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 May 31, 2017
or
o	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from _____________to_____________

 

Commission File Number 333-199818

 

SIRRUS CORP.

(Exact name of registrant as specified in its charter)

 

Nevada		81-4158931
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)
11340 Lakefield Drive, Suite 200, Johns Creek GA		30097
(Address of principal executive offices)		(Zip Code)

 

(888) 263-7622

(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, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth 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
		Emerging growth company	x

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) o YES    x NO

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

 

35,763,339 common shares issued and outstanding as of July 12, 2017.

 

TABLE OF CONTENTS

 

PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements			3
Item 2.	Management's Discussion and Analysis of Financial Condition or Plan of Operation			9
Item 3.	Quantitative and Qualitative Disclosures About Market Risk			14
Item 4.	Controls and Procedures			14
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings			15
Item 1A.	Risk Factors			15
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds			15
Item 3.	Defaults Upon Senior Securities			15
Item 4.	Mine Safety Disclosures			15
Item 5.	Other Information			15
Item 6.	Exhibits			16
SIGNATURES				17

 

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PART I - FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

SIRRUS CORP.

Balance Sheets

As of May 31, 2017 and August 31, 2016

(Unaudited)

 

		May 31, 2017				August 31, 2016
ASSETS
Current Assets
Cash and cash equivalents		$	15,563			$	139
Total Current Assets			15,563				139
TOTAL ASSETS		$	15,563			$	139
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts payable and accrued liabilities		$	121,249			$	9,404
Accrued interest			2,847				-
Due to related parties			127,250				-
Due to previous shareholder			-				17,319
Short term notes			84,410				-
Total Current Liabilities			335,756				26,723
STOCKHOLDERS' DEFICIT
Preferred stock, par value $0.00001 per share, 100,000,000 shares authorized, no shares issued and outstanding			-				-
Common stock, par value $0.00001 per share, 200,000,000 shares authorized, 35,763,339 shares issued and outstanding			358				358
Additional paid-in capital			74,251				56,932
Accumulated deficit			(394,802	)			(83,874	)
Total stockholders' deficit			(320,193	)			(26,584	)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT		$	15,563			$	139

 

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

 

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SIRRUS CORP.

Statements of Operations

For the Three and Nine Months Ended May 31, 2017 and 2016

(Unaudited)

 

		For the Three Months Ended								For the Nine Months Ended
		May 31,				May 31,				May 31,				May 31,
		2017				2016				2017				2016
OPERATING EXPENSES
General and administrative		$	180,450			$	13,499			$	308,081			$	20,403
OPERATING LOSS			(180,450	)			(13,499	)			(308,081	)			(20,403	)
Interest expense			(1,573	)			-				(2,847	)			-
NET LOSS		$	(182,023	)		$	(13,499	)		$	(310,928	)		$	(20,403	)
Basic and Diluted Loss per Common Share		$	(0.01	)		$	(0.00	)		$	(0.01	)			(0.00	)
Basic and Diluted Weighted Average Common Shares Outstanding			35,763,339				35,763,339				35,763,339				35,763,339

 

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

 

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SIRRUS CORP.

Statements of Cash Flows

For the Nine Months Ended May 31, 2017 and 2016

(Unaudited)

 

		For the Nine Months Ended
		May 31,				May 31,
		2017				2016
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss		$	(310,928	)		$	(20,403	)
Adjustments to reconcile net loss to net cash used in operating activities:
Changes in operating assets and liabilities:
Prepaid expenses			-				937
Accounts payable and accrued liabilities			111,845				(4,169	)
Accrued interest			2,847				-
Due to related parties			127,250				-
Net cash used in operating activities			(68,986	)			(23,635	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from related party advances			-				15,519
Repayments of related party advances			-				(386	)
Issuance of short term notes			84,410				-
Net cash provided by financing activities			84,410				15,133
Net increase (decrease) in cash and cash equivalents			15,424				(8,502	)
Cash and cash equivalents - beginning of period			139				12,452
Cash and cash equivalents - end of period		$	15,563			$	3,950
Supplemental Cash Flow Disclosures
Cash paid for interest		$	-			$	-
Cash paid for income taxes		$	-			$	-
Non-cash financing transactions
Debt assumed by previous related party		$	17,319			$	-

 

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

 

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SIRRUS CORP.

