UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 10-Q

 

(Mark One)

 

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended February 28, 2021
or
☐	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from _________ to _________

 

Commission File Number 333-190658

 

Startech Labs, Inc.

(Exact name of registrant as specified in its charter)

 

Nevada		N/A
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

 

244 Madison Avenue, New York City, NY		10016-2817
(Address of principal executive offices)		(Zip Code)

 

(802) 255-4212

(Registrant’s telephone number, including area code)

 

____________________________________________________

(Former name, former address and former fiscal year, if changed since last report)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☐ YES     ☒ NO

 

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ☐ YES     ☒ NO

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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	☐	Smaller reporting company	☒
		Emerging growth company	☒

 

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. ☐

 

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

 

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS

 

Check whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. ☐ YES     ☐ NO

 

APPLICABLE ONLY TO CORPORATE ISSUERS

 

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

 

60,648,433 common stock issued and outstanding as of March 31, 2021

 

  

FORM 10-Q

 

TABLE OF CONTENTS

 

PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements		3
Item 2.	Management s Discussion and Analysis of Financial Condition and Results of Operations		13
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		17
Item 4.	Controls and Procedures		17
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings		18
Item 1A.	Risk Factors		18
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		18
Item 3.	Defaults Upon Senior Securities		18
Item 4.	Mine Safety Disclosures		18
Item 5.	Other Information		18
Item 6.	Exhibits		19
SIGNATURES			20

 

2

  

PART I - FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

STARTECH LABS, INC.

BALANCE SHEETS

(Unaudited)

 

		February 28,				May 31,
		2021				2020
ASSETS
Current Assets
Total Current Assets		$	-			$	-
Intangible Assets			400				-
Total Assets		$	400			$	-
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts payable and accrued liabilities		$	2,974			$	4,225
Accrued interest			43,610				23,986
Convertible notes			129,402				113,670
Total Current Liabilities			175,986				141,881
Total Liabilities			175,986				141,881
STOCKHOLDERS' DEFICIT
Common Stock: $0.001 par value, 75,000,000 shares authorized, 60,648,433 shares and 55,148,433 issued and outstanding, respectively			60,648				55,148
Additional paid-in capital			38,654,622				38,622,389
Accumulated deficit			(38,890,856	)			(38,819,418	)
Total Stockholders' Deficit			(175,586	)			(141,881	)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT		$	400			$	-

 

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

 

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STARTECH LABS, INC.

STATEMENTS OF OPERATIONS

(Unaudited)

  

		For the Three Months Ended								For the Nine Months Ended
		February 28,				February 29,				February 28,				February 29,
		2021				2020				2021				2020
Operating Expenses
General and administration			450				450				1,350				2,350
Professional			4,524				4,411				23,732				23,633
Stock based compensation			-				38,500,000				-				38,500,000
Total operating expenses			4,974				38,504,861				25,082				38,525,983
Net loss from operations			(4,974	)			(38,504,861	)			(25,082	)			(38,525,983	)
Other expense
Interest expense			(9,820	)			(11,811	)			(46,356	)			(72,492	)
Total other expense			(9,820	)			(11,811	)			(46,356	)			(72,492	)
Net loss before taxes			(14,794	)			(38,516,672	)			(71,438	)			(38,598,475	)
Provision for income taxes			-				-				-				-
Net loss		$	(14,794	)		$	(38,516,672	)		$	(71,438	)		$	(38,598,475	)
Net Loss Per Common Share – Basic and Diluted		$	(0.00	)		$	(259.49	)		$	(0.00	)		$	(260.04	)
Weighted Average Common Shares Outstanding			60,648,433				148,433				60,648,433				148,433

 

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

 

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STARTECH LABS, INC.

