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EX-32 - EXHIBIT 32 - Darkstar Ventures, Inc.exhibit32.htm
EX-31.2 - EXHIBIT 31.2 - Darkstar Ventures, Inc.exhibit31-2.htm
EX-31.1 - EXHIBIT 31.1 - Darkstar Ventures, Inc.exhibit31-1.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

  

FORM 10-Q

  

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934

 

For the quarter ended October 31 2017

 

[  ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934

  

Commission file number:000-54649

  

DARKSTAR VENTURES, INC.

 

(Exact name of registrant as specified in its charter)

  

Nevada   26-0299456
(State of incorporation)   (I.R.S. Employer Identification No.)

 

7 ELIEZRI STREET

JERUSALEM , ISRAEL

(Address of principal executive offices)

PHONE 972-544592892

  

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See 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 [ ] Smaller reporting company [X]
(Do not check if a smaller reporting company)      

 

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 December 20, 2017 647,345,000 shares of common stock, par value $0.0001 per share, were issued and outstanding

 

 

 

 

 

 

 

 

 

DARKSTAR VENTURES, INC.

 

FORM 10-Q

 

QUARTER ENDED OCTOBER 31 2016

 

TABLE OF CONTENTS

   
  Page
PART I  
Item 1. Financial Statements 2
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 13
Item 3 Quantitative and Qualitative Disclosures About Market Risk 15
Item 4 Controls and Procedures 15
PART II  

Item I. Legal proceedings

 

16
Item 1a Risk Factors 16
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 16
Item 3. Defaults Upon Senior Securities 16
Item 4. Mine Safety Disclosures 16
Item 5. Other Information 16
Item 6. Exhibits 16
Signatures 17

  

 

 

 

 

 

 1 
 

 

  

PART I  FINANCIAL INFORMATION

 

Item 1. Financial Statements.

   

 

 

DARKSTAR VENTURES, INC.

 

INTERIM CONSOLIDATED FINANCIAL STATEMENTS

 

AS OF OCTOBER 31, 2017

IN U.S. DOLLARS

 

 

UNAUDITED

 

 

TABLE OF CONTENTS

 

 

  Page
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS:  
Condensed Consolidated Balance sheets as of October 31, 2017(Unaudited)  and July 31, 2017 3
Condensed Consolidated Statements of Comprehensive Loss for the three months  
ended October 31, 2017 and 2016 (Unaudited) 4
Condensed Consolidated Statements of stockholders' deficit for the period of three months  
ended October 31, 2017 and 2016 (Unaudited) 5
Condensed Consolidated Statements of cash flows for the three months  
ended October 31, 2017 and 2016 (Unaudited) 6
Notes to condensed unaudited interim financial statements 7 - 12

 

 

 2 
 

 

 

DARKSTAR VENTURES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

   October 31,  July 31,
   2017  2017
      Audited
A s s e t s          
CURRENT ASSETS:          
Cash and cash equivalents  $19,687   $34,205 
related parties   158,660    135,644 
Other current assets   23,955    26,859 
          T o t a l  current assets   202,302    196,708 
           
LAND DEVELOPMENT COSTS   11,360    11,243 
           
PROPERTY AND EQUIPMENT, NET   4,178    4,680 
           
OTHER ASSETS   26,407    32,445 
           
          T o t a l  assets  $244,247   $245,076 
           
             Liabilities and Stockholders’ Deficit          
CURRENT LIABILITIES:          
Trade payables  $24,947   $24,001 
Other accounts payables and accrued expenses   31,147    13,478 
T o t a l  current liabilities   56,094    37,479 
           
LONG TERM LOAN   630,417    583,574 
           
STOCKHOLDERS' EQUITY (DEFICIENCY):          
Preferred stock, 5,000,000 shares authorized, par value $0.0001, none issued and outstanding
Common shares par value $0.0001:
Authorized: 2,000,000,000 shares at October 31, 2017 and July 31, 2017.
Issued and outstanding: 647,345,000 shares at October 31, 2017 and July 31, 2017.
   64,734    64,734 
Additional paid-in capital   575,851    575,851 
Accumulated other comprehensive income   (26,627)   (18,033)
Receivables on account of shares issued   —      (12,561)
Accumulated deficit   (1,056,222)   (985,968)
T o t a l  Stockholders’ Equity (Deficiency)   (442,264)   (375,977)
T o t a l  liabilities and Stockholders’ Equity (Deficiency)  $244,247   $245,076 

 

The accompanying notes are an integral part of the consolidated financial statements.

