UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended February 28, 2017
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ________ to ________
Commission file number: 000-54567
VINCOMPASS CORP.
(Exact name of small business issuer in its charter)
Wyoming | 80-0552115 | |
(State or jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
795 Folsom Street, 1st Floor, San Francisco, CA | 94107 | |
(Address of principal executive offices) | (Zip Code) |
Issuer’s telephone number: 415-817-9955
Issuer’s email address: peter@vincompass.com
Securities Registered Under Section 12(b) of the Exchange Act: None
Securities Registered Under Section 12(g) of the Exchange Act:
Common Stock, $0.001 par value
(Title of class)
Indicate by check mark if the registrant is a well-known seasoned issuer as defined by Rule 405 of the Securities Act (the “Act” or “Securities Act”). Yes [ ] No [X]
Indicate by check mark if the registrant is not required to file reports pursuant to Rule 13 or Section 15(d) of the Act. Yes [ ] No [X]
Indicate by check mark whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant Rule 405 of Regulation S-T (s 220.405 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 [X] No [ ]
Check if disclosure of delinquent filers in response to Item 405 of Regulation S-K is not contained in this form, and no disclosure will be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X]
Indicate by check mark whether the registrant is a large accelerated filer, a non-accelerated filer or a smaller reporter.
Large accelerated filer [ ] | Accelerated filer [ ] | |
Non-accelerated filer [ ] | Smaller reporting company [X] |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
Issuer’s revenues for its most recent fiscal year: $0.
The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter: (24,787,193 common shares at $1.18) of $29,246,887 the Corporation is quoted on the OTC-QB under the symbol “VCPS”).
(APPLICABLE ONLY TO CORPORATE REGISTRANTS)
State the number of shares outstanding of each of the Issuer’s classes of common stock, as of the latest practicable date: 144,322,775 common shares issued and outstanding as of the date of this report.
Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]
DOCUMENTS INCORPORATED BY REFERENCE
List hereunder the following documents if incorporated by reference and the Part of the Form 10-K into which the document is incorporated: (1) any annual report to shareholders; (2) any proxy or information statement and (3) any prospectus filed pursuant to Rule 424(b) or (c) under the Securities Act of 1933, as amended (the “Securities Act”):
● | None |
TABLE OF CONTENTS
Cautionary Statement Regarding Forward-Looking Statements
This annual report contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements relate to future events or our future financial performance. Some discussions in this report may contain forward-looking statements that involve risk and uncertainty. A number of important factors could cause our actual results to differ materially from those expressed in any forward-looking statements made in this report. Forward-looking statements are often identified by words like: “believe”, “expect”, “estimate”, “anticipate”, “intend”, “project” and similar expressions or words which, by their nature, refer to future events.
In some cases, you can also identify forward-looking statements by terminology such as “may”, “will”, “should”, “plans”, “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, including the risks in the section entitled “Risk Factors”, beginning on page 4, 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 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 financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles. References to common shares refer to common shares in our capital stock.
As used in this annual report, the terms “we”, “us”, “our”, and “VinCompass” means VinCompass Corporation unless otherwise indicated.
PART I
Item 1. Description of Business.
We were incorporated in the State of Wyoming on January 28, 2010, 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, 1st Floor, San Francisco, CA, 94107.
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Our Current Business
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”).
Corporate History
VinCompass® is an e-Commerce 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.
The Problem
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) |
● | On-demand revenue generated from Virtual Vineyard, Private Label, Individually Branded, and Charity wines. |
● | Engagement with an App beginning with discovery in the restaurant |
● | Business Intelligence recurring revenue; Information and Insights for Restaurants and Wineries |
Revenue Streams | GM% | Frequency | Segments* | |||||||
Private Label Wines - Now | 40%+ | On Demand | B2B & B2C | |||||||
Wine Club | 35% | Recurring | Mainly B2C | |||||||
Single Wines | 30%< | On Demand | Mainly B2C | |||||||
Subscriptions Fremium | 95% | Recurring | Mainly B2C |
*B2B is Business to Business
*B2C is Business to Consumer
Business Strategy
Invitation Only Model – We employ a complete Social graph network and full attribution for all members. Members can sign in via selected Social Networks and as Members, they 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 14% 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.
Research and Development
Our patent pending Recommendation Engine application has been cloud based since the beginning in 2011. It is capable of computing billions of constraints within seconds to provide the personalized optimized wine recommendation. Approximately 70% of our expenses to date have been spent on development.
Our VinCompass App was released with Apple iTune and Google Play in 2012.
An independent research study from VinTank in 2011, the wine industry’s most sophisticated social engagement and CRM consultants, concluded that of the 482 Wine Apps reviewed in the study, no one solved the Restaurant problem until VinCompass. Paul Mabray, VinTank’s Chief Strategy Officer, stated in his findings, “There is only one real pain point in the consumer experience and it is often when a consumer is in a white table cloth restaurant and staring at wines they don’t understand. The only app (though through a closed network) trying to fix that goal is VinCompass.”
Intellectual Property
™ Registration’s
FoWL™ - Fear of the Wine List
VinPrint® - Wine Preference DNA
VinCompass® Guiding your Wine Journey
Virtual Vineyard™
22 Claims Patent Pending – Application Number PCT/US12/46480
About the 22 Claims Patent Pending
A computer readable medium comprises instructions, which when executed by a data processor of a portable electronic device, cause the data processor to obtain a list of wines available at a commercial establishment; and identify at least one attribute associated with each wine included on the list of wines. The instructions further cause the data processor to, for each wine included on the list of wines, determine a score indicative of a likelihood that the user will purchase the wine on the basis of the at least one attribute and at least one of a characteristic associated with the user and a preference input by the user. Based on the score, the instructions further cause the data processor to identify at least one recommended wine for recommendation to the user; and present the at least one recommended wine on a display interface of the portable electronic device.
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Data Factory- This application covers the conversion of unstructured, different formatted wine list into our Data Model that with our Domain Expertise are aggregated, classified, enriched and standardized for publishing. The final product is organized and copyrighted. We currently have over 10,000 Restaurants and over 1 million wines under manage via the Content Factory. This IP is based on the Company’s decades of experience in the Content field.
Competition
Amazon uses a lot of the same fulfillment and compliance technology that we use. Additionally, it legitimizes the wine eComm business. However, as a regulated business with perishable (limited supply of any vintage) Other than their commercial relationship with millions of members, Amazon does not have a huge competitive advantage in the wine industry. They don’t have the VinPrint® or engagement in the Restaurant for them to discover what the members might like, strategically missing the curation based on the VinPrint®.
The other competitor is Majestic who acquired Naked Wines which will significantly accelerate the planned development of Majestic’s online capabilities whilst providing Naked Wines with a nationwide store network to allow a Click & Collect delivery option for its customers.
Competitive Edge
● | Patent pending recommendation engine derives user’s personalized VinPrint®. |
● | Only App to engage the user by individualized wine curating starting at the restaurant. |
● | Enterprise-grade certified wine eComm cloud-enabled backend for scale and compliance. |
● | Established critical mass of 1MM+ wines cataloged and under management in 10,000 + restaurants. |
Forward Looking Statements
When used herein, the words or phrases “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimate,” “projected,” “intends to,” or similar expressions are intended to identify “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to certain risks and uncertainties, including but not limited to lack of a public market for the Shares, competition, factors affecting the Company’s ability to implement its growth strategy, contingent risks, state and federal regulation and licensing requirements that could cause the Company’s actual results to differ materially from historical earnings and those presently anticipated or projected. Such factors, which are discussed in “Risk Factors,” and “Business” could affect the Company’s financial performance and could cause the Company’s actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods in this Memorandum. As a result, potential investors are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date made. The Company’s independent accountants have not examined or compiled the accompanying forward-looking statements and accordingly do not provide any assurance with respect to such statements.
RISKS RELATED TO OUR BUSINESS
General Company Risks
Our business is heavily dependent on Apple, Inc. and Google
The Company’s success depends upon the popularity of the electronic devices through which our customers would connect to the VinCompass App. If consumer preferences for these products change, or the Company is unable to obtain clients who utilize the VinCompass App or eComm portal for wine, the Company’s sales could decline and its results could be adversely affected. The Company is highly dependent on the allowance by Apple and Google of third-party developers to market Apps in the App Store. If Apple, Inc. or Google were to not allow third-party developers of Apps, or were to not select our App for inclusion in the App Store, our Company could be adversely affected.
If we are unable to attract new customers, or if our existing customers do not purchase additional products or services, the growth of our business and cash flows will be adversely affected.
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To increase our revenues and cash flows, we must regularly add new customers and, to a somewhat lesser extent, sell additional products and services to our existing customers. If we are unable to sell our products and services to customers that have been referred to us, unable to generate sufficient sales leads through our marketing programs, or if our existing or new customers do not perceive the VinCompass app and eComm portal for wine to be of sufficiently high value and quality, we may not be able to increase sales and our operating results would be adversely affected. In addition, if we fail to sell new products and services to existing or new customers, our operating results will suffer, and our revenue growth, cash flows and profitability may be materially and adversely affected.
We may experience service failures or interruptions due to defects in the software, infrastructure or processes that comprise our App software, any of which could adversely affect our business.
Our software may contain undetected defects in the software, infrastructure or processes. If these defects lead to failures in our App, we could experience delays or lost revenues during the period required to correct the cause of the defects. Furthermore, we cannot be certain that defects will not be found in new software or upgraded existing software or that service disruptions will not occur in the future, resulting in loss of, or delay in, market acceptance, which could have an adverse effect on our business, results of operations and financial condition.
If we do not successfully maintain the VinCompass brand in our existing markets or successfully market the VinCompass brand in new markets, our revenues and earnings could be materially and adversely affected.
We believe that developing, maintaining and enhancing the VinCompass brand in a cost-effective manner is critical in expanding our customer base. Promotion of our brand will depend largely on continuing our sales and marketing efforts and providing high-quality service to our customers. We cannot be assured that these efforts will be successful in marketing the VinCompass brand. If we are unable to successfully promote our brand, or if we incur substantial expenses in attempting to do so, our revenues and earnings could be materially and adversely affected.
If we are unable to adapt our products and App software to rapid technological change, our revenues and profits could be materially and adversely affected.
Rapid changes in technology, products, services, customer requirements and operating standards occur frequently, especially within the technologies of Apple brand products and Google Play. These changes could render our proprietary technology and systems obsolete. Any technological changes that reduce or eliminate the need for Apps that connect Apple and Google devices to customers in our target markets could harm our business. We must continually improve the performance, features and reliability of our App software and eComm website, particularly in response to our competition.
Our success will depend, in part, on our ability to:
● | enhance our existing products and services; | |
● | develop new products, services and technologies that address the increasingly sophisticated and varied needs of our target markets; and | |
● | respond to technological advances and emerging industry standards and practices on a cost-effective and timely basis. |
We cannot be certain of our success in accomplishing the foregoing. If we are unable for technical, legal, financial or other reasons, to adapt to changing market conditions or buyer requirements, our market share, business and operating results could be materially and adversely affected.
We may be subject to claims that we or our technologies infringe upon the intellectual property or other proprietary rights of a third-party. Any such claims may require us to incur significant costs, to enter into royalty or licensing agreements or to develop or license substitute technology, which may harm our business.
We may in the future be subject to claims that our technologies infringe upon the intellectual property or other proprietary rights of a third-party. While we believe that our products do not infringe upon the proprietary rights of third parties, we cannot guarantee that third parties will not assert infringement claims against us in the future, particularly with respect to technology that we acquire through acquisitions of other companies. We might not prevail in any intellectual property infringement litigation, given the complex technical issues and inherent uncertainties in such litigation. Defending such claims, regardless of their merit, could be time-consuming and distracting to management, and result in costly litigation or settlement.
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Government regulation of the Internet and e-commerce is evolving, and unfavorable changes or our failure to comply with regulations could harm our operating results.
As Internet commerce continues to evolve, increasing regulation by federal, state or foreign agencies becomes more likely. For example, we believe increased regulation is likely in the area of data privacy, and laws and regulations applying to the solicitation, collection, processing or use of personal or consumer information could affect our customers’ ability to use and share data, potentially reducing demand for our products. In addition, taxation of products and services provided over the Internet or other charges imposed by government agencies or by private organizations for accessing the Internet may also be imposed. Any regulation imposing greater fees for Internet use or restricting information exchange over the Internet could result in a decline in the use of the Internet and the viability of Internet-based services and product offerings, which could harm our business and operating results.
We face significant competition which could adversely affect our profitability.
The wine industry is intensely competitive. Wines compete in several Super-premium and Ultra-premium wine market segments with many other Super-premium and Ultra-premium domestic and foreign wines, with imported wines coming from the Burgundy and Bordeaux regions of France, as well as Italy, Chile, Argentina, South Africa and Australia. Our wines also compete with popularly-priced generic wines and with other alcoholic and, to a lesser degree, non-alcoholic beverages, for shelf space in retail stores and for marketing focus by distributors, many of which carry extensive brand portfolios. A result of this intense competition has been and may continue to be upward pressure on our selling and promotional expenses. In addition, the wine industry has experienced significant consolidation. Many of our competitors have greater financial, technical, marketing and public relations resources than we do. Our sales may be harmed to the extent we are not able to compete successfully against such wine or alternative beverage producers’ costs. There can be no assurance that in the future we will be able to successfully compete with our current competitors or that we will not face greater competition from other wineries and beverage manufacturers.
The loss of Mr. Lachapelle or other key employees or personnel would damage our reputation and business.
We believe that our success largely depends on the continued employment of a number of our key employees, including Peter Lachapelle, our Chief Executive Officer and Chief Financial Officer. Any inability or unwillingness of Mr. Lachapelle, or other key management team members to continue in their present capacities could harm our business and our reputation.
A reduction in our access to, or an increase in the cost of, the third-party services we use to produce our wine could harm our business.
We utilize several third-party facilities, of which there is a limited supply, for the production of our wines. Our inability in the future to use these or alternative facilities, at reasonable prices or at all, could increase the cost or reduce the amount of our production, which could reduce our sales and our profits. We do not have long-term agreements with any of these facilities, and they may provide services to our competitors at a price above what we are willing to pay. The activities conducted at outside facilities include crushing, fermentation, storage, blending and bottling. Our reliance on these third parties varies according to the type of production activity. As production increases, we must increasingly rely upon these third-party production facilities. Reliance on third parties will also vary with annual harvest volumes.
In addition, we have limited control over the quality control and quality assurance of these third-party manufacturers. If our suppliers are not able to deliver products that satisfy our requirements, we may be forced to seek alternative providers for these goods and services, which may not be available at the same price, or at all, which would harm our financial results.
