10-Q 1 cocmf_10q.htm QUARTERLY REPORT 10Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



FORM 10-Q


[X]  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the quarterly period ended: January 31, 2014


[  ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the transition period from _______to_______


Commission File Number 000-54800

 

CORECOMM SOLUTIONS INC.

(Exact name of registrant as specified in its charter)

 

British Columbia, Canada

(State or other jurisdiction

of incorporation or organization)

99-0364150

(I.R.S. Employer

Identification No.)


810-789 West Pender Street, Vancouver, BC, V6C 1H2

(Address of principal executive offices) (Zip Code)


(604) 787-2811

(Registrant’s telephone number, including area code)



Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  [X] Yes    [   ] 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 to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). [X] Yes    [   ] No


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filed,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

[  ]

 

Accelerated filer

[  ]

Non-accelerated filer

[  ]

(Do not check if a smaller reporting company)

Smaller reporting company

[X]


Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). [   ] Yes    [X] No


Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.  As of March 17, 2014 the number of shares of the registrant’s common stock outstanding was 7,216,661.





 


TABLE OF CONTENTS

 

PART I-FINANCIAL INFORMATION

1

ITEM 1.  FINANCIAL STATEMENTS.

1

BALANCE SHEETS

1

STATEMENTS OF OPERATIONS

2

STATEMENT OF STOCKHOLDERS' DEFICIT

3

STATEMENTS OF CASH FLOWS

4

NOTES TO THE INTERIM FINANCIAL STATEMENTS

5

ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

7

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

12

ITEM 4.  CONTROLS AND PROCEDURES.

13

PART II-OTHER INFORMATION

14

ITEM 1.  LEGAL PROCEEDINGS.

14

ITEM 1A.  RISK FACTORS.

14

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

18

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.

19

ITEM 4.  MINE SAFETY DISCLOSURES

19

ITEM 5.  OTHER INFORMATION.

19

ITEM 6.  EXHIBITS.

19



























i




PART I-FINANCIAL INFORMATION


Item 1.  Financial Statements.


CORECOMM SOLUTIONS INC.

(A DEVELOPMENT STAGE COMPANY)

BALANCE SHEETS

EXPRESSED IN US DOLLARS


  

January 31, 2014

 

October 31, 2013

  

(unaudited)

 

 

ASSETS

 

 

 

 

 

 

 

Current assets

 

 

 

Cash

$

1,258

 

$

4,266

GST recoverable

 

2,443

 

 

1,960

Prepaids

 

1,000

 

 

-

 

 

4,701

 

 

6,226

 

 

 

 

 

 

Unproved mineral property

 

11,697

 

 

11,697

 

$

16,398

 

$

17,923

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' DEFICIT

 

 

 

 

 

  

 

 

 

 

 

Current liabilities

 

 

 

 

 

Accounts payable

$

80,112

 

$

56,623

Accrued liabilities

 

13,851

 

 

9,014

Due to related parties

 

10,883

 

 

7,816

 

 

104,846

 

 

73,453

  

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

 

 

Stockholders' deficit

 

 

 

 

 

Common stock, no par value, unlimited authorized

 

 

 

 

 

7,216,661 and 6,916,666 issued and outstanding at

 

 

 

 

 

January 31, 2014 and October 31, 2013

 

499,000

 

 

472,000

Additional paid in capital

 

(26,180)

 

 

(26,180)

Comprehensive loss

 

5,500

 

 

(63)

Deficit

 

(566,768)

 

 

(501,287)

 

 

(88,448)

 

 

(55,530)

 

$

16,398

 

$

17,923










The accompanying notes are an integral part of these interim financial statements




1



CORECOMM SOLUTIONS INC.