STATEMENT OF STOCKHOLDERS’ DEFICIT

FOR THE NINE MONTHS ENDED FEBRUARY 28, 2021 AND FEBRUARY 29, 2020

(Unaudited)

  

										Additional
		Common stock								paid-in				Accumulated
		Shares				Amount				capital				Deficit				Total
Balance, May 31, 2020			55,148,433			$	55,148			$	38,622,389			$	(38,819,418	)		$	(141,881	)
Beneficial conversion feature			-				-				16,632				-				16,632
Common shares issued for repayment of convertible notes			5,500,000				5,500				5,500				-				11,000
Net loss for the period			-				-				-				(38,305	)			(38,305	)
Balance, August 31, 2020			60,648,433			$	60,648			$	38,644,521			$	(38,857,723	)		$	(152,554	)
Beneficial conversion feature			-				-				7,401				-				7,401
Net loss for the period			-				-				-				(18,339	)			(18,339	)
Balance, November 30, 2020			60,648,433			$	60,648			$	38,651,922			$	(38,876,062	)		$	(163,492	)
Beneficial conversion feature			-				-				2,700				-				2,700
Net loss for the period			-				-				-				(14,794	)			(14,794	)
Balance, February 28, 2021			60,648,433			$	60,648			$	38,654,622			$	(38,890,856	)		$	(175,586	)

 

										Additional
		Common stock								paid-in				Stock				Accumulated
		Shares				Amount				capital				Payable				Deficit				Total
Balance, May 31, 2019			148,433			$	148			$	71,465			$	-			$	(157,219	)		$	(85,606	)
Beneficial conversion feature			-				-				45,746				-				-				45,746
Net loss for the period			-				-				-				-				(65,119	)			(65,119	)
Balance, August 31, 2019			148,433			$	148			$	117,211			$	-			$	(222,338	)		$	(104,979	)
Beneficial conversion feature			-				-				8,788				-				-				8,788
Net loss for the period			-				-				-				-				(16,684	)			(16,684	)
Balance, November 30, 2019			148,433			$	148			$	125,999			$	-			$	(239,022	)		$	(112,875	)
Stock based compensation			-				-				-				38,500,000				-				38,500,000
Net loss for the period			-				-				-				-				(38,516,672	)			(38,516,672	)
Balance, February 29, 2020			148,433			$	148			$	125,999			$	38,500,000			$	(38,755,694	)		$	(129,547	)

 

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

 

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STARTECH LABS, INC.

STATEMENTS OF CASH FLOWS

(Unaudited)

 

		For the Nine Months Ended
		February 28,				February 29,
		2021				2020
Cash Flows from Operating Activities:
Net loss		$	(71,438	)		$	(38,598,475	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation			-				38,500,000
Amortization of debt discount			26,732				54,534
Changes in operating assets and liabilities:
Accounts payable			(1,250	)			(2,478	)
Accrued interest			19,624				17,958
Net Cash Used in Operating Activities			(26,332	)			(28,461	)
Cash Flows from Investing Activities:
Acquisition of intangible assets			(400	)			-
Net Cash Used in Investing Activities			(400	)			-
Cash Flows from Financing Activities:
Proceeds from issuance of convertible notes			26,732				28,461
Net Cash Provided by Financing Activities			26,732				28,461
Net Change in Cash and Cash Equivalents			-				-
Cash and Cash Equivalents, beginning of period			-				-
Cash and Cash Equivalents, end of period		$	-			$	-
Supplemental Disclosure Information:
Cash paid for interest		$	-			$	-
Cash paid for taxes		$	-			$	-
Non-Cash Disclosure:
Beneficial conversion feature		$	26,732			$	54,534
Issuance of common shares for repayment of convertible notes		$	11,000			$	-

 

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

 

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STARTECH LABS, INC.

NOTES TO THE UNAUDITED FINANCIAL STATEMENTS

FEBRUARY 28, 2021

 

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

 

Organization, Nature of Business and Trade Name

 

Startech Labs, Inc. (the Company), formerly UpperSolution.com, was incorporated in the State of Nevada on April 20, 2013 with the principal business objective of creating an independent and unbiased mobile app that enables consumers to find the best cellular rate plan for their need and getting real-time notifications when a new cellular plan is available.

 

The Company’s activities are subject to significant risks and uncertainties including failing to secure additional funding to operationalize the Company’s apps before another company develops similar apps.

 

On January 10, 2018, the Company, Analog Nest Technologies, Inc., and the shareholders of Analog Nest Technologies, Inc. closed a transaction pursuant to that certain Share Exchange Agreement (the “Share Exchange Agreement”), whereby the Company acquired 100% of the outstanding shares of common stock of Analog Nest (the “Analog Nest Stock”) from the Analog Nest Shareholders. In exchange for the Analog Nest Stock the Company issued 100,000 shares of its common stock. The Company’s Director and Chief Executive Officer held all of the shares of Analog Nest Technologies, Inc. at the time of the transaction.