Notes to the Unaudited Financial Statements

May 31, 2017

 

NOTE 1 - NATURE OF BUSINESS AND CONTINUANCE OF OPERATIONS

 

Sirrus Corp. (the “Company”) was formed on May 7, 2014 in Nevada. The Company was originally engaged in the business of designing, marketing and distributing electronic cigarettes (“e-cigarette”) in East Africa.

 

As of October 14, 2016, a change of control of the Company occurred, the Company now focuses on cyber security.

 

These financial statements have been prepared on a going concern basis which assumes the Company will continue to realize it assets and discharge its liabilities in the normal course of business. As of May 31, 2017, the Company has incurred losses totaling $394,802 since inception, has not yet generated revenue from operations, and will require additional funds to maintain our operations. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they become due. The Company intends to finance operating costs over the next twelve months through continued financial support from its shareholders and private placements of common stock. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation of Interim Financial Statements

 

The accompanying interim unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the nine months ended May 31, 2017 are not necessarily indicative of the results that may be expected for the year ending August 31, 2017. Notes to the unaudited interim financial statements that would substantially duplicate the disclosures contained in the audited consolidated financial statements for fiscal year 2017 have been omitted. This report should be read in conjunction with the audited financial statements and the footnotes thereto for the fiscal year ended August 31, 2016 included in the Company’s Form 10-K as filed with the Securities and Exchange Commission on December 14, 2016.

 

Use of Estimates and Assumptions

 

The preparation of financial statements in conformity with United States generally accepted accounting principles 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. The Company regularly evaluates estimates and assumptions related to deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company's estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

 

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Cash and Cash Equivalents

 

The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents. As of May 31, 2017, and August 31, 2016 the Company had $15,563 and $139 cash and cash equivalents, respectively.

 

Earnings (Loss) Per Common Share ("EPS")

 

Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. At May 31, 2017, the Company had no potentially dilutive securities outstanding.

 

Income Taxes

 

The Company accounts for income taxes using the asset and liability method. The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.

 

Subsequent Events

 

The Company has evaluated all transactions through the financial statement issuance date for subsequent disclosure consideration.

 

Recently Issued Accounting Pronouncements

 

The Company has reviewed recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on our financial statements.

 

NOTE 3 - RELATED PARTY TRANSACTIONS

 

As of May 31, 2017, and August 31, 2016, the Company owed $0 and $17,319, respectively, to its former president and director, for incorporation fees, product purchases, transfer agent fees, and travel expenses that they paid for on the Company’s behalf. The total amount is unsecured, non-interest bearing, and has no specific terms for repayment. On October 18, 2016, the total amounts owing to the former president and director of $17,319 was assumed by a related party.

 

During the nine months ended May 31, 2017, the Company incurred expenses with two related parties for $139,000. As of May 31, 2017, amount owing to these related parties are $127,250.

 

NOTE 4 - PROMISSORY NOTES

 

On October 14, 2016, the Company entered into a promissory note agreement for $25,000. The promissory note bears interest at 8%, and matures one year after issuance. As of May 31 2017, an amount of $1,255 of interest has been accrued.

 

On November 7, 2016, the Company entered into a promissory note agreement for $3,000. The promissory note bears interest at 8%, and matures one year after issuance. As of May 31, 2017, an amount of $135 of interest has been accrued.

 

On December 9, 2016, the Company entered into a promissory note agreement for $3,810. The promissory note is non-interest bearing and matures in June 2017.

 

On January 18, 2017, the Company entered into a promissory note agreement for $50,000. The promissory note bears interest at 8%, and matures one year after issuance. As of May 31, 2017, an amount of $1,457 of interest has been accrued.

 

On May 11, 2017, the Company entered into a promissory note agreement for $1,500. The promissory note is non-interest bearing and matures in June 2017.

 

On May 31, 2017, the Company entered into a promissory note agreement for $1,100. The promissory note is non-interest bearing and matures in June 2017.

 

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NOTE 5 – SUBSEQUENT EVENTS

 

Subsequent to May 31, 2017 and through the date that these financials were made available, the Company had the following subsequent events:

 

On July 6, 2017, the Company entered into a securities purchase agreement for two convertible promissory notes in the aggregate principal amount of $52,500. Each note bears interest at the rate of 10% per annum, and are due on July 6, 2018.

 

The first note was funded on July 10, 2017 for $26,250. Interest will be paid by the Company in common stock.

