ITEM
1.
|
FINANCIAL
STATEMENTS
|
VinCompass
Corp.
Consolidated
Balance Sheets
(Unaudited)
|
|
31-May-17
|
|
28-Feb-17
|
ASSETS
|
|
|
|
|
|
|
|
|
|
Current Assets:
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
29,279
|
|
|
$
|
13,952
|
|
Total Current Assets
|
|
|
29,279
|
|
|
|
13,952
|
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS
|
|
$
|
29,279
|
|
|
$
|
13,952
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES & STOCKHOLDER’S DEFICIT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
$
|
178,789
|
|
|
$
|
195,302
|
|
Accrued payroll
|
|
|
206,000
|
|
|
|
216,000
|
|
Accounts Payable to related parties
|
|
|
325,781
|
|
|
|
289,281
|
|
Convertible notes payable, net of discount of $81,530 and
$73,281, respectively
|
|
|
285,803
|
|
|
|
259,981
|
|
Derivative liability
|
|
|
202,966
|
|
|
|
112,461
|
|
Total Current Liabilities
|
|
|
1,199,339
|
|
|
|
1,073,025
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities
|
|
$
|
1,199,339
|
|
|
$
|
1,073,025
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ Deficit:
|
|
|
|
|
|
|
|
|
Series A Preferred Stock, $0.001 par value; 20,000,000 and 2,000,000 authorized;
5,000,000 and 1,000,000 shares issued and outstanding, respectively
|
|
$
|
5,000
|
|
|
$
|
1,000
|
|
Series B Preferred Stock, $0.50 par value; 20,000,000 and
0 authorized; 0 shares issued and outstanding, respectively
|
|
$
|
-
|
|
|
$
|
-
|
|
Common Stock, $0.001 par value; 4,960,000,000 and 400,000,000 shares authorized;
147,322,775 and 47,079,718 shares issued and outstanding, respectively
|
|
|
147,322
|
|
|
|
47,149
|
|
Additional Paid-in Capital
|
|
|
2,554,924
|
|
|
|
1,890,147
|
|
Accumulated Deficit
|
|
|
(3,877,306
|
)
|
|
|
(2,997,369
|
)
|
|
|
|
|
|
|
|
|
|
Total Stockholders’ Deficit
|
|
|
(1,170,060
|
)
|
|
|
(1,059,073
|
)
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES & STOCKHOLDERS’
DEFICIT
|
|
$
|
29,279
|
|
|
$
|
13,952
|
|
The
accompanying notes are an integral part of these unaudited consolidated financial statements
.
VinCompass
Corp.
Consolidated
Statements of Operations
(Unaudited)
|
|
For the Three
Months Ended May 31,
|
|
|
2017
|
|
2016
|
Operating Expenses:
|
|
|
|
|
|
|
|
|
General and administrative
|
|
|
339,878
|
|
|
|
147,111
|
|
Total Operating Expenses
|
|
|
339,878
|
|
|
|
147,111
|
|
|
|
|
|
|
|
|
|
|
Loss from operations
|
|
|
(339,878
|
)
|
|
|
(147,111
|
)
|
|
|
|
|
|
|
|
|
|
Other Expenses:
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
(202,709
|
)
|
|
|
(7,949
|
)
|
Loss on derivative
|
|
|
(337,350
|
)
|
|
|
-
|
|
Total other expense
|
|
|
(540,059
|
)
|
|
|
(7,949
|
)
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(879,937
|
)
|
|
$
|
(155,060
|
)
|
|
|
|
|
|
|
|
|
|
Basic and diluted loss per share
|
|
$
|
(0.01
|
)
|
|
$
|
(0.00
|
)
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares outstanding – basic and diluted
|
|
|
69,043,891
|
|
|
|
43,702,289
|
|
The
accompanying notes are an integral part of these unaudited consolidated financial statements
.
VinCompass
Corp.