(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF OPERATIONS

(UNAUDITED)



 

 

 

From August 4, 2010

 

Three months ended

 

(Inception) to

 

January 31, 2014

 

January 31, 2013

 

January 31, 2014

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

Administration

$

18,692

 

$

2,500

 

$

46,043

Accounting

 

1,869

 

 

1,110

 

 

47,256

Bank charges

 

127

 

 

76

 

 

1,642

Consulting

 

3,738

 

 

2,500

 

 

96,662

Corporate communications

 

1,548

 

 

-

 

 

2,590

Management fees

 

10,281

 

 

6,000

 

 

199,801

Mineral exploration

 

-

 

 

1,000

 

 

24,220

Office

 

2,658

 

 

5,432

 

 

30,181

Professional fees

 

16,911

 

 

1,066

 

 

105,300

Regulatory and filing

 

7,266

 

 

3,112

 

 

46,374

Research and development

 

1,122

 

 

-

 

 

1,122

Travel and entertainment

 

935

 

 

-

 

 

4,964

Foreign exchange

 

334

 

 

-

 

 

1,191

Loss before other items

 

(65,481)

 

 

(22,796)

 

 

(607,346)

 

 

 

 

 

 

 

 

 

Other items:

 

 

 

 

 

 

 

 

Exploration tax credit

 

-

 

 

-

 

 

1,960

Interest income

 

-

 

 

-

 

 

42,218

Write-down of unproved mineral properties

 

-

 

 

-

 

 

(3,600)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

$

(65,481)

 

$

(22,796)

 

$

(566,768)

 

 

 

 

 

 

 

 

 

Loss per share - basic and diluted

$

0.01

 

$

0.00

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares outstanding:

 

7,083,694

 

 

6,919,661

 

 

 











The accompanying notes are an integral part of these interim financial statements




2



CORECOMM SOLUTIONS INC.

(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF STOCKHOLDERS' DEFICIT

(UNAUDITED)



 

 

 

 

 

Additional

 

 

 

 

 

 

 

Stock

Paid-in

Comprehensive

Accumulated

 

 

 

Shares

Amount

Subscribed

Capital

Loss

Deficit

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at October 31, 2012

6,916,661

$

472,000

$

-

$

(27,180)

$

-

$

(348,123)

$

96,697

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

-

 

-

 

-

 

-

 

-

 

(22,796)

 

(22,796)

Balance at January 31, 2013

6,916,661

 

472,000

 

-

 

(27,180)

 

-

 

(370,919)

 

73,901

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Donated services

-

 

-

 

-

 

1,000

 

-

 

-

 

1,000

 

Effect of exchange rate changes on cash

-

 

-

 

-

 

-

 

(63)

 

-

 

(63)

 

Net loss

-

 

-

 

-

 

-

 

-

 

(130,368)

 

(130,368)

Balance at October 31, 2013

6,916,661

 

472,000

 

-

 

(26,180)

 

(63)

 

(501,287)

 

(55,530)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock issued

300,000

 

27,000

 

-

 

-

 

-

 

-

 

27,000

 

Effect of exchange rate changes on cash

-

 

-

 

-

 

-

 

5,563

 

 

 

5,563

 

Net loss

-

 

-

 

-

 

-

 

-

 

(65,481)

 

(65,481)

Balance at January 31, 2014

7,216,661

$

499,000

$

-

$

(26,180)

$

5,500

$

(566,768)

$

(88,448)




















The accompanying notes are an integral part of these interim financial statements




3



CORECOMM SOLUTIONS INC.

(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF CASH FLOWS

(UNAUDITED)



 

Three months ended

 

From August 4,

2010

(inception) to

January 31, 2014

 

January 31, 2014

 

January 31, 2013

 

 

Cash flow used in in operating activities:

 

 

 

 

 

Net loss

$

(65,481)

 

$

(22,796)

 

$

(566,768)

 

 

 

 

 

 

 

 

 

Consulting fees

 

-

 

 

-

 

 

26,250

Donated services

 

-

 

 

-

 

 

1,000

Property write-off

 

-

 

 

-

 

 

3,600

 

 

 

 

 

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

GST recoverable

 

(483)

 

 

(3,982)

 

 

(2,443)

Prepaids

 

(1,000)

 

 

-

 

 

(1,000)