 

Director: _______________

 

Date:_________________

 

 3 
 

 

DARKSTAR VENTURES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited)

 

 

 

       
       
   Three months ended
   October 31
   2017  2016
    

$

      
           
           
Project development and general and administrative expenses  $35,359   $31,802 
  Operating loss   (35,359)   (31,802)
           
Interest expense, net   (26,301)   (15,382)
  Net loss  $(61,660)  $(47,184)
           
Other comprehensive loss - Foreign currency gain (loss)   (8,594)   (862)
  Comprehensive loss  $(70,254)  $(48,046)
           
           
Basic and diluted net loss per common share  $(0.00)  $(0.00)
           
Weighted average number of common shares outstanding during the period – basic and diluted   647,345,000    647,345,000 
           

 

The accompanying notes are an integral part of the consolidated financial statements.

 

 4 
 

 

DARKSTAR VENTURES, INC.

 

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT)

 

   Common Stock, $0.0001 Par Value 

 

Receivables on

  Foreign currency  Additional paid-in  Accumulated  Total Stockholders'
   Shares  Amount 

account of

shares issued

 

translation

adjustments

  Capital  deficit  Equity (deficit)
                      
BALANCE AT JULY 31, 2017 (audited)   647,345,000   $64,734   $(12,561)  $(18,033)  $575,851   $(985,968)  $(375,977)
                                    
Received on account of shares issued             12,561                   12,561 
Foreign currency translation adjustments                  (8,594)             (8,594)
Net loss for the three months ended October 31, 2016                  —           (70,254)   (70,254)
BALANCE AT OCTOBER 31, 2017 (Unaudited)   647,345,000   $64,734    —     $(26,627)  $575,851   $(1,056,222)  $(442,264)

 

 

 

   Common Stock, $0.0001 Par Value 

 

Receivables on

  Foreign currency  Additional paid-in  Accumulated  Total Stockholders'
   Shares  Amount 

account of

shares issued

 

translation

adjustments

  Capital  deficit  Equity (deficit)
                      
BALANCE AT JULY 31, 2016 (audited)   647,345,000   $64,734   $(150,000)  $(862)  $511,116   $(599,125)  $(174,137)
                                    
Received on account of shares issued             120,000                   120,000 
Foreign currency translation adjustments                  173              173 
Net loss for the three months ended October 31, 2016                  —           (48,046)   (48,046)
BALANCE AT OCTOBER 31, 2016 (Unaudited)   647,345,000   $64,734    (30,000)  $(689)  $511,116   $(647,171)  $(102,010)

 

 

The accompanying notes are an integral part of the consolidated financial statements.

 5 
 

 

DARKSTAR VENTURES, INC.

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

       
       
   Three months ended
   October 31
   2017  2016
    

$

      
CASH FLOWS FROM OPERATING ACTIVITIES:          
Net loss  $(70,254)  $(48,046)
Adjustments required to reconcile net loss          
to net cash used in operating activities:          
   Depreciation   502    —   
Land development cost   (117)   —   
Increase in accrued interest on long term loan   46,843    13,623 
Increase in accrued interest on related party loan   (23,016)   —   
Increase in prepaid expenses and other receivables   8,942    (97,202)
Increase (decrease) in other account payables   18,615    (7,617)
Net cash used in operating activities   (18,485)   (139,242)
           
CASH FLOWS FROM INVESTING ACTIVITIES:   —      —   
           
CASH FLOWS FROM FINANCING ACTIVITIES:          
       Proceeds from receivables on account of shares   12,561    120,000 
Net cash provided by financing activities   12,561    120,000 
           
 INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS   (5,924)   (19,242)
           
EFFECT OF EXCHANGE RATE CHANGES   (8,594)   173 
           
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD   34,205    53,609 
           
CASH AND CASH EQUIVALENTS AT END OF PERIOD  $19,687   $34,540 

 

 

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:          
Cash paid during the period for:          
      Interest  $—     $—   
      Income taxes  $—     $—   

 

The accompanying notes are an integral part of the consolidated financial statement

 

 6 
 

 

DARKSTAR VENTURES, INC.