Consolidated
Statement of Cash Flows
(Unaudited)
|
|
For the Three Months Ended
May
31,
|
|
|
2017
|
|
2016
|
Cash flow from operating activities:
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(879,937
|
)
|
|
$
|
(155,060
|
)
|
Adjustments to reconcile net loss to net cash
used in operating activities:
|
|
|
|
|
|
|
|
|
Stock based compensation
|
|
|
149,900
|
|
|
|
31,250
|
|
Amortization of debt discount
|
|
|
193,571
|
|
|
|
-
|
|
Loss on derivative liabilities
|
|
|
337,350
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable to related party
|
|
|
36,500
|
|
|
|
21,170
|
|
Accrued payroll
|
|
|
30,000
|
|
|
|
30,000
|
|
Accounts payable and accrued expenses
|
|
|
(9,057
|
)
|
|
|
31,134
|
|
Net cash used in operating activities
|
|
|
(141,673
|
)
|
|
|
(41,506
|
)
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
Proceeds from convertible debt
|
|
|
157,000
|
|
|
|
-
|
|
Net cash provided by financing activities
|
|
$
|
157,000
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
Net decrease in cash
|
|
|
15,327
|
|
|
|
(41,506
|
)
|
Cash at beginning of period
|
|
|
13,952
|
|
|
|
43,680
|
|
Cash at end of period
|
|
$
|
29,279
|
|
|
$
|
2,174
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of noncash activities:
|
|
|
|
|
|
|
|
|
Settlement of deferred payroll by issuance of Preferred stock
|
|
$
|
40,000
|
|
|
$
|
-
|
|
Debt discount recognized from derivative liabilities
|
|
$
|
185,000
|
|
|
$
|
-
|
|
Release of derivative liabilities due to conversion of convertible debt
|
|
$
|
431,845
|
|
|
$
|
-
|
|
Common shares issued for conversion of convertible note
|
|
$
|
147,205
|
|
|
$
|
-
|
|
The
accompanying notes are an integral part of these unaudited consolidated financial statements
.
VINCOMPASS
CORP
.
Notes
to the Consolidated Financial Statements
May
31, 2017
(Unaudited)
NOTE
1 — ORGANIZATION AND DESCRIPTION OF BUSINESS
VinCompass Corp. (Formerly known as Tiger
Jiujiang Mining, Inc.), entered into a Share Exchange Agreement with VinCompass®, whereby VinCompass Corp. exchanged 60% of
its outstanding shares of common stock for 100% of the outstanding shares of VinCompass® common stock. As of the closing date,
VinCompass® will operate as a wholly owned subsidiary of VinCompass Corp.
On March 7, 2017, the Board approved and filed
an Amended & Restated Articles of Incorporation with the Secretary of State of Wyoming whereby: the aggregate number of shares
of all classes of capital stock which this Corporation shall have authority to issue is 1,000,000,000 shares, of which 20,000,000
shares shall be shares of Series A Preferred Stock shall have 100:1 voting rights, and a conversion right of 10:1 to common stock
which may or may not be converted in the future, par value of $.001 per share and of which 20,000,000 shares shall be shares of
Series B Preferred Stock shall have no voting rights (unless converted), and a conversion right into common shares of stock at
a variable conversion rate (“Variable Conversion Price”). The Variable Conversion Price shall mean 50% multiplied
by the Market Price (as defined herein)(representing a discount rate of 50%) which may or may not be converted in the future,
par value of $0.50 per share as described herein (“Preferred Stock”), and 960,000,000 shares shall be shares of common
stock, par value of $.001 per share (“Common Stock”).
On
May 8, 2017, the Board approved and filed an Amended & Restated Articles of Incorporation with the Secretary of State of Wyoming
to: (i) increase our authorized common stock to 5,000,000,000 shares,
of which 20,000,000
shares shall be shares of Series A preferred Stock shall have 100:1 voting rights, and a conversion right of 10:1 to common stock
which may or may not be converted in the future, par value of $.001 per share and of which 20,000,000 shares shall be shares of
Series B Preferred Stock shall have no voting rights (unless converted), and a conversion right into common shares of stock at
a variable conversion rate (“Variable Conversion Price”). The Variable Conversion Price shall mean 50% multiplied
by the Market Price (as defined herein)(representing a discount rate of 50%) which may or may not be converted in the future,
par value of $0.50 per share as described herein (“Preferred Stock”), and 4,960,000,000 shares shall be shares of
common stock, par value of $.001 per share (“Common Stock
”).