We have identified a material weakness in internal control over financial reporting. Our failure to establish and maintain effective internal control over financial reporting could result in our failure to meet our reporting obligations and cause investors to lose confidence in our reported financial information, which in turn could cause the trading price of our common stock to decline.
In connection with the audits of our consolidated financial statements as of the fiscal years ended February 28, 2017 and February 29, 2016, our management identified a material weakness in our internal control over financial reporting. A material weakness is defined as a deficiency or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.
The material weakness pertains to deficiencies in the accounting research and reporting functions and the closing and reporting process due to our lack of accounting documentation and procedures, lack of segregation of duties, potential for management override of controls and lack of current expertise in reporting requirements.
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Historically, we have functioned as a closely held, principally family-owned enterprise. In preparation for becoming a public company, we have added an experienced Chief Financial Officer, and a Controller, and have more recently added accounting personnel to support the accounting function. In addition, we have implemented policies to document various procedures. We are in the process of documenting and testing our internal control over financial reporting. The actions that we are taking are subject to ongoing senior management review. Although we plan to complete this remediation process as quickly as possible, we cannot at this time estimate how long it will take, and our initiatives may not prove to be successful in remediating the material weakness. If our remedial measures are insufficient to address the material weakness, or if significant deficiencies or material weaknesses in our internal control over financial reporting are discovered or occur in the future, it may adversely affect the results of our management evaluations and, when required, annual auditor attestation reports regarding the effectiveness of our internal control over financial reporting required by Section 404 of the Sarbanes-Oxley Act of 2002. In addition, if we are unable to successfully remediate the material weakness and if we are unable to produce accurate and timely financial statements or we are required to restate our financial results, our stock price may be adversely affected. For more information, please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Internal Controls” in this report.
We depend upon our trademarks and proprietary rights, and any failure to protect our intellectual property rights or any claims that we are infringing upon the rights of others may adversely affect our competitive position and brand equity.
Our future success depends significantly on our ability to protect our current and future brands and products and to defend our intellectual property rights. We have staked out a reputation for innovation and we have introduced new product innovations. There is also a risk that we could, by omission, fail to timely renew or protect a trademark or that our competitors will challenge, invalidate or circumvent any existing or future trademarks issued to, or licensed by, us.
RISKS RELATING TO OUR INDUSTRY
A reduction in consumer demand for premium wines could harm our business.
There have been periods in the past in which there were substantial declines in the overall per capita consumption of alcoholic beverages in the United States and other markets in which our business could be affected. A limited or general decline in consumption in one or more of our product categories could occur in the future due to a variety of factors, including a general decline in economic conditions, increased concern about the health consequences of consuming beverage alcohol products and about drinking and driving, a trend toward a healthier diet including lighter, lower calorie beverages such as diet soft drinks, juices and water products, the increased activity of anti-alcohol consumer groups and increased federal, state or foreign excise and other taxes on alcoholic beverage products. Declines such as these could decrease the consumer need and interest in using the VinCompass platform and service. The competitive position of our products could also be affected adversely by any failure to achieve consistent, reliable quality in the product or service levels to customers.
Changes in consumer spending could have a negative impact on our financial condition and business results.
Wine sales depend upon a number of factors related to the level of consumer spending, including the general state of the economy, federal and state income tax rates, deductibility of business entertainment expenses under federal and state tax laws, and consumer confidence in future economic conditions. Changes in consumer spending in these and other areas can affect both the quantity and the price of wines that customers are willing to purchase at restaurants or through retail outlets and may decrease consumer interest in using the VinCompass app. Reduced consumer confidence and spending may result in reduced demand for our products, limitations on our ability to increase prices and increased levels of selling and promotional expenses. This, in turn, may have a considerable negative impact upon our sales and profit margins.
The market price of our stock may fluctuate due to seasonal fluctuations in our wine sales, operating expenses and net income.
We could experience seasonal and quarterly fluctuations in sales, operating expenses and net income. Generally, the second and third quarters of our fiscal year have lower sales volumes than the first and fourth quarters. We have managed, and will continue to manage, our business to achieve long-term objectives. In doing so, we may make decisions that we believe will enhance our long-term profitability, even if these decisions may reduce quarterly earnings. These decisions include the timing of the release of our wines for sale, our wines’ competitive positioning and the grape and bulk wine sources we use to produce our wines.
Bad weather, plant diseases and other factors could reduce the amount or quality of the grapes available to produce our Partner wines.
A shortage in the supply of quality grapes may result from the occurrence of any number of factors which determine the quality and quantity of grape supply, such as weather conditions, pruning methods, the existence of diseases and pests, and the number of vines producing grapes, as well as the level of consumer demand for wine. Any shortage could cause an increase in the price of some or all of the grape varieties required for our wine Partner’s production and/or a reduction in the amount of wine we are able to produce, which could harm our business and reduce our sales and profits. The California wine industry is currently experiencing a shortage of grapes due to the fact that grapes were in oversupply in the early 2000s and the industry is just now starting to replant.
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Adverse public opinion about alcohol may harm our business.
While a number of research studies suggest that moderate alcohol consumption may provide various health benefits, other studies conclude or suggest that alcohol consumption has no health benefits and may increase the risk of stroke, cancer and other illnesses. An unfavorable report on the health effects of alcohol consumption could significantly reduce the demand for wine, which could harm our business and reduce our sales and profits.
In recent years, activist groups have used advertising and other methods to inform the public about the societal harms associated with the consumption of alcoholic beverages. These groups have also sought, and continue to seek, legislation to reduce the availability of alcoholic beverages, to increase the penalties associated with the misuse of alcoholic beverages, or to increase the costs associated with the production of alcoholic beverages. Over time, these efforts could cause a reduction in the consumption of alcoholic beverages generally, which could harm our business and reduce our sales and profits.
Increased regulatory costs or taxes would harm our financial performance.
The wine industry is regulated extensively by the Federal Tax and Trade Bureau and state and local liquor authorities and State of California environmental agencies. These regulations and laws dictate various matters, including:
● | Excise taxes; | |
● | Licensing requirements; | |
● | Trade and pricing practices; | |
● | Permitted distribution channels; | |
● | Permitted and required labeling; | |
● | Advertising; | |
● | Relationships with distributors and retailers; and | |
● | Air quality, storm water and irrigation use. |
In addition, federal legislation has been proposed that could significantly increase excise taxes on wine. Other federal legislation has been proposed which would prevent us from selling wine directly through the mail. This proposed legislation, or other new regulations, requirements or taxes, could harm our business and operating results. Future legal or regulatory challenges to the wine industry could also harm our business and impact our operating results.
Prompted by growing government budget shortfalls and public reaction against alcohol abuse, Congress and many state legislatures are considering various proposals to impose additional excise taxes on the production and sale of alcoholic beverages, including table wines. Some of the excise tax rates being considered are substantial. The ultimate effects of such legislation, if passed, cannot be assessed accurately since the proposals are still in the discussion stage. Any increase in the taxes imposed on table wines can be expected to have a potentially adverse impact on overall sales of such products. However, the impact may not be proportionate to that experienced by producers of other alcoholic beverages and may not be the same in every state.
RISKS ASSOCIATED WITH OUR COMMON STOCK
The Company’s stock price may be volatile.
The market price of the Company’s common stock is likely to be highly volatile and could fluctuate widely in price in response to various potential factors, many of which will be beyond the Company’s control, including:
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● | competition; | |
● | additions or departures of key personnel; | |
● | the Company’s ability to execute its business plan; | |
● | operating results that fall below expectations; | |
● | loss of any strategic relationship; | |
● | industry developments; | |
● | economic and other external factors; and | |
● | period-to-period fluctuations in the Company’s financial results. |
In addition, the securities markets have from time to time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies. These market fluctuations may also materially and adversely affect the market price of the Company’s common stock.
Absence of Public Market
There has never been any established “public market” for shares of Common Stock of the Company, and no assurance can be given that any market for the Company’s Common Stock will develop or be maintained. If a public market ever develops in the future, the sale of “unregistered” and “restricted” shares of Common Stock pursuant to Rule 144 of the Act, may adversely affect the market price, if any, for the Company’s shares and could impair the Company’s ability to raise capital through the sale of its equity securities. In order to qualify for the resale of Common Stock under Rule 144, certain holding periods must be met and either legal opinions setting forth exemptions from the Act must be provided or registration statements must be in effect relating to such Common Stock. Further, there is no assurance that Rule 144 will be applicable to the Company and investors may not be able to rely on its provisions now or in the future.
We do not expect to pay dividends in the foreseeable future.
We do not intend to declare dividends for the foreseeable future, as we anticipate that we will reinvest any future earnings in the development and growth of our business. Therefore, investors will not receive any funds unless they sell their common stock, and stockholders may be unable to sell their shares on favorable terms or at all. We cannot assure you of a positive return on investment or that you will not lose the entire amount of your investment in our common stock.
We may in the future issue additional shares of our common stock which would reduce investors’ ownership interests in the Company and which may dilute our share value.
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 40,000,000 shares shall be shares of preferred stock, par value of $.001 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”).
Then on May 8, 2017, our 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. A true and correct copy of the Amended & Restated Certificate of Incorporation is attached hereto as an Exhibit and is incorporated herein by reference.
Notwithstanding the designation of the class of Series A Preferred stock designated in Article XII, Series B Preferred stock designated in Article XIII, the designations, preferences, limitations, restrictions, and relative rights of any additional classes of Preferred Stock, and variations in the relative rights and preferences as between different series shall be established in accordance with the Wyoming Business Corporation Act by the board of directors of the Corporation (“Board of Directors”). Except for such voting powers with respect to the election of directors or other matters as may be stated in the resolutions of the Board of Directors creating any series of Preferred Stock, the holders of any such series shall have no voting power.
The future issuance of all or part of our remaining authorized common stock or preferred stock may result in substantial dilution in the percentage of our common stock held by our then existing stockholders. We may value any common stock issued in the future on an arbitrary basis. The issuance of common stock for future services or acquisitions or other corporate actions may have the effect of diluting the value of the shares held by our investors, and might have an adverse effect on any trading market for our common stock.
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The Company’s common stock is currently deemed to be “penny stock”, which makes it more difficult for investors to sell their shares.
If a market develops and the price of the Company’s stock is below $5.00 per share, or the Company does not have $2,000,000 in net tangible assets, or is not listed on an exchange or on the NASDAQ National Market System, among other conditions, the Company’s shares may be subject to a rule promulgated by the Securities and Exchange Commission (the “SEC”) that imposes additional sales practice requirements on broker-dealers who sell such securities to persons other than established customers and institutional accredited investors. For transactions covered by the rule, the broker-dealer must make a special suitability determination for the purchaser and receive the purchaser’s written consent to the transaction prior to the sale. Furthermore, if the price of the Company’s stock is below $5.00, and does not meet the conditions set forth above, sales of the Company’s stock in the secondary market will be subject to certain additional new rules promulgated by the SEC. These rules generally require, among other things, that brokers engaged in secondary trading of stock provide customers with written disclosure documents, monthly statements of the market value of penny stocks, disclosure of the bid and asked prices, and disclosure of the compensation to the broker-dealer and disclosure of the sales person working for the broker-dealer. These rules and regulations may affect the ability of broker-dealers to sell the Company’s securities, thereby limiting the liquidity of the Company’s securities. They may also affect the ability of the Company’s shareholders to resell their securities in the secondary market.
FINRA sales practice requirements may limit a stockholder’s ability to buy and sell our stock.
The Financial Industry Regulatory Authority (“FINRA”) has adopted rules that relate to the application of the SEC’s penny stock rules in trading our securities and require that a broker/dealer have reasonable grounds for believing that the investment is suitable for that customer, prior to recommending the investment. Prior to recommending speculative, low priced securities to their non-institutional customers, broker/dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information.
Under interpretations of these rules, FINRA believes that there is a high probability that speculative, low priced securities will not be suitable for at least some customers. FINRA’s requirements make it more difficult for broker/dealers to recommend that their customers buy our common stock, which may have the effect of reducing the level of trading activity and liquidity of our common stock. Further, many brokers charge higher transactional fees for penny stock transactions. As a result, fewer broker/dealers may be willing to make a market in our common stock, reducing a shareholder’s ability to resell shares of our common stock.
ITEM 1B. UNRESOLVED STAFF COMMENTS
As of the date of this report, there are no unresolved comments pending from the SEC.
Our business office is located at 795 Folsom Street, 1st Floor, San Francisco, CA, 94107. Our telephone number is 415-817-9955. Our principal office is provided by our officer and director at no cost. We believe that the condition of our principal office is satisfactory, suitable and adequate for current needs.
Our plan of Operations is centered around 5 primary areas i) Increasing Restaurant coverage from over 10K locations, ii) Go To Market activities, iii) Data iv) eCommerce, v) Development
i) | Increasing Restaurant coverage from over 10K locations currently over the next year to exceed 20K locations in major cities and where the members dine. | |
ii) | Go To Market activities, Partner collaboration in Member acquisition and on boarding. Specific communities are being developed for on boarding entire communicates on mass. | |
iii) | Data Improve the 5C’s - Currency, Correct, Constancy, Completeness and Coverage. Each of the 5C’s improves Member Experience as well as our value proposition of avoiding Fear of the Wine List (FoWL™). This combined refresh and expansion of Restaurant coverage will enhance the Value of VinCompass | |
iv) | eCommerce we will have 2 primary focus on Private Label Wines for both B2C and B2B clients and a curated Wine Club for B2C. | |
v) | Development we will continue to do enhancements to our technology. These enhancements will be in the App, the Web site and internal IP technology to enable eCommerce of Wine to be compliance across 40 States. |
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We know of no material, existing or pending legal proceedings against us, 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 or beneficial shareholder, is an adverse party or has a material interest adverse to the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS and ISSUER PURCHASES OF EQUITY SECURITIES
The shares of our common stock became available for quotation on the Over-the-Counter Market (OTC-QB) under the symbol “TIGY” on October 10, 2012, subsequently changed to “VCPS” on January 14, 2016. The market for our common shares is limited and can be volatile. The following table sets forth the high and low bid prices of our common stock on a quarterly basis for the periods indicated as quoted on the OTC-BB. These quotations reflect inter-dealer prices without retail mark-up, mark-down or commissions and may not reflect actual transactions.
Quarter Ended | High Bid | Low Bid | ||||||
31-May-16 | $ | 1.25 | $ | 1.25 | ||||
31-Aug-16 | $ | 1.18 | $ | 0.08 | ||||
30-Nov-16 | $ | 0.87 | $ | 0.02 | ||||
28-Feb-17 | $ | 0.15 | $ | 0.01 |
As of the date of this report, the shareholders’ list of our common shares showed 45 registered shareholders holding 38,216,404 common shares with 106,106,371common shares being held by broker-dealers.