 

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

 

NOTE 1 - GENERAL

 

Darkstar Ventures, Inc. (“the Company” or “we”) was incorporated on May 8, 2007 under the laws of the State of Nevada. 

 

The Company established a wholly-owned subsidiary in Israel, Bengio Urban Renewals Ltd ("Bengio")., to focus its limited resources in the area of real estate development, particularly focusing on the urban renewal market in Israel.

 

The Company’s activities are subject to significant risks and uncertainties, including failing to secure additional funding to operationalize the Company’s current business plan.

 

Basis of Presentation

The Company maintains its accounting records on an accrual basis in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”).

 

These financial statements are presented in US dollars.

 

Fiscal Year End

The Corporation has adopted a fiscal year end of July 31.

 

NOTE 2 - INTERIM FINANCIAL STATEMENTS

 

The accompanying unaudited interim consolidated financial statements as of October 31, 2017 and for the three months then ended, have been prepared in accordance with accounting principles generally accepted in the United States relating to the preparation of financial statements for interim periods. Accordingly, they do not include all the information and footnotes required for annual financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended October 31, 2017 are not necessarily indicative of the results that may be expected for the year ending July 31, 2018.

 

The July 31, 2017 Condensed Balance Sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. These financial statements should be read in conjunction with the financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K/A for the year ended July 31, 2017.

 

 

NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES

 

The principal accounting policies are set out below, these policies have been consistently applied to the period presented, unless otherwise stated:

 

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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 or revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

 7 
 

Functional currency

The functional currency of the Company is the U.S. dollar (“$” or “dollar"), which is the currency of the primary economic environment in which the operations of the Company are conducted. The functional currency of its foreign subsidiary is the New Israeli Shekel ("NIS").

 

The financial statements of the subsidiary were translated into dollars in accordance with the relevant standards of the Financial Accounting Standards Board ("FASB"). Accordingly, assets and liabilities were translated from NIS to $ using year-end exchange rates and income and expense items were translated at average exchange rates during the year.

 

Gains or losses resulting from translation adjustments are reflected in stockholders' deficit, under “accumulated other comprehensive income (loss)”.

 

Principles of consolidation

The consolidated financial statements include the accounts of the Company, the wholly owned subsidiaries of Bengio Urban Renewals Ltd for the quarter ended October 30, 2017. Significant intercompany balances and transactions have been eliminated.

  

Cash and cash equivalents

Cash and equivalents include investments with initial maturities of three months or less. The Company maintains its cash balances at credit-worthy financial institutions that are insured by the Federal Deposit Insurance Corporation ("FDIC") up to $250,000.

 

Property, plant and equipment

Property, plant and equipment (“PPE”) are stated at cost less accumulated depreciation and amortization.  Expenditures for maintenance and repairs are charged to expense as incurred.  Additions, improvements and major replacements that extend the life of the asset are capitalized.

 

Depreciation and amortization is recorded using the straight-line method over the estimated useful lives of depreciable assets, which are generally three to five years.

 

Land development costs

Land development costs, including estimated value of land, under TAMA 38 purchase agreements are capitalized when definite agreement is signed with the tenants. Tax arising from such agreements is recorded as Obligation under construction agreements when the Company can estimate the tax obligation.

 

Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses are carried at amortized cost and represent liabilities for goods and services provided to the Company prior to the end of the financial year that are unpaid and arise when the Company becomes obliged to make future payments in respect of the purchase of these goods and services.

 

Revenue Recognition

The Company recognizes revenue when all of the following have occurred: persuasive evidence of an agreement with the customer exists, delivery has occurred or services have been rendered, the selling price is fixed or determinable and collectability of the selling price is reasonably assured.

 

The Company recognizes revenues when title has passed to the customer, which is generally when products are shipped.

