorded $664 and $0 as depreciation expenses for the three months ended January 31, 2016 and 2015, respectively.

NOTE 6 – ACCOUNTS PAYABLE AND ACCRUED LIABILITES

The Company’s accounts payable and accrued liabilities consist of the following:

	January 31,		July 31,
	2016		2015

Trade payable	$	42,094	$	271
Accrued liabilities		21,651		46,115
Accrued interest		3,843		1,387
	$	67,588	$	47,773

NOTE 7 – SHORT-TERM LOANS

The Company’s short-term loans consist of the following:

	January 31,		July 31,
	2016		2015

Short-term loans from Deep Blue Trading	$	94,473	$	64,026
Short-term loans from Galloway		23,785		-
Loans from Steampunk Wizards, Inc.		-		164,730
	$	118,258	$	228,756

The Deep Blue Trading loans are secured, bears interest rate of 7% per annum and are payable, together with interest, within one year from date of grant. The Galloway loans were borrowed from a shareholder, who has approximately 1% of the Company’s common shares. The Galloway loans are unsecured, bears interest rate of 7% per annum and are payable, together with interest, within one year from date of grant. During the three and six months ended January 31, 2016, the Company accrued interest of $1,296 and $2,514, respectively.

On July 16, 2015, Steampunk Wizards, Inc. entered into a share exchange agreement with Malta Co. The exchange was closed on August 21, 2015. As a result of the exchange of Malta Co. became a wholly owned subsidiary of Steampunk Wizards, Inc. Prior to the closing, Steampunk Wizards, Inc. advanced $164,730 (EUR 145,000) to the Malta Co. The advance was unsecured, non-interest bearing and reclassified as inter-company loans during the period ended January 31, 2016.

NOTE 8 – DUE TO RELATED PARTIES

On August 21, 2015, the Company assumed $101,095 loans provided by the former Chief Executive Officer (“CEO”) of the Company through the share exchange transaction. During the period ended January 31, 2016, the former CEO advanced $16,822 to the Company and the Company repaid $46,267 to the former CEO. In addition, pursuant to an employee agreement effective on March 1, 2014, the Company was obligated to pay $10,000 per month to the former CEO for management services. Accordingly, $60,000 management fees for the period ended January 31, 2016, were accrued as amount due to related parties. As at January 31, 2016, the Company owed $131,650 to the former CEO.

As at January 31, 2016 and July 31, 2015, the Company owed $21,864 and $22,114 to a shareholder of the Company. The decrease in due to this shareholder was due to change of foreign exchange rate. This loan is non-interest bearing and due on demand.

During the three and six months ended January 31, 2016, a company, which is owned by the Company’s chief technology officer, provided management services of $22,028 and $46,810 to the Company, respectively. As at January 31, 2016 and July 31, 2015, $15,787 and $1,042 due to this company was included in accounts payable and accrued liabilities, respectively.

NOTE 9 – EQUITY

Share capital

Preferred Stock

The Company has 20,000,000 authorized preferred shares with a par value of $0.0001 per share. The Board of Directors are authorized to divide the authorized shares of Preferred Stock into one or more series, each of which shall be so designated as to distinguish the shares thereof from the shares of all other series and classes.

There were no shares of preferred stock issued and outstanding as at January 31, 2016 and July 31, 2015.

Common Stock

During the six month period ended January 31, 2016, the Company issued 462,420 shares for cash of $405,579.

On October 22, 2015, we received an investment of $50,000 from an unrelated party for issuance of 50,269 shares of common stock which we disclosed in the Form 10-Q for the period ended October 31, 2015. However, due to unexpected delay and calculation error, 42,735 shares (included in 462,420 above) were issued by the Company on January 29, 2016 to this investor. The remaining 7,534 shares owed under this investment were issued on March 4, 2016.

There were 27,616,096 and 14,908,438 shares of common stock issued and outstanding as of January 31, 2016 and July 31, 2015, respectively.