Our common shares are issued in registered form through our stock transfer agent VStock Transfer, LLC, of 77 Spruce St., Ste. 201, Cedarhurst, NY 11516. They can be contacted by telephone at 1-855-987-8625.
We have not declared any dividends since incorporation and do not anticipate that we will do so in the foreseeable future. Although there are no restrictions that limit the ability to pay dividends on our common shares, our intention is to retain future earnings for use in our operations and the expansion of our business.
ITEM 6. SELECTED FINANCIAL DATA
As a “smaller reporting company”, we are not required to provide the information required by this Item.
ITEM 7. MANAGEMENT’S DISCUSSION and ANALYSIS OF FINANCIAL CONDITION and RESULTS OF OPERATIONS
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 any 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.
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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, 1st 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.
(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 55.23% 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.
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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
● | Recurring revenue generated from wine club & freemium subscriptions (akin to Amazon’s Prime) |
● | On-demand revenue generated from Virtual Vineyard, Private Label, Individually Branded, and Charity wines. |
● | Engagement with an App beginning with discovery in the restaurant |
● | Business Intelligence recurring revenue; Information and Insights for Restaurants and Wineries |
Business Strategy
Invitation and Social Network Model – We employ a complete Social graph network and full attribution for all members. Members can sign in via selected Social Networks and as Members, they 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 14% 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 Operations
Year Ended | Year Ended | |||||||
Feb. 28, 2017 | Feb. 29, 2016 | |||||||
Revenue | $ | Nil | $ | Nil | ||||
Operating Expenses | $ | 848,986 | $ | 464,634 | ||||
Net Loss | $ | (941,244 | ) | $ | (493,572 | ) |
COMMON SHARES: Since inception we have used common stock, an advance from a related party and a loan from an arm’s length party to raise money for our optioned mineral acquisition and corporate expenses. Net cash provided by financing activities in the most recent fiscal year ended February 28, 2017, was $429,837 and $171,160 respectively, being made up as follows:
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CASH FLOWS FROM FINANCING ACTIVITIES
For the Fiscal Year Ended | For the Fiscal Year Ended | |||||||
February 28, 2017 | February 29, 2016 | |||||||
$ | $ | |||||||
Proceeds from common stock sold for cash | 79,500 | 55,000 | ||||||
Proceeds from Short-term related party debt | 41,423 | 116,160 | ||||||
Proceeds from convertible notes | 300,000 | 0 | ||||||
CASH PROVIDED BY FINANCING ACTIVITIES | 420,923 | 171,160 |
Revenue
We have not earned material revenues since our inception.
Expenses
For the | For the | |||||||
Year End | Year End | |||||||
February 28, 2017 | February 29, 2016 | |||||||
SG&A Expenses | 848,986 | 464,634 | ||||||
Total Operating Expenses | 848,986 | 464,634 | ||||||
Loss on settlement of note payable | - | 26,653 | ||||||
Loss on change in fair value of derivative liabilities | 57,194 | - | ||||||
Interest expense | 35,064 | 2,270 | ||||||
Total other expense | 92,258 | 28,923 | ||||||
Net Loss | (941,244 | ) | (493,557 | ) |
GENERAL & ADMINISTRATIVE EXPENSES: $579,490 costs were incurred in the year ended February 28, 2017. By comparison, $343,836 was incurred for previous fiscal period ended February 29, 2016. Development costs were 410,505 in the past year and by comparison were 189,363 for the fiscal year end February 29, 2016, representing an increase of 116% year over year. We expect that the Development expenses will increase with the Plan of Operations. Development expenses since inception and including FYE 2016 were 1,510,008 and with the addition of FYE 2017 amount of 410,505 the revised Development expenses since inception total 1,920,513. This significant expense represents over 62% of the loss since inception. As a result of more activity in the current year end, however, going forward this expense category will vary depending more on corporate capital raising activities and development than any other activity. Highlights from these investments in Development include:
● | Faster on boarding of members, Restaurants and Wineries. We expect to be able to on board 25,000 Restaurants in the coming year; | |
● | Expansion of food pairing options and updating recommendation engine delivers better curated wine suggestions. We expect this to continue to enhance our Patent Application. The PTO has scheduled our review in the fall of this year and there is no disclosed monetization plan for the IP at this time. Additional Social Network integrations are being completed such as LinkedIn with and anticipated access to over 10,000,000 new members; | |
● | Information and Insights have continued to develop our Digital Business, expected commercialization this coming year. |
SALES & MARKETING EXPENSES: $269,496 costs were incurred in the year ended February 28, 2017. By comparison only $120,798 was incurred for previous fiscal period ended February 29, 2016 representing an increase of 123% over a year. As a result of more activity in the current year end, going forward these costs will increase commensurate with bringing in additional sales. We expect that these expenses will increase with the Plan of Operations. As part of the plan we expect to participate in various event that will promote VinCompass and provide updates on the strategies and progress of the Company. This information will also be found on our Investor Relations section of our website (http://www.vincompass.com/investor_relations)
INCOME TAX PROVISION: As a result of operating losses, there has been no provision for the payment of income taxes to date in 2017 - 2016 or from the date of inception.
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Liquidity and Financial Condition
Working Capital
At | At | |||||||
28-Feb-17 | 29-Feb-16 | |||||||
Current Assets | $ | 13,952 | $ | 43,680 | ||||
Current Liabilities | 1,073,025 | 380,525 | ||||||
Working Capital Deficit | $ | (1,059,073 | ) | $ | (336,845 | ) |
Cash Flows
For the Year | For the Year | |||||||
Ended | Ended | |||||||
February 28, 2017 | February 29, 2016 | |||||||
$ | $ | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
Net loss | (941,244 | ) | (493,557 | ) | ||||
Adjustments to reconcile net income loss to net cash used in operating activities: | ||||||||
Loss on common stock issued for settlement of note payable and accrued interest | - | 26,653 | ||||||
Stock based Compensation | 130,765 | - | ||||||
Amortization of debt discount | 23,999 | - | ||||||
Loss on change in fair value of derivative liabilities | 57,194 | - | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts payable to related party | 56,739 | 74,959 | ||||||
Deferred payroll | 120,000 | 96,000 | ||||||
Accounts Payable and accrued expenses | 101,896 | 85,693 | ||||||
CASH FLOWS USED IN OPERATING ACTIVITIES: | (450,651 | ) | (210,252 | ) |
Future Operations
Presently, our revenues are not sufficient 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 may require in excess $1,000,000 to fund our ongoing operating expenses and working capital requirements for the next twelve months, broken down as follows:
Operating expenses | $ | 300,000 | ||
Sales & Marketing | 300,000 | |||
Development program | 250,000 | |||
Working Capital | 125,000 | |||
Total | $ | 975,000 |
Going Concern
As at February 28, 2017, we had a working capital deficit of $990,942. We plan to raise the additional capital required to meet the balance of our estimated funding requirements for the next twelve months primarily through the sale of equity based securities, loans from shareholders and related as well as non-related parties. We anticipate that we will not be able to satisfy any of these funding requirements internally until we significantly increase revenues.
There is substantial doubt about our ability to continue as a going concern because our business is dependent upon obtaining further financing. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.
Future Financings
We will require additional financing in order to enable us to proceed with our plan of operations, as discussed above, and in order to continue 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 other obligations as they become due. We are pursuing various alternatives to meet our immediate and long-term financial requirements.
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We anticipate continuing to rely on equity sales of our common stock in order to fund our business operations which would result in dilution to existing stockholders. There is no assurance that we will achieve any sales of equity securities or arrange for debt or other financing to fund our planned activities.
We presently do not have any arrangements for additional financing and no potential lines of credit or sources of financing are currently available for the purpose of proceeding with our plan of operations.
Contractual Obligations
As a “smaller reporting company”, we are not required to provide tabular disclosure obligations.
Critical Accounting Policies
Our financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.
We regularly evaluate the accounting policies and estimates that we use to prepare our financial statements. A complete summary of these policies is included in the notes to our financial statements. In general, management’s estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.
Recently Issued Accounting Pronouncements
The Company has evaluated and implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
Use of Estimates and Assumptions and Critical Accounting Estimates and Assumptions
The preparation of financial statements in conformity with U.S. GAAP 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 reporting amounts of revenues and expenses during the reporting period.
Critical accounting estimates are estimates for which (a) the nature of the estimate is material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change and (b) the impact of the estimate on financial condition or operating performance is material. The Company’s critical accounting estimate(s) and assumption(s) affecting the financial statements were:
(i) | Assumption as a going concern: Management assumes that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. | |
(ii) | Valuation allowance for deferred tax assets: Management assumes that the realization of the Company’s net deferred tax assets resulting from its net operating loss (“NOL”) carry–forwards for Federal income tax purposes that may be offset against future taxable income was not considered more likely than not and accordingly, the potential tax benefits of the net loss carry-forwards are offset by a full valuation allowance. Management made this assumption based on (a) the Company has incurred recurring losses, (b) general economic conditions, and (c) its ability to raise additional funds to support its daily operations by way of a public or private offering, among other factors. |
These significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to these estimates or assumptions, and certain estimates or assumptions are difficult to measure or value.
Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable in relation to the financial statements taken as a whole under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.
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Management regularly evaluates the key factors and assumptions used to develop the estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such evaluations, if deemed appropriate, those estimates are adjusted accordingly.
Actual results could differ from those estimates.
Related Parties
The Company follows subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions.
Pursuant to Section 850-10-20 the Related parties include a. affiliates of the Company; b. Entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825–10–15, to be accounted for by the equity method by the investing entity; c. trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; d. principal owners of the Company; e. management of the Company; f. other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g. Other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.
The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: a. the nature of the relationship(s) involved; b. a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c. the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d. amount due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.
Commitment and Contingencies
The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.
If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.
Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed.
Revenue Recognition
The Company follows paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company will recognize revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured.
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Issued Accounting Pronouncements
In August 2014, the FASB issued the FASB Accounting Standards Update No. 2014-15”Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”).
In connection with preparing financial statements for each annual and interim reporting period, an entity’s management should evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued (or within one year after the date that the financial statements are available to be issued when applicable). Management’s evaluation should be based on relevant conditions and events that are known and reasonably knowable at the date that the financial statements are issued (or at the date that the financial statements are available to be issued when applicable). Substantial doubt about an entity’s ability to continue as a going concern exists when relevant conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued (or available to be issued). The term probable is used consistently with its use in Topic 450, Contingencies.
When management identifies conditions or events that raise substantial doubt about an entity’s ability to continue as a going concern, management should consider whether its plans that are intended to mitigate those relevant conditions or events will alleviate the substantial doubt. The mitigating effect of management’s plans should be considered only to the extent that (1) it is probable that the plans will be effectively implemented and, if so, (2) it is probable that the plans will mitigate the conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern.
If conditions or events raise substantial doubt about an entity’s ability to continue as a going concern, but the substantial doubt is alleviated as a result of consideration of management’s plans, the entity should disclose information that enables users of the financial statements to understand all of the following (or refer to similar information disclosed elsewhere in the footnotes):
a. | Principal conditions or events that raised substantial doubt about the entity’s ability to continue as a going concern (before consideration of management’s plans) | |
b. | Management’s evaluation of the significance of those conditions or events in relation to the entity’s ability to meet its obligations | |
c. | Management’s plans that alleviated substantial doubt about the entity’s ability to continue as a going concern. |
If conditions or events raise substantial doubt about an entity’s ability to continue as a going concern, and substantial doubt is not alleviated after consideration of management’s plans, an entity should include a statement in the footnotes indicating that there is substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued (or available to be issued). Additionally, the entity should disclose information that enables users of the financial statements to understand all of the following:
a. | Principal conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern. | |
b. | Management’s evaluation of the significance of those conditions or events in relation to the entity’s ability to meet its obligations. | |
c. | Management’s plans that are intended to mitigate the conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern. |
The amendments in this Update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted.
Management does not believe that any recently issued, but not yet effective accounting pronouncements, when adopted, will have a material effect on the accompanying financial statements.
ITEM 7A. QUANTITATIVE and QUALITATIVE DISCLOSURES ABOUT MARKET RISKS
As a “smaller reporting company”, we are not required to provide the information required by this Item.
ITEM 8. FINANCIAL STATEMENTS and SUPPLEMENTARY DATA
Our audited financial statements for the fiscal year ending February 28, 2017, and February 29, 2016, immediately follow.
19 |
VinCompass Corporation
February 28, 2017 and February 29, 2016
Index to the Financial Statements
F-1 |
Report of Independent Registered Public Accounting Firm
To the Board of Director and stockholders of VinCompass Corp.
795 Folsom Street, 1st floor
San Francisco, CA
We have audited the accompanying consolidated balance sheets of VinCompass Corp. and its subsidiary (collectively, the “Company”) as of February 28, 2017 and February 29, 2016, and the related consolidated statements of operations, changes in stockholder’s deficit, and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of VinCompass Corp. and its subsidiary as of February 28, 2017 and February 29, 2016, and the results of their operations and their cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company suffered losses from operations and has negative operating cash flows. These conditions raise substantial doubt about its ability to continue as a going concern. Management’s plans regarding those matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ MaloneBailey, LLP
Houston, Texas
June 13, 2017
F-2 |
VinCompass Corp.
28-Feb-17 | 29-Feb-16 | |||||||
ASSETS | ||||||||
Current Assets | ||||||||
Cash | $ | 13,952 | $ | 43,680 | ||||
Total Current Assets | 13,952 | 43,680 | ||||||
TOTAL ASSETS | $ | 13,952 | $ | 43,680 | ||||
LIABILITIES & STOCKHOLDERS’ DEFICIT | ||||||||
Current Liabilities | ||||||||
Accounts payable and accrued liabilities | $ | 195,302 | $ | 93,406 | ||||
Accounts payable to related party | 131,698 | 74,959 | ||||||
Deferred Payroll | 216,000 | 96,000 | ||||||
Short term debt -Related Party | 157,583 | 116,160 | ||||||
Notes Payable, net of $73,251 discount as of February 28, 2017 and February 29, 2016 | 259,981 | - | ||||||
Derivative liabilities | 112,461 | - | ||||||
Total Current Liabilities | 1,073,025 | 380,525 | ||||||
Total Liabilities | $ | 1,073,025 | $ | 380,525 | ||||
Shareholder’s Deficit | ||||||||
Preferred Stock, $0.001 par value; 2,000,000 authorized; 42,000,000 shares issued and outstanding | $ | 1,000 | $ | 1,000 | ||||
Common Stock, $0.001 par value; 400,000,000 shares authorized; 47,079,718 and 43,702,017 Shares issued and outstanding, respectively | 47,149 | 43,702 | ||||||
Additional Paid-in Capital | 1,890,147 | 1,674,578 | ||||||
Accumulated Deficit | (2,997,369 | ) | (2,056,125 | ) | ||||
Total Stockholders’ Deficit | (1,059,073 | ) | (336,845 | ) | ||||
TOTAL LIABILITIES & STOCKHOLDERS’ DEFICIT | $ | 13,952 | $ | 43,680 |
See accompanying notes to consolidated financial statements.
