Item 1. Financial Statements
FELLAZO CORP.
Consolidated Balance Sheets
(Unaudited)
|
|
|
February 28,
|
|
|
August 31,
|
|
|
|
|
2021
|
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
Current Assets
|
|
|
|
|
|
|
|
Cash and cash equivalent
|
|
$
|
11,890
|
|
|
$
|
6,665
|
|
|
Prepaid expense and deposit
|
|
|
-
|
|
|
|
7,728
|
|
|
Total Current Assets
|
|
|
11,890
|
|
|
|
14,393
|
|
|
TOTAL ASSETS
|
|
$
|
11,890
|
|
|
$
|
14,393
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' DEFICIT
|
|
|
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
$
|
24,151
|
|
|
$
|
30,137
|
|
|
Due to related party
|
|
|
1,223,950
|
|
|
|
1,073,252
|
|
|
Total Current Liabilities
|
|
|
1,248,101
|
|
|
|
1,103,389
|
|
|
TOTAL LIABILITIES
|
|
|
1,248,101
|
|
|
|
1,103,389
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' Deficit
|
|
|
|
|
|
|
|
|
|
Common stock, $0.001 par value, 1,000,000,000 shares authorized; 86,264,000 shares issued and outstanding
|
|
|
86,264
|
|
|
|
86,264
|
|
|
Additional paid-in capital
|
|
|
36,122
|
|
|
|
36,122
|
|
|
Accumulated deficit
|
|
|
(1,262,587
|
)
|
|
|
(1,143,619
|
)
|
|
Accumulated other comprehensive loss
|
|
|
(3,215
|
)
|
|
|
(1,094
|
)
|
|
Total Fellazo Corp. Stockholders' Deficit
|
|
|
(1,143,416
|
)
|
|
|
(1,022,327
|
)
|
|
Non-controlling interest
|
|
|
(92,795
|
)
|
|
|
(66,669
|
)
|
|
Total Stockholders' Deficit
|
|
|
(1,236,211
|
)
|
|
|
(1,088,996
|
)
|
|
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT
|
|
$
|
11,890
|
|
|
$
|
14,393
|
|
The accompanying notes are an integral part of these unaudited consolidated financial statements.
FELLAZO CORP.
Consolidated Statements of Operations and Comprehensive Loss
(Unaudited)
|
|
|
Three months ended
|
|
|
Six Months Ended
|
|
|
|
|
February 28,
|
|
|
February 29,
|
|
|
February 28,
|
|
|
February 29,
|
|
|
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
|
Revenues
|
|
$
|
185,960
|
|
|
$
|
18,273
|
|
|
$
|
202,976
|
|
|
$
|
56,138
|
|
|
Cost of Goods Sold
|
|
|
140,456
|
|
|
|
13,442
|
|
|
|
150,014
|
|
|
|
40,531
|
|
|
Gross profit
|
|
|
45,504
|
|
|
|
4,831
|
|
|
|
52,962
|
|
|
|
15,607
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative expenses
|
|
$
|
104,422
|
|
|
$
|
79,909
|
|
|
$
|
195,848
|
|
|
$
|
153,238
|
|
|
Total operating expenses
|
|
|
104,422
|
|
|
|
79,909
|
|
|
|
195,848
|
|
|
|
153,238
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations
|
|
|
(58,918
|
)
|
|
|
(75,078
|
)
|
|
|
(142,886
|
)
|
|
|
(137,631
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before taxes
|
|
|
(58,918
|
)
|
|
|
(75,078
|
)
|
|
|
(142,886
|
)
|
|
|
(137,631
|
)
|
|
Provision for income tax
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Net loss
|
|
|
(58,918
|
)
|
|
|
(75,078
|
)
|
|
|
(142,886
|
)
|
|
|
(137,631
|
)
|
|
Net loss attributable to the non-controlling interest
|
|
|
(3,833
|
)
|
|
|
(14,163
|
)
|
|
|
(23,918
|
)
|
|
|
(22,235
|
)
|
|
Net Loss Attributable to The Shareholders of Fellazo Corp.
|
|
$
|
(55,085
|
)
|
|
$
|
(60,915
|
)
|
|
$
|
(118,968
|
)
|
|
$
|
(115,396
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation gain (loss)
|
|
|
(625
|
)
|
|
|
893
|
|
|
|
(4,329
|
)
|
|
|
763
|
|
|
Total comprehensive loss
|
|
|
(59,543
|
)
|
|
|
(74,185
|
)
|
|
|
(147,215
|
)
|
|
|
(136,868
|
)
|
|
Comprehensive Loss attributable to the non-controlling interest
|
|
|
(4,152
|
)
|
|
|
(13,708
|
)
|
|
|
(26,126
|
)
|
|
|
(21,846
|
)
|
|
Comprehensive Loss Attributable to The Shareholders of Fellazo Corp.