Accounts payable and accrued liabilities

 

28,326

 

 

(13,782)

 

 

132,612

Due to related parties

 

3,067

 

 

-

 

 

142,734

Net cash used in operating activities

 

(35,571)

 

 

(40,560)

 

 

(264,015)

 

 

 

 

 

 

 

 

 

Cash flows used in investing activities:

 

 

 

 

 

 

 

 

Notes receivable, net of allowance

 

-

 

 

-

 

 

(27,180)

Property acquisition

 

-

 

 

-

 

 

(297)

Net cash used in investing activities

 

-

 

 

-

 

 

(27,477)

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Shares issued

 

27,000

 

 

-

 

 

287,250

Net cash provided by financing activities

 

27,000

 

 

-

 

 

287,250

 

 

 

 

 

 

 

 

 

Effect of exchange rate changes on cash

 

5,563

 

 

-

 

 

5,500

 

 

 

 

 

 

 

 

 

Net (decrease) increase in cash

 

(3,008)

 

 

(40,560)

 

 

1,258

 

 

 

 

 

 

 

 

 

Cash, beginning

 

4,266

 

 

117,120

 

 

-

 

 

 

 

 

 

 

 

 

Cash, ending

$

1,258

 

$

76,560

 

$

1,258

Effect of exchange rate changes on cash

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

 

 

 

Cash paid during the period

 

 

 

 

 

 

 

 

Taxes

$

-

 

$

-

 

$

-

Interest

$

-

 

$

-

 

$

-

 

 

 

 

 

 

 

 

 

Non-cash transactions

 

 

 

 

 

 

 

 

Shares issued for mineral properties

$

-

 

$

-

 

$

15,000

Shares issued for settlement of debt

$

-

 

$

-

 

$

170,500




The accompanying notes are an integral part of these interim financial statements




4



CORECOMM SOLUTIONS INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE INTERIM FINANCIAL STATEMENTS

JANUARY 31, 2014

 (UNAUDITED)


NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION

 

Nature of Operations


CoreComm Solutions Inc. (the “Company”) entered into a license agreement (the “License Agreement”) on December 2, 2013 allowing the Company to commercialize a web-based technology used for performing complex search queries on the internet in the education market for English and Spanish users (the “Technology”) (Note 3). As a result of the agreement, the Company changed its principal business focus from the acquisition and exploration of mineral resources to technology and changed its name to CoreComm Solutions Inc. on January 6, 2014.


The unaudited interim financial statements of the Company have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission (“SEC”). They do not include all information and footnotes required by GAAP for complete financial statements. Except as disclosed herein, there have been no material changes in the information disclosed in the notes to the financial statements for the year ended October 31, 2013, included in the Company’s annual report on Form 10-K, filed with the SEC. The interim unaudited financial statements should be read in conjunction with those financial statements for the year ended October 31, 2013 included in the Company’s annual report on Form 10-K. In the opinion of management, all adjustments considered necessary for fair presentation, consisting solely of normal recurring adjustments, have been made. Operating results for the three months period ended January 31, 2014, are not necessarily indicative of the results that may be expected for the year ending October 31, 2014.


Recent Accounting Pronouncements


The Company has reviewed recently issued accounting pronouncements and plans to adopt those that are applicable to it. It does not expect the adoption of these pronouncements to have a material impact on its financial position, results of operations or cash flows.


NOTE 2 - RELATED PARTY TRANSACTIONS


The Company incurred the following transactions with related parties that are not disclosed elsewhere in the financial statements:


 

Three Months Ended January 31,

 

2014

 

2013

Management fees incurred to a former director

$

-

 

$

3,000

Consulting and management fees incurred to a former officer

 

-

 

 

3,360

Management fees incurred to a director

 

2,337

 

 

-

Management fees incurred to a Chief Executive Officer of the Company

 

5,608

 

 

-

Management fees incurred to a Chief Financial Officer of the Company

 

2,337

 

 

-

Total transactions with related parties

$

10,282

 

$

6,360


At January 31, 2014, the Company owed $10,883(2013 - $7,816) to related parties. The amount bears no interest, is due on demand and is unsecured.