F-3 |
VinCompass Corp.
Consolidated Statements of Operations
For the | For the | |||||||
Year Ended | Year Ended | |||||||
02/29/2017 | 29-Feb-16 | |||||||
SG&A Expenses | $ | 848,986 | $ | 464,634 | ||||
Total Operating Expenses | $ | 848,986 | $ | 464,634 | ||||
Interest expense | 35,064 | 2,270 | ||||||
Loss on settlement of note payable | - | 26,653 | ||||||
Loss on derivative | 57,194 | |||||||
Net Loss | $ | 941,244 | $ | 493,557 | ||||
Basic and diluted loss per share | (0.02 | ) | (0.02 | ) | ||||
Weighted Average number of shares outstanding – Basic and Diluted | 44,169,944 | 28,218,021 |
See accompanying notes to consolidated financial statements.
F-4 |
VinCompass Corp.
Consolidated Statement of Cash Flows
For the | For the | |||||||
Year Ended | Year Ended | |||||||
28-Feb-17 | 29-Feb-16 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
Net loss | $ | (941,244 | ) | $ | (493,557 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Loss on common stock for settlement of note payable and accrued interest | - | 26,653 | ||||||
Stock based compensation | 130,765 | - | ||||||
Amortization of debt discount | 23,999 | - | ||||||
Loss on change in fair value of derivative liabilities | 57,194 | - | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts payable to related party | 56,739 | 74,959 | ||||||
Deferred payroll | 120,000 | 96,000 | ||||||
Accounts Payable and accrued expenses | 101,896 | 85,693 | ||||||
CASH FLOWS USED IN OPERATING ACTIVITIES: | $ | (450,651 | ) | $ | (210,252 | ) | ||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
Cash received from reverse merger | 2,202 | |||||||
Proceeds from subscription received | - | 25,000 | ||||||
CASH PROVIDED BY IN INVESTING ACTIVITIES | - | 27,202 | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
Borrowings from Related Party | 96,663 | 116,160 | ||||||
Repayment part of Related Party debt | (55,240 | ) | - | |||||
Proceeds on sale of common stock for cash | 79,500 | 55,000 | ||||||
Proceeds from convertible note | 300,000 | - | ||||||
CASH PROVIDED BY FINANCING ACTIVITIES | $ | 420,923 | $ | 171,160 | ||||
NET CHANGE IN CASH | (29,728 | ) | (11,890 | ) | ||||
Cash at beginning of reporting period | 43,680 | 55,570 | ||||||
Cash at end of reporting period | $ | 13,952 | $ | 43,680 | ||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION: | ||||||||
Noncash financing transactions | ||||||||
Loss on common stock for settlement of note payable and accrued interest | - | 106,614 | ||||||
Debt discount recognized from derivative liabilities | 60,000 | - | ||||||
Common shares issued for conversion of convertible note | 4,018 | - | ||||||
Release of derivative liabilities due to conversion of convertible debt | 4,733 | - |
See accompanying notes to consolidated financial statements.
F-5 |
VINCOMPASS CORP.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIT
Preferred Stock | Additional | Total Stockholders | ||||||||||||||||||||||||||
Shares | Par $0.001 | Par $0.001 | Paid-in Capital | Accumulated Deficit | Equity (Deficit) | |||||||||||||||||||||||
$ | $ | $ | $ | $ | ||||||||||||||||||||||||
Balances at February 28, 2015 | - | - | 26,000,000 | 26,000 | 1,617,138 | (1,562,568 | ) | 80,570 | ||||||||||||||||||||
Reverse Merger Adjustment | 1,000,000 | 1,000 | 17,500,000 | 17,500 | (130,625 | ) | (112,125 | ) | ||||||||||||||||||||
Shares issued for settlement of note payable and accrued interest | - | - | 133,267 | 133 | 133,134 | 133,267 | ||||||||||||||||||||||
Shares issued to third party for cash | - | - | 68,750 | 69 | 54,931 | 55,000 | ||||||||||||||||||||||
Net loss | (493,5578 | ) | (493,559 | ) | ||||||||||||||||||||||||
Balances at February 29, 2016 | 1,000,000 | 1,000 | 43,702,017 | 43,702 | 1,674,578 | (2,056,125 | ) | (336,845 | ) | |||||||||||||||||||
Shares issued to third party for compensation | 3,254,979 | 3,255 | 127,510 | 130,765 | ||||||||||||||||||||||||
Shares issued for conversion of Note | 93,000 | 93 | 3,925 | 4,018 | ||||||||||||||||||||||||
Shares issued to third party for cash | 99,375 | 99 | 79,401 | 79,500 | ||||||||||||||||||||||||
Derivative liabilities released due to conversion | 4,733 | 4,733 | ||||||||||||||||||||||||||
Net loss | (941,244 | ) | (941,244 | ) | ||||||||||||||||||||||||
Balances at February 28, 2017 | 1,000,000 | 1,000 | 47,149,371 | 47,149 | 1,890,147 | (2,997,369 | ) | (1,059,073 | ) |
The Accompanying notes are an integral part of these consolidated financial statements
F-6 |
VINCOMPASS CORP.
Notes to the Consolidated Financial Statements
Note 1. General Organization and Business
On March 7, 2017, our 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 40,000,000 shares shall be shares of preferred stock, par value of $.001 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”).
The Preferred Stock . Notwithstanding the designation of the class of Series A Preferred stock designated in Article XII, Series B Preferred stock designated in Article XIII, the designations, preferences, limitations, restrictions, and relative rights of any additional classes of Preferred Stock, and variations in the relative rights and preferences as between different series shall be established in accordance with the Wyoming Business Corporation Act by the board of directors of the Corporation (“Board of Directors”). Except for such voting powers with respect to the election of directors or other matters as may be stated in the resolutions of the Board of Directors creating any series of Preferred Stock, the holders of any such series shall have no voting power.
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 40,000,000 shares shall be shares of preferred stock, par value of $.001 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”).
VinCompass Corp. (Formerly known as Tiger Jiujiang Mining, Inc.), entered into a Share Exchange Agreement with VinCompass, whereby VinCompass Corp. exchanged 60.0% 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.
As of January 14, 2016, VinCompass Corp had 400,000,000 and 2,000,000 shares of common stock and preferred stock authorized, respectively, of which 17,500,000 and 1,000,000 were issued and outstanding, respectively. As a result of the Share Exchange Agreement, each outstanding share of VinCompass common stock shall be transferred, conveyed and delivered to VinCompass Corp. in exchange for 26,000000 newly-issued shares of common stock of VinCompass Corp. The 1,000,000 shares of preferred stock are held by VinCompass management as of closing date.
The Merger will be accounted for as a “reverse merger” and recapitalization since, immediately following the completion of the transaction, the holders of VinCompass’s stock will have effective control of VinCompass Corp. In addition, VinCompass will have control of the combined entity through control of the Board by designating all board seats to be held by the existing board of VinCompass Corp. Additionally, all of VinCompass’s officers and senior executive positions will continue on as management of the combined entity after consummation of the Merger. For accounting purposes, VinCompass will be deemed to be the accounting acquirer in the transaction and, consequently, the transaction will be treated as a recapitalization of VinCompass Corp. Accordingly, VinCompass assets, liabilities and results of operations will become the historical financial statements of the registrant, and VinCompass’s assets, liabilities and results of operations will be consolidated with VinCompass Corp effective as of the date of the closing of the Merger. No step-up in basis or intangible assets or goodwill will be recorded in this transaction. VinCompass received $2,202 cash and assumed $114,327 liabilities upon execution of the reverse merger.
On December 14, 2015, FINRA approved the Corporate Name Change, Symbol Change, and the Forward Split took effect on December 15, 2015 for Tiger Jiujiang Mining Corp. The Forward Split shares are payable upon surrender of certificates to the Company’s transfer agent. Accordingly, the Company’s symbol will change to TIGYD to reflect the Forward Split and Symbol Change and twenty (20) business days thereafter, the “D” will be removed and the symbol will change to VCPS.
Note 2. Significant Accounting Policies
Basis of Presentation and Fiscal Year
These financial statements have been presented by the Company in accordance with accounting principles generally accepted in the United States and are expressed in U.S. dollars. The Company’s fiscal year-end is February 28.
F-7 |
Principles of Consolidation Policy
The consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles, or U.S. GAAP, and include the accounts of VinCompass Corp, its wholly-owned subsidiaries and other entities in which VinCompass Corp has a controlling financial interest. All significant intercompany accounts and transactions have been eliminated in consolidation.
Basic and Diluted Loss per Share
The Company computes net loss per share in accordance with ASC 260, “Earnings per Share”, which requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic loss per share is computed by dividing the net loss available to common shareholders by the weighted average number of common shares outstanding during the year. Diluted EPS gives effect to all dilutive potential common shares outstanding during the year including stock options, using the treasury stock method, and convertible preferred stock, using the if-converted method. In computing diluted EPS, the average stock price for the year is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential common shares if their effect is anti-dilutive.
Cash and Cash Equivalents
The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents.
The Company maintains its cash in bank deposit accounts which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts. The Company believes it is not exposed to any significant credit risk related to cash and cash equivalents.
Income Taxes
The Company accounts for income taxes pursuant to the provisions of ASC 740, Income Taxes, whereby deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amount of existing assets and liabilities and their respective tax bases and the future tax benefits derived from operating loss and tax credit carryforwards. The Company provides a valuation allowance on its deferred tax assets when it is more likely than not that such deferred tax assets will not be realized.
The Company also follows the guidance related to accounting for income tax uncertainties. In accounting for uncertainty in income taxes, the Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more likely than not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority. No liability for unrecognized tax benefits was recorded as of February 28, 2017, and February 29, 2016.
Related Parties
A party is considered to be related to the Company if the party directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. A party which can significantly influence the management or operating policies of the transacting parties or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests is also a related party.
Stock-based Compensation
We account for equity-based transactions with nonemployees under the provisions of ASC Topic No. 505-50, Equity-Based Payments to Non-Employees (“ASC 505-50”). ASC 505-50 establishes that equity-based payment transactions with nonemployees shall be measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The fair value of common stock issued for payments to nonemployees is measured at the market price on the date of grant. The fair value of equity instruments, other than common stock, is estimated using the Black-Scholes option valuation model. In general, we recognize the fair value of the equity instruments issued as deferred stock compensation and amortize the cost over the term of the contract.
We account for employee stock-based compensation in accordance with the guidance of FASB ASC Topic 718, Compensation—Stock Compensation, which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values. The fair value of the equity instrument is charged directly to compensation expense and credited to additional paid-in capital over the period during which services are rendered.
Fair value of financial instruments
The Company follows Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 825-10-50-10, Financial Instruments—Overall—Disclosure, for disclosures about fair value of our financial instruments and ASC 820-10-35-37, Fair Value Measurement—Overall—Subsequent Measure—Fair Value Hierarchy, to measure the fair value of our financial instruments. ASC 820-10-35-37 establishes a framework for measuring fair value GAAP and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820-10-35-37 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three levels of fair value hierarchy defined by ASC 820-10-35-37 are described below:
Level 1: Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
Level 2: Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
Level 3: Pricing inputs that are generally observable inputs and not corroborated by market data.
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 February 28, 2017.
Fair value measured at February 28, 2017 | ||||||||||||||||
Fair value at February 28, 2017 |
Quoted prices in active markets (Level 1) |
Significant other observable inputs (Level 2) |
Significant unobservable inputs (Level 3) |
|||||||||||||
Derivative liabilities | $ | 112,461 | $ | - | $ | - | $ | 112,461 |
Derivative Financial Instruments
Derivative liabilities are recognized in the balance sheets at fair value based on the criteria specified in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 815-15 – Derivatives and Hedging – Embedded Derivatives (“ASC 815-15”). Pursuant to ASC Topic 815-15 an evaluation of the embedded conversion feature of convertible debt is evaluated to determine if the bifurcated debt conversion feature is required to be classified as a derivative liability. Since the terms of the embedded conversion features of the Company’s convertible debt provides for the issuance of shares of common stock at the election of the holders and the number of shares is subject to adjustment for a decline in the price of the Company’s common stock, the Company determined that the embedded conversion option met the criteria of a derivative liability. The estimated fair value of the embedded conversion feature of debt classified as derivative liabilities are determined using the Black-Scholes option pricing model. The model utilizes Level 3 unobservable inputs to calculate the fair value of the derivative liabilities at each reporting period. The Company determined that using an alternative valuation model such as a Binomial-Lattice model would result in minimal differences. The fair value of the embedded conversion feature of debt classified as derivative liabilities are adjusted for changes in fair value at each reporting period, and the corresponding non-cash gain or loss is recorded as other income or expense in the statement of operations. As of February 28, 2017, the embedded conversion feature of $112,461 of convertible notes payable was classified as a derivative liability. Each reporting period the embedded conversion feature is re-valued and adjusted through the caption “change in fair value of derivative liabilities” on the statements of operations.
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 had accumulated deficits of $2,997,369 at February 28, 2017 and $2,056,125 at February 29, 2016. It had net losses of $941,244 and $493,557 and for the years February 28, 2017 and February 29, 2016, respectively. 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.
F-8 |
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. Common Stock
During the year ended February 28, 2017, the Company issue 93,000 shares for conversion of notes payable and accrued interest, totaled $4,108. Furthermore, during the year, the Company issued 79,500 shares to third parties for cash investment of $93,430 in the Company. During the year 3,254,979 shares were issued in lieu of compensation of $130,765.
As a result of the Reverse Merger, As of January 14, 2016, VinCompass Corp had 400,000,000 and 2,000,000 shares of common stock and preferred stock authorized, respectively, of which 17,500,000 and 1,000,000 were issued and outstanding, respectively. As a result of the Share Exchange Agreement, each outstanding share of VinCompass common stock shall be transferred, conveyed and delivered to VinCompass Corp. in exchange for 26,000000 newly issued shares of common stock of VinCompass Corp.