NOTE
2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis
of Presentation
The
accompanying unaudited consolidated interim financial statements of VinCompass Corp have been prepared in accordance with accounting
principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should
be read in conjunction with the audited financial statements and notes thereto contained in the Company’s Form 10-K filed
with SEC. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation
of financial position and the results of operations for the interim periods presented have been reflected herein. The results
of operations for interim periods are not necessarily indicative of the results to be expected for the full year ended February
28, 2018. Notes to the financial statements which would substantially duplicate the disclosure contained in the audited financial
statements for the year ended February 28, 2017 as reported on Form 10-K have been omitted.
NOTE
3 – GOING CONCERN
The accompanying financial statements have
been prepared assuming the Company will continue as a going concern, which contemplates, among other things, the realization of
assets and satisfaction of liabilities in the normal course of business. The Company has had no revenue to dare, has an accumulated
deficit of $3,877,306 as of May 31, 2017 and a net loss of $879,937 for the three months ended May 31, 2017. These factors raise
substantial doubt about the Company’s ability to continue as a going concern.
While
the Company is attempting to increase operations and generate revenues, the Company’s cash position may not be significant
enough to support the Company’s daily operations. The Company will continue to pursue additional equity and/or debt financing
while managing cash flows from operations in an effort to provide funds to meet its obligations on a timely basis and to support
future business development. There is no assurance that these efforts will be successful. Management believes that the actions
presently being taken to further implement its business plan and generate additional revenues provide the opportunity for the
Company to continue as a going concern. While the Company believes in the viability of its strategy to generate additional revenues
and in its ability to raise the additional funds, there can be no assurances to that effect. The ability of the Company to continue
as a going concern is dependent upon the Company’s ability to further implement its business plans and generate additional
revenues.
The
financial statements do not include any adjustments to the amounts and classification of assets and liabilities that may result
should the Company be unable to continue as a going concern.
NOTE 4 – EQUITY
On March 7, 2017, the Board approved and filed
an Amended & Restated Articles of Incorporation with the Secretary of State of Wyoming whereby: the aggregate number of shares
of all classes of capital stock which this Corporation shall have authority to issue is 1,000,000,000 shares, of which 20,000,000
shares shall be shares of Series A Preferred Stock shall have 100:1 voting rights, and a conversion right of 10:1 to common stock
which may or may not be converted in the future, par value of $.001 per share and of which 20,000,000 shares shall be shares of
Series B Preferred Stock shall have no voting rights (unless converted), and a conversion right into common shares of stock at
a variable conversion rate (“Variable Conversion Price”). The Variable Conversion Price shall mean 50% multiplied
by the Market Price (as defined herein)(representing a discount rate of 50%) which may or may not be converted in the future,
par value of $0.50 per share as described herein (“Preferred Stock”), and 960,000,000 shares shall be shares of common
stock, par value of $.001 per share (“Common Stock”).
On
May 8, 2017, the Board approved and filed an Amended & Restated Articles of Incorporation with the Secretary of State of Wyoming
to: (i) increase our authorized common stock to 5,000,000,000 shares,
of which 20,000,000
shares shall be shares of Series A Preferred Stock shall have 100:1 voting rights, and a conversion right of 10:1 to common stock
which may or may not be converted in the future, par value of $.001 per share and of which 20,000,000 shares shall be shares of
Series B Preferred Stock shall have no voting rights (unless converted), and a conversion right into common shares of stock at
a variable conversion rate (“Variable Conversion Price”). The Variable Conversion Price shall mean 50% multiplied
by the Market Price (as defined herein)(representing a discount rate of 50%) which may or may not be converted in the future,
par value of $0.50 per share as described herein (“Preferred Stock”), and 4,960,000,000 shares shall be shares of
common stock, par value of $.001 per share (“Common Stock
”).
During the three months ended May 31, 2017,
the Company issued 9,000,000 shares for services to third parties. The fair value of the shares is determined to be $9,900 using
the market price upon issuance.
During the three months ended May 31, 2017,
the Company issued 91,173,404 shares for converted debt principal of $139,749 and accrued interest of $7,456.
During the three months ended May 31, 2017,
the Company issued 4,000,000 shares of preferred stock to settle $40,000 accrued payroll due to the CEO see note 5. The Series
A Preferred Stock shall have 100:1 voting rights, and a conversion right of 10:1 to common stock which may or may not be converted
in the future. The fair value of the shares is determined to be $180,000 using the weighted-average stock price during three months
ended May 31, 2017 while the par value of $0.001 of the shares for $40,000. The surplus of $140,000 is recorded as stock based
compensation expense.
