We believe it is important to communicate our expectations. However, there may be events in the future that we are not able to accurately predict or over which we have no control. Our actual results and the timing of certain events could differ materially from those anticipated in these forward-looking statements as a result of certain factors.
The increase in general and administrative expenses from $69,603 during the year ended April 30, 2016 to $125,257 during the year ended April 30, 2017 was due to increased fees incurred with respect to regulatory compliance.
The decrease in interest expense form $202,913 during the year ended April 30, 2016 to $0 during the year ended April 30, 2017 was due to the fact that all the Company’s interest bearing debt was converted into shares of the Company’s common stock during the year ended April 30, 2016 and consequently no interest-bearing debt was issued and outstanding during the year ended April 30, 2017.
As of April 30, 2017 and 2016, the Company had no assets. The Company’s current liabilities as of April 30, 2017 totaled $142,196 comprised of $519 of accounts payable and $141,677 due to a related party. This compares with total liabilities of $16,939 comprised of $5,242 of accounts payable and $11,697 due to a related party, as of April 30, 2016.
Four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on our management’s judgments regarding the fixed nature of the selling prices of the products and services delivered and the collectability of those amounts.
For the years ended April 30, 2017 and 2016, the Company did not realize any revenue.
As of April 30, 2015, the Company had an aggregate of $127,000 non-interest bearing demand notes payable to Paragon Capital LP, at that time, the Company’s controlling shareholder.
Effective December 10, 2015, we made a payment to the former controlling shareholder of $228 upon closure of the Company’s previous bank account. As the payment was to a related party, the loss on payment has been recognized in additional paid-in capital.
Following the change of control of the Company effective December 8, 2015 through March 9, 2016, an entity related to the Company’s then sole officer and director advanced funds totaling $11,444 to the Company to meet its working capital requirements. The advances were unsecured, interest free and due on demand. Effective March 9, 2016, the full $11,444 balance of the loan was forgiven. As the loan was with a related party, the forgiveness of the loan has been recognized in additional paid in capital.
From March 9, 2016 through April 30, 2016, an entity related to the Company’s controlling shareholder has advanced funds totaling $11,697 to the Company to meet its working capital requirements. The advances were unsecured, interest free and due on demand.
During the year ended April 30, 2017, an entity related to the Company’s controlling shareholder has advanced funds totaling $129,980 to the Company to meet its working capital requirements. The advances were unsecured, interest free and due on demand.
On November 3, 2015, the Company entered into a Convertible Note Agreement with Paragon Capital, LP, at that time, the Company’s controlling shareholder, in the amount of $20,000. The note was due on August 31, 2017, and bore interest at 6% per annum. While the note was outstanding, the outstanding principal amount and all unpaid accrued interest under the note were convertible into shares of Common Stock of the Company at $0.01 per share. The Company assessed the embedded conversion feature and determined that the intrinsic value of the beneficial conversion feature at inception exceeded the face value of this note and accordingly recorded at beneficial conversion feature (capped at the face value of the of the note) of $20,000. Such beneficial conversion feature was accounted for as a debt discount, which was amortized to interest expense using the effective interest rate method over the life of the note. Effective December 8, 2015, the $20,000 principal balance of the loan was converted into 2,000,000 shares of our common stock, the unamortized balance of $19,897 debt discount was expensed in full and accrued interest of 115 was forgiven. As the accrued interest was with a related party, the gain on forgiveness of the interest has been recognized in additional paid in capital.
Following the conversion of these convertible notes payable effective December 8, 2015, no convertible notes payable remained issued or outstanding.
As of April 30, 2017, the Company had a federal net operating loss carryforward of approximately $1,265,000, which expires beginning in 2018 and through 2037. This carryforward is limited due to the changes in control that took place in the years ended April 30, 2008 and April 30, 2016 and maybe further limited in the future upon change(s) in control of the Company in accordance with the provisions under Internal Revenue Code Section 381.
No shares of preferred stock were issued or outstanding during the years ended April 30, 2017 and 2016.
As of April 30, 2017, the Company was authorized to issue 100,000,000 shares of common stock with a par value of $0.0001.