During the year ended February 28, 2016, the Company issue 133,267 shares for settlement of notes payable and accrued interest, totaled $106,614. The fair value of the shares is determined to be $133,267, using $1.00 per share, which is the previous common stock sold for cash price, resulting in a loss of $26,653 reflected in the Statement of Operations.
Furthermore, during the year ended February 28, 2016, the Company issued 68,750 shares to third parties for cash investment of $55,000 in the Company. These transactions took place at $0.80
Note 5. Related Party Transactions
As of February 28, 2017, the amounts due to the majority shareholder and a director totaled $157,583, and bear no interest and with no stated repayment terms; the Company recorded no imputed interest on these borrowings. There were borrowings from related party of $96,663 and payment of $55,240, (Balance of $116,160 as of February 29, 2016).
As of February 28, 2017, the Company accrued payroll expense of $216,000 ($96,000 as at February 29, 2016) and accrued rental and operating expenses of $131,698 ($74,959 as at February 29, 2016) due to the Company’s CEO.
Note 6. Income Taxes
The Company uses the liability method, where deferred tax assets and liabilities are determined based on the expected future tax consequences of temporary differences between the carrying amounts of assets and liabilities for financial and income tax reporting purposes.
During the years ended February 28, 2017 and February 29, 2016, the Company incurred net losses, and therefore, had no tax liability. The net deferred asset generated by the loss carry-forward has been fully reserved. The cumulative net operating loss carry-forward is approximately$872,980 and $466,904, respectively as of February 28, 2017 and February 29, 2016 and will expire in years 2020 through 2036.
Deferred tax assets consist of the tax effect of NOL carry-forwards. The Company has provided a full valuation allowance on the deferred tax assets because of the uncertainty regarding its ability to be realized.
As of the years ended February 28, 2017 and February 29, 2016, deferred tax assets consisted of the following:
2/28/2017 | 2/29/2016 | |||||||
Tax benefit at U.S. statutory rate | (418,666 | ) | $ | 163,416 | ||||
Valuation allowance | (418,666 | ) | (163,416 | ) | ||||
$ | - | $ | - |
F-9 |
Note 7. Convertible notes.
The following table summarized the convertible notes as of February 28, 2017:
Note # | Loan date | Maturity Date | Convertible Date | Interest | Loan Principal | Original Issue Discount | Derivative discount | Discount Amortization | Net Balance end Feb 2017 | |||||||||||||||||||||||
1 | 7/7/2016 | 7/7/2017 | 1/7/2017 | 10 | % | 29,482 | (3,500 | ) | (30,000 | ) | 11,176 | 7,158 | ||||||||||||||||||||
2 | 8/15/2016 | 8/15/2017 | 2/15/2017 | 10 | % | 33,500 | (3,500 | ) | (30,000 | ) | 4,044 | 4,044 | ||||||||||||||||||||
3 | 9/28/2016 | 9/28/2017 | 3/28/2017 | 10 | % | 73,500 | (8,500 | ) | 3,563 | 68,563 | ||||||||||||||||||||||
4 | 10/20/2016 | 10/20/2019 | 4/20/2017 | 0 | % | 60,000 | (10,000 | ) | 1,196 | 51,196 | ||||||||||||||||||||||
5 | 10/28/2016 | 7/28/2017 | 4/28/2017 | 10 | % | 78,780 | (8,780 | ) | 3,956 | 73,956 | ||||||||||||||||||||||
6 | 2/22/2017 | 11/30/2017 | 11/1/2017 | 10 | % | 58,000 | (3,000 | ) | 64 | 55,064 | ||||||||||||||||||||||
333,262 | (37,280 | ) | (60,000 | ) | 23,999 | 259,981 |
These notes become convertible six months after the dates of agreement at variable conversion prices.
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.
On July 7, 2016, the Company issued a Convertible Promissory Note. The principal amount of the loan is $33,500 with an original issue discount of $3,500. The note bears interest at a rate of 10% per annum, is unsecured and becomes due and payable with accrued interest on July 7, 2017. Note provider has the option to convert the note plus accrued interest into shares of the Company’s common stock after six months, at a price of 58% (42% discount) of the average of the lowest three trading prices for the previous 20 days prior to the conversion date. On January 7, 2017, the company bifurcated the conversion feature and accounted for it as a derivative liability. The Company recorded the derivative liability at its fair value of $41,473 based on the Black Scholes Merton pricing model, a corresponding debt discount of $30,000 to be amortized utilizing the interest method of accretion over the remaining term of the note and a loss on the issuance of convertible debt of $11,473. On January 20, 2017, the Company converted $4,018 of principal into 93,000 shares of common stock. The fair value of the derivative liability associated with the converted principal is determined to be $4,733, and is re-classed from liability to equity. As of February 28, 2017, the Company fair valued the derivative at $48,943 resulting in a loss on the change in the fair value of $12,203. In addition, total of $11,176 of the debt discount has been amortized to interest expense. As of February 28, 2017 there is $29,482 of principal due on this note.
On August 15, 2016, the Company issued a Convertible Promissory Note. The principal amount of the loan is $33,500 with an original issue discount of $3,500. The note bears interest at a rate of 10% per annum, is unsecured and becomes due and payable with accrued interest on August 15, 2017. Note provider has the option to convert the note plus accrued interest into shares of the Company’s common stock after six months, at a price of 58% (42% discount) of the average of the lowest three trading prices for the previous 20 days prior to the conversion date. On February 15, 2017, the company bifurcated the conversion feature and accounted for it as a derivative liability. The Company recorded the derivative liability at its fair value of $45,032 based on the Black Scholes Merton pricing model, a corresponding debt discount of $30,000 to be amortized utilizing the interest method of accretion over the remaining term of the note and a loss on the issuance of convertible debt of $15,032. As of February 28, 2017, the Company fair valued the derivative at $63,518 resulting in a loss on the change in the fair value of $18,486. In addition, total of $4,044 of the debt discount has been amortized to interest expense. As of February 28, 2017 there is $33,500 of principal due on this note.
A summary of the activity of the derivative liability for the year ended February 28, 2017 is as follows:
Balance at February 29, 2016 | $ | - | ||
Addition of derivative as a debt discount | 60,000 | |||
Decrease to derivative due to conversions | (4,733 | ) | ||
Derivative loss due to mark to market adjustment | 57,194 | |||
Balance at February 28, 2017 | $ | 112,461 |
F-10 |
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 year ended February 28, 2017 is as follows:
Date of valuation | February 28, 2017 | Inception | ||||||
Volatility (annual) | 308% - 315% | 247% - 255% | ||||||
Risk-free rate | .61% - .69% | .61% - .67% | ||||||
Years to maturity | .35 - .46 | .5 |
Level 1: Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
Level 2: Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
Level 3: Pricing inputs that are generally observable inputs and not corroborated by market data.
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 February 28, 2017.
Fair value measured at February 28, 2017 | ||||||||||||||||
Fair
value at February 28, 2017 | Quoted
prices in active markets (Level 1) | Significant
other observable inputs (Level 2) | Significant
unobservable inputs (Level 3) | |||||||||||||
Derivative liabilities | $ | 112,461 | $ | - | $ | - | $ | 112,461 |
Note 8. Subsequent Events.
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 40,000,000 shares shall be shares of preferred stock, par value of $.001 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”).
Notwithstanding the designation of the class of Series A Preferred stock designated in Article XII, Series B Preferred stock designated in Article XIII, the designations, preferences, limitations, restrictions, and relative rights of any additional classes of Preferred Stock, and variations in the relative rights and preferences as between different series shall be established in accordance with the Wyoming Business Corporation Act by the board of directors of the Corporation (“Board of Directors”). Except for such voting powers with respect to the election of directors or other matters as may be stated in the resolutions of the Board of Directors creating any series of Preferred Stock, the holders of any such series shall have no voting power.
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 40,000,000 shares shall be shares of preferred stock, par value of $.001 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”).
Between March 21, 2017 and May 22, 2017 the Company executed 4 Convertible Notes totaling $173,850.00. The notes bear an interest rate of 10.0% per annum and are due between January 15, 2018 and April 5, 2018
The Company has also issued 97, 173, 404 shares from Convertible Note conversions since the period ended February 28, 2017
F-11 |
ITEM 9. CHANGES IN and DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 9A(T). CONTROLS AND PROCEDURES
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer (our president) and our principal accounting and financial officer (our chief financial officer and treasurer) to allow for timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and our management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
Our management does not expect that our disclosure controls or our internal controls over financial reporting will prevent all error and fraud. A control system, no matter how well conceived and operated, can provide only reasonable, but not absolute, assurance that the objectives of a control system are met. Further, any control system reflects limitations on resources and the benefits of a control system must be considered relative to its costs. These limitations also include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of a control. The design of a control system is also based upon certain assumptions about potential future conditions; over time controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and may not be detected.
As of February 29, 2016, the year-end period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on this, our chief financial and chief executive officers concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this annual report. There have been no significant changes in our internal controls over financial reporting that occurred during the fiscal year ended February 28, 2017, that have materially or are reasonably likely to materially affect our internal controls over financial reporting.
Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act. Our management assessed the effectiveness of our internal control over financial reporting as of February 28, 2017. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework. A material weakness is a deficiency or a 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 will not be prevented or detected on a timely basis. We have identified the following material weaknesses.
1. | As of February 28, 2017, we did not maintain effective controls over the control environment. Specifically, we have not developed and effectively communicated to our employees our accounting policies and procedures. This has resulted in inconsistent practices. Further, the Board of Directors does not currently have any independent members and no director qualifies as an audit committee financial expert as defined in Item 407(d)(5)(ii) of Regulation S-K. Since these entity level programs have a pervasive effect across the organization, management has determined that these circumstances constitute a material weakness. | |
2. | As of February 28, 2017, we did not maintain effective controls over financial statement disclosure. Specifically, controls were not designed and in place to ensure that all disclosures required were originally addressed in our financial statements. Accordingly, management has determined that this control deficiency constitutes a material weakness. | |
3. | As of February 28, 2017, the Company did not have a robust financial consolidation system throughout the period and as a result, adjustments were required in order to produce financial statements for external reporting purposes. Also, the Company did not segregate certain accounting duties due to the small size of its accounting staff. |
Because of these material weaknesses, management has concluded that the Company did not maintain effective internal control over financial reporting as of February 28, 2017, based on the criteria established in Internal Control-Integrated Framework under COSO.
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This annual report does not include an attestation report of the company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the company’s registered public accounting firm pursuant to rules of the SEC that permit the company to provide only management’s report in this annual report.
ITEM 9B. OTHER INFORMATION None.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS and CORPORATE GOVERNANCE
The following individuals were serving as the directors and executive officers of our company as of the date of this annual report. All directors of our company hold office until the next annual meeting of our shareholders or until their successor(s) have been elected and qualified. The executive officers of our company are appointed by our board of directors and hold office until their death, resignation or removal from office.
Name | Position Held | Age | Date First Elected | |||
Chief Executive Officer | ||||||
Peter Lachapelle | Secretary, Treasurer | 56 | November 25, 2015 | |||
Chief Financial Officer | ||||||
Mike Profita
Ken Bado |
Director
Director
Director |
61
62 |
July 11, 2016
February 16, 2016 |
Business Experience
The following is a brief account of the education and business experience during at least the past five years of each director, executive officer and key employee of our company, indicating the person’s principal occupation during that period, and the name and principal business of the organization in which such occupation and employment were carried out.
Peter Lachapelle, 56, is the Founder and CEO of VinCompass. In Lachapelle’ s 25 plus years of industry experience, prior to founding VinCompass, he was a Vice President and Special Advisor at IHS Inc. (IHS – NYSE). This role involved providing solutions to complex customer business problems within the IHS Product Life Cycle and Environment domains. IHS, Inc. provided critical information / insights, decision- support tools, and related services. During this time Peter also functioned as the Executive Sponsor of REACH Compliance Solutions.
Prior to IHS he also held various General Manager / Vice President roles at i2 Technologies (ITWO – NASDAQ), a leading supply chain solutions company. Previous to his time at i2, he was the President of Canadian and Latin American wholly owned subsidiaries of Mentor Graphics (MENT - NASDAQ), an electronic design automation company. In his early career he co-founded an electronics distribution company.
Lachapelle received his masters of business administration from the University of Western Ontario. He has also completed various executive development programs at Harvard, ESIE, Kellogg, The Massachusetts Institute of Technology and Stanford University.
Mr. Michael J. Profita, 61, with over 30 years in high tech industries, Mr. Profita has a broad range of experience in both public and venture backed companies. Mr. Profita is a Partner in Momentum Capital and serves as Chief Executive Officer at Affluence Corp., Chief Financial Officer at Advizor Solutions, Inc., and Chief Financial Officer at Naerodynamics, Inc. Prior highlights of his career include EVP and CFO at Apropos Technology (APRS-NASDAQ) where he led their $100MM IPO. Additionally, Mr. Profita was president of thincSoft LLC and led the company from inception to exit. Mr. Profita is a frequent guest lecturer at Northwestern University and Marquette University and was named one of the top dealmakers in Chicago. Mr. Profita holds a MM in management from the University of Chicago, an MBA in Finance from Loyola University of Chicago and a B.S. in Economics and Finance from Marquette University.
Mr. George M. Bado, 62, known as “Ken”, is a turnaround expert, angel investor and board member with a consistent record of executing hyper growth for software companies and monetizing technology by solving their customer's critical business problems. Mr. Badois the Chief Executive Officer of GMB Consulting LLC.
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Prior
career highlights for Mr. Bado include: Chief Executive Officer and President at MarkLogic Corporation, a Big Data company in
the Bay Area, as well as Executive Vice President of Autodesk (ADSK-NASDAQ) where he led the growth from $800 million to over
$2 billion in 6 years. Mr. Bado has a proven track record in leading P&Ls including sales/marketing and services. Additionally,
Mr Bado is an active board member on “Airex Inc” and non-profit “Voices of Hope for Aphasia”.
Mr. Bado holds a Bachelor's degree from Bethany College in West Virginia.
Involvement in Certain Legal Proceedings
During the past five years, none of our officers, directors, promoters or control persons have had any of the following events occur:
● | a bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; |
● | conviction in a criminal proceeding or being subject to a pending criminal proceeding, excluding traffic violations and other minor offenses; |
● | being subject to any order, judgement or decree, not substantially reversed, suspended or vacated, of any court of competent jurisdiction, permanently enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking business; and/or |
● | being found by a court of competent jurisdiction, in a civil action, the SEC or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgement has not been reversed, suspended or vacated. |
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Exchange Act requires our executive officers and directors and persons who own more than 10% of our common stock to file with the SEC initial statements of beneficial ownership, reports of changes in ownership and annual reports concerning their ownership of our common stock and other equity securities, on Forms 3, 4 and 5 respectively. Executive officers, directors and greater than 10% shareholders are required by the SEC regulations to furnish us with copies of all Section 16(a) reports that they file.