NOTE
5 – RELATED PARTY TRANSACTIONS
As of May 31,
2017, the amounts due to the majority shareholder and a director bear no interest and with no stated repayment terms totaled $325,781
($289,281 as at February 28, 2017) arose from payments made on behalf of the Company, including by private credit card.
As of May 31, 2017, the Company had an accrued
payroll expense of $206,000 ($216,000 as at February 28, 2017), after converting $40,000 of the amount owed into 4,000,000 Preference
Shares see Note 4. Of the total amount owed to Related Parties, the CEO is owed $511,781 for the period ending May 31, 2017 compared
to $495,281 ending February 28, 2017.
|
|
May
31, 2017
|
|
February
28, 2017
|
Accrued payroll
|
|
$
|
206,000
|
|
|
$
|
216,000
|
|
Accounts payable
to related parties
|
|
|
325,781
|
|
|
|
289,281
|
|
|
|
$
|
531,781
|
|
|
$
|
505,281
|
|
NOTE
6 – CONVERTIBLE NOTES PAYABLE
During the three months ended May 31, 2017,
the Company executed four Convertible Promissory Notes totaling $173,850 for proceeds of $157,000. Three of the notes bear an
interest rate of 10% and one at 8% per annum and are due between January 15, 2018 and March 28, 2018. During the three months
ended May31, 2017, there are $193,571 debt discount amortized into interest expense for the convertible notes below.
The
following table summarizes the convertible notes as of May 31, 2017:
Note
#
|
|
|
Date
|
|
Maturity
Date
|
|
Convertible
Date
|
|
Interest
|
|
|
Balance
of
Loan
|
|
|
Debt
Discount
|
|
|
Net
Balance
May 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
|
8/15/2016
|
|
8/15/2017
|
|
2/15/2017
|
|
|
10
|
%
|
|
$
|
21,792
|
|
|
$
|
(5,789
|
)
|
|
$
|
16,003
|
|
|
2
|
|
|
9/28/2016
|
|
9/28/2017
|
|
3/28/2017
|
|
|
10
|
%
|
|
|
47,392
|
|
|
|
(24,837
|
)
|
|
|
22,555
|
|
|
3
|
|
|
10/28/2016
|
|
7/28/2017
|
|
4/26/2017
|
|
|
10
|
%
|
|
|
66,299
|
|
|
|
(34,433
|
)
|
|
|
31,866
|
|
|
4
|
|
|
2/22/2017
|
|
11/30/2017
|
|
8/15/2017
|
|
|
10
|
%
|
|
|
58,000
|
|
|
|
(1,954
|
)
|
|
|
56,046
|
|
|
5
|
|
|
3/15/2017
|
|
3/15/2018
|
|
9/11/2017
|
|
|
10
|
%
|
|
|
37,000
|
|
|
|
(4,262
|
)
|
|
|
32,738
|
|
|
6
|
|
|
3/28/2017
|
|
3/28/2018
|
|
9/24/2017
|
|
|
8
|
%
|
|
|
45,850
|
|
|
|
(4,823
|
)
|
|
|
41,027
|
|
|
7
|
|
|
4/10/2017
|
|
1/15/2018
|
|
10/7/2017
|
|
|
10
|
%
|
|
|
38,000
|
|
|
|
(2,556
|
)
|
|
|
35,444
|
|
|
8
|
|
|
5/16/2017
|
|
2/25/2018
|
|
11/12/2017
|
|
|
10
|
%
|
|
|
53,000
|
|
|
|
(2,876
|
)
|
|
|
50,124
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
367,333
|
|
|
$
|
(81,530
|
)
|
|
$
|
285,803
|
|
These
notes become convertible six months after the dates of agreement at a variable conversion price.
The
Company evaluates embedded conversion features within convertible debt under ASC 815 “Derivatives and Hedging” to
determine whether the embedded conversion feature(s) should be bifurcated from the host instrument and accounted for as a derivative
at fair value with changes in fair value recorded in earnings. If the conversion feature does not require derivative treatment
under ASC 815, the instrument is evaluated under ASC 470-20 “Debt with Conversion and Other Options” for consideration
of any beneficial conversion features.