 

Analog Nest was incorporated in the State is a mobile application company focused on utility/entertainment apps for Google’s Android and Apple’s iOS platforms.

 

On June 26, 2019, a majority of our stockholders and our board of directors approved a change of name of our company to “Startech Labs, Inc.” and a reverse stock split of our issued and outstanding shares of common stock on a ninety-five (95) old for one (1) new basis. The name change and reverse stock split became effective on July 17, 2019.

 

On December 1, 2018, the Company disposed of its mobile application company subsidiary, Analog Nest Technologies, Inc.

 

On January 16, 2021, the Company acquired travel booking websites and mobile apps.

 

The Company develops customized web solutions with both commercial and retail applications. Currently focused on further development of fare aggregators and travel metasearch engines, the Company owns and operates international online travel and hospitality web portals where users can search for flights and hotels and select the most economical options.

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

A summary of significant accounting policies of Startech Labs, Inc. (the Company) is presented to assist in understanding the Company’s financial statements. The accounting policies presented in these footnotes conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the accompanying financial statements. These financial statements and notes are representations of the Company’s management who are responsible for their integrity and objectivity.

 

Basis of Presentation

 

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial statements and with the instructions to Form 10-Q and Regulation S-X of the United States Securities and Exchange Commission (“SEC”). Accordingly, they do not contain all information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements.

 

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In the opinion of the company’s management, the accompanying unaudited interim financial statements contain all the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the company as of February 28, 2021 and the results of operations and cash flows for the periods presented. The results of operations for the nine months ended February 28, 2021 are not necessarily indicative of the operating results for the full fiscal year or any future period. These unaudited financial statements should be read in conjunction with the financial statements and related notes thereto included in the company’s Annual Report on Form 10-K for the year ended May 31, 2020 filed with the SEC on August 21, 2020.

 

Use of Estimates

 

The preparation of financial statements in 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. A change in managements’ estimates or assumptions could have a material impact on the Company’s financial condition and results of operations during the period in which such changes occurred. Actual results could differ from those estimates. The Company’s financial statements reflect all adjustments that management believes are necessary for the fair presentation of their financial condition and results of operations for the periods presented.

 

Revenue Recognition

 

The Company recognizes revenue in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers, using the following five-step procedure:

 

Step 1: Identify the contract(s) with customers

Step 2: Identify the performance obligations in the contract

Step 3: Determine the transaction price

Step 4: Allocate the transaction price to performance obligations

Step 5: Recognize revenue when the entity satisfies a performance obligation

 

Basic and Diluted Net Loss Per Share

 

Net loss per share is calculated in accordance with Codification topic 260, “Earnings Per Share” for the periods presented. Basic net loss per share is computed using the weighted average number of common shares outstanding. Diluted loss per share has not been presented because there are no dilutive items. Diluted net loss per share is based on the assumption that all dilutive stock options, warrants, and convertible debt are converted or exercised by applying the treasury stock method. Under this method, options and warrants are assumed exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. Options, warrants and/or convertible debt will have a dilutive effect, during periods of net profit, only when the average market price of the common stock during the period exceeds the exercise or conversion price of the items.

 

For the nine months ended February 28, 2021 and February 29, 2020, respectively, the following convertible notes were excluded from the computation of diluted net loss per shares as the result of the computation was anti-dilutive:

 

		February 28,				February 29,
		2021				2020
		(Shares)				(Shares)
Convertible notes payable			47,748,982				25,666,292

 

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Fair Value of Financial Instruments

 

The Company applies fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities, which are required to be recorded at fair value, the Company considers the principal or most advantageous market in which the Company would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as risks inherent in valuation techniques, transfer restrictions and credit risk. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:

 

Level 1 – Quoted prices in active markets for identical assets or liabilities.

 

Level 2 – Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

 

Level 3 – Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability.

 

In accordance with the fair value accounting requirements, companies may choose to measure eligible financial instruments and certain other items at fair value. The Company has not elected the fair value option for any eligible financial instruments.