Based solely on our review of the copies of such forms received by us, or written representations from certain reporting persons, we believe that during fiscal year ended February 28, 2017, all filing requirements applicable to our officers, directors and greater than 10% percent beneficial owners were complied with , with the exception of the following:
Number of Late | Number of Transactions Not | Failure to File | ||||||||||
Name | Reports | Reported on a Timely Basis | Required Forms | |||||||||
Peter Lachapelle | 0 | 1 | (1) | 0 | ||||||||
Ken Bado | 0 | 1 | (1) | 0 | ||||||||
Mike Profita | 0 | 1 | (1) | 0 |
(1) Peter Lachapelle, Ken Bado and Mike Profita filed a Form 3 – Initial Statement of Beneficial Ownership of Securities.
Code of Ethics
Our Board of Directors on February 22, 2010, adopted a formal written Code of Business Conduct and Ethics and Compliance Program for all officers, directors and senior employees. Our Code of Business Conduct and Ethics Program was filed as an exhibit to our Form S-1 filed with the SEC on October 26, 2011. A copy will be sent without charge to anyone requesting a copy by contacting us at our principal office by letter or e-mail.
Audit Committee and Audit Committee Financial Expert
Our board of directors has determined that it does not have a member of its audit committee that qualifies as an ‘audit committee financial expert” as defined in Item 407(d)(5)(ii) of Regulation S-K, and is “independent” as the term is used in Item 7(d)(3)(iv) of Schedule 14A under the Exchange Act.
We believe that the members of our board of directors are collectively capable of analyzing and evaluating our financial statements and understanding internal controls and procedures for financial reporting. We believe that retaining an independent director who would qualify as an “audit committee financial expert” would be overly costly and burdensome and is not warranted in our circumstances given the early stages of our development and the fact that we have not generated any material revenues to date. In addition, we currently do not have nominating, compensation or audit committees or committees performing similar functions nor do we have a written nominating, compensation or audit committee charter. Our board of directors does not believe that it is necessary to have such committees because it believes the functions of such committees can be adequately performed by our board of directors.
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Web Site
The Company maintains its Web site at “www.VinCompass.com” and has an e-mail address at “Peter@VinCompass.com”.
ITEM 11. EXECUTIVE COMPENSATION
(a) | General |
The particulars of the compensation paid to the following person:
● | our principal executive officer whom disclosure would have been provided under (b) but for the fact that the individual was not serving as our executive officer at the end of the years ended February 28, 2017, and February 29, 2016. |
(b) | Summary Compensation Table |
Options | ||||||||||||||||||||||||||||
Fiscal | Awards | |||||||||||||||||||||||||||
Year End | (Value | |||||||||||||||||||||||||||
Name and | Feb. 29 | Stock | Securities | of Options) | ||||||||||||||||||||||||
Principal | or | Awards | Underlying | ($) | Total | |||||||||||||||||||||||
Position | 28 | Salary | Bonus | ($) | Options | (5) | Compensation | |||||||||||||||||||||
Peter Lachapelle – Pres. & Director | 2017 | $ | 120,000 | $ | 0 | $ | 0 | Nil | $ | 0 | $ | 120,000 | ||||||||||||||||
Peter Lachapelle – Pres. & Director | 2016 | $ | 96,000 | $ | 0 | $ | 0 | Nil | $ | 0 | $ | 96,000 |
There are no employment contracts, compensatory plans or arrangements, including payments to be received from VinCompass with respect to any executive officer, that would result in payments to such person because of his or her resignation, retirement or other termination of employment with VinCompass, or its subsidiaries, any change in control, or a change in the person’s responsibilities following a change in control of VinCompass.
(c) | Options Grants During the Last Fiscal Year / Stock Option Plans |
We do not currently have a stock option plan in favor of any director, officer, consultant or employee of our company. No individual grants of stock options, whether or not in tandem with stock appreciation rights known as SARs or freestanding SARs have been made to any executive officer or director since our inception; accordingly, no stock options have been granted or exercised by any of the officers or directors since we were founded.
(d) | Aggregated Options Exercises in Last Fiscal Year |
No individual grants of stock options, whether or not in tandem with stock appreciation rights known as SARs or freestanding SARs have been made to any executive officer or any director since our inception; accordingly, no stock options have been granted or exercised by any of the officers or directors since we were founded.
(e) | Long-Tem Incentive Plans and Awards |
We do not have any long-term incentive plans that provide compensation intended to serve as incentive for performance. No individual grants or agreements regarding future payouts under non-stock price-based plans have been made to any executive officer or any director, employee or consultant since inception; accordingly, no future payouts under non-stock price-based plans/agreements have been granted or entered into or exercised by any of the officers or directors or employees or consultants since we were founded. We expect to announce Long Term incentive plans in the next year.
(f) | Compensation of Directors |
The members of the Board of Directors are not compensated by VinCompass for acting as such. Directors are reimbursed for reasonable out-of-pocket expenses incurred. There are no arrangements pursuant to which directors are or will be compensated in the future for any services provided as a director.
We do not have any agreements for compensating directors for their services in their capacity as directors, although such directors are expected in the future to receive stock options to purchase shares of our common stock as awarded by our board of directors.
23 |
(g) | Employment Contracts, Termination of Employment, Change-in-Control Arrangements |
There are no employment or other contracts or arrangements with officers or directors other than those disclosed in this report. There are no compensation plans/arrangements, including payments to be made by VinCompass, with respect to the officers, directors, employees or consultants of VinCompass that would result from the resignation, retirement or any other termination of such directors, officers, employees or consultants. There are no arrangements for directors, officers or employees that would result from a change-in-control.
(h) | Indebtedness of Directors, Senior Officers, Executive Officers and Other Management |
None of our directors or executive officers or any associate or affiliate of our company during the last two fiscal years is or has been indebted to our company by way of guarantee, support agreement, letter of credit or other similar agreement or understanding currently outstanding.
(i) | Family Relationships |
There are no family relationships between any of our directors, executive officers or directors.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT and RELATED STOCKHOLDER MATTERS
Security Ownership of Certain Beneficial Owners |
The following table sets forth, as of the date of this report, the total number of shares owned beneficially by each of our directors, officers and key employees, individually and as a group, and the present owners of 5% or more of our total outstanding shares. The shareholder listed below has direct ownership of his shares and possesses sole voting and dispositive power with respect to the shares.
Name and Address of Beneficial Owner | Title of Class | Amount and Nature of Beneficial Ownership (1) (#) |
Percent of Class (2) (%) |
|||||||||
Peter Lachapelle (3) 795 Folsom Street, 1st Floor San Francisco, CA 94107 |
Common | 18,000,000 | 40.9% | |||||||||
George M. Bado (Ken) (4) 1825 Hackett Creek Drive McKinney, TX 75070 |
Common | 575,000 | .013% | |||||||||
Mike Profita (5) Blair House Upper O’Connel Street Ennis Clare, Ireland |
Common | 375,000 | .008% | |||||||||
All Officers and Directors as a Group (3 Persons) |
Common | 18,950,000 | 43.09% |
(1) | The number and percentage of shares beneficially owned is determined under rules of the SEC and the information is not necessarily indicative of beneficial ownership for any other purpose. Under such rules, beneficial ownership includes any shares as to which the individual has sole or shared voting power or investment power and also any shares that the individual has the right to acquire within 60 days through the exercise of any stock option or other right. The persons named in the table have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them, subject to community property laws where applicable and the information contained in the footnotes to this table. | |
(2) | Based on 43,972,313 issued and outstanding shares of common stock as of February 28, 2017. | |
(3)
(4)
(5) |
Mr. Lachapelle is the Company’s President, Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer and sole Director.
Mr. Bado is a member of the Board of Directors.
Mr. Profita is a member of the Board of Directors. |
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Equity Compensation Plans
We do not have a stock option plan in favor of any director, officer, consultant or employee of our company.
Changes in Control
There are no present arrangements or pledges of the Company’s securities that may result in a change in control of the Company.
ITEM 13. CERTAIN RELATIONSHIPS and RELATED TRANSACTIONS, and DIRECTOR INEPSENDENCE
Except as disclosed herein, no director, executive officer, shareholder holding at least 5% of shares of our common stock, or any family member thereof, had any material interest, direct or indirect, in any transaction, or proposed transaction since the year ended on February 28, 2017, in which the amount involved in the transaction exceeded or exceeds one percent of the average of our total assets at the year-end for the last three completed fiscal years.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVIVES
The aggregate fees billed for the most recently completed fiscal year ended February 28, 2017, and for fiscal year ended February 29, 2016, for professional services rendered by the principal accountant for the audit of our annual financial statements and review of the financial statements included in our quarterly reports on Form 10-Q and services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for these fiscal periods were as follows:
Year Ended | ||||||||
February 28, 2017 | February 29, 2016 | |||||||
Audit Fees | $ | 20,500 | $ | 8,000 | ||||
Audit Related Fees | Nil | Nil | ||||||
Tax Fees | Nil | Nil | ||||||
All Other Fees | Nil | Nil | ||||||
Total | $ | 20,500 | $ | 8,000 |
Audit-Related Fees: The aggregate fees billed for the fiscal year ending on February 28, 2017, for assurance and related services by the principal accountant that are reasonably related to the performance of the audit or review for the audit or review of our annual financial statements and the review of financial statements and are not reported under the previous item, Audit Fees, was approximately $0 versus $0 for the similar period last year and for the period from inception on January 20, 2010, to February 28, 2017, the amount was $0.
Tax Fees: The aggregate fees billed for the fiscal years ended February 28, 2017, and February 29, 2016 for professional services rendered by the principal accountant for tax compliance and tax planning was approximately $0 and for the period from inception on January 20, 2010, to February 28, 2017, the amount was approximately $0.
All Other Fees: The aggregate fees billed for the fiscal years ended February 28, 2017, and February 29, 2016, for products and services provided by the principal accountant other than the services reported above was $0 and for the period from inception on January 20, 2010, to February 29, 2016, the amount was approximately $0.
Our board of directors has considered the nature and amount of fees billed by our independent auditors and believes that the provision of services for activities unrelated to the audit is compatible with maintaining our independent auditors’ independence.
PART IV
Item 15. Exhibits, Financial Statement Schedules
(a) | Financial Statements |
(1) | Financial statements for our company are listed in the index under Item 8 of this report. | |
(2) | All financial statement schedules are omitted because they are not applicable, not material or the required information is shown in the financial statements or notes thereto. |
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(b) | Exhibits |
(1) | Registration Statements | |
1.1 * | S-1 Offering Statement dated October 26, 2011, including audited financial statements for the fiscal year ended February 28, 2011 (incorporated by reference from our registration statement on Form S-1 filed on October 26, 2011 | |
(2) | General | |
3.1 * | Articles of Incorporation of Tiger Jiujiang Mining, Inc. | |
3.2 * | Bylaws of Tiger Jiujiang Mining, Inc. | |
4.1 * | Specimen Stock Certificate | |
10.1 * | Option To Purchase And Royalty Agreement between Tiger Jiujiang Mining, Inc. and Kiukiang Gold Mining Company | |
10.2 ** | Amendment to Option to Purchase and Royalty Agreement between Tiger Jiujiang Mining, Inc. and Kiukiang Gold Mining Company dated May 2, 2011 | |
10.3*** | Second Amendment to Option to Purchase and Royalty Agreement between Tiger Jiujiang Mining, Inc. and Kiukiang Gold Mining Company dated May 22, 2013 | |
10.4
10.5**** |
Third Amendment to Option to Purchase and Royalty Agreement between Tiger Jiujiang Mining, Inc. and Kiukiang Gold Mining Company dated May 31, 2014 Share Exchange Agreement by and among the Company, the controlling stockholders of the Company, VinCompass, and the shareholders of VinCompass dated November 22, 2015 | |
99.2 * | Code of Business Conduct and Ethics and Compliance Program | |
(31) | Section 302 Certification | |
31.1 | Section 302 Certification - Certification of Peter Lachapelle as Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
31.2 | Section 302 Certification - Certification of Peter Lachapelle as Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
(32) | Section 906 Certification | |
32.1 | Section 906 Certification - Certification of Peter Lachapelle as Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
32.2 | Section 906 Certification - Certification of Peter Lachapelle as Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
● | Filed herewith |
● | * Incorporated by reference to S-1 Registration Statement filed on May 14, 2010 |
● | ** Incorporated by reference to S-1/A registration statement filed on June 13, 2014 |
● | *** Incorporated by reference to Form 10K filed on April 29, 2014 **** Incorporated by reference to Form 8K filed on January 14, 2016 |
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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.
VINCOMPASS CORPORATION
(Registrant)
By: | /s/ “Peter Lachapelle” | |
Peter Lachapelle, President, Secretary, Treasurer and Director (Principal Executive Officer, Chief | ||
Executive Officer, Principal Financial Officer and Chief Financial Officer) | ||
Date: June 13, 2017 |
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: | /s/ “Peter Lachapelle” | |
Peter Lachapelle, President, Secretary, Treasurer and Director (Principal Executive Officer, Chief | ||
Executive Officer, Principal Financial Officer and Chief Financial Officer) | ||
Date: June 13, 2017 |
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EXHIBIT 31.1
CERTIFICATIONS
I, Peter Lachapelle, certify that:
1. | I have reviewed this annual report on Form 10-K of VinCompass Corp.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this report; |
4. | The issuer’s registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the issuer and we have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared; | |
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
c) | evaluated the effectiveness of the issuer’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
d) | disclosed in this report any change in the issuer’s internal control over financial reporting that occurred during the issuer’s most recent fiscal quarter (the issuer’s fourth fiscal quarter in the case of this being an annual report) that has materially affected, or is reasonably likely to materially affect, the issuer’s internal control over financial reporting; and |
5. | The issuer’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the issuer’s auditors and the audit committee of the issuer's board of directors (or persons performing the equivalent function): |
a) | all deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the issuer's ability to record, process, summarize and report financial information; and | |
b) | any fraud, whether or not material, that involves management or other employees who have a role in the issuer’s internal controls over financial reporting. |
Date: June 13, 2017
/s/ “Peter Lachapelle” |
Peter Lachapelle |
Chief Executive Officer and Principal Executive Officer |
EXHIBIT 31.2
CERTIFICATIONS
I, Peter Lachapelle, certify that:
1. | I have reviewed this annual report on Form 10-K of VinCompass Corp.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this report; |
4. | The issuer’s registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the issuer and we have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared; | |
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
c) | evaluated the effectiveness of the issuer’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
d) | disclosed in this report any change in the issuer’s internal control over financial reporting that occurred during the issuer’s most recent fiscal quarter (the issuer’s fourth fiscal quarter in the case of this being an annual report) that has materially affected, or is reasonably likely to materially affect, the issuer’s internal control over financial reporting; and |
5. | The issuer’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the issuer’s auditors and the audit committee of the issuer's board of directors (or persons performing the equivalent function): |
a) | all deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the issuer's ability to record, process, summarize and report financial information; and | |
b) | any fraud, whether or not material, that involves management or other employees who have a role in the issuer’s internal controls over financial reporting. |
Date: June 13, 2017
/s/ “Peter Lachapelle” |
Peter Lachapelle |
Chief Financial Officer and Principal Financial Officer |
EXHIBIT 32.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of VinCompass Corp. (the “Company”) on Form 10-K for the year ended February 28, 2017, as filed with the Securities and Exchange Commission on the date hereof (the “Annual Report”), I, Peter Lachapelle, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
1. | the Annual Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | the information contained in the Annual Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: June 13, 2017
/s/ “Peter Lachapelle” |
Peter Lachapelle |
Chief Executive Officer |
A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided and furnished to the Securities and Exchange Commission or its staff upon request.