Convertible
note holders have the option to convert the note plus accrued interest into shares of the Company’s common stock after six
months, at a certain discount of the average of the lowest trading prices for the previous 20 days prior to the conversion date.
The Company determined the embedded conversion feature as a derivative liability, and recorded at fair value as of May 31, 2017.
A
summary of the activity of the derivative liability for the period ended May 31, 2017 is as follows:
Balance
at February 28, 2017
|
|
$
|
112,461
|
|
Addition of
derivative as a debt discount
|
|
|
185,000
|
|
Addition of
derivative as day 1 loss
|
|
|
318,217
|
|
Decrease due
to debt conversion
|
|
|
(431,845
|
)
|
Change in
Fair Value
|
|
|
19,133
|
|
Balance at
May 31, 2017
|
|
$
|
202,966
|
|
A
summary of quantitative information about significant unobservable inputs (Level 3 inputs) used in measuring the Company’s
derivative liabilities that are categorized within Level 3 of the fair value hierarchy for the quarter ended May 31, 2017 is as
follows:
Date
of valuation
|
|
May
31, 2017
|
|
Inception
|
Volatility (annual)
|
|
|
396%
- 417%
|
|
|
|
247%
- 255%
|
|
Risk-free rate
|
|
|
.92%
- 1.38%
|
|
|
|
.61%
- .67%
|
|
Years to maturity
|
|
|
.25
–.33
|
|
|
|
.5
|
|
The
carrying amount of the Company’s financial assets and liabilities, such as cash, prepaid expenses and accrued expenses approximate
their fair value because of the short maturity of those instruments. The Company’s notes payable approximates the fair value
of such instruments based upon management’s best estimate of interest rates that would be available to the Company for similar
financial arrangements at May 31, 2017.
|
|
Fair
value measured at May 31, 2017
|
|
|
Fair
value at May 31, 2017
|
|
Quoted
prices in active markets (Level 1)
|
|
Significant
other observable inputs (Level 2)
|
|
Significant
unobservable inputs (Level 3)
|
Derivative liabilities
|
|
$
|
202,966
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
202,966
|
|
NOTE
7 - SUBSEQUENT EVENTS
Management
has evaluated subsequent events pursuant to the requirements of ASC Topic 855, from the balance sheet date through the date the
financial statements were issued, and has determined that no material subsequent events exist other than the following.
Since
the period ending May 31, 2017 the Company executed a Promissory Notes totaling $11,000.00 on July 11, 2017. The note bears an
interest rate of 10.0% per annum and is due January 11, 2018
The Company
has also issued
114,480,000
shares from Convertible Note conversions since the period ended
May 31, 2017
.
ITEM
2.
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MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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Cautionary
Statement Regarding Forward-Looking Statements
The
following Management’s Discussion and Analysis should be read in conjunction with VinCompass Corp. financial statements
and the related notes thereto. The Management’s Discussion and Analysis contains forward-looking statements that involve
risks and uncertainties, such as statements of our plans, objectives, expectations and intentions. Any statements that are not
statements of historical fact are forward-looking statements. When used, the words “believe,” “plan,”
“intend,” “anticipate,” “target,” “estimate,” “expect,” and the like,
and/or future-tense or conditional constructions (“will,” “may,” “could,” “should,”
etc.), or similar expressions, identify certain of these forward-looking statements. These forward-looking statements are subject
to risks and uncertainties that could cause actual results or events to differ materially from those expressed or implied by the
forward-looking statements in this Report on Form 10-Q. The Company’s actual results and the timing of events could differ
materially from those anticipated in these forward-looking statements as a result of several factors. The Company does not undertake
any obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this Report
on Form 10-Q.
As
used in this quarterly report, the terms “we”, “us”, “our”, and “Company” shall
mean “VinCompass” where events are referenced.
Our
financial statements are stated in United States Dollars (“USD” or “US$” or “$”) and are prepared
in accordance with United States Generally Accepted Accounting Principles. All references to “common shares” refer
to the common shares in our capital stock.