 

Cost of Sales

Cost of sales consists of the cost of merchandise sold to customers.

 

 8 
 

Income taxes

Income taxes are accounted for in accordance with ASC Topic 740, “Income Taxes.” Under the asset and liability method, deferred tax assets and liabilities are recognized for the future consequences of differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases (temporary differences). Deferred tax assets and liabilities are measured using tax rates expected to apply to taxable income in the years in which those temporary differences are recovered or settled. Valuation allowances for deferred tax assets are established when it is more likely than not that some portion or all of the deferred tax assets will not be realized.

 

Share-base payments

Share-based payments to employees are measured at the fair value of the options issued and amortized over the vesting periods. Share-based payments to non-employees are measured at the fair value of the goods or services received or the fair value of the equity instruments issued if it is determined the fair value of the goods or services cannot be reliably measured, and are recorded at the date the goods or services are received. The amount recognized as an expense is adjusted to reflect the number of awards expected to vest. The offset to the recorded cost is to share-based payments reserve. Consideration received on the exercise of stock options is recorded as capital stock and the related share-based payments reserve is transferred to share capital.

 

Earnings per share

The Company computes net loss per share in accordance with ASC 260, “Earnings Per Share” ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic EPS is calculated by dividing the profit or loss attributable to common shareholders of the Company by the weighted average number of common shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to common shareholders and the weighted average number of common shares outstanding for the effects of all potential dilutive common shares. As at March 31, 2017 the Company had no potentially dilutive shares.

 

Fair Value of Financial Instruments

The Company measures assets and liabilities at fair value based on an expected exit price as defined by the authoritative guidance on fair value measurements, which represents the amount that would be received on the sale of an asset or paid to transfer a liability, as the case may be, in an orderly transaction between market participants. As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level.

 

The following are the hierarchical levels of inputs to measure fair value:

- Level 1: Quoted prices in active markets for identical instruments;

- Level 2: Other significant observable inputs (including quoted prices in active markets for similar instruments);

- Level 3: Significant unobservable inputs (including assumptions in determining the fair value of certain investments).

 

Adoption of New Accounting Standards

ASC Update 2014-15 “Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern"

 

In August 2014, the FASB issued ASC Update 2014-15, "Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern" ("ASU 2014-15"). ASU 2014-15 provide guidance on management’s responsibility in evaluating whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued (or within one year after the date that the financial statements are available to be issued when applicable). ASU 2014-15 also provide guidance related to the required disclosures as a result of management evaluation.

 

 9 
 

The amendments in ASU 2014-15 became effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Management applied the guidance of ASU 2014-15 to these financial statements and has determined that there is a substantial doubt about the Company’s ability to continue as a going concern. Certain disclosures were updated to conform to the disclosures required under ASU 2014-15.

 

Newly issued accounting pronouncements

ASC Update 2014-09 “Revenue from Contracts with Customers (Topic 606)” and Related Updates

 

In May of 2014, the FASB issued ASC Update 2014-09, “Revenue from Contracts with Customers (Topic 606).” ASC Update 2014-09 provides guidance for the recognition, measurement and disclosure of revenue related to the transfer of promised goods or services to customers. This update was effective for fiscal years beginning after December 15, 2016, for which early adoption was prohibited.

 

However, in August of 2015, the FASB issued ASC Update 2014-14, “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date,” deferring the effective date of ASC Update 2014-09 to fiscal years beginning after December 15, 2017(the first quarter of fiscal year 2018 for the Company), and permitting early adoption of this update, but only for annual reporting periods beginning after December 15, 2016, and interim reporting periods within that reporting period.

 

During 2016, the FASB issued several Accounting Standard Updates that focuses on certain implementation issues of the new revenue recognition guidance including Narrow-Scope Improvements and Practical Expedients, Principal versus Agent Considerations and Identifying Performance Obligations and Licensing.

 

An entity should apply the amendments in this ASU using one of the following two methods: 1. retrospectively to each prior reporting period presented with a possibility to elect certain practical expedients, or, 2. Retrospectively with the cumulative effect of initially applying ASU 2014-09 recognized at the date of initial application. If an entity elects the latter transition method, it also should provide certain additional disclosures.