 

As of February 28, 2021, and May 31, 2020, the carrying value of accounts payable and loans that are required to be measured at fair value, approximated fair value due to the short-term nature and maturity of these instruments.

 

Intangible Assets

 

The Company accounts for intangible assets (including website and mobile app) in accordance with ASC 350 “Intangibles-Goodwill and Other” (“ASC 350”). ASC 350 requires that goodwill and other intangibles with indefinite lives be tested for impairment annually or on an interim basis if events or circumstances indicate that the fair value of an asset has decreased below its carrying value. In addition, ASC 350 requires that goodwill be tested for impairment at the reporting unit level (operating segment or one level below an operating segment) on an annual basis and between annual tests when circumstances indicate that the recoverability of the carrying amount of goodwill may be in doubt. Application of the goodwill impairment test requires judgment, including the identification of reporting units; assigning assets and liabilities to reporting units, assigning goodwill to reporting units, and determining the fair value. Significant judgments required to estimate the fair value of reporting units include estimating future cash flows, determining appropriate discount rates and other assumptions. Changes in these estimates and assumptions or the occurrence of one or more confirming events in future periods could cause the actual results or outcomes to materially differ from such estimates and could also affect the determination of fair value and/or goodwill impairment at future reporting dates.

 

The cost of intangible assets with determinable useful lives is amortized to reflect the pattern of economic benefits consumed, either on a straight-line or accelerated basis over the estimated periods benefited. Patents, technology and other intangibles with contractual terms are generally amortized over their respective legal or contractual lives. When certain events or changes in operating conditions occur, an impairment assessment is performed and lives of intangible assets with determinable lives may be adjusted.

 

During the nine months ended February 28, 2021, the Company acquired travel booking websites and mobile apps of $400. The intangible assets are subject to annual impairment test.

 

Share-based Expenses

 

ASC 718 “Compensation – Stock Compensation” prescribes accounting and reporting standards for all share-based payment transactions in which employee services and non-employee services are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other equity instruments such as employee stock ownership plans and stock appreciation rights. Share-based payments to employees and non-employees, including grants of employee stock options, are recognized as compensation expense in the financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period).

 

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Recent Accounting Pronouncements

 

Management has considered all other recent accounting pronouncements issued since the last audit of our financial statements. The Company’s management believes that these recent pronouncements will not have a material effect on the Company’s financial statements.

 

NOTE 3 – GOING CONCERN

 

The Company’s financial statements are prepared using accounting principles generally accepted 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. However, the Company does not have significant cash or other current assets, nor does it have an established source of revenues sufficient to cover its operating costs and to allow it to continue as a going concern.

 

Under the going concern assumption, an entity is ordinarily viewed as continuing in business for the foreseeable future with neither the intention nor the necessity of liquidation, ceasing trading, or seeking protection from creditors pursuant to laws or regulations. Accordingly, assets and liabilities are recorded on the basis that the entity will be able to realize its assets and discharge its liabilities in the normal course of business.

 

The Company has incurred net losses since inception on April 20, 2013 through February 28, 2021 totaling $38,890,856 and has negative working capital of $175,986 at February 28, 2021. The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plan described in the Business paragraph and eventually attain profitable operations. The accompanying financial statements do not include any adjustments that may be necessary if the Company is unable to continue as a going concern.

 

During the next year, the Company’s foreseeable cash requirements will relate to continual development of the operations of its business, maintaining its good standing and making the requisite filings with the Securities and Exchange Commission, and the payment of expenses associated with research and development. The Company may experience a cash shortfall and be required to raise additional capital.

 

Historically, it has mostly relied upon funds from the sale of shares of stock and from acquiring loans to finance its operations and growth. Management may raise additional capital through future public or private offerings of the Company’s stock or through loans from private investors, although there can be no assurance that it will be able to obtain such financing. The Company’s failure to do so could have a material and adverse effect upon it and its shareholders.

 

In the past year, the Company funded operations by using cash proceeds received through related party proceeds. For the coming year, the Company plans to continue to fund the Company through related party issuances, debt and securities sales and issuances until the company generates enough revenues through the operations as stated above.