THE
FOLLOWING ANALYSIS OF THE RESULTS OF OUR OPERATIONS AND FINANCIAL CONDITION FOR THE THREE-MONTH PERIOD ENDING MAY 31, 2017, SHOULD
BE READ IN CONJUNCTION WITH THE CORPORATION’S FINANCIAL STATEMENTS, INCLUDING THE NOTES THERETO CONTAINED ELSEWHERE IN THIS
FORM 10-Q AND IN OUR ANNUAL REPORT FILED ON FORM 10-K ON MAY 31, 2017.
The
following discussion should be read in conjunction with our audited financial statements and the related notes that appear elsewhere
in this Annual 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 Annual Report, particularly
in the section entitled “Risk Factors”.
We
are a development stage company and have not generated material revenue to date. We have incurred recurring losses to date. Our
financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments
relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be
unable to continue in operation.
As
a result of Closing the Share Exchange Agreement as filed with the Commission on November 25, 2015 in the Company’s current
report on Form 8-K, the registrant is no longer a shell corporation as that term is defined in Rule 405 of the Securities Act
and Rule 12b-2 of the Exchange Act.
We
were incorporated in the State of Wyoming on January 20, 2010, as Tiger Jiujiang Mining, Inc. and established a fiscal year end
of February 28. Our statutory registered agent’s office is located at 1620 Central Avenue, Suite 202, Cheyenne, Wyoming
82001 and our business office is located at 795 Folsom Street, 1
st
Floor, San Francisco, CA. Our telephone number is
415-817-9955.
On
November 22, 2015, the Company, then under the name Tiger Jiujiang Mining, Inc., a Wyoming corporation (the “Company”)
entered into a Share Exchange Agreement (the “Share Exchange Agreement”) with VinCompass Corp., a California corporation
(“VinCompass”), the shareholders of VinCompass® (the “VinCompass Shareholders”), and the controlling
stockholders of the Company (by unanimous vote) (the “Tiger Controlling Stockholders”). Pursuant to the Share Exchange
Agreement, the Company acquired 5,200,000 (100%) shares of common stock of VinCompass® from the VinCompass® Shareholders
(the “VinCompass Shares”) and in exchange issued 26,000,000 (59.77%) restricted shares of its common stock to the
VinCompass® Shareholders (the “Tiger Shares”). As a result of the Share Exchange Agreement, VinCompass became
a wholly-owned subsidiary of the Company upon closing and the Company now carries on the business of VinCompass® as its primary
business. The Share Exchange Agreement contains customary representations, warranties and conditions to closing. The closing of
the Share Exchange Agreement (the “Closing”) occurred on January 14, 2016 (the “Closing Date”).
As
a result of the Share Exchange Agreement:
(a)
each outstanding VinCompass® Share was cancelled, extinguished and converted into and became the right to receive a pro rata
portion of the Tiger Shares which equaled the number of VinCompass Shares held by each VinCompass® Shareholder multiplied
by the exchange ratio of 5(the “Exchange Ratio”). Based on the Exchange Ratio, as a result of the Share Exchange Agreement,
the VinCompass Shareholders own a total of 26,000,000 restricted shares of common stock of the Company; and
(b)
Pursuant to the Share Exchange Agreement, Ya-Ping irrevocably canceled a total of 25,000,000 restricted shares of common stock
of the Company.
As
a result of the Share Exchange Agreement, the VinCompass Shareholders own a total of 26,000,000 restricted shares of the Company,
which represents 59.77% of our issued and outstanding shares of common stock. The Share Exchange Agreement is being accounted
for as a “reverse acquisition,” as the VinCompass® Shareholders own a majority of the outstanding shares of the
Company’s capital stock immediately following the Closing of the Share Exchange Agreement. Accordingly, VinCompass®
is deemed to be the acquirer in the reverse acquisition. After the Closing of the Share Exchange Agreement, the Board of Directors
and management of the Company are comprised of VinCompass’s management team and the operations of VinCompass® are the
continuing operations of the Company.
BUSINESS
VinCompass®
is an eCommerce platform built on patent pending technology that takes the guess work out of the wine buying equation for the
consumer. We have multiple revenue streams focused on providing curated wine through our wine club, direct purchases
via our App and private label wines with the majority of the revenue realized as recurring wine subscriptions. Our intelligent
software platform determines an individual’s VinPrint® (wine DNA preference) so consumers can purchase wine
that meets their profile with alluring value and availability.