 

The Company intends to adopt ASU 2014-09 as of January 1, 2018. The Company is in the process of evaluating the impact of ASU 2014-09 on its potential revenue streams, if any, and on its financial reporting and disclosures. Management is expecting to complete the evaluation of the impact of the accounting and disclosure changes on the business processes, controls and systems throughout 2017. Since the company did not report any revenues since its inception, management believes that the adoption of ASU 2014-09 will not have significant impact on its financial statements.

 

NOTE 4 –LOAN TO RELATED PARTY

   October 30,  July 31,
  

2017

(unaudited)

 

2017

(Audited)

     $    $ 
           
Loan to related party   158,660    135,644 
           
The above loan is unsecured, bears 26% annum interest. This loan is repayable till October 2018.          

 

 

 10 
 

 

NOTE 5 - GOING CONCERN

 

The Company has not commenced planned principal operations. The Company had an accumulated deficit of $1,056,222 as of October 31, 2017. In addition, the Company continues to have negative cash flows from operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

 

There can be no assurance that sufficient funds required during the next year or thereafter will be generated from operations or that funds will be available from external sources such as debt or equity financings or other potential sources. The lack of additional capital resulting from the inability to generate cash flow from operations or to raise capital from external sources would force the Company to substantially curtail or cease operations and would, therefore, have a material adverse effect on its business. Furthermore, there can be no assurance that any such required funds, if available, will be available on attractive terms or that they will not have a significant dilutive effect on the Company’s existing stockholders.

 

The accompanying 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.

 

 

NOTE 6 – INCOME TAXES

 

The benefit for income taxes for the periods ended October 30, 2017 and July 31, 2017 differ from the amount which would be expected as a result of applying the statutory tax rates to the losses before income taxes due primarily to changes in the valuation allowance to fully reserve net deferred tax assets.

Realization of deferred tax assets is dependent upon sufficient future taxable income during the period that deductible temporary differences and carry-forwards are expected to be available to reduce taxable income.

The components of these differences are as follows:

   October 30,  October 30,
   2017  2016
    (Unaudited)    (Unaudited) 
    $    $ 
Net tax loss carry-forwards   (70,254)   (48,046)
    Statutory rate   15%   15%
    Expected tax recovery   (10,538)   (7,207)
    Change in valuation allowance   10,538    7,207 
Income tax provision   —      —   
           
    October 30,    July 31, 
    2017    2017 
    (Unaudited)    (Audited) 
    $    $ 
Components of deferred tax assets:          
    Non capital tax loss carry forwards   (158,433)   (147,895)
   Less: valuation allowance   158,433    147,895 
Net deferred tax asset   —      —   

 

The Company has provided a valuation allowance against the full amount of the deferred tax asset due to management’s uncertainty about its realization. As of October 30, 2017 the Company had approximately $1,056,222 in tax loss carryforwards that can be utilized future periods to reduce taxable income, and expire by the year 2037.

 

 11 
 

NOTE 7 – RELATED PARTY TRANSACTIONS

 

Details of transactions between the Corporation and related parties are disclosed below.

 

The following entities have been identified as related parties:

Avraham Bengio Director and greater than 10% stockholder

 

The following transactions were carried out with related parties:

   October 30,  July 31,
   2017  2017
    (Unaudited)    (Audited) 
    $    $ 
Balance sheet:          
  Loan to related party   158,660    135,644 
           

 

The above loan is unsecured, bears 26% annum interest. This loan is repayable till October 2018.

 

 

NOTE 8 – SUBSEQUENT EVENTS

 

In accordance with ASC 855-10, Company management reviewed all material events through the date of this report and determined that there are no additional material subsequent events to report.

 

 

 12 
 

 

Item 2. Management ’ s Discussion and Analysis or Plan of Operations.

 

As used in this Form 10-Q, references to “Darkstar ", the ” Company, ”“ we, ”“ our ” or “ us ” refer to Darkstar, unless the context otherwise indicates.