5




NOTE 3 - LICENSE AGREEMENT


On December 2, 2013, the Company entered into the License Agreement with an arms-length party (the “Vendor”) for the Technology (Note 1).


In consideration of the License Agreement, the Company is required to make cash payments totaling $500,000 and issue a total of 2,857,142 common shares of the Company according to the following schedule:

 

·

$100,000 by April 1, 2014;

·

$200,000 by August 1, 2014; and

·

$200,000 by January 1, 2015.

·

2,857,142 common shares no later than the day following the closing of the proposed private placement for 5,000,000 common shares of the Company at $0.10 per share (Note 5).


In addition, if, while using the Technology, the number of daily queries the Company receives exceeds 125,000, the Company will be required to pay a gross revenue share to the Vendor of 45% for each additional query.


The initial term of the License Agreement is 50 years. The Company has the right to terminate the License Agreement at any time if the Company is unsuccessful in raising minimum financing of $500,000.


NOTE 4 - UNPROVED MINERAL PROPERTIES


At January 31, 2014, the Company held interest in three mineral exploration claims located in vicinity of Osoyoos, British Columbia.


To keep the claims in good standing, the Company is required to incur exploration expenses of approximately $678 per year for the next two years and $5,540 per year thereafter.


NOTE 5 - COMMON STOCK


On December 2, 2013, the Company announced a private offering of up to 5,000,000 common shares of the Company at a price of $0.10 per share.


On January 8, 2014, the Company closed the first tranche and issued 300,000 shares for gross proceeds of $30,000. The Company paid finders a cash commission totalling $3,000 associated with the first tranche.


Subsequent to January 31, 2014, the Company received a subscription for 60,000 shares for gross proceeds of $6,000.



















6



Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations.


Forward-Looking Statements


This Quarterly Report on Form 10-Q filed by CoreComm Solutions Inc. contains forward-looking statements. These are statements regarding financial and operating performance and results and other statements that are not historical facts. The words “expect,” “project,” “estimate,” “believe,” “anticipate,” “intend,” “plan,” “forecast,” and similar expressions are intended to identify forward-looking statements. Certain important risks could cause results to differ materially from those anticipated by some of the forward-looking statements. Some, but not all, of these risks include, among other things:


general economic conditions, because they may affect our ability to raise money

our ability to raise enough money to continue our operations

changes in regulatory requirements that adversely affect our business

changes in the prices for minerals that adversely affect our business

other uncertainties, all of which are difficult to predict and many of which are beyond our control


We caution you not to place undue reliance on these forward-looking statements, which reflect our management’s view only as of the date of this report. We are not obligated to update these statements or publicly release the results of any revisions to them to reflect events or circumstances after the date of this report or to reflect the occurrence of unanticipated events. You should refer to, and carefully review, the information in future documents we file with the United States Securities and Exchange Commission (the “SEC”).


General


You should read this discussion and analysis in conjunction with our interim unaudited financial statements and related notes included in this Quarterly Report on Form 10-Q and the audited financial statements and related notes for the fiscal year ended October 31, 2013 included in our Annual Report on Form 10-K. The inclusion of supplementary analytical and related information may require us to make estimates and assumptions to enable us to fairly present, in all material respects, our analysis of trends and expectations with respect to our results of operations and financial position taken as a whole. Actual results may vary from the estimates and assumptions we make.


Overview


We were incorporated on August 4, 2010 under the laws of the State of Nevada under the name “SOS Link Corporation”.  On April 15, 2011, we changed our place of incorporation from the State of Nevada to the Province of British Columbia, Canada and concurrently changed our name to “Venza Gold Corp.”.  The change from Nevada to British Columbia was approved by our shareholders on April 14, 2011.  On January 6, 2014, we changed our name to “CoreComm Solutions Inc.” to reflect our current business.