 

NOTE 4 – COMMON STOCK

 

The Company has authorized seventy-five million (75,000,000) shares of common stock with a par value of $0.001.

 

On June 26, 2019, a majority of our stockholders and our board of directors approved a reverse stock split of our issued and outstanding shares of common stock on a ninety-five (95) old for one (1) new basis. The reverse stock split became effective on July 17, 2019. The reverse stock split has been retrospectively reflected in the financial statements for the year ended May 31, 2019.

 

On March 9, 2020, the Company issued 55,000,000 shares of restricted common stock valued at $38,500,000 based on stock trading price at $0.70 per share to the Company’s Chief Executive Officer as compensation for the payment of the salary for the year 2019.

 

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On June 1, 2020, the Company issued 5,500,000 shares of common stock valued at $5,500,000 based on stock trading price at $1.00 per share for the partial repayment of convertible notes at aggregated principal amount of $11,000.

 

As of February 28, 2021, and May 31, 2020, 60,648,433 shares and 55,148,433 shares of common stock were issued and outstanding, respectively.

 

NOTE 5 – RELATED PARTY TRANSACTIONS

 

On June 1, 2019, the Company issued convertible notes to three un-affiliated parties for an aggregate amount of $81,859 to replace the full amount of related party advances that had been provided to the Company through May 31, 2019. The convertible notes are due on demand, bear interest at 25% per annum and are convertible at $0.01 per share for the Company common stock.

 

NOTE 6 – CONVERTIBLE NOTES

 

		February 28,				May 31,
		2021				2020
Convertible Notes - June 2019		$	56,859			$	56,859
Convertible Notes - August 2019			14,716				14,716
Convertible Notes - November 2019			8,789				8,789
Convertible Notes - February 2020			18,956				29,956
Convertible Notes - May 2020			3,350				3,350
Convertible Notes - August 2020			16,632				-
Convertible Notes - November 2020			7,400				-
Convertible Notes - November 2020			2,700.00				0
			129,402				113,670
Less current portion of convertible notes payable			(129,402	)			(113,670	)
Long-term convertible notes payable		$	-			$	-

 

On June 1, 2019, the Company issued convertible notes to three unaffiliated parties for an aggregate amount of $81,859 to replace the full amount of related party advances that had been provided to the Company through May 31, 2019. The convertible notes are due on demand, bear interest at 25% per annum and are convertible at $0.01 per share for the Company common stock. The total debt discount from the beneficial conversion features of $81,859 was expensed upon issuance of the notes.

 

On August 31, 2019, the Company issued a convertible note to an unaffiliated party of $14,717 for paying operating expenses on behalf of the Company. The convertible note is due on demand, bears interest at 25% per annum and is convertible at $0.95 per share for the Company common stock. The debt discount from the beneficial conversion of $6,971 was expensed upon issuance of the note.

 

On November 30, 2019, the Company issued a convertible note to an unaffiliated party of $8,789 for paying operating expenses on behalf of the Company. The convertible note is due on demand, bears interest at 25% per annum and is convertible at $0.95 per share for the Company common stock. The debt discount from the beneficial conversion of $8,788 was expensed upon issuance of the note.

 

On January 3, 2020, the Company amended a convertible note of $25,000 issued on June 1, 2019. The amended convertible note is due on demand, bear interest at 5% per annum and are convertible at $0.002 per share for the Company common stock. On February 17, 2020, the note holder of the amended convertible note sold the note to two unaffiliated parties. On June 1, 2020, principal of $11,000 from the convertible notes was converted for 5,500,000 shares of common stock.

 

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On February 29, 2020, the Company issued a convertible note to an unaffiliated party of $4,956 for paying operating expenses on behalf of the Company. The convertible note is due on demand, bears interest at 25% per annum and is convertible at $0.001 per share for the Company common stock. The debt discount from the beneficial conversion of $4,956 was expensed upon issuance of the note.

 

On May 31, 2020, the Company issued a convertible note to an unaffiliated party of $3,350 for paying operating expenses on behalf of the Company. The convertible note is due on demand, bears interest at 25% per annum and is convertible at $0.001 per share for the Company common stock. The debt discount from the beneficial conversion of $3,350 was expensed upon issuance of the note.