NOTE 10 – COMMITMENTS AND CONTINGENCIES

On July 2, 2015, Malta Co. entered into a lease agreement with Central Garage Ltd. The term of the lease is one year with monthly payments of EUR 1,200.

The Company has no other commitments or contingencies as of January 31, 2016.

From time to time the Company may become a party to litigation matters involving claims against the Company. Management believes that it is adequately insured for its operations and there are no current matters that would have a material effect on the Company's financial position or results of operations.

NOTE 11 -SUBSEQUENT EVENTS

Subsequent to January 31, 2016, 7,534 Short shares was issued by the Company for cash received during the six months ended January 31, 2016.

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

CAUTIONARY NOTE CONCERNING FORWARD-LOOKING STATEMENTS

Except for historical information, this report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements involve risks and uncertainties, including, among other things, statements regarding our business strategy, future revenues and anticipated costs and expenses. Such forward-looking statements include, among others, those statements including the words “expects,” “anticipates,” “intends,” “believes” and similar language. Our actual results may differ significantly from those projected in the forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, those discussed herein as well as in the “Description of Business – Risk Factors” section in our Annual Report on Form 10-K for year ended July 31, 2015, as filed on November 13, 2015. You should carefully review the risks described in our Annual Report and in other documents we file from time to time with the Securities and Exchange Commission. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this report. We undertake no obligation to publicly release any revisions to the forward-looking statements or reflect events or circumstances after the date of this document.

Although we believe that the expectations reflected in these forward-looking statements are based on reasonable assumptions, there are a number of risks and uncertainties that could cause actual results to differ materially from such forward-looking statements. The Company assumes no obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise.

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

The following discussion provides information which management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read along with our unaudited condensed consolidated financial statements for the three and six months ended January 31, 2016 and notes thereto contained elsewhere in this Report, and our annual report on Form 10-K our Annual Report on Form 10-K for year ended July 31, 2015, as filed on November 13, 2015, including the consolidated financial statements and notes thereto. The following discussion and analysis contains forward-looking statements, which involve risks and uncertainties. Our actual results may differ significantly from the results, expectations and plans discussed in these forward-looking statements. See “Cautionary Note Concerning Forward-Looking Statements.”

All references in this Form 10-Q to “Company”, “Steampunk”, “Steampunk Wizards,” “we,” “us” or “our” mean Steampunk Wizards, Inc., unless otherwise indicated.

Our unaudited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.

Overview

Prior to the Share Exchange (as defined hereafter), we were an exploration stage company under the name of Freedom Petroleum Inc. (changed to Steampunk Wizards, Inc., effective on July 2, 2015) that originally intended to engage in the exploration and development of oil and gas properties. In April 2015, after reviewing the markets with investor appetite and management's duties to its shareholders, the Company determined to discontinue its oil and gas operation. We then began exploring opportunities in the computer gaming and application industry.

We have had limited operations and have been issued a "going concern" opinion by our auditor, based upon our reliance on the sale of our common stock and loans from a related party, as the sole source of funds for our future operations.

On July 15, 2015, we entered into a share exchange agreement (the “Exchange Agreement”) which was consummated on August 21, 2015, with Steampunk Wizards Ltd., a company incorporated pursuant to the laws of Malta (“Malta Co.”) on October 27, 2014, Anton Lin, the Company’s Chief Executive Officer (“CEO” or “Lin”), and the persons listed in Exhibit A thereof (the “Shareholders”), being the owners of record of all of the issued share capital of Malta Co. (the “Steampunk Stock”). Pursuant to the Exchange Agreement, upon surrender by the Shareholders and the cancellation by Malta Co. of the certificates evidencing the Steampunk Stock as registered in the name of each Shareholder, and pursuant to the registration of the Company in the register of members maintained by Malta Co. as the new holder of the Steampunk Stock and the issuance of the certificates evidencing the aforementioned registration of the Steampunk Stock in the name of the Company, the Company issued 4,812,209 shares (the “New Shares”) (subject to adjustment for fractionalized shares as set forth below) of the Company’s common stock to the Shareholders (or their designees), and Lin caused 10,096,229 shares of the Company’s common stock that he owned (the “Lin Stock,” together with the New Shares, the “Acquisition Stock”) to be transferred to the Shareholders (or their designees), which collectively represented 55% of the issued and outstanding common stock of the Company immediately after the closing, in exchange for the Steampunk Stock, representing 100% of the issued share capital of Malta Co. As a result of the exchange of the Steampunk Stock for the Acquisition Stock (the “Share Exchange”), Malta Co. became our wholly owned subsidiary and there was a change of control of the Company.