We are a development stage company engaged in marketing and commercializing correlation technology (“Correlation Technology”) to the education industry.  On December 2, 2013, we entered into a license agreement (the “MSI License Agreement”) with Make Sence, Inc. (“MSI”) whereby MSI granted us a license to commercialize its Correlation Technology platform in the worldwide Kindergarten to Grade 12 (“K-12”) education market.  As a result of licensing the Correlation Technology, we plan to launch our “edForm” and “edForma” portals which will utilize the Technology to serve the search requirements of English and Spanish users.  


In addition, we hold a 100% interest in the OS Gold Claim, located in vicinity of Osoyoos, British Columbia, Canada.  As a result of our entry into the MSI License Agreement, we have suspended operations on the OS Gold Claim.

 

To date, we have not earned any revenues from our educational Correlation Technology platform business or our mineral exploration activities.  We are presently in the development stage of our business and we can provide no assurance that the web portals we are developing based on the Correlation Technology will provide sufficient funds to keep us operational.







7




Recent Corporate Developments


MSI License Agreement  


On December 2, 2013, we entered into the MSI License Agreement with MSI pursuant to which MSI granted us a license to commercialize its Correlation Technology platform in the worldwide K-12 education market.  As a result of licensing the Correlation Technology, we are planning to launch edForm and edForma portals which will utilize the Correlation Technology to serve the search requirements of English and Spanish education users.


In consideration of the license, we agreed to make cash payments totaling $500,000 (the “License Fee”) and issue a total of 2,857,142 common shares of our common stock (which shares have not yet been issued).  The License Fee is to be paid according to the following payment schedule:


(a) $100,000 on or before April 1, 2014;

(b) $200,000 on or before August 1, 2014; and

(c) $200,000 on or before January 1, 2015


In addition, if while using the Correlation Technology, the number of daily queries we receive exceeds 125,000, we will be required to pay a gross revenue share to MSI of 45% for each additional query.


The initial term of the MSI License Agreement is 50 years.  We also retain the right to terminate the MSI License Agreement at any time if we are unsuccessful in raising minimum financing of $500,000.


Financing  


On December 2, 2013, concurrent with signing of the MSI License Agreement, we announced an offering of up to 5,000,000 shares of our common stock, at a price of $0.10 per share, in separate concurrent private placement offerings.


Foreign Offering


We are planning to issue up to 4,000,000 shares of our common stock pursuant to the provisions of Regulation S of the United States Securities Act of 1933, as amended (the “Securities Act”). The offering will be made to persons who are not residents of the United States and are otherwise not “U.S. Persons” as that term is defined in Rule 902(k) of Regulation S of the Securities Act.


As of the date of this report, we have closed the first tranche of this offering and issued 300,000 shares of our common stock at $0.10 per share for gross proceeds of $30,000.  We paid a finder, who was not a US Person, a finder’s fee totaling $3,000 in connection with this issuance.


In addition, on February 10, 2014, we have received a subscription to 60,000 shares for a gross proceeds of $6,000. As of the date of this report these shares have not been issued.


US Offering


We are also planning to issue up to 1,000,000 shares of our common stock pursuant to the provisions of Rule 506(b) of Regulation D of the Securities Act. The US Offering will be made to persons who are “accredited investors” as that term is defined under Regulation D of the Securities Act.  As of the date of this report, we have not completed any sales of securities under the US Offering.


New Directors and Officers


On December 2, 2013, Gerald Diakow resigned as our Chief Executive Officer, Chief Financial Officer and President. Mr. Diakow continues to be the member of our board of directors.


To fill the vacancies created by Mr. Diakow’s resignation, we appointed Patrick Fitzsimmons as Chief Executive Officer and President and James Hyland as Chief Financial Officer on December 2, 2013.  Also on the same day, Mr. Fitzsimmons was appointed as our director to fill the vacancy created when Ralph Biggar resigned as a director of the Company on July 26, 2013.