EXHIBIT 32.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of VinCompass Corp. (the “Company”) on Form 10-K for the year ended February 28, 2017, as filed with the Securities and Exchange Commission on the date hereof (the “Annual Report”), I, Peter Lachapelle, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
1. | the Annual Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | the information contained in the Annual Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: June 13, 2017
/s/ “Peter Lachapelle” |
Peter Lachapelle |
Chief Financial Officer |
A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided and furnished to the Securities and Exchange Commission or its staff upon request.
Document and Entity Information - USD ($) |
12 Months Ended | ||
---|---|---|---|
Feb. 28, 2017 |
Jun. 11, 2017 |
Aug. 31, 2016 |
|
Document And Entity Information | |||
Entity Registrant Name | VinCompass Corp. | ||
Entity Central Index Key | 0001490949 | ||
Document Type | 10-K | ||
Document Period End Date | Feb. 28, 2017 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --02-28 | ||
Entity a Well-known Seasoned Issuer? | No | ||
Entity a Voluntary Filer? | No | ||
Entity's Reporting Status Current? | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 29,246,887 | ||
Entity Common Stock, Shares Outstanding | 144,322,775 | ||
Trading Symbol | VCPS | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2017 |
Consolidated Balance Sheets (Parenthetical) - USD ($) |
Feb. 28, 2017 |
Feb. 29, 2016 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Note payable, net of discount | $ 73,251 | $ 73,251 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred stock, shares issued | 42,000,000 | 42,000,000 |
Preferred stock, shares outstanding | 42,000,000 | 42,000,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 400,000,000 | 400,000,000 |
Common stock, shares issued | 47,079,718 | 43,702,017 |
Common stock, shares outstanding | 47,079,718 | 43,702,017 |
Consolidated Statements of Operations - USD ($) |
12 Months Ended | |
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Feb. 28, 2017 |
Feb. 29, 2016 |
|
Income Statement [Abstract] | ||
SG&A Expenses | $ 848,986 | $ 464,634 |
Total Operating Expenses | 848,986 | 464,634 |
Interest expense | 35,064 | 2,270 |
Loss on settlement of note payable | 26,653 | |
Loss on derivative | 57,194 | |
Net Loss | $ 941,244 | $ 493,557 |
Basic and diluted loss per share | $ (0.02) | $ (0.02) |
Weighted Average number of shares outstanding - Basic and Diluted | 44,169,944 | 28,218,021 |
General Organization and Business |
12 Months Ended |
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Feb. 28, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
General Organization and Business |
Note 1. General Organization and Business
On March 7, 2017, our 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 40,000,000 shares shall be shares of preferred stock, par value of $.001 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”).
The Preferred Stock . Notwithstanding the designation of the class of Series A Preferred stock designated in Article XII, Series B Preferred stock designated in Article XIII, the designations, preferences, limitations, restrictions, and relative rights of any additional classes of Preferred Stock, and variations in the relative rights and preferences as between different series shall be established in accordance with the Wyoming Business Corporation Act by the board of directors of the Corporation (“Board of Directors”). Except for such voting powers with respect to the election of directors or other matters as may be stated in the resolutions of the Board of Directors creating any series of Preferred Stock, the holders of any such series shall have no voting power.
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 40,000,000 shares shall be shares of preferred stock, par value of $.001 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”).
VinCompass Corp. (Formerly known as Tiger Jiujiang Mining, Inc.), entered into a Share Exchange Agreement with VinCompass, whereby VinCompass Corp. exchanged 60.0% 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.
As of January 14, 2016, VinCompass Corp had 400,000,000 and 2,000,000 shares of common stock and preferred stock authorized, respectively, of which 17,500,000 and 1,000,000 were issued and outstanding, respectively. As a result of the Share Exchange Agreement, each outstanding share of VinCompass common stock shall be transferred, conveyed and delivered to VinCompass Corp. in exchange for 26,000000 newly-issued shares of common stock of VinCompass Corp. The 1,000,000 shares of preferred stock are held by VinCompass management as of closing date.
The Merger will be accounted for as a “reverse merger” and recapitalization since, immediately following the completion of the transaction, the holders of VinCompass’s stock will have effective control of VinCompass Corp. In addition, VinCompass will have control of the combined entity through control of the Board by designating all board seats to be held by the existing board of VinCompass Corp. Additionally, all of VinCompass’s officers and senior executive positions will continue on as management of the combined entity after consummation of the Merger. For accounting purposes, VinCompass will be deemed to be the accounting acquirer in the transaction and, consequently, the transaction will be treated as a recapitalization of VinCompass Corp. Accordingly, VinCompass assets, liabilities and results of operations will become the historical financial statements of the registrant, and VinCompass’s assets, liabilities and results of operations will be consolidated with VinCompass Corp effective as of the date of the closing of the Merger. No step-up in basis or intangible assets or goodwill will be recorded in this transaction. VinCompass received $2,202 cash and assumed $114,327 liabilities upon execution of the reverse merger.
On December 14, 2015, FINRA approved the Corporate Name Change, Symbol Change, and the Forward Split took effect on December 15, 2015 for Tiger Jiujiang Mining Corp. The Forward Split shares are payable upon surrender of certificates to the Company’s transfer agent. Accordingly, the Company’s symbol will change to TIGYD to reflect the Forward Split and Symbol Change and twenty (20) business days thereafter, the “D” will be removed and the symbol will change to VCPS. |
Significant Accounting Policies |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Feb. 28, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Significant Accounting Policies |
Note 2. Significant Accounting Policies
Basis of Presentation and Fiscal Year
These financial statements have been presented by the Company in accordance with accounting principles generally accepted in the United States and are expressed in U.S. dollars. The Company’s fiscal year-end is February 28.
Principles of Consolidation Policy
The consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles, or U.S. GAAP, and include the accounts of VinCompass Corp, its wholly-owned subsidiaries and other entities in which VinCompass Corp has a controlling financial interest. All significant intercompany accounts and transactions have been eliminated in consolidation.
Basic and Diluted Loss per Share
The Company computes net loss per share in accordance with ASC 260, “Earnings per Share”, which requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic loss per share is computed by dividing the net loss available to common shareholders by the weighted average number of common shares outstanding during the year. Diluted EPS gives effect to all dilutive potential common shares outstanding during the year including stock options, using the treasury stock method, and convertible preferred stock, using the if-converted method. In computing diluted EPS, the average stock price for the year is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential common shares if their effect is anti-dilutive.
Cash and Cash Equivalents
The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents.
The Company maintains its cash in bank deposit accounts which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts. The Company believes it is not exposed to any significant credit risk related to cash and cash equivalents.
Income Taxes
The Company accounts for income taxes pursuant to the provisions of ASC 740, Income Taxes, whereby deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amount of existing assets and liabilities and their respective tax bases and the future tax benefits derived from operating loss and tax credit carryforwards. The Company provides a valuation allowance on its deferred tax assets when it is more likely than not that such deferred tax assets will not be realized.
The Company also follows the guidance related to accounting for income tax uncertainties. In accounting for uncertainty in income taxes, the Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more likely than not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority. No liability for unrecognized tax benefits was recorded as of February 28, 2017, and February 29, 2016.
Related Parties
A party is considered to be related to the Company if the party directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. A party which can significantly influence the management or operating policies of the transacting parties or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests is also a related party.
Stock-based Compensation
We account for equity-based transactions with nonemployees under the provisions of ASC Topic No. 505-50, Equity-Based Payments to Non-Employees (“ASC 505-50”). ASC 505-50 establishes that equity-based payment transactions with nonemployees shall be measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The fair value of common stock issued for payments to nonemployees is measured at the market price on the date of grant. The fair value of equity instruments, other than common stock, is estimated using the Black-Scholes option valuation model. In general, we recognize the fair value of the equity instruments issued as deferred stock compensation and amortize the cost over the term of the contract.
We account for employee stock-based compensation in accordance with the guidance of FASB ASC Topic 718, Compensation—Stock Compensation, which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values. The fair value of the equity instrument is charged directly to compensation expense and credited to additional paid-in capital over the period during which services are rendered.
Fair value of financial instruments
The Company follows Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 825-10-50-10, Financial Instruments—Overall—Disclosure, for disclosures about fair value of our financial instruments and ASC 820-10-35-37, Fair Value Measurement—Overall—Subsequent Measure—Fair Value Hierarchy, to measure the fair value of our financial instruments. ASC 820-10-35-37 establishes a framework for measuring fair value GAAP and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820-10-35-37 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three levels of fair value hierarchy defined by ASC 820-10-35-37 are described below:
Level 1: Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
Level 2: Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
Level 3: Pricing inputs that are generally observable inputs and not corroborated by market data.
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 February 28, 2017.
Derivative Financial Instruments
Derivative liabilities are recognized in the balance sheets at fair value based on the criteria specified in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 815-15 – Derivatives and Hedging – Embedded Derivatives (“ASC 815-15”). Pursuant to ASC Topic 815-15 an evaluation of the embedded conversion feature of convertible debt is evaluated to determine if the bifurcated debt conversion feature is required to be classified as a derivative liability. Since the terms of the embedded conversion features of the Company’s convertible debt provides for the issuance of shares of common stock at the election of the holders and the number of shares is subject to adjustment for a decline in the price of the Company’s common stock, the Company determined that the embedded conversion option met the criteria of a derivative liability. The estimated fair value of the embedded conversion feature of debt classified as derivative liabilities are determined using the Black-Scholes option pricing model. The model utilizes Level 3 unobservable inputs to calculate the fair value of the derivative liabilities at each reporting period. The Company determined that using an alternative valuation model such as a Binomial-Lattice model would result in minimal differences. The fair value of the embedded conversion feature of debt classified as derivative liabilities are adjusted for changes in fair value at each reporting period, and the corresponding non-cash gain or loss is recorded as other income or expense in the statement of operations. As of February 28, 2017, the embedded conversion feature of $112,461 of convertible notes payable was classified as a derivative liability. Each reporting period the embedded conversion feature is re-valued and adjusted through the caption “change in fair value of derivative liabilities” on the statements of operations. |
Going Concern |
12 Months Ended |
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Feb. 28, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern |
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 had accumulated deficits of $2,997,369 at February 28, 2017 and $2,056,125 at February 29, 2016. It had net losses of $941,244 and $493,557 and for the years February 28, 2017 and February 29, 2016, respectively. 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. |
Common Stock |
12 Months Ended |
---|---|
Feb. 28, 2017 | |
Equity [Abstract] | |
Common Stock |
Note 4. Common Stock
During the year ended February 28, 2017, the Company issue 93,000 shares for conversion of notes payable and accrued interest, totaled $4,108. Furthermore, during the year, the Company issued 79,500 shares to third parties for cash investment of $93,430 in the Company. During the year 3,254,979 shares were issued in lieu of compensation of $130,765.
As a result of the Reverse Merger, As of January 14, 2016, VinCompass Corp had 400,000,000 and 2,000,000 shares of common stock and preferred stock authorized, respectively, of which 17,500,000 and 1,000,000 were issued and outstanding, respectively. As a result of the Share Exchange Agreement, each outstanding share of VinCompass common stock shall be transferred, conveyed and delivered to VinCompass Corp. in exchange for 26,000000 newly issued shares of common stock of VinCompass Corp.
During the year ended February 28, 2016, the Company issue 133,267 shares for settlement of notes payable and accrued interest, totaled $106,614. The fair value of the shares is determined to be $133,267, using $1.00 per share, which is the previous common stock sold for cash price, resulting in a loss of $26,653 reflected in the Statement of Operations.
Furthermore, during the year ended February 28, 2016, the Company issued 68,750 shares to third parties for cash investment of $55,000 in the Company. These transactions took place at $0.80 |
Related Party Transactions |
12 Months Ended |
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Feb. 28, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions |
Note 5. Related Party Transactions
As of February 28, 2017, the amounts due to the majority shareholder and a director totaled $157,583, and bear no interest and with no stated repayment terms; the Company recorded no imputed interest on these borrowings. There were borrowings from related party of $96,663 and payment of $55,240, (Balance of $116,160 as of February 29, 2016).
As of February 28, 2017, the Company accrued payroll expense of $216,000 ($96,000 as at February 29, 2016) and accrued rental and operating expenses of $131,698 ($74,959 as at February 29, 2016) due to the Company’s CEO. |
Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||
Income Taxes |
Note 6. Income Taxes
The Company uses the liability method, where deferred tax assets and liabilities are determined based on the expected future tax consequences of temporary differences between the carrying amounts of assets and liabilities for financial and income tax reporting purposes.
During the years ended February 28, 2017 and February 29, 2016, the Company incurred net losses, and therefore, had no tax liability. The net deferred asset generated by the loss carry-forward has been fully reserved. The cumulative net operating loss carry-forward is approximately$872,980 and $466,904, respectively as of February 28, 2017 and February 29, 2016 and will expire in years 2020 through 2036.
Deferred tax assets consist of the tax effect of NOL carry-forwards. The Company has provided a full valuation allowance on the deferred tax assets because of the uncertainty regarding its ability to be realized.
As of the years ended February 28, 2017 and February 29, 2016, deferred tax assets consisted of the following:
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Convertible Notes |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Convertible Notes |
Note 7. Convertible notes.