 

Forward-Looking Statements

 

The following discussion should be read in conjunction with our unaudited financial statements, which are included elsewhere in this Form 10-Q (the “ Report” ). This Report contains forward-looking statements which 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.

 

Corporate Background and Business Overview

 

We were incorporated on May 8, 2007 in the State of Nevada. We are a development stage company that was originally established to offer eco-friendly health and wellness products to the general public via the internet. As we had previously disclosed, on November 20, 2012, we entered into a binding letter of intent (“LOI”) with Real Aesthetic, Inc., a Nevada corporation (“Real Aesthetic”), to acquire all of the issued and outstanding shares of common stock in exchange for common stock of the Company. The closing of the transactions contemplated by the LOI was subject to the completion of the due diligence investigation of both parties, execution and delivery of documentation for the transaction, consents from the respective boards of directors of both companies and any third parties and the delivery of audited financial statements by Real Aesthetic. Subsequently, we decided not to pursue the contemplated transaction with Real Aesthetic. The Company has since abandoned its business plan.

  

The Registrant has recently determined, through its recently established, wholly-owned new Israeli subsidiary, Bengio Urban Renewals Ltd to focus its limited resources in the area of real estate development, particularly focusing on the urban renewal market in Israel. We believe, based upon the current real estate market in Israel, that urban renewal projects present an opportunity for us to generate revenues and profits, which we have never experienced since our inception.  The basis for our belief is that in several major Israeli cities, there is virtually no more room to grow. As a result, several municipal governments have allowed older buildings to be renovated, thereby giving their respective cities the opportunity to develop new apartments to be added to or replacing existing buildings. 

 

Additionally, municipalities have express their concern that many buildings constructed before 1980 will be unable to withstand earthquakes. In Israel, very few apartment buildings are owned by a single person or entity and since the majority of apartments within buildings are privately owned, the burden to renovate buildings in order to render them safer in the event of a major earthquake primarily falls on the multiple owners of various apartment buildings and complexes. 

 

“Tama 38” is an Israeli national zoning plan whereby a contractor assumes the responsibility of renovating an apartment building. In exchange for covering all costs of renovations, securing building permits and paying requisite taxes, the contractor has is granted the right to build additional floors to the existing building and sell the apartments built on these floors. 

 

The apartment owners benefit by receiving a modernized building, strengthened against earthquakes, as well as the additional apartments added to their buildings. In some cases balconies, storage rooms, parking spaces and elevators may be added as well, further enhancing the building’s value.

 

 

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“PinuiBinui” projects are defined as development where the residents of apartments are temporarily evacuated so that the buildings may be demolished and rebuilt.  The tenants then return to new apartments in the newly finished and renovated building.  The contractor pays all costs for demolition, construction, relocating apartment owners and renting their temporary homes during construction.  In exchange, the contractor adds new apartments in the building which are sold to generate profit.

  

 

 

As with “Tama 38,” the value of the apartments in the building is increased thereby benefitting the owners and the tenants return to a new, often larger and safer apartment in a building often with more amenities.

 

Since February 2016, the Registrant’s Board of Directors authorized the establishment of a new  wholly-owned Israeli subsidiary, Bengio Urban Renewals Ltd (“Bengio Urban”) to focus its limited resources in the area of real estate development, particularly focusing on the urban renewal market in Israel. To that end, the Registrant raised $150,000 from the sale of restricted shares to investors to fund the new real estate development operations of Bengio Urban, which has recently hired employees and has signed contracts with the current tenants of three buildings who have agreed to vacate the buildings so that they can be redeveloped into modern state of the art new residential buildings .

 

On February 16, 2016, the Board of Directors of the Company and the holder of a majority of the issued and outstanding shares of common stock of the Company (the "Majority Consenting Stockholder"), together, executed a joint written consent to authorize and approve a Certificate of Amendment to the Company's Articles of Incorporation to increase the authorized capital stock of the Company from 505,000,000 shares (the "Capital Stock"), consisting of 500,000,000 shares of common stock, par value $0.0001 (the "Common Stock") and 5,000,000 shares of preferred stock, par value $0.0001 (the "Preferred Stock"), to an authorized capital stock of the Corporation of 2,005,000,000 shares consisting of 2,000,000,000 shares of Common Stock and five million 5,000,000 shares of Preferred Stock. It was also decided that the Board of Directors shall have the authority to establish one or more series of Preferred Stock and fix relative rights and preferences of any series of Preferred Stock, without any further action or approval of our stockholders.