8




Change of Name and Ticker Symbol  


On January 6, 2014, we changed our name to CoreComm Solutions Inc. (the “Name Change”).  To effect the Name Change, we filed a Notice of Alteration with the British Columbia Registrar of Companies.  Other than the Name Change, no other changes were made to our Notice of Articles.


On January 8, 2014, our common shares commenced trading on the OTC Markets under the new ticker symbol “COCMF”.


Annual General Meeting

 

On March 12, 2014, we held our Annual General Meeting. At the meeting, our shareholders approved the appointment of Patrick Fitzsimmons, James Hyland, Gerald Diakow and Grant Farkes as directors. In addition, our shareholders ratified and approved  the appointment of Dale Matheson Carr-Hilton LaBonte LLP as our auditors for ensuing year.  Our shareholders also voted, on an advisory basis, to approve the compensation of the named executive officers. In addition, our shareholders voted, on an advisory basis, to hold an advisory vote on named executive compensation every three years.


Summary of financial condition

 

The following table summarizes and compares our financial condition at January 31, 2014 and October 31, 2013.


  

January 31, 2014

October 31, 2013

Working capital

$(100,145)

$(67,227)

Current assets

$4,701

$6,226

Unproved mineral property

$11,697

$11,697

Total liabilities

$104,846

$73,453

Common stock and additional paid in capital

$472,820

$445,820

Deficit

$(566,768)

$(501,287)


Results of Operation


Our operating results for the three months ended January 31, 2014 and 2013 and the changes in the operating results between those periods are summarized in the table below.


  

 

Three months ended

January 31,

 

Percentage

Increase

Changes

between the

periods ended

January 31,

  

 

2014

 

2013

 

(Decrease)

   2014 and 2013

Operating expenses:

 

 

 

 

 

 

 

Administration

$

18,692

 

$

2,500

 

 

648%

$

16,192

Accounting

 

1,869

 

 

1,110

 

 

68%

 

759

Bank charges

 

127

 

 

76

 

 

67%

 

51

Consulting

 

3,738

 

 

2,500

 

 

49%

 

1,238

Corporate communications

 

1,548

 

 

-

 

 

100%

 

1,548

Management fees

 

10,281

 

 

6,000

 

 

71%

 

4,281

Mineral exploration

 

-

 

 

1,000

 

 

(100%)

 

(1,000)

Office

 

2,658

 

 

5,432

 

 

(51%)

 

(2,774)

Professional fees

 

16,911

 

 

1,066

 

 

1486%

 

15,845

Regulatory and filing

 

7,266

 

 

3,112

 

 

133%

 

4,154

Research and development

 

1,122

 

 

-

 

 

n/a

 

1,122

Travel and entertainment

 

935

 

 

-

 

 

n/a

 

935

Foreign exchange

 

334

 

 

-

 

 

n/a

 

334

Net loss

$

(65,481)

 

$

(22,796)

 

 

187%

$

42,685



 

9




Revenues


During the three months ended January 31, 2014 and 2013 we did not generate any revenue and we do not anticipate generating revenue from business operations until such time as we secure contracts for our web portals. There can be no assurance that we will be successful in securing such contracts. We are presently a development stage company engaged in the development and marketing of our web portals based on correlation technology. We can provide no assurances that we will be able to generate enough funds from our operations to support our ongoing operations.


Operating expenses


Our operating expenses increased by $42,685, or 187%, from $22,796 for the three months ended January 31, 2013 to $65,481 for the three months ended January 31, 2014. The increases in our operating expenses were associated with the due diligence and subsequent acquisition of the license to commercialize the Correlation Technology platform in the worldwide K-12 education market. The acquisition of the license resulted in the changes to the operations which led to the increases in our administrative, consulting, management, professional and regulatory fees. These increases were partially offset by decreased exploration and office expenses which resulted from suspension of our exploration activities.