|
|
$
|
(55,391
|
)
|
|
$
|
(60,477
|
)
|
|
$
|
(121,089
|
)
|
|
$
|
(115,022
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and dilutive net loss per common share
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding - basic and diluted
|
|
|
183,792,000
|
|
|
|
86,264,000
|
|
|
|
86,264,000
|
|
|
|
86,264,000
|
|
The accompanying notes are an integral part of these unaudited consolidated financial statements.
FELLAZO CORP.
Consolidated Statements of Changes in Stockholders’ Deficit
(Unaudited)
For the six months ended February 28, 2021
|
|
|
|
|
|
|
|
|
Additional
|
|
|
|
|
|
Accumulated other
|
|
|
Non
|
|
|
|
|
|
|
|
Common Stock
|
|
|
Paid in
|
|
|
Accumulated
|
|
|
comprehensive
|
|
|
controlling
|
|
|
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
Deficit
|
|
|
loss
|
|
|
Interest
|
|
|
Total
|
|
|
Balance, August 31, 2020
|
|
|
86,264,000
|
|
|
$
|
86,264
|
|
|
$
|
36,122
|
|
|
$
|
(1,143,619
|
)
|
|
$
|
(1,094
|
)
|
|
$
|
(66,669
|
)
|
|
$
|
(1,088,996
|
)
|
|
Net loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(63,883
|
)
|
|
|
-
|
|
|
|
(20,085
|
)
|
|
|
(83,968
|
)
|
|
Foreign currency translation gain
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,815
|
)
|
|
|
(1,889
|
)
|
|
|
(3,704
|
)
|
|
Balance, November 30, 2020
|
|
|
86,264,000
|
|
|
$
|
86,264
|
|
|
$
|
36,122
|
|
|
$
|
(1,207,502
|
)
|
|
$
|
(2,909
|
)
|
|
$
|
(88,643
|
)
|
|
$
|
(1,176,668
|
)
|
|
Net loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(55,085
|
)
|
|
|
-
|
|
|
|
(3,833
|
)
|
|
|
(58,918
|
)
|
|
Foreign currency translation gain
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(306
|
)
|
|
|
(319
|
)
|
|
|
(625
|
)
|
|
Balance, February 28, 2021
|
|
|
86,264,000
|
|
|
$
|
86,264
|
|
|
$
|
36,122
|
|
|
$
|
(1,262,587
|
)
|
|
$
|
(3,215
|
)
|
|
$
|
(92,795
|
)
|
|
$
|
(1,236,211
|
)
|
For the six months ended February 29, 2020
|
|
|
Common Stock
|
|
|
Additional
Paid in
|
|
|
Accumulated
|
|
|
Accumulated other
comprehensive
|
|
|
Non
controlling
|
|
|
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
Deficit
|
|
|
loss
|
|
|
Interest
|
|
|
Total
|
|
|
Balance, August 31, 2019
|
|
|
86,264,000
|
|
|
$
|
86,264
|
|
|
$
|
36,122
|
|
|
$
|
(889,870
|
)
|
|
$
|
(209
|
)
|
|
$
|
(10,434
|
)
|
|
$
|
(778,127
|
)
|
|
Net loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(54,481
|
)
|
|
|
-
|
|
|
|
(8,072
|
)
|
|
|
(62,553
|
)
|
|
Foreign currency translation gain
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(64
|
)
|
|
|
(66
|
)
|
|
|
(130
|
)
|
|
Balance, November 30, 2019
|
|
|
86,264,000
|
|
|
$
|
86,264
|
|
|
$
|
36,122
|
|
|
$
|
(944,351
|
)
|
|
$
|
(273
|
)
|
|
$
|
(18,572
|
)
|
|
$
|
(840,810
|
)
|
|
Net loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(60,915
|
)
|
|
|
-
|
|
|
|
(14,163
|
)
|
|
|
(75,078
|
)
|
|
Foreign currency translation gain
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
438
|
|
|
|
455
|
|
|
|
893
|
|
|
Balance, February 29, 2020
|
|
|
86,264,000
|
|
|
$
|
86,264
|
|
|
$
|
36,122
|
|
|
$
|
(1,005,266
|
)
|
|
$
|
165
|
|
|
$
|
(32,280
|
)
|
|
$
|
(914,995
|
)
|
The accompanying notes are an integral part of these unaudited consolidated financial statements
FELLAZO CORP.