 

The second $26,250 note is a Back-End Note. In connection with the Back-End Note, the lender issued a secured recourse promissory note to the Company to offset the Back-End Note. During the first six-month period after the first note is issued, the Company may redeem the First Note by paying to an amount equal to 135% of the face amount plus any accrued interest during the first 90 days after issuance; 145% of the face amount plus any accrued interest from the 91st day through the 150th day after issuance; and 150% of the face amount plus any accrued interests from the 151st day through the 180th day after issuance. The first note may not be prepaid after the 180th day after issuance. The Back-End Note may not be prepaid.

 

The holder of the notes may convert all or any amount the principal face amount of the Notes then outstanding and accrued interest into shares of the Company's Common Stock at a price per share equal to 50% of the lesser of the lowest closing bid or the lowest trading price: (i) twenty prior trading days, including the day upon which a Notice of Conversion is received by the Company or (ii) the twenty prior trading days immediately preceding the issuance date of the Notes.

 

On May 8, 2017 (the "Effective Date"), Sirrus Security, Inc. ("Sirrus Security"), a Georgia corporation and wholly-owned subsidiary of the Company, entered into a Strategic Partnership Agreement with RelifyTime, LLC, a Nevada limited liability company ("Relify"), pursuant to which Relify has engaged Sirrus Security to develop and design a software applications program and hosting platform to be known as "Relify Time". As consideration for the development and use of the Product, Relify has agreed to pay Sirrus Security a royalty fee in an amount equal to 40% of the gross profit (gross sales less cost of goods sold), commencing on the date when Relify first sells licensed services incorporating the Product until an aggregate of $500,000 has been paid to Sirrus Security.

 

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Item 2. Management's Discussion and Analysis of Financial Condition or Plan of Operation

 

FORWARD-LOOKING STATEMENTS

 

The information set forth in this Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") contains certain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, including, among others (i) expected changes in our revenue and profitability, (ii) prospective business opportunities and (iii) our strategy for financing our business. Forward-looking statements are statements other than historical information or statements of current condition. Some forward-looking statements may be identified by use of terms such as "believes", "anticipates", "intends" or "expects". These forward-looking statements relate to our plans, liquidity, ability to complete financing and purchase capital expenditures, growth of our business including entering into future agreements with companies, and plans to successfully develop and obtain approval to market our product. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs.

 

Although we believe that our expectations with respect to the forward-looking statements are based upon reasonable assumptions within the bounds of our knowledge of our business and operations, in light of the risks and uncertainties inherent in all future projections, the inclusion of forward-looking statements in this Quarterly Report should not be regarded as a representation by us or any other person that our objectives or plans will be achieved.

 

We assume no obligation to update these forward-looking statements to reflect actual results or changes in factors or assumptions affecting forward-looking statements.

 

Our revenues and results of operations could differ materially from those projected in the forward-looking statements as a result of numerous factors, including, but not limited to, the following: the risk of significant natural disaster, the inability of the our company to insure against certain risks, inflationary and deflationary conditions and cycles, currency exchange rates, and changing government regulations domestically and internationally affecting our products and businesses.

 

You should read the following discussion and analysis in conjunction with the Financial Statements and Notes attached hereto, and the other financial data appearing elsewhere in this Quarterly Report.

 

US Dollars are denoted herein by "USD", "$" and "dollars".

 

Overview

 

We were incorporated under the laws of the State of Nevada on May 7, 2014. Our original business plan was to seek to engage in the designing, marketing and distribution of electronic cigarettes (“e-cigarette”) in East Africa.

 

On October 14, 2016, the Company, Ahmed Guled (the “Selling Stockholder”) and Linux Labs Technologies, Inc., a Georgia corporation entered into a Stock Purchase Agreement, dated October 14, 2016. Ms. Sparrow Marcioni and Mr. Steven James share voting and dispositive control over Linux Labs on a 50/50 basis.

 

Pursuant to the Purchase Agreement, Linux Labs purchased 25 million shares of common stock of the Company held by the Selling Stockholder, representing approximately 69.90% of the issued and outstanding shares of the Company's common stock, and the Indebtedness (as defined below) in consideration for an aggregate purchase price of $50,000, consisting of $10,000 in cash and $40,000 evidenced by a promissory note, dated October 14, 2016, in the principal amount of $40,000, bearing interest at the rate of 6% per annum, maturing on April 14, 2017 and secured by the Shares pursuant to a Stock Pledge Agreement dated October 14, 2016 between the Linux Labs and the Selling Stockholder. Pursuant to the Stock Purchase Agreement, $40,000 of the purchase price was allocated to the shares and $10,000 was allocated to purchase of the Indebtedness.