Following the Share Exchange, we abandoned our prior business plan and now pursuing Malta Co.’s historical businesses and proposed businesses.

For financial accounting purposes, the Exchange Agreement has been accounted for as a reverse acquisition by the Malta Co., and resulted in treating the share exchange transaction as a recapitalization whereby Malta Co. was the accounting acquirer and the Company was the acquired entity. The consummation of the Share Exchange resulted in a change of control of the Company. Accordingly, the historical financial statements prior to the acquisition are those of the accounting acquirer, Malto Co., and have been prepared to give retroactive effect to the reverse acquisition completed on August 21, 2015, and represent the operations of Malta Co. The consolidated financial statements after the acquisition date include the balance sheets of both companies at historical cost, the historical results of Malta Co. and the results of the Company from the acquisition date. All share and per share information in the accompanying consolidated financial statements and footnotes has been retroactively restated to reflect the recapitalization

Incorporated in 2014, Malta Co. was a games development and technology company specialized in developing enchanting games and gaming technology where the real and virtual worlds blur. Making full use of the team’s experience and diverse talent set, Malta Co. built a mobile game with 3D printable rewards embedded and the associated IP and server technology. By providing 3D printable codes as in-game rewards, which allow gamers to print off merchandise they have earned through gameplay, Malta Co. was able to bring the gaming experience into the real world.

Upon the closing of the Share Exchange, the Company takes over Malta Co.’s in-house team consisting of designers, developers, artists, programmers and marketers that allows it to design and develop its own games through every stage from conception to publication. The company has been growing recently and now has the capacity to produce and launch one or two major game franchises each year, along with four to six casual games. The first game, a casual game called Bungee Mummy: Challenges, is a compendium of 4 mini games set in the Bungee Mummy Egyptian theme and launched in early August 2015. It is a mobile game designed primarily for smartphones and tablets (supporting both Android and IOS). Thereafter, having launched a trial version of our larger game- Bungee Mummy: King’s Escape - in early 2015, we launched a replacement game called Bungee Mummy: Reborn on Android and iOS in December 2015. Bungee Mummy: Reborn is a level-based adventure-puzzler with an Egyptian theme. Since then, the company has released two further games. Whack-A-Geemie, a mobile game that fuses slots with whack-a-mole and Neon Gliders, an endless runner set in space with retro-style graphics. All games are playable in Andriod and iOS smartphones and tables, and Neon Gliders is also playable on Apple TV.

Plan of Operation

The company intends to continue to expand its portfolio of games publicly available for download. It is focusing on releasing a higher number of smaller games to demonstrate the studio’s capabilities while also exposing itself to as much of the market as possible.

Meanwhile, a slot machine game has been developed but not released to the public. The Company is in talks with online gambling platform operators about the potential to provide them with slot machines, but no firm decisions have been taken yet.

The company is focusing on developing relationships with publishing companies who can provide large advertising platforms for the Company’s games.

Limited Operating History; Need for Additional Capital

There is no historical financial information about us upon which to base an evaluation of our performance. We have not generated any revenues from operations. We cannot guarantee we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources, possible delays in the launching of our games and market or wider economic downturns. We do not believe we have sufficient funds to operate our business for the next 12 months.