Consolidated Statements of Cash Flows
(Unaudited)
|
|
|
Six Months Ended
|
|
|
|
|
February 28,
|
|
|
February 29,
|
|
|
|
|
2021
|
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Operating Activities:
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(142,886
|
)
|
|
$
|
(137,631
|
)
|
|
Adjustments to reconcile net loss to net cash used in operations:
|
|
|
|
|
|
|
|
|
|
Expenses paid by related party
|
|
|
200,002
|
|
|
|
155,377
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
Prepaid
|
|
|
1,133
|
|
|
|
5,240
|
|
|
Deposit
|
|
|
6,712
|
|
|
|
993
|
|
|
Accounts payable and accrued liabilities
|
|
|
(6,034
|
)
|
|
|
(16,200
|
)
|
|
Net Cash Provided by Operating Activities
|
|
|
58,927
|
|
|
|
7,779
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Financing Activities:
|
|
|
|
|
|
|
|
|
|
Expenses paid on behalf of related party
|
|
|
-
|
|
|
|
(350,642
|
)
|
|
Advances from related party
|
|
|
10,458
|
|
|
|
298,572
|
|
|
Repayment to related party
|
|
|
(64,122
|
)
|
|
|
(4,368
|
)
|
|
Net Cash Used in Financing Activities
|
|
|
(53,664
|
)
|
|
|
(56,438
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Effects on changes in foreign exchange rate
|
|
|
(38
|
)
|
|
|
425
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in cash and cash equivalents
|
|
|
5,225
|
|
|
|
(48,234
|
)
|
|
Cash and cash equivalents, beginning of period
|
|
|
6,665
|
|
|
|
54,467
|
|
|
Cash and cash equivalents, end of period
|
|
$
|
11,890
|
|
|
$
|
6,233
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental cash flow information
|
|
|
|
|
|
|
|
|
|
Interest paid
|
|
$
|
-
|
|
|
$
|
-
|
|
|
Income taxes paid
|
|
$
|
-
|
|
|
$
|
-
|
|
The accompanying notes are an integral part of these unaudited consolidated financial statements
FELLAZO CORP.
Notes to the Consolidated Financial Statements
For the Period Ended February 28, 2021
(Unaudited)
NOTE 1 – ORGANIZATION, DESCRIPTION OF BUSINESS AND GOING CONCERN
Fellazo Corp. (“the Company”, “we”, “us” or “our”) was incorporated in the State of Nevada on May 28, 2014.
The Company had commenced to be engaged in the industry of “Healthcare and Personal Wellness” products and related products. Activities include but not limited to sourcing raw materials or partly or fully finished products, manufacturing, wholesale and trading of these products.
Our office is located at 8th Floor, Wisma Huazong, Lot 15285, 0.7km Lebuhraya SungeiBesi, 43300 Seri Kembangan, Selangor Darul Ehsan, Malaysia.
Going Concern Uncertainties
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the discharge of liabilities in the normal course of business for the foreseeable future.
As of February 28, 2021, the Company had an accumulated deficit of $1,262,587, and net loss of $142,886 for the six months ended February 28, 2021. Losses have principally occurred as a result of the substantial resources required for general and administrative expenses associated with our operations. The continuation of the Company as a going concern is dependent upon the continued financial support from its stockholders or external financing. Management believes the existing stockholders will provide the additional cash to meet with the Company’s obligations as they become due. However, there is no assurance that the Company will be successful in securing sufficient funds to sustain the operations.
These conditions raise substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to reflect the possible future effect on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the outcome of these uncertainties. Management believes that the actions presently being taken to obtain additional funding and implement its strategic plan provides the opportunity for the Company to continue as a going concern.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial statements and Article 8 of Regulation S-X of the United States Securities and Exchange Commission (“SEC”). Accordingly, they do not contain all information and footnotes required by U.S. GAAP for complete financial statements. However, except as disclosed herein, there has been no material change in the information disclosed in the Notes to Consolidated Financial Statements included in the Annual Report on Form 10-K for the year ended August 31, 2020.
Principles of Consolidation
The accompanying consolidated financial statements include the financial statements of the Company and its 49% owned subsidiary Fellazo Berhad, an entity under common control. All significant inter-company balances and transactions within the Company have been eliminated upon consolidation.