 

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Pursuant to a Debt Purchase Agreement, dated October 18, 2016, among the Company, Selling Stockholder and Linux Labs, Linux Labs purchased indebtedness owed the Selling Stockholder by the Company.

 

Upon the consummation of the Stock Purchase Agreement and the transactions contemplated thereby, there was a change in control of the Company.

 

As of October 14, 2016 a change of control of the Company occurred, new management was appointed and on October 18, 2016, the Company established a new wholly owned subsidiary, Sirrus Security Inc., a Georgia corporation. With the change of control and the formation of a wholly-owned subsidiary, the Company will now focus on cyber security.

 

On April 26, 2017, Sirrus Security, Inc. (“Sirrus Security”), a Georgia corporation and wholly-owned subsidiary of the Company entered into an Independent Contractor Agreement with American Academy Holdings LLC, a North Carolina limited liability company d/b/a Healthicity (“Healthicity”), pursuant to which Healthcity engaged Sirrus Security to perform the following services to Healthcity and its clients, including, but not limited to the following:

 

	1.	Penetration Testing: Network Discovery, exploration, vulnerability Assessment & Reporting.
	2.	Risk Analysis: Technical Assessment and configuration review and Security Testing and Evaluation

 

After the in-depth penetration and risk analysis, Sirrus Security will provide key findings to Healthicity, including a high level overview, an inventory of identified systems, ports, software versions, and vulnerabilities that may pose a risk, and a detailed report containing serious vulnerabilities with impacts, descriptions, and recommendations.

 

Healthicity may terminate the agreement at any time without cause effective upon five (5) working days' prior written notice to Sirrus Security. In addition, Healthcity may terminate the agreement effective immediately if Sirrus Security is convicted of any crime or offense, fails or refuses to comply with the written policies or reasonable directive of Healthicity, is guilty of serious misconduct in connection with performance hereunder, violates HIPAA Privacy or materially breaches provisions of this agreement.

 

Under the Agreement, in connection with the services, Sirrus Security will have responsibilities with respect to the Use and/or Disclosure of Protected Health Information (“PHI”) as mandated by the Privacy Standards (45 C.F.R. Parts 160 and 164), Electronic Transactions Standards (45 C.F.R. Parts 160 and 162), and Security Standards (45 C.F.R. Parts 160, 162 and 164) promulgated under the Administrative Simplifications subtitle of the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) as well as the data breach notification requirements as promulgated under the American Recovery and Reinvestment Act of 2009 (“ARRA”).

 

On May 8, 2017, Sirrus Security, entered into a Strategic Partnership Agreement with RelifyTime, LLC, a Nevada limited liability company ("Relify"), pursuant to which Relify has engaged Sirrus Security to develop and design a software applications program and hosting platform to be known as "Relify Time".

 

As consideration for the development and use of the product, Relify has agreed to pay Sirrus Security a royalty fee in an amount equal to 40% of the gross profit (gross sales less cost of goods sold), commencing on the date when Relify first sells licensed services incorporating the Product until an aggregate of $500,000 has been paid to Sirrus Security.

 

During the royalty period, Sirrus Security will provide maintenance and support for product. Any support and maintenance services, updates, versions or new releases after the expiration of the royalty period shall be contracted under a separate agreement between the parties to be executed no later than 30 days prior to the end of the royalty period.

 

At any time during the term of the agreement and up to one year thereafter, if Relify decides to sell the product to a third party, Sirrus Security will have a 30-day right of first refusal to acquire the product from Relify. At any time during the term of the agreement and one year thereafter, Relify shall grant Sirrus Security the right of first refusal for any financing transaction, expiring 14 days after notice is given.

 

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Upon the completion of the royalty period, all intellectual property rights developed by Sirrus Security in connection with the provision of the services to Relify under the Agreement, or jointly by Sirrus Security or Relify, or by Sirrus Security pursuant to the specifications or instructions provided by Relify, shall belong exclusively to Relify. All pre-existing intellectual property rights shall remain the sole property of Sirrus Security. Notwithstanding anything contained in the Agreement, Sirrus Security shall be free to use any ideas, concepts, or know-how developed or acquired by Sirrus Security during the performance of the agreement to the extent obtained and retained by Sirrus Security’ personnel.