We have no assurance that future financing will be available to us on acceptable terms, or at all. If financing is not available on satisfactory terms, we may be unable to continue, develop or expand our operations. Equity financing could result in additional dilution to existing shareholders.

If we are unable to raise additional capital to maintain our operations in the future, we may be unable to carry out our full business plan or we may be forced to cease operations.

Results of Operations

Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation. We expect we will require additional capital to meet our long term operating requirements. We expect to raise additional capital through, among other things, the sale of equity or debt securities, but we cannot guarantee that we will be able to achieve same.

We have not yet generated significant revenues and have accumulated deficit of $966,314 since inception through January 31, 2016.

The following table provides selected financial data about our company as of January 31, 2016 and July 31, 2015.

Balance Sheet Data

	January 31,			July 31,
	2016			2015

Cash	$	15,663		$	53,472
Total assets	$	69,594		$	78,231
Total liabilities	$	339,360		$	298,643
Stockholders' deficit	$	(269,766	)	$	(220,412	)

For the three month period ended January 31, 2016 and 2015

During the three month period ended January 31, 2016 we recorded $71,083 costs on software development, office and administration expense of $109,510, professional fees of $80,444 for ongoing regulatory requirements and accrued $1,296 interest on short-term loans.

During the three month period ended January 31, 2015, we recorded $0 costs on software development, office and administration expense of $51,731, professional fees of $16,468 for ongoing regulatory requirements and accrued $0 interest on short-term loans.

For the six month period ended January 31, 2016 and 2015

During the three month period ended January 31, 2016 we recorded $98,931 costs on software development, office and administration expense of $254,851, professional fees of $140,891 for ongoing regulatory requirements and accrued $2,514 interest on short-term loans.

Liquidity and Capital Resources

Working Capital

	January 31,			July 31,
	2016			2015

Current Assets	$	56,413		$	73,424
Current Liabilities		339,360			298,643
Working Capital (Deficiency)	$	(282,947	)	$	(225,219	)

Cash Flows

					October 27, 2014
	Six Months Ended				(Inception) to
	January 31,				January 31,
	2016				2015

Cash used in operating activities		$	(468,454	)		$	(27,779	)
Cash provided by investing activities		$	(9,905	)		$	(35,111	)
Cash provided by financing activities		$	443,231			$	124,639
Net (decrease) increase in cash and cash equivalents		$	(37,809	)		$	62,155

Cash Flow from Operating Activities

During the six month period ended January 31, 2016, cash used in operating activities was $468,454. The Company had a net loss of $492,277, but this loss was offset by depreciation of $1,502, other income adjusted with short-term loan of $12,139, an increase in accounts receivable of $1,083, an increase in prepaid expenses and other deposit of $117, an increase in other assets of $3,288, a decrease in accounts payable and accrued liabilities of $23,566, an increase in accrued interest of $2,514 and an increase in accrued management fees of $60,000.

During the six month period ended January 31, 2015, cash used in operating activities was $27,779. The Company had a net loss of $68,199, an increase in prepaid expenses and other deposit of $1,145, increase in other assets of $5,580 and an was offset by an increase in accounts payable and accrued liabilities of $47,145.

Cash Flow from Investing Activities

During the six month period ended January 31, 2016, the Company used $9,905 cash to purchase equipment.

During the six month period ended January 31, 2015, the Company used $3,768 cash to purchase equipment and $31,343 to purchase intangible asserts.

Cash Flow from Financing Activities

During the six month period ended January 31, 2016, the Company issued 462,420 shares of common stock for cash of $405,579. On August 21, 2015, the Company assumed $101,095 loans provided by the former Chief Executive Officer (“CEO”) of the Company through the share exchange transaction. During the period ended January 31, 2016, the former CEO advanced $16,822 to the Company and the Company repaid $46,267 to the former CEO. In addition, pursuant to an employee agreement effective on March 1, 2014, the Company was obligated to pay $10,000 per month to the former CEO for management service. Accordingly, $60,000 management fees for the period ended January 31, 2016, were accrued as amount due to related parties. During the period ended January 31, 2016, the Company received $67,097 short-term loans from unrelated third party, repaid $0 short-term loans and reclassified $164,730 short-term loan through the share exchange transaction.