Variable Interest Entities
The Company holds both the power to direct the most significant activities of FB, as well as an economic interest in FB and, as such, is deemed to be the primary beneficiary or consolidator of FB. The determination of the VIE’s primary beneficiary requires an evaluation of the contractual and implied rights and obligations associated with each party’s relationship with or involvement in the entity, an estimate of the entity’s expected losses and expected residual returns and the allocation of such estimates to each party involved in the entity.
Revenue recognition
The Company commenced its operation in mid-October 2019. At this initial stage revenue is earned from the trading of raw bird-nest only.
The Company’s revenue recognition procedures consist of the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations pursuant to each of its sales transactions:
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|
•
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identify the contract with a customer;
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|
|
•
|
identify the performance obligations in the contract;
|
|
|
•
|
determine the transaction price;
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|
|
•
|
allocate the transaction price to performance obligations in the contract; and
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|
|
•
|
recognize revenue as the performance obligation is satisfied.
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However, at this initial stage of our operations which started with trading of raw bird-nest, the management is using this stage as exposure of management to the bird-nest business in order to learn and experience with our suppliers. who are bird-nest farmers or their agents, determination of quality of the raw material, the process of raw bird-nest cleaning of the different class of the raw material and market for these clean bird-nest.
At this initial stage we have not entered into any formal contracts with our suppliers and purchasers, most of the suppliers and purchasers are known to our management or introduced to the management by closed business friends.
Cost of Goods Sold – Trading of Raw Bird-Nest
At this initial stage of business operations which the management considered as exposure, gaining of knowledge and experience of the overall bird-nest business, our Cost of goods sold only include the actual cost of the raw bird-nest.
Foreign Currency Translation
Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the statement of operations.
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Exchange Rates
|
|
February 28,
2021
|
|
|
August 31,
2020
|
|
|
Spot rate RM : USD exchange rate
|
|
|
0.2466
|
|
|
|
0.2401
|
|
|
Average period RM : USD exchange rate
|
|
|
0.2470
|
|
|
|
0.2357
|
|
NOTE 3 – RELATED PARTY TRANSACTIONS
Our Management Agent, Swipypay Berhad (a company established in Malaysia) is 80% owned by our Director – Mr. Yap Kit Chuan. Total outstanding amount due to our Management Agent was $1,223,950 and $1,073,252 as at February 28, 2021 and August 31, 2020 respectively. The additional amount of $150,698 incurred in the six months ended February 28, 2021 consisted of operating expenses paid on behalf of the Company of $200,002 and advances from a related party of $10,458, and a repayment to related party of $64,122. The difference of amount was a result of change of exchange rate.
Item 2. Management’s Discussion and Analysis of Financial Condition or Plan of Operation
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 consolidated financial statements are prepared in accordance with United States Generally Accepted Accounting Principles. The following discussion should be read in conjunction with our consolidated 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.
In this quarterly report, unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to “common shares” refer to the common shares in our capital stock.
As used in this quarterly report, the terms “we”, “us”, “our”, “our company” or “the Company” mean Fellazo Corp., and Fellazo Berhad, a Malaysian company, of which we own 49%, unless otherwise indicated.
Overview of Corporate History
Fellazo Corp. was incorporated in the State of Nevada on May 28, 2014. The Company’s fiscal year end is August 31.
Overview of Current Business
The Company’s core business is “Healthcare and Personal Wellness” products - primarily bird-nest based, which include manufacturing and retail (retail chain and online). With our expertise in online applications platforms, we will be developing an online network platform to market and sell our products, and also create a system to source and purchase raw materials we required.
In mid of October 2019, the Company’s 49% subsidiary Fellazo Berhad (“FB”) started purchases of raw bird-nests directly from bird-nest farmers or their agents, and re-selling them to bird-nest processors; wherever possible these raw bird-nests are delivered directly from the farmer to the processor, so that we would not have to maintain a facility to store these raw bird-nests at an early stage of our business development.
FB had an arrangement to utilize a raw bird-nest processing factory located at our office building as a show factory for visits by our potential customers for processed bird-nest and bird-nest based health supplement.
FB had also placed an initial deposit for our OEM personal cleansing and nourishing facial products, these initial batches of products would generally be used for marketing purposes, such as trial samples for potential customers. FB is working with our Management Agent to seek out potential partners for our wellness and personal care products
Due to the outbreak of Covid-19 pandemic and a government-imposed lockdown, we ceased operations mid-January 2020, and have yet to recover even with partial lifting of lockdown.