 

The term of the agreement continues until the completion of the Royalty Period. The agreement may be terminated by either party upon written notice to the other, if the other party breaches any material obligation under the agreement and fails to cure such breach within 30 days of receiving notification. In the case of a termination of the agreement, Relify has agreed to pay Sirrus Security for all services rendered and work performed up to the effective date of the termination.

 

The agreement also contains customary indemnification and confidentiality provisions. Neither party may assign its rights or obligations under the agreement without the prior written consent of the other party.

 

We have not declared bankruptcy, been involved in receivership or any similar proceeding.

 

Our office is located at 11340 Lakefield Drive, Suite 200, Johns Creek GA 30097 and our telephone number is (888) 263-7622. Our registered statutory office is located at 711 S. Carson Street, Suite 6, Carson City, Nevada 89701, (775) 882-4641. We do not own any property.

 

Results of Operations

 

Three Months Ended May 31, 2017 Compared to Three Months Ended May 31, 2016

 

We have not earned any revenues from inception through May 31, 2016.

 

		Three Months Ended May 31, 2017				Three Months Ended May 31, 2016
Revenue		$	-			$	-
Operating Expenses
General and administrative expenses			180,450				13,499
Other Income (expenses)
Interest expense			1,573				-
Net loss		$	(182,023	)		$	(13,499	)

 

Our operating expenses, for the three months ended May 31, 2017 were $180,450 compared to $13,499 for the same period in 2016. The increase in operating expenses was primarily as a result of an increase in management fees, accounting, and consulting fees. During the three months ended May 31, 2017, interest expense of $1,573 was incurred.

 

We incurred a net loss of $182,023 and $13,499 for the three months ended May 31, 2017 and May 31, 2016, respectively.

 

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Nine months Ended May 31, 2017 Compared to Nine months Ended May 31, 2016

 

		Nine months Ended May 31, 2017				Nine months Ended May 31, 2016
Revenue		$	-			$	-
Operating Expenses
General and administrative expenses			308,081				20,403
Other Income (expenses)
Interest expense			2,847				-
Net Loss		$	(310,928	)		$	(20,403	)

 

Our operating expenses, for the nine months ended May 31, 2017 were $308,081 compared to $20,403 for the same period in 2016. The increase in operating expenses was primarily as a result of an increase in management fees, accounting, and consulting fees.

 

We incurred a net loss of $310,928 and $20,403 for the nine months ended May 31, 2017 and May 31, 2016, respectively.

 

Liquidity and Capital Resources

 

Working Capital

 

		May 31, 2017				August 31, 2016
Current Assets		$	15,563			$	139
Current Liabilities		$	335,756			$	26,723
Working Capital Deficit		$	(320,193	)		$	(26,584	)

 

Cash Flows

 

		Nine months Ended				Nine months Ended
		May 31, 2017				May 31, 2016
Cash Flows used in Operating Activities		$	(68,986	)		$	(23,635	)
Cash Flows from Investing Activities			-				-
Cash Flows from Financing Activities			84,410				15,133
Net Increase (Decrease) in Cash		$	15,424			$	(8,502	)

 

As at May 31, 2017, the Company’s cash balance was $15,563 and total assets were $15,563. As at August 31, 2016, our company’s cash balance was $139 and total assets were $139.

 

As at May 31, 2107, the Company had total liabilities of $335,756, compared with total liabilities of $26,723 as at August 31, 2016.

 

As at May 31, 2017, the Company had working capital deficiency of $320,193 compared with working capital deficiency of $26,862 as at August 31, 2016. The decrease in working capital was primarily attributed to increase in accounts payable, due to related parties, and short term notes.

 

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Cash Flow from Operating Activities

 

During the nine months ended May 31, 2017, the Company used $68,986 in cash from operating activities, compared to $23,635 cash used in operating activities during the nine months ended May 31, 2016. The cash used from operating activities for the nine months ended May 31, 2017 was attributed to a net loss of $310,928, offset by an increase in accounts payable and accrued liabilities of $111,845, accrued interest of $2,847, and an increase in due to related parties of $127,250.

 

Cash Flow from Investing Activities

 

During the nine months ended May 31, 2017, the Company used $0 in investing activities compared to $0 used in investing activities during the nine months ended May 31, 2016.