Liquidity and Capital Resources

 

GOING CONCERN

 

The unaudited interim financial statements included in this quarterly report have been prepared on a going concern basis, which implies that we will continue to realize our assets and discharge our liabilities in the normal course of business. We have not generated any revenues from operations since inception, have never paid any dividends and are unlikely to pay dividends or generate significant earnings in the immediate or foreseeable future. Our continuation as a going concern depends upon the continued financial support of our shareholders, our ability to obtain necessary debt or equity financing to continue operations, and the attainment of profitable operations. Our ability to achieve and maintain profitability and positive cash flow depends upon our ability to secure contracts for our Correlation Technology, generate revenue from advertising, and control our operating costs. Based upon our current plans, we expect to incur operating losses in future periods. At January 31, 2014, we had a working capital deficit of $100,145 and accumulated losses of $566,768 since inception. These factors raise substantial doubt about our ability to continue as a going concern. We cannot assure you that we will be able to generate significant revenues in the future. These unaudited interim financial statements do not give effect to any adjustments that would be necessary should we be unable to continue as a going concern and therefore be required to realize our assets and discharge our liabilities in other than the normal course of business and at amounts different from those reflected in our financial statements.


Working Capital

 

  

 

At January 31, 2014

 

 

At October 31, 2013

 

Current assets

 

$

4,701

 

 

$

6,226

 

Current liabilities

 

 

104,846

 

 

 

73,453

 

Working capital (deficit)                                   

 

$

(100,145)

 

 

$

(67,227)

 


During the three months ended January 31, 2014, our working capital decreased by $32,918, from a working capital deficit of $67,227 at October 31, 2013 to a working capital deficit of $100,145 at January 31, 2014. The decrease in working capital deficit was primarily related to (i) a decrease in cash to fund ongoing operations; and (ii) increases in accounts payable and accrued liabilities and amounts due to related parties associated with the elevated expenditures necessitated by the change in our business direction.


Cash Flows

 

  

 

Three months ended

January 31,

 

  

 

2014

 

 

2013

 

Net cash used in operating activities

 

$

(35,571)

 

 

$

(40,560)

 

Net cash provided by investing activities

 

 

-

 

 

 

-

 

Net cash from financing activities

 

 

27,000

 

 

 

-

 

Effect of exchange rate changes on cash

 

 

5,563

 

 

 

-

 

Net decrease in cash during period

 

$

(3,008)

 

 

$

(40,560)

 




10




Net cash used in operating activities. During the three months ended January 31, 2014, we used $35,571 to support our operating activities. This cash was used to cover our operating loss of $65,481, increase GST recoverable by $483 and prepaids by $1,000. These uses of cash were offset by increases in accounts payable and accrued liabilities of $28,326 and by increases in amounts due to related parties of $3,067.

 

During the three months ended January 31, 2013, we used $40,560 to support our operating activities. This cash was used to cover our operating loss of $22,796, increase GST recoverable by $3,982 and decrease our accounts payable by $13,782.


Net cash used in investing activities. During the three months ended January 31, 2014 and 2013 we did not use any cash in investing activities.


Net cash provided by financing activities. On January 8, 2014, we issued 300,000 shares of our common stock at a price of $0.10 per share for gross proceeds of $30,000 to two subscribers pursuant to Regulation S of the Securities Act of 1933, as amended (the “Act”). The subscribers represented that they were not  “U.S. Persons” as that term is defined in Regulation S of the Act. We paid a finder, who was not a US Person, a finder’s fee totaling $3,000 in connection with this issuance.


We did not have any financing activities during the three months ended January 31, 2013.


Capital Resources


Our ability to continue the development of our services through Correlation Technology is subject to our ability to obtain the necessary funding.  We expect to raise funds through sales of our debt or equity securities. We have no committed sources of capital.  If we are unable to raise funds as and when we need them, we may be required to curtail, or even to cease, our operations.


As of January 31, 2014, we had cash on hand of $1,258, which raises substantial doubt about our continuation as a going concern. We plan to mitigate our losses in future years by controlling our operating expenses and actively seeking advertising contracts for our new web portals. In addition, we are also seeking financing of up to $500,000 through the private placement offering which we announced on December 2, 2013. Despite our current contracts and proposed private placement offering, we cannot provide assurance that we will be successful in generating additional capital to support our development. The financial statements do not include any adjustments that might result from the outcome of these uncertainties.