 

Other than our current director and officer, we employ addition 2 employees as of October 31, 2017

 

Transfer Agent

 

We have engaged Vstock Transfer LLC, 77 Spruce Street, Suite 201, Cedarhurst, NY, 11516 as our stock transfer agent. Their telephone number is (212) 828-8436 and their fax number is (646) 536-3179. The transfer agent is responsible for all record-keeping and administrative functions in connection with our issued and outstanding common stock.

  

Results of Operations

 

Results of operations for the three months ended October 31, 2017

 

The Company did not generate any revenues from operations for the three months ended October 31, 2017

 

During the three months ended October 31, 2017 the operating expenses and the comprehensive loss was $35,359 and $70,254 respectively. The operating expenses and comprehensive loss was primarily the result of professional fees, legal, auditing and other consulting fees associated with SEC compliance and operating expenses in the subsidiary from its commencement of its business activities .

 

We expect to continue to incur significant operating expenses. As a result, we will need to generate significant revenues to achieve profitability, which may not occur. Even if we do achieve profitability, we may be unable to sustain or increase profitability on a quarterly or annual basis in the future.

  

Liquidity and Capital Resources

 

Our cash balance as of October 31, 2017 was $19,687. The Company is currently seeking to raise additional equity thru private placements to enable the continuation of its current TAMA 38 business plan ..

  

 

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Going Concern Consideration

 

Our auditors have issued an opinion on our annual financial statements which includes a statement describing our going concern status. This means that 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 our bills and meet our other financial obligations. This is because we have not generated any revenues and no revenues are anticipated until we begin marketing the product which cannot be guaranteed.

     

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 are material to investors.

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

 

A smaller reporting company, as defined by Item 10 of Regulation S-K, is not required to provide the information required by this item.

   

Item 4. Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures

 

The Company's Chief Executive Officer, who is also the Chief Financial and Accounting Officer, evaluated the effectiveness of the Company's disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this quarterly report. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and our management is required to apply their judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based upon that evaluation, the CEO  concluded that, as of October 31 , 2017 , the Company’s disclosure controls and procedures were not effective to provide reasonable assurance that information required to be disclosed in the reports that the Company files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the applicable rules and forms, and that it is accumulated and communicated to management, including the CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.   As a result of this evaluation, management identified the following deficiencies, which are deemed to be material weaknesses:

  

☐        Due to the size of the Company, there is a lack of segregation of duties, which would allow for proper processing, review and approval of transactions and events that have an impact on the Company’s financial results.

 

☐        The Company lacks a system to allow for the review and monitoring of internal control over financial reporting, which would mitigate concerns related to management’s override of controls.

 

☐        The Company lacks an independent Audit Committee, which can provide oversight of management and the financial reporting process.

   

Changes in Internal Control over Financial Reporting

 

There were no changes in our internal controls over financial reporting for the three months ended October 31, 2017 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

 

 

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PART II OTHER INFORMATION

 

Item A . Legal Proceedings

 

None

 

Item 1 A. Risk Factors

 

A smaller reporting company, as defined by Item 10 of Regulation S-K, is not required to provide the information required by this item.

 

 

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

 

During the quarter ended October 31, 2017, the Company did not issue any shares of unregistered common stock.

  

Item 3. Defaults Upon Senior Securities.

 

None

 

Item 4. Mine Safety Disclosures

 

None

 

Item 5. Other Information.

 

None

 

Item 6. Exhibits

  

31.1 and 31.2 Certification of Principal Executive and Financial Officer pursuant to Section 302 of  the Sarbanes-Oxley Act
   
32 Certification of Principal Executive and Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act

    

 

 

 

 

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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.

   

DARKSTAR VENTURES INC

 

December 20, 2017

  

/s/ Avraham Bengio 
AvramBengio
CEO / Director and Internal Accounting Officer

   

 

 

 

 

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