 

On August 31, 2020, the Company issued a convertible note to an unaffiliated party of $16,632 for paying operating expenses on behalf of the Company. The convertible note is due on demand, bears interest at 25% per annum and is convertible at $0.001 per share for the Company common stock. The debt discount from the beneficial conversion of $16,632 was expensed upon issuance of the note.

 

On November 30, 2020, the Company issued a convertible note to an unaffiliated party of $7,400 for paying operating expenses on behalf of the Company. The convertible note is due on demand, bears interest at 25% per annum and is convertible at $0.001 per share for the Company common stock. The debt discount from the beneficial conversion of $7,400 was expensed upon issuance of the note.

 

On February 28, 2021, the Company issued a convertible note to an unaffiliated party of $2,700 for paying operating expenses on behalf of the Company. The convertible note is due on demand, bears interest at 25% per annum and is convertible at $0.001 per share for the Company common stock. The debt discount from the beneficial conversion of $2,700 was expensed upon issuance of the note.

 

During the nine months ended February 28, 2021 and February 29, 2020, the Company incurred note interest expense of $19,623 and $17,958, respectively.

 

As of February 28, 2021, and May 31, 2020, the convertible notes payable was $129,402 and $113,670, respectively, and accrued note interest payable was $43,610 and $23,986, respectively.

 

NOTE 7 – RISKS AND UNCERTAINTIES

 

In early 2020, the World Health Organization declared the rapidly spreading coronavirus disease (COVID-19) outbreak a pandemic. This pandemic has resulted in governments worldwide enacting emergency measures to combat the spread of the virus. The Company considered the impact of COVID-19 on the assumptions and estimates used and determined that there were no material adverse impacts on the Company’s results of operations and financial position at February 28, 2021. The full extent of the future impacts of COVID-19 on the Company’s operations is uncertain. A prolonged outbreak could have a material adverse impact on financial results and business operations of the Company in the future. The Company is not aware of any specific event or circumstance that would require an update to its estimates or judgments or a revision of the carrying value of its assets or liabilities as of the date of issuance of this financial statements. These estimates may change, as new events occur and additional information is obtained.

 

NOTE 8 – SUBSEQUENT EVENT

 

In accordance with ASC 855-10, the Company has analyzed its operations subsequent to the February 28, 2021 to the date these financial statements were issued and has determined that it does not have any material subsequent events to disclose in these financial statements.

 

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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 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 company”, mean Startech Labs, Inc., a Nevada corporation, unless otherwise indicated.

 

Overview

 

We were incorporated in the State of Nevada on April 20, 2013 under the name UpperSolution.com with the principal business objective of creating an independent and unbiased mobile app that enables consumers to find the best cellular rate plan for their need and getting real-time notifications when a new cellular plan is available.

 

On January 10, 2018, our company, Analog Nest Technologies, Inc. (“Analog Nest”) and the shareholders of Analog (the “Analog Nest Shareholders”) closed a transaction pursuant a share exchange agreement dated January 10, 2018, whereby our company acquired 100% of the outstanding shares of common stock of Analog Nest (the “Analog Nest Stock”) from the Analog Nest Shareholders. In exchange for the Analog Nest Stock our company issued 100,000 shares of our common stock to the Analog Nest Shareholders.

 

Analog Nest was incorporated in the State of Nevada on September 8, 2017 as a mobile application (“app”) company focused on utility/entertainment apps for Google’s Android and Apple’s iOS platforms. In December 2017, Analog Nest acquired the following apps: Old Fart Booth, Old Fart Booth Pro, Ugly Face Booth, Ugly Santa Booth, Baldy – Bald Photo Booth, Fatty – Make Funny Fat Faces, Slender Man Scary Prank, Anime Booth, Anime Booth Free, Minecart Mayhem, Pimp My Pet, Pimp My Dog, Cavity Detector – Scary Prank, Mustacher, Alex From Target, A Farm Animal Salon, Mustacher Pro, Pimp My Cat, and Animal Dress Up Salon.

 

On June 26, 2019, a majority of our stockholders and our board of directors approved a change of name of our company to “Startech Labs, Inc.” and a reverse stock split of our issued and outstanding shares of common stock on a ninety-five (95) old for one (1) new basis. The name change and reverse stock split became effective on July 17, 2019.