In view of the still unknown market, economy uncertainty and further regional and district lockdowns, and the fact that bird-nest has been considered a prestige product, our market may take a longer time to recover than other industries.
On August 1, 2020, FB executed an Addendum and Update to the existing Management Agent agreement with Swipypay Berhad to include additional functions (which include provision of the show factory) and a new monthly management fee increase from $5,000 to $10,000 per month, in anticipation of FB’s increase in operational volume in the 2021.
Our office is located at 8th Floor, Wisma Huazong, Lot 15285, 0.7 km Lebuhraya Sungei Besi, 43300 Seri Kembangan, Selangor Darul Ehsan, Malaysia. Our corporate website is http://fellazo.com.
We have never declared bankruptcy, been in receivership, or involved in any kind of legal proceeding.
Results of Operations
The following summary of our results of operations should be read in conjunction with our financial statements included elsewhere in this quarterly report.
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. We expect we will require additional capital to meet our long term operating requirements. We expect to raise additional capital through, among other things, the sale of equity or debt securities.
Comparison of the three months ended February 28, 2021 and 2020
|
|
|
Three months ended
|
|
|
|
|
|
|
|
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|
|
February 28,
|
|
|
February 29,
|
|
|
|
|
|
|
|
|
|
|
2021
|
|
|
2020
|
|
|
Change
|
|
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%
|
|
|
Revenue
|
|
$
|
185,960
|
|
|
$
|
18,273
|
|
|
$
|
167,687
|
|
|
|
918
|
%
|
|
Cost of Goods Sold
|
|
|
140,456
|
|
|
|
13,442
|
|
|
|
127,014
|
|
|
|
945
|
%
|
|
General and administrative expenses
|
|
|
104,422
|
|
|
|
79,909
|
|
|
|
24,513
|
|
|
|
31
|
%
|
|
Net loss
|
|
$
|
58,918
|
|
|
$
|
75,078
|
|
|
$
|
(16,160
|
)
|
|
(22
|
%)
|
For the three months ended February 28, 2021, we had revenue of $185,960 and cost of goods sold of $140,456, as compared to $18,273 and $13,442 for the same period in 2020. The Company started with trading of raw bird-nest since fiscal year 2020 and it is an initial stage of our operations. Due to the outbreak of Covid-19 pandemic and a government-imposed lockdown, we ceased operations mid-January 2020.
Our general and administrative expenses were $104,422 for the three months ended February 28, 2021, as compared to $79,909 for the same period in 2020. The increase in general and administrative expenses was primarily due to increased management fees and payroll expense.
Our net loss decreased by $16,160 due to an increase in gross profit offset by an increase in operating expense.
Comparison of the six months ended February 28, 2021 and 2020
|
|
|
Six Months Ended
|
|
|
|
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February 28,
|
|
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February 29,
|
|
|
|
|
|
|
|
|
|
|
2021
|
|
|
2020
|
|
|
Change
|
|
|
%
|
|
|
Revenue
|
|
$
|
202,976
|
|
|
$
|
56,138
|
|
|
$
|
146,838
|
|
|
|
262
|
%
|
|
Cost of Goods Sold
|
|
|
150,014
|
|
|
|
40,531
|
|
|
|
109,483
|
|
|
|
270
|
%
|
|
General and administrative expenses
|
|
|
195,848
|
|
|
|
153,238
|
|
|
|
42,610
|
|
|
|
28
|
%
|
|
Net loss
|
|
$
|
142,886
|
|
|
$
|
137,631
|
|
|
$
|
5,255
|
|
|
|
4
|
%
|
For the six months ended February 28, 2021, we had revenue of $202,976 and cost of goods sold of $150,014, as compared to $56,138 and $40,531 for the same period in 2020. We started with trading of raw bird-nest since fiscal year 2020 and it is an initial stage of our operations and due to the outbreak of Covid-19 pandemic and a government-imposed lockdown, we ceased operations mid-January 2020.
Our general and administrative expenses were $195,848 for the six months ended February 28, 2021, as compared to $153,238 for the same period in 2020. The increase in general and administrative expenses was primarily due to increased management fees and payroll expense.
Our net loss increased by $5,255 due to an increase in operating expense offset by an increase in gross profit.