Contingencies and Commitments

 

We had no contingencies at January 31, 2014.  

 

In association with the license agreement dated December 2, 2013 with Make Sence Inc. we have the following commitments:

 

  

  

License Fees

  

April 1, 2014

  

$

100,000

  

August 1, 2014

  

$

200,000

  

January 1, 2015

  

$

200,000

  

  

  

$

500,000

  

 

Off-Balance Sheet Arrangements


We have no off-balance sheet arrangements and no non-consolidated, special-purpose entities.


Critical Accounting Policies


The preparation of financial statements in conformity with United States generally accepted accounting principles requires our management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.  Our management routinely makes judgments and estimates about the effects of matters that are inherently uncertain.  







11




The JOBS Act contains provisions that, among other things, reduce certain reporting requirements for qualifying public companies.  As an “emerging growth company,” we may, under Section 7(a)(2)(B) of the Securities Act, delay adoption of new or revised accounting standards applicable to public companies until such standards would otherwise apply to private companies. We may take advantage of this extended transition period until the first to occur of the date that we (i) are no longer an "emerging growth company" or (ii) affirmatively and irrevocably opt out of this extended transition period. We have elected to take advantage of the benefits of this extended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards. Until the date that we are no longer an "emerging growth company" or affirmatively and irrevocably opt out of the exemption provided by Securities Act Section 7(a)(2)(B), upon issuance of a new or revised accounting standard that applies to our financial statements and that has a different effective date for public and private companies, we will disclose the date on which adoption is required for non-emerging growth companies and the date on which we will adopt the recently issued accounting standard.


Our significant accounting policies are disclosed in the notes to the audited financial statements for the year ended October 31, 2013. The following accounting policies have been determined by our management to be the most important to the portrayal of our financial condition and results of operation:


Revenue Recognition


Revenue is recognized when pervasive evidence of an agreement exists, when it is received or when the income is determinable and collectability is reasonably assured.


Foreign Currency Translation and Transaction


Our functional currency is the Canadian dollar and reporting currency is the United States dollar.  We translate assets and liabilities to US dollars using year-end exchange rates, translate unproved mineral properties using historical exchange rates, and translate revenues and expenses using average exchange rates during the period. Gains and losses arising on settlement of foreign currency denominated transactions or balances are included in the determination of income. Foreign currency transactions are primarily undertaken in US dollars. We have not to the date of these financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.


Fair Value of Financial Instruments


Our financial instruments include cash, accounts receivable, accounts payable and amounts due to related parties. We believe the fair value of these financial instruments approximate their carrying values due to their short maturities.


Concentration of Credit Risk


Financial instruments that potentially subject us to significant concentrations of credit risk consist principally of cash and trade accounts receivable.


At January 31, 2014, we had approximately $1,258 in cash on deposit with a large chartered Canadian bank, of which $33 was insured.  As part of our cash management process, we perform periodic evaluations of the relative credit standing of this financial institution.  We have not experienced any losses in cash balances and do not believe we are exposed to any significant credit risk on our cash.


Recent Accounting Standards and Pronouncements


Recent accounting pronouncements issued by the Financial Accounting Standards Board or other authoritative standards groups with future effective dates are either not applicable or are not expected to be significant to our financial statements.


Item 3.  Quantitative and Qualitative Disclosures about Market Risk.


Not Applicable.







12




Item 4.  Controls and Procedures.


Disclosure Controls and Procedures


We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report.  The evaluation was undertaken in consultation with our accounting personnel.  Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.


Changes in Internal Control over Financial Reporting


There have been no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15 (f) under the Exchange Act) during the quarter ended January 31, 2014 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.




































13




PART II-OTHER INFORMATION


Item 1.  Legal Proceedings.


None.


Item 1A.  Risk Factors.


IN ADDITION TO THE FACTORS DISCUSSED ELSEWHERE IN