Our
Proposed Exploration Program – Plan of Operation – Results of Operations
Wine
buying is a daunting task and for the average consumer, there has been no means to easily select wines to enjoy and cellar that
matches preferences for taste and price. To help fill this void, a plethora of wine clubs have popped up on the internet which
have failed to address this problem. The clubs push wine that provide them with the greatest margin rather than address the needs
of the consumer. As a result the membership renewals and reorder rates are well below those of other consumer product based clubs.
The
solution is VinCompass®…. a full-service personalized wine curator and eCommerce platform. Our wine club will provide
members only wines that meet their individual VinPrint® and at price levels determined by the consumer, providing enhanced
membership renewals and reorder rates.
The
Opportunity
Unlike
the numerous .com wine sites and Apps that target retail wine enthusiasts looking to purchase wine, VinCompass® addresses
the unmet need to uniquely pair taste and budget. With mobile devices now enabling 100’s of millions of consumers to instantly
fulfill their interests in music, sports, news and reading, VinCompass® is poised to become the mobile app-enabled cloud service
for consumers to discover, archive, socialize and acquire curated wines thus creating new opportunities to monetize the fast growing
$1B$+/month e-wine marketplace.
For
vineyards, it can be difficult and expensive to reach would-be customers. Unlike wine superstores who fail to connect boutique
growers with the palate of discriminating drinkers, VinCompass® employs a unique, patent-pending “VinPrint”®
to create a digital blue print of an individual’s’ wine preferences and then match those preferences with an inventory
of more than 1 million wines and the wine lists of more than 10,000 restaurants. VinCompass® creates a personalized one-to-one
relationship with life-long customers that growers otherwise would not otherwise be able to establish and cultivate to scale.
For wine lovers,
the rise of such unprecedented access may result in too many choices; Restaurant lists can seem like a set of encyclopedias with
too many different value options. Regardless of wine knowledge, choosing wine can be intimidating or time consuming. The VinCompass®
mobile app quickly presents a list of nearby restaurants, whose wine lists they can peruse before even walking in the door. Before
the sommelier hands over the wine list, VinCompass® will help select the ideal bottle based on wine tastes, budget and food
preferences.
Our
Brand and Products
App
– VinCompass in the apple iTunes and Google Play
Web
Site – eComm portal for Wine
Business
Model
Both
recurring and on-demand revenue in Wine eComm
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Recurring
revenue generated from wine club & freemium subscriptions (akin to Amazon’s Prime)
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On-demand
revenue generated from Virtual Vineyard, Private Label, Individually Branded, and Charity wines.
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●
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Engagement
with an App beginning with discovery in the restaurant
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●
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Business
Intelligence recurring revenue; Information and Insights for Restaurants and Wineries
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Business
Strategy
Invitation
Only Model
– We employ a complete Social graph network and full attribution for all members. Social as Members can invite
other members to join and drive the social aspect.
Social
Media Partnerships
- We will service communities that have high affinity to wine consumers. These Partnerships get the advantage
of providing significant benefit’s to their community that is not generally available. The members of VinCompass generally
save about 16% on wine spend and yet enjoy wine more by 14% on average thanks to the Patent Pending Recommendation Engine. As
well as ultimately enjoying a curated wine via eComm for consumption outside of the Restaurants.
Results
of Operation for the Three Months Ended May 31, 2017 and 2016
The
Company had net losses of $879,937 for the three months ended May 31, 2017 and a net loss of $155,060 for the equivalent quarter
ended May 31, 2016. The costs can be subdivided into the following categories which have and will vary from quarter to quarter
based on the level of corporate activity and capital-raising.
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For
the three months ended
May 31,
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2017
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2016
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Development
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$
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79,978
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$
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39,530
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Sales and Marketing
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46,518
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31,243
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Professional Fees
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39,711
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37,034
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Other General
& Administrative Expenses
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173,671
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|
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39,304
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Total
Operating Expenses
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|
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339,878
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147,111
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Interest expense
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202,709
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7,949
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Loss on derivative
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337,350
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-
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Net Loss
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$
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879,937
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$
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155,060
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Development expenses relate to product development,
salaries and consulting fees, which have increased in the current quarter to $79,978 over last year’s comparative of $39,530
representing an increase of 102% .
