UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

or

Commission File Number 001-36128

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   o 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   o 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.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) x YES   o 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. o YES   o 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 September 12, 2016.

 TABLE OF CONTENTS

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)

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

Magicstem Group Corp.,

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)

__________ 

* 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)

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

Magicstem Group Corp.,

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

JULY 31, 2016

(Unaudited)

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, 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.

Prepaid Expenses

Prepaid expenses consist of annual filing fees that are paid in advance.  The prepaid balances are amortized as the related expense occurs.  During the three months ended July 31, 2015 we reclassified $8,333 relating to our OTCQB annual fee from office and general expense where it had been expensed in the prior quarter to prepaid expense.  Amortization of the prepaid expenses are included in office and general expenses.

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 July 31, 2016, the Company had working capital deficiency of $70,410 and an accumulated deficit of $118,179. 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 – 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 July 31, 2016, the Company’s current president, chief executive officer and director advanced $26,785 by the way of loans to cover the Company’s operating expenses. As at July 31, 2016 and October 31, 2015, the Company owed this director  a total of $91,602 and $64,817, respectively. The loan is non-interest bearing, due upon demand and unsecured.

NOTE 5 – 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. On April 1, 2016 Mr. Chun-heng Lin resigned as group senior manager of our company. On April 1, 2016, we appointed Ms. Kit U Tang 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 July 31, 2016 Compared to the Three Months Ended July 31, 2015

Our operating results for the three month periods ended July 31, 2016 and 2015 are summarized as follows:

Revenue

We recognized no revenues for the three month periods ended July 31, 2016 and July 31, 2015 as we have not yet commenced operations.

Operating Expenses

During the three months ended July 31, 2016, we incurred operating expenses of $8,774 compared to $7,278 in the three months ended July 31, 2015, an increase of $1,466.  The increase in operating expenses is primarily as a result of an increase in office and general expenses and a reduction in professional fees. During the three months ended July 31, 2015 we reclassified $8,333 relating to our OTCQB annual fee from office and general expense where it had been expensed in the prior quarter to prepaid expense.

Net Losses 

During the three months ended July 31, 2016, we incurred losses of $8,774 compared to losses of $7,278 incurred during the three months ended July 31, 2015, an increase of $1,466 due to the factors discussed above.

Results of Operations for the Nine Months Ended July 31, 2016 Compared to the Nine Months Ended July 31, 2015

Our operating results for the Nine month periods ended July 31, 2016 and 2015 are summarized as follows:

Revenue

We recognized no revenues in the nine months periods ended July 31, 2016 and July 31, 2015 as we have not yet commenced operations.

Operating Expenses

During the nine months ended July 31, 2016, we incurred operating expenses of $28,954 compared to $39,332 in the nine months ended July 31, 2015, a decrease of $10,378. The decrease in operating expenses is primarily as a result of our company lowering office and general expenses and a reduction in professional fees.

Net Losses 

During the nine months ended July 31, 2016, we incurred losses of $28,954 compared to losses of $39,332 incurred during the nine months ended July 31, 2015, a decrease of $10,378 due to the factors discussed above.

Liquidity and Capital Resources

Working Capital

Cash Flows

As at July 31, 2016, we had $13,111 in cash, and liabilities of $92,654 compared to $17,528 cash and $64,817 liabilities as at October 31, 2015. The increase in our working capital deficiency arose due to increase advances from related party.

Cash Flow from Operating Activities

During the nine months ended July 31, 2016, we used $31,202 in our operating activities compared to $51,250 used in operating activities during the nine months ended July 31, 2015. During the nine months ended July 31, 2016 we incurred losses of $28,954 and we increased accounts payable and accrued expenses by $1,052. By comparison, during the nine months ended July 31, 2015 we incurred losses of $39,332 and increased accounts payable and accrued expenses by $3,585.

Cash Flow from Investing Activities

We neither generated funds nor used funds in investing activities during the nine month periods ended July 31, 2016 and 2015, respectively.

Cash Flow from Financing Activities

During the nine months ended July 31, 2016, we received a $26,785 loan from a current officer, compared to a $70,393 loan received from a former officer during the nine months ended July 31, 2015. The decrease in cash flow from financing activities in 2016 reflected our need to fund the decreased cash flow used in operating activities in 2016 as compared to 2015 as described above.

Going Concern

Our financial statements for the three and nine month period ended July 31, 2016 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:

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.

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.

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 July 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 and nine month periods ended July 31, 2016 and July 31, 2015.

Item 3. Defaults Upon Senior Securities

No senior debt was issued or outstanding during the three month periods ended July 31, 2016 and 2015.

Item 4. Mining Safety Disclosures

Not applicable to our company

Item 5. Other Information

None.

Item 6. Exhibits

_______ 

*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.