 

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

 

Our office is located at 244 Madison Avenue, New York, NY 10016-2817 and our telephone number is (802) 255-4212. We do not own any property and we do not have a corporate website.

 

Our Current Business

 

Startech Labs develops customized web solutions with both commercial and retail applications. Currently focused on further development of fare aggregators and travel metasearch engines, Startech Labs owns and operates international online travel and hospitality web portals where users can search for flights and hotels and select the most economical options.

 

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Results of Operations

 

The following summary of our operations should be read in conjunction with our unaudited financial statements for the three months and nine months ended February 28, 2021 and February 29, 2020.

 

Three months ending February 28, 2021 compared to three months ending February 29, 2020:

 

		For the Three Months Ended
		February 28,				February 29,
		2021				2020				Change				%
Operating Expenses
General and administrative expenses		$	450			$	450			$	-				0	%
Professional fees			4,524				4,411				113				3	%
Stock based compensation			-				38,500,000				(38,500,000	)		(100%)
Other expense			9,820				11,811				(1,991	)		(17%)
Net Loss		$	(14,794	)		$	(38,516,672	)		$	38,501,878			(100%)

 

Net loss

 

Net loss totaled $14,794 for the three months ended February 28, 2021, compared to a net loss for the three months ended February 29, 2020 of $38,516,672. The decrease in net loss was mainly due to stock based compensation of $38,500,000 incurred during the three months ended February 29, 2020.

 

Operating expense

 

Operating expenses for three months ended February 28, 2021 included general and administrative expenses of $450 and professional fees of $4,524. Operating expenses for three months ended February 29, 2020 included general and administrative expenses of $450, professional fees of $4,411 and stock based compensation of $38,500,000 for the year 2019 salary of the Company’s Chief Executive Officer.

 

Other expense

 

Other expense for three months ended February 28, 2021 included convertible note discount amortization of $2,700 and convertible note interest expense of $7,120. Other expense for three months ended February 29, 2020 included convertible note interest expense of $11,811.

 

Nine months ending February 28, 2021 compared to six months ending February 29, 2020:

  

		For the Nine Months Ended
		February 28,				February 29,
		2021				2020				Change				%
Operating Expenses
General and administrative expenses		$	1,350			$	2,350			$	(1,000	)		(43%)
Professional fees			23,732				23,633				99				0	%
Stock based compensation			-				38,500,000				(38,500,000	)		(100%)
Other expense			46,356				72,492				(26,136	)		(36%)
Net Loss		$	(71,438	)		$	(38,598,475	)		$	38,527,037			(100%)

 

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Net loss

 

Net loss totaled $71,438 for the nine months ended February 28, 2021, compared to a net loss for the nine months ended February 29, 2020 of $38,598,475. The decrease in net loss was mainly due to stock based compensation of $38,500,000 incurred during the nine months ended February 29, 2020.

 

Operating expense

 

Operating expenses for nine months ended February 28, 2021 included general and administrative expenses of $1,350 and professional fees of $23,732. Operating expenses for nine months ended February 29, 2020 included general and administrative expenses of $2,350, professional fees of $23,633 and stock based compensation of $38,500,000 for the year 2019 salary of the Company’s Chief Executive Officer.

 

Other expense

 

Other expense for nine months ended February 28, 2021 included convertible note discount amortization of $26,733 and convertible note interest expense of $19,623. Other expense for nine months ended February 29, 2020 included convertible note discount amortization of $54,534 and convertible note interest expense of $17,958.

 

Liquidity and Capital Resources

 

Working Capital

 

		February 28,				May 31,
		2021				2020				Change
Current Assets		$	-			$	-			$	-
Current Liabilities		$	175,986			$	141,881			$	34,105
Working Capital Deficiency		$	(175,986	)		$	(141,881	)		$	(34,105	)

 

The increase in working capital deficiency during the nine months ended February 28, 2021 was primarily a result of an increase of convertible notes and accrued interest payable.