Sales & Marketing relate to advertising,
promotion, salaries & travel expenses was $46,518 for the three months ended May 31, 2017 compared to $31,243 for May 31,
2016 representing an increase of 48% .
Other General & Administrative expenses
includes all other expenses including legal accounting, audit fees, office expenses, rent and car allowance was $173,671 for the
three months ended May 31, 2017 compared to $39,304 for May 31, 2016. Adjusting for the surplus of $140,000 recorded as stock
based compensation expense which may or may not be converted in the future (see Note 4) 33, 671 for the three months ended May
31, 2017 compared to $39,304 for May 31, 2016 representing an relative decrease of 15% .
Interest
expense includes interest on convertible notes, amortization of debt discount and cost of finance amounting to $202,709 a substantial
increased over last years comparative of $7,949. The Interest Expense of $202,709 was composed primarily of non cash Debt Discount
Amortization of $193,571 for the convertible notes, resulting from raising finance through convertible notes, see Note 6.
Plan
of Operation
As
of May 31, 2017 and February 28, 2017, we had a deficit of $1,170,060 and $1,059,073 in working capital.
Over
the balance of the current fiscal year we intend to seek financing for the ongoing development of the VinCompass business plan
and to further develop our business model. We will need to raise sufficient additional capital for the work plus for our administrative
operations and working capital through the sale of equity shares in the form of a private placement or public offering, loans
or advances from officers or directors or others or convertible debentures.
We
do not expect any changes or hiring of employees since contracts are given to consultants and sub-contractor specialists in specific
fields of expertise. We do not expect to purchase or sell any plant or significant equipment. We intend to lease or rent any equipment
that we will need in order to carry out our business plan development.
Presently,
we have not generated any revenues to meet operating and capital expenses. We have incurred operating losses since inception,
and this is likely to continue through fiscal 2017-2018. Management projects that we will require a total of up to $975,000 to
fund ongoing operating expenses and working capital requirements. We continue to have term sheet negotiations with various third-party
Family Offices, Financial Institutions and Private Individuals. The Company’s operating plan proposes a minimum capital
injection of $1,000,000 for the year ending February 2018, and is also evaluating all equity and debt financing options; and/or
a registration statement for up to $5,000,000. The additional new capital will be used for go to market, accelerate monetization
such as the Digital Information and Insight business as well as increasing working capital.
Due
to the uncertainty of our ability to meet our current operating and capital expenses, in their report on the annual financial
statements for the year ended February 28, 2017, our independent auditors included an explanatory paragraph regarding concerns
about our ability to continue as a going concern. Our financial statements contain additional note disclosures describing the
circumstances that lead to this disclosure by our former independent auditors. Our issuance of additional equity securities could
result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those
loans would be available, will increase our liabilities and future cash commitments.
There
are no assurances that we will be able to obtain further funds required for continued long term operations. There can be no assurance
that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable
terms. If we are not able to obtain the additional financing on a timely basis, we will not be able to meet our obligations as
they become due.
Liquidity
and Capital Resources
As
of end of the last quarter on May 31, 2017, we have yet to generate any revenues from operations.
As
of May 31, 2017, our total assets, consisting entirely of cash, amounted to $29,279 while total current liabilities were $1,199,339.
Our working capital deficit was $1,170,060 as of May 31, 2017. The comparative figures as of the year ended February 28, 2017
were $13, 952, $1,073,025 and $1,059,073 respectively.
Net
Cash Used in Operating Activities
During
the three-month period ended May 31, 2017, $141,673 in cash was used for operating activities as compared to $41,506 used in the
three- months ended May 31, 2016.
Cash
Flow from Investing Activities
There
was no investing activity for the three months ended May 31, 2017 and 2016.
Cash
Flow from Financing Activities
During
the thee-month periods ended May 31, 2017 and 2016, the Company had $157,000 and $0 respectively, in cash provided by financing
activities.
Other
During
the quarter ended May 31, 2017, the Company allocated 9,000,000 shares, to be issued in lieu of fees paid to third parties. The
fair value of the shares is determined to be $9,900 using $0.001 per share, which represent the market price at the grant date.
In addition third party convertible note holders converted $147,205 of notes into 91,173,404 shares, at various dates during the
three month and at various prices, such issuances were approved by the board.