The following table summarized the convertible notes as of February 28, 2017:
These notes become convertible six months after the dates of agreement at variable conversion prices.
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.
On July 7, 2016, the Company issued a Convertible Promissory Note. The principal amount of the loan is $33,500 with an original issue discount of $3,500. The note bears interest at a rate of 10% per annum, is unsecured and becomes due and payable with accrued interest on July 7, 2017. Note provider has the option to convert the note plus accrued interest into shares of the Company’s common stock after six months, at a price of 58% (42% discount) of the average of the lowest three trading prices for the previous 20 days prior to the conversion date. On January 7, 2017, the company bifurcated the conversion feature and accounted for it as a derivative liability. The Company recorded the derivative liability at its fair value of $41,473 based on the Black Scholes Merton pricing model, a corresponding debt discount of $30,000 to be amortized utilizing the interest method of accretion over the remaining term of the note and a loss on the issuance of convertible debt of $11,473. On January 20, 2017, the Company converted $4,018 of principal into 93,000 shares of common stock. The fair value of the derivative liability associated with the converted principal is determined to be $4,733, and is re-classed from liability to equity. As of February 28, 2017, the Company fair valued the derivative at $48,943 resulting in a loss on the change in the fair value of $12,203. In addition, total of $11,176 of the debt discount has been amortized to interest expense. As of February 28, 2017 there is $29,482 of principal due on this note.
On August 15, 2016, the Company issued a Convertible Promissory Note. The principal amount of the loan is $33,500 with an original issue discount of $3,500. The note bears interest at a rate of 10% per annum, is unsecured and becomes due and payable with accrued interest on August 15, 2017. Note provider has the option to convert the note plus accrued interest into shares of the Company’s common stock after six months, at a price of 58% (42% discount) of the average of the lowest three trading prices for the previous 20 days prior to the conversion date. On February 15, 2017, the company bifurcated the conversion feature and accounted for it as a derivative liability. The Company recorded the derivative liability at its fair value of $45,032 based on the Black Scholes Merton pricing model, a corresponding debt discount of $30,000 to be amortized utilizing the interest method of accretion over the remaining term of the note and a loss on the issuance of convertible debt of $15,032. As of February 28, 2017, the Company fair valued the derivative at $63,518 resulting in a loss on the change in the fair value of $18,486. In addition, total of $4,044 of the debt discount has been amortized to interest expense. As of February 28, 2017 there is $33,500 of principal due on this note.
A summary of the activity of the derivative liability for the year ended February 28, 2017 is as follows:
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 year ended February 28, 2017 is as follows:
Level 1: Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
Level 2: Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
Level 3: Pricing inputs that are generally observable inputs and not corroborated by market data.
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 February 28, 2017.
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Subsequent Events |
12 Months Ended |
---|---|
Feb. 28, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events |
Note 8. Subsequent Events.
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 40,000,000 shares shall be shares of preferred stock, par value of $.001 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”).
Notwithstanding the designation of the class of Series A Preferred stock designated in Article XII, Series B Preferred stock designated in Article XIII, the designations, preferences, limitations, restrictions, and relative rights of any additional classes of Preferred Stock, and variations in the relative rights and preferences as between different series shall be established in accordance with the Wyoming Business Corporation Act by the board of directors of the Corporation (“Board of Directors”). Except for such voting powers with respect to the election of directors or other matters as may be stated in the resolutions of the Board of Directors creating any series of Preferred Stock, the holders of any such series shall have no voting power.
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 40,000,000 shares shall be shares of preferred stock, par value of $.001 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”).
Between March 21, 2017 and May 22, 2017 the Company executed 4 Convertible Notes totaling $173,850.00. The notes bear an interest rate of 10.0% per annum and are due between January 15, 2018 and April 5, 2018
The Company has also issued 97, 173, 404 shares from Convertible Note conversions since the period ended February 28, 2017 |
Significant Accounting Policies (Policies) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||
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Feb. 28, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation and Fiscal Year |
Basis of Presentation and Fiscal Year
These financial statements have been presented by the Company in accordance with accounting principles generally accepted in the United States and are expressed in U.S. dollars. The Company’s fiscal year-end is February 28. |
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Principles of Consolidation Policy |
Principles of Consolidation Policy
The consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles, or U.S. GAAP, and include the accounts of VinCompass Corp, its wholly-owned subsidiaries and other entities in which VinCompass Corp has a controlling financial interest. All significant intercompany accounts and transactions have been eliminated in consolidation. |
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Basic and Diluted Loss per Share |
Basic and Diluted Loss per Share
The Company computes net loss per share in accordance with ASC 260, “Earnings per Share”, which requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic loss per share is computed by dividing the net loss available to common shareholders by the weighted average number of common shares outstanding during the year. Diluted EPS gives effect to all dilutive potential common shares outstanding during the year including stock options, using the treasury stock method, and convertible preferred stock, using the if-converted method. In computing diluted EPS, the average stock price for the year is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential common shares if their effect is anti-dilutive. |
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Cash and Cash Equivalents |
Cash and Cash Equivalents
The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents.
The Company maintains its cash in bank deposit accounts which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts. The Company believes it is not exposed to any significant credit risk related to cash and cash equivalents. |
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Income Taxes |
Income Taxes
The Company accounts for income taxes pursuant to the provisions of ASC 740, Income Taxes, whereby deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amount of existing assets and liabilities and their respective tax bases and the future tax benefits derived from operating loss and tax credit carryforwards. The Company provides a valuation allowance on its deferred tax assets when it is more likely than not that such deferred tax assets will not be realized.
The Company also follows the guidance related to accounting for income tax uncertainties. In accounting for uncertainty in income taxes, the Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more likely than not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority. No liability for unrecognized tax benefits was recorded as of February 28, 2017, and February 29, 2016. |
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Related Parties |
Related Parties
A party is considered to be related to the Company if the party directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. A party which can significantly influence the management or operating policies of the transacting parties or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests is also a related party. |
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Stock-based Compensation |
Stock-based Compensation
We account for equity-based transactions with nonemployees under the provisions of ASC Topic No. 505-50, Equity-Based Payments to Non-Employees (“ASC 505-50”). ASC 505-50 establishes that equity-based payment transactions with nonemployees shall be measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The fair value of common stock issued for payments to nonemployees is measured at the market price on the date of grant. The fair value of equity instruments, other than common stock, is estimated using the Black-Scholes option valuation model. In general, we recognize the fair value of the equity instruments issued as deferred stock compensation and amortize the cost over the term of the contract.
We account for employee stock-based compensation in accordance with the guidance of FASB ASC Topic 718, Compensation—Stock Compensation, which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values. The fair value of the equity instrument is charged directly to compensation expense and credited to additional paid-in capital over the period during which services are rendered. |
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Fair value of financial instruments |
Fair value of financial instruments
The Company follows Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 825-10-50-10, Financial Instruments—Overall—Disclosure, for disclosures about fair value of our financial instruments and ASC 820-10-35-37, Fair Value Measurement—Overall—Subsequent Measure—Fair Value Hierarchy, to measure the fair value of our financial instruments. ASC 820-10-35-37 establishes a framework for measuring fair value GAAP and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820-10-35-37 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three levels of fair value hierarchy defined by ASC 820-10-35-37 are described below:
Level 1: Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
Level 2: Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
Level 3: Pricing inputs that are generally observable inputs and not corroborated by market data.
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 February 28, 2017.
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Derivative Financial Instruments |
Derivative Financial Instruments
Derivative liabilities are recognized in the balance sheets at fair value based on the criteria specified in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 815-15 – Derivatives and Hedging – Embedded Derivatives (“ASC 815-15”). Pursuant to ASC Topic 815-15 an evaluation of the embedded conversion feature of convertible debt is evaluated to determine if the bifurcated debt conversion feature is required to be classified as a derivative liability. Since the terms of the embedded conversion features of the Company’s convertible debt provides for the issuance of shares of common stock at the election of the holders and the number of shares is subject to adjustment for a decline in the price of the Company’s common stock, the Company determined that the embedded conversion option met the criteria of a derivative liability. The estimated fair value of the embedded conversion feature of debt classified as derivative liabilities are determined using the Black-Scholes option pricing model. The model utilizes Level 3 unobservable inputs to calculate the fair value of the derivative liabilities at each reporting period. The Company determined that using an alternative valuation model such as a Binomial-Lattice model would result in minimal differences. The fair value of the embedded conversion feature of debt classified as derivative liabilities are adjusted for changes in fair value at each reporting period, and the corresponding non-cash gain or loss is recorded as other income or expense in the statement of operations. As of February 28, 2017, the embedded conversion feature of $112,461 of convertible notes payable was classified as a derivative liability. Each reporting period the embedded conversion feature is re-valued and adjusted through the caption “change in fair value of derivative liabilities” on the statements of operations. |
Significant Accounting Policies (Tables) |
12 Months Ended |
---|---|
Feb. 28, 2017 | |
Accounting Policies [Abstract] | |
Schedule of Derivative Liability Measured with Unobservable Inputs |
Income Taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||
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Feb. 28, 2017 | |||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||
Schedule of Deferred Tax Assets |
As of the years ended February 28, 2017 and February 29, 2016, deferred tax assets consisted of the following:
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Convertible Notes (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Convertible Notes |
The following table summarized the convertible notes as of February 28, 2017:
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Schedule of Derivative Liability |
A summary of the activity of the derivative liability for the year ended February 28, 2017 is as follows:
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Schedule of Derivative Liability Measured with Fair Value Assumptions |
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 year ended February 28, 2017 is as follows:
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Schedule of Derivative Liability Measured with Unobservable Inputs |
Significant Accounting Policies (Details Narrative) - USD ($) |
12 Months Ended | |
---|---|---|
Feb. 28, 2017 |
Feb. 29, 2016 |
|
Accounting Policies [Abstract] | ||
Percentage of largest benefit has grater than likelihood | 50.00% | |
Unrecognized tax benefits | ||
Derivative liabilities | $ 112,461 |
Significant Accounting Policies - Schedule of Derivative Liability Measured with Unobservable Inputs (Details) |
Feb. 28, 2017
USD ($)
|
---|---|
Derivative liabilities | $ 112,461 |
Level 1 [Member] | |
Derivative liabilities | |
Level 2 [Member] | |
Derivative liabilities | |
Level 3 [Member] | |
Derivative liabilities | $ 112,461 |
Going Concern (Details Narrative) - USD ($) |
12 Months Ended | |
---|---|---|
Feb. 28, 2017 |
Feb. 29, 2016 |
|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accumulated deficit | $ 2,997,369 | $ 2,056,125 |
Net loss | $ 941,244 | $ 493,557 |
Related Party Transactions (Details Narrative) - USD ($) |
12 Months Ended | |
---|---|---|
Feb. 28, 2017 |
Feb. 29, 2016 |
|
Related Party Transactions [Abstract] | ||
Amounts due to majority shareholder | $ 157,583 | |
Borrowings from related party | 96,663 | |
Repayment of related party debt | 55,240 | |
Balnce due to related party | 157,583 | $ 116,160 |
Deferred payroll | 216,000 | 96,000 |
Accounts payable to related party | $ 131,698 | $ 74,959 |
Income Taxes (Details Narrative) - USD ($) |
12 Months Ended | |
---|---|---|
Feb. 28, 2017 |
Feb. 29, 2016 |
|
Income Tax Disclosure [Abstract] | ||
Net operating loss carry-forward | $ 872,980 | $ 466,904 |
Net operating loss expiration year | 2020 through 2036 |
Income Taxes - Schedule of Deferred Tax Assets (Details) - USD ($) |
Feb. 28, 2017 |
Feb. 29, 2016 |
---|---|---|
Income Tax Disclosure [Abstract] | ||
Tax benefit at U.S. statutory rate | $ (418,666) | $ 163,416 |
Valuation allowance | (418,666) | (163,416) |
Total |
Convertible Notes - Schedule of Derivative Liability (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Feb. 28, 2017 |
Feb. 29, 2016 |
|
Debt Disclosure [Abstract] | ||
Balance at February 29, 2016 | ||
Addition of derivative as a debt discount | 23,999 | |
Decrease to derivative due to conversions | (4,733) | |
Derivative loss due to mark to market adjustment | 57,194 | |
Balance at February 28, 2017 | $ 112,461 |
Convertible Notes - Schedule of Derivative Liability Measured with Fair Value Assumptions (Details) |
12 Months Ended | 85 Months Ended |
---|---|---|
Feb. 28, 2017
$ / shares
|
Feb. 28, 2017
$ / shares
|
|
Years to maturity | $ .5 | $ .5 |
Minimum [Member] | ||
Volatility (annual) | 308.00% | 247.00% |
Risk-free rate | 0.61% | 0.61% |
Years to maturity | $ .35 | $ .35 |
Maximum [Member] | ||
Volatility (annual) | 315.00% | 255.00% |
Risk-free rate | 0.69% | 0.67% |
Years to maturity | $ .46 | $ .46 |
Convertible Notes - Schedule of Derivative Liability Measured with Unobservable Inputs (Details) |
Feb. 28, 2017
USD ($)
|
---|---|
Derivative liabilities | $ 112,461 |
Level 1 [Member] | |
Derivative liabilities | |
Level 2 [Member] | |
Derivative liabilities | |
Level 3 [Member] | |
Derivative liabilities | $ 112,461 |
Subsequent Events (Details Narrative) - USD ($) |
12 Months Ended | ||||
---|---|---|---|---|---|
Feb. 28, 2017 |
May 08, 2017 |
Mar. 07, 2017 |
Feb. 29, 2016 |
Jan. 14, 2016 |
|
Preferred stock authorized | 2,000,000 | 2,000,000 | 2,000,000 | ||
Preferred stock, par value | $ 0.001 | $ 0.001 | |||
Common stock, authorized | 400,000,000 | 400,000,000 | 400,000,000 | ||
Common stock, par value | $ 0.001 | $ 0.001 | |||
Subsequent Event [Member] | |||||
Maximum number of shares authorized by the board | 5,000,000,000 | 1,000,000,000 | |||
Preferred stock authorized | 40,000,000 | 40,000,000 | |||
Preferred stock, par value | $ .001 | $ .001 | |||
Common stock, authorized | 4,960,000,000 | 960,000,000 | |||
Common stock, par value | $ 0.001 | $ 0.001 | |||
Number of shares issued for conversion | 97,173,404 | ||||
Subsequent Event [Member] | Between March 21, 2017 and May 22, 2017 [Member] | |||||
Total convertible notes payable | $ 173,850 | ||||
Interest at a rate per annum | 10.00% | ||||
Debt instrument, due date, description | Between January 15, 2018 and April 5, 2018 |
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