 

		For the Nine Months Ended
		February 28,				February 29,
		2021				2020
Cash Flows used in Operating Activities		$	(26,332	)		$	(28,461	)
Cash Flows used in Investing Activities			(400	)			-
Cash Flows from Financing Activities			26,732				28,461
Net Change in Cash and Cash Equivalents		$	-			$	-

 

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Cash Flows

 

Cash Flow from Operating Activities

 

During the nine months ended February 28, 2021, our company used $26,332 in cash from operating activities, compared to $28,461 cash used in operating activities during the nine months ended February 29, 2020.

 

The cash used from operating activities for the nine months ended February 28, 2021 was attributed to a net loss of $71,438, reduced by amortization of debt discount of $26,732 and changes in operating assets and liabilities of $18,374.

 

The cash used from operating activities for the nine months ended February 29, 2020 was attributed to a net loss of $38,598,475, reduced by stock based compensation of $38,500,000, amortization of debt discount of $54,534 and changes in operating assets and liabilities of $15,480.

 

Cash Flow from Investing Activities

 

During the nine months ended February 28, 2021 and February 29, 2020, our company did not use any cash in investing activities.

 

Cash Flow from Financing Activities

 

During the nine months ended February 28, 2021, our company received $26,732 and $28,461 from the issuance of convertible notes, respectively.

 

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.

 

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.

 

Going Concern

 

We have incurred net loss since our inception on April 20, 2013 through February 28, 2021 totaling $38,890,856 and have completed only the preliminary stages of our business plan. We anticipate incurring additional losses before realizing any revenues and will depend on additional financing in order to meet our continuing obligations and ultimately, to attain profitability. Our ability to obtain additional financing, whether through the issuance of additional equity or through the assumption of debt, is uncertain. Accordingly, our independent auditors’ report on our financial statements for the year ended May 31, 2020 includes an explanatory paragraph regarding concerns about our ability to continue as a going concern, including additional information contained in the notes to our financial statements describing the circumstances leading to this disclosure. The financial statements do not include any adjustments that might result from the uncertainty about our ability to continue our business.

 

Recently Issued Accounting Pronouncements

 

We do not expect the adoption of any recently issued accounting pronouncements to have a significant impact on our net results of operations, financial position, or cash flows.

 

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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

 

Disclosure Controls and Procedures

 

Our management, with the participation of our Chief Executive Officer (our principal executive officer, principal financial officer and principal accounting officer), has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a- 15(e) and 15d- 15(e) under the Securities Exchange Act of 1934, as amended (Exchange Act)), as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on such evaluation, our Chief Executive Officer has concluded that as of such date, our disclosure controls and procedures were not effective such that the information relating to us required to be disclosed in our Securities and Exchange Commission (“SEC”) reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

 

Changes in Internal 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

 

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 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

 

None.

 

Item 3. Defaults Upon Senior Securities

 

None.

 

Item 4. Mine Safety Disclosures

 

Not applicable.

 

Item 5. Other Information

 

On February 28, 2021, the Company issued a convertible note to an unaffiliated party of $2,700 for paying operating expenses on behalf of the Company. The convertible note is due on demand, bears interest at 25% per annum and is convertible at $0.001 per share for the Company common stock. The debt discount from the beneficial conversion of $2,700 was expensed upon issuance of the note.

 

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Item 6. Exhibits

 

				INCORPORATED BY REFERENCE
EXHIBIT NUMBER		Exhibit Description		Form		Exhibit		Filing Date
(3)		(i) Articles of Incorporation, (ii) Bylaws
3.1*		Articles of Incorporation		10-K		3.1		August 21, 2019
3.2		By-Laws		S-1		3.2		August 16, 2013
3.3*		Certificate of Amendment		10-K		3.3		August 21, 2019
(31)		(i) Rule 13a-14(a)/15d-14(a) Certifications, (ii) Rule 13a-14/15d-14 Certifications
31.1*		Rule 13(a)-14(a)/15(d)-14(a) Certification of Chief Executive Officer and Chief Financial Officer
(32)		Section 1350 Certifications
32.1**		Section 1350 Certification of Chief Executive Officer and Chief Financial Officer
(100)		Interactive Data File
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

_________

*Filed herewith.

**Furnished herewith.

 

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SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) 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.

 

 

		STARTECH LABS, INC.
		(Registrant)
Dated: April 8, 2021		/s/ Kevin So
		Kevin So
		President, Chief Executive Officer, Secretary and Director
		(Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)

 

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