 

Cash Flow from Financing Activities

 

During the nine months ended May 31, 2017 our company received $84,410 from financing activities compared to $15,133 received from financing activities during the nine months ended May 31, 2016. The cash flow for financing activities for the nine months ended May 31, 2017, was a result of the issuance of short term notes for $84,410.

 

Going Concern

 

There is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay for our expenses. This is because we have not generated sufficient revenues to cover operating costs or raised enough funds. There is no assurance we will ever reach this point. Accordingly, we must raise sufficient capital from sources. We must raise cash to stay in business. In response to these problems, management intends to raise additional funds through public or private placement offerings. At this time, however, the Company does not have plans or intentions to raise additional funds by way of the sale of additional securities.

 

Critical Accounting Policies

 

Use of Estimates

 

The discussion and analysis of our financial condition and results of operations is based upon the accompanying financial statements, which have been prepared in accordance with the accounting principles generally accepted in the United States of America and are expressed in United States Dollars. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management’s application of accounting policies. We believe that understanding the basis and nature of the estimates and assumptions involved with the following aspects of our financial statements is critical to an understanding of our financial statements.

 

Revenue Recognition

 

Revenue from the sale of goods is recognized when the following conditions are satisfied:

 

	·	Our company has transferred to the buyer the significant risks and rewards of ownership of the goods;
	·	Our company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
	·	The amount of revenue can be measured reliably;
	·	It is probable that the economic benefits associated with the transaction will flow to the entity; and
	·	The costs incurred or to be incurred in respect of the transaction can be measured reliably.

 

Stock-Based Compensation

 

Compensation costs attributable to stock options or similar equity instruments granted are measured at the fair value at the grant date, and expensed over the expected vesting period. We did not grant any stock options during the nine months ended May 31, 2017.

 

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Recent Accounting Pronouncements

 

In August 2014, the Financial Accounting Standards Board issued Accounting Standards Update 2014-15, Presentation of Financial Statements - Going Concern. The Update provides U.S. GAAP guidance on management’s responsibility in evaluating whether there is substantial doubt about a company’s ability to continue as a going concern and about related footnote disclosures. For each reporting period, management will be required to evaluate whether there are conditions or events that raise substantial doubt about a company’s ability to continue as a going concern within one year from the date the financial statements are issued. The amendments in this Update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Our Company adopted this pronouncement effective for the period ended May 31, 2017, the adoption did not have a material impact to the consolidated financial statements..

 

Off-Balance Sheet Arrangements

 

We have no 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 stockholders.

 

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

 

Management’s Report on 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 president (our principal executive officer, principal financial officer and principal accounting officer) to allow for timely decisions regarding required disclosure.

 

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our president (our principal executive officer, 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 president (our principal executive officer, principal financial officer and principal accounting officer) concluded that our disclosure controls and procedures were not effective in providing reasonable assurance in the reliability of our reports as of the end of the period covered by this quarterly report.

 

Changes in Internal Control Over Financial Reporting

 

During the period covered by this report there were no changes in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

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PART II - OTHER INFORMATION

 

Item 1. Legal Proceedings

 

From time to time, we may become involved in litigation relating to claims arising out of its operations in the normal course of business. We are not involved in any pending legal proceeding or litigation and, to the best of our knowledge, no governmental authority is contemplating any proceeding to which we area party or to which any of our properties is subject, which would reasonably be likely to have a material adverse effect on us.

 

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

 

None.

 

Item 3. Defaults Upon Senior Securities

 

None.

 

Item 4. Mine Safety Disclosures

 

Not Applicable.

 

Item 5. Other Information

 

None.

 

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Item 6. Exhibits

 

The following exhibits are included as part of this report:

 

Exhibit Number		Description
(31)		Rule 13a-14(a)/15d-14(a) Certification
31.1		Section 302 Certification under the Sarbanes-Oxley Act of 2002 of the Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer
(32)		Section 1350 Certification
32.1		Section 906 Certification under the Sarbanes-Oxley Act of 2002 of the Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer
101		Interactive Data Files
101.INS*		XBRL Instance Document
101.SCH*		XBRL Taxonomy 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

_________

* XBRL Information is furnished and not filed or a part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

 

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SIGNATURES

 

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

 

	SIRRUS CORP.
	(Registrant)
Dated: July 20, 2017	/s/ Sparrow Marcioni
	Sparrow Marcioni
	President, Chief Executive Officer, Secretary, Treasurer and Director
	(Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)

 

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