Liquidity and Capital Resources
Working Capital
|
|
|
February 28,
|
|
|
August 31,
|
|
|
|
|
|
|
|
|
|
|
2021
|
|
|
2020
|
|
|
Change
|
|
|
%
|
|
|
Current assets
|
|
$
|
11,890
|
|
|
$
|
14,393
|
|
|
$
|
(2,503
|
)
|
|
(17
|
%)
|
|
Current liabilities
|
|
$
|
1,248,101
|
|
|
$
|
1,103,389
|
|
|
$
|
144,712
|
|
|
|
13
|
%
|
|
Working capital deficiency
|
|
$
|
(1,236,211
|
)
|
|
$
|
(1,088,996
|
)
|
|
$
|
(147,215
|
)
|
|
|
14
|
%
|
The Company’s current assets consists of cash and cash equivalents of $11,890 at February 28, 2021, as compared to cash and cash equivalents of $6,665 and prepaid expense and deposit of $7,728 at August 31, 2020.
As at February 28, 2021, current liabilities consisted of accounts payable and accrued liabilities of $24,151 and due to a related party of $1,223,950, as compared to August 31, 2020, current liabilities consisted of accounts payable and accrued liabilities of $30,137 and due to a related party of $1,073,252. The increase in current liabilities is primarily due to the operating expenses paid by the related party.
Cash Flows
|
|
|
Six Months Ended
|
|
|
|
|
|
|
|
February 28,
|
|
|
February 29,
|
|
|
|
|
|
|
|
2021
|
|
|
2020
|
|
|
Change
|
|
|
Cash provided by operating activities
|
|
$
|
58,927
|
|
|
$
|
7,779
|
|
|
$
|
51,148
|
|
|
Cash used in financing activities
|
|
|
(53,664
|
)
|
|
|
(56,438
|
)
|
|
|
2,774
|
|
|
Effects on changes in foreign exchange rate
|
|
|
(38
|
)
|
|
|
425
|
|
|
|
(463
|
)
|
|
Net change in cash and cash equivalents
|
|
$
|
5,225
|
|
|
$
|
(48,234
|
)
|
|
$
|
53,459
|
|
Cash Flow from Operating Activities
Cash flows provided by operations was $58,927 during the six months ended February 28, 2021, compared with $7,779 during the same period in 2020 The increase in cash provided by operating activities is mainly due to expenses paid by related party.
Cash Flow from Financing Activities
During the six months ended February 28, 2021, the Company received $10,458 from a related party, and repaid $64,122 to a related party. During the six months ended February 29, 2020, the Company received $298,572 from a related party, paid $350,642 for expenses on behalf of a related party and repaid $4,368 to a related party.
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.
Critical Accounting Policies and Estimates
Management’s discussion and analysis of our financial condition and results of operations are based upon our unaudited consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. We review the accounting policies used in reporting our financial results on a regular basis. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, net sales and expenses and related disclosure of contingent liabilities. We base our estimates on historical experience and on various other assumptions that we believe are reasonable for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Our actual results may differ materially from these estimates.
For a complete description of our critical accounting policies and estimates, refer to our 2020 Annual Report on Form 10-K filed with the Securities and Exchange Commission on December 28, 2020.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that is designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
An evaluation was conducted under the supervision and with the participation of our management of the effectiveness of the design and operation of our disclosure controls and procedures as of February 28, 2021. Based on that evaluation, our management concluded that our disclosure controls and procedures were not effective as of such date to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms as a result of the following material weaknesses:
(1) lack of a functioning audit committee and lack of a majority of outside directors on the Company’s board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures;
(2) inadequate segregation of duties consistent with control objectives;
(3) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of U.S. GAAP and SEC disclosure requirements; and
(4) ineffective controls over period end financial disclosure and reporting processes.
The specific material weakness identified by our management was ineffective controls over certain aspects of the financial reporting process because of a lack of a sufficient complement of personnel with a level of accounting expertise and an adequate supervisory review structure that is commensurate with our financial reporting requirements and inadequate segregation of duties. A “material weakness” is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements would not be prevented or detected on a timely basis.
We expect to be materially dependent upon third parties to provide us with accounting consulting services for the foreseeable future which we believe mitigates the impact of the material weaknesses discussed above. Until such time as we have a chief financial officer with the requisite expertise in U.S. GAAP and establish an audit committee and implement internal controls and procedures, there are no assurances that the material weaknesses and significant deficiencies in our disclosure controls and procedures will not result in errors in our financial statements which could lead to a restatement of those financial statements.
Changes in Internal Controls
There have been no changes in our internal controls over financial reporting identified in connection with the evaluation required by paragraph (d) of Securities Exchange Act Rule 13a-15 or Rule 15d-15 that occurred in the quarter ended February 28, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART –I - OTHER INFORMATION