Going Concern Matters

Critical Accounting Policy and Estimates

We prepare our financial statements in conformity with GAAP, which requires management to make certain estimates and assumptions and apply judgments. We base our estimates and judgments on historical experience, current trends and other factors that management believes to be important at the time the financial statements are prepared and actual results could differ from our estimates and such differences could be material. Due to the need to make estimates about the effect of matters that are inherently uncertain, materially different amounts could be reported under different conditions or using different assumptions. On a regular basis, we review our critical accounting policies and how they are applied in the preparation our financial statements. Please refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our Annual Report on Form 10-K for the year ended July 31, 2015, for disclosures regarding the Company's critical accounting policies and estimates, as well as any updates further disclosed in our interim financial statements as described in this Form 10-Q.

Use of Estimates

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 revenue and expenses during the reporting period. Actual results could differ from those estimates.

Off-Balance Sheet Arrangements

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.

Item 4. Control and Procedures.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures as defined in Rule 13a-15(e) under the Exchange Act as of the end of the period covered by this Quarterly Report on Form 10-Q. In designing and evaluating the disclosure controls and procedures, our management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs. The design of any disclosure controls and procedures 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.

Based on that evaluation, our chief executive officer and chief financial officer concluded that, as of January 31, 2016, our disclosure controls and procedures were not effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules, regulations and forms, and (ii) that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Controls Over Financial Reporting

There were no changes in the Company’s internal controls over financial reporting that occurred during the period covered by this Report 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.

From time to time, the Company may be involved in litigation relating to claims arising out of our operations in the normal course of business. We are not aware of any pending or threatened legal proceeding that, if determined in a manner adverse to us, could have a material adverse effect on our business and operations.

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

During the six month period ended January 31, 2016, the Company issued 462,420 shares for cash of $405,579.

There were 27,616,096 and 14,908,438 shares of common stock issued and outstanding as of January 31, 2016 and July 31, 2015, respectively.

Subsequent to January 31, 2016, 7,534 Short shares was issued by the Company for cash received during the six months ended January 31, 2016.

Item 3. Defaults Upon Senior Securities.

(a) Not Applicable.

(b) Not Applicable.

Itwm 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

Item 6. Exhibits.

Exhibit
Number		Description of Exhibit

(3)		Articles of Incorporation and Bylaws

3.1		Articles of Incorporation (incorporated by reference to our Registration Statement on Form S-1 filed on September 24, 2012)

3.2		Bylaws (incorporated by reference to our Registration Statement on Form S-1 filed on September 24, 2012)

(31)		Rule 13a-14(a) / 15d-14(a) Certifications

31.1*		Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.

31.2*		Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.

(32)		Section 1350 Certifications

32.1*		Rule 1350 Certification of Chief Executive Officer.

32.2*		Rule 1350 Certification of Chief Financial Officer.

101		Interactive Data File

101*		Interactive Data File (Form 10-Q for the quarter ended January 31, 2016 furnished in XBRL).
101.INS		XBRL Instance Document
101.SCH		XBRLTaxonomy 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

* Filed herewith.

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.

	STEAMPUNK WIZARDS, INC.
	(Registrant)


Dated: March 21, 2016	/s/ Joshua O’Cock
	Joshua O’Cock
	President, Chief Executive Officer, Chief Financial Officer, Treasurer, Secretary, and Director
	(Principal Executive Officer and Financial and Accounting Officer)

Tianci International, Inc. - FORM 10-Q - March 21, 2016

Attached files

Tianci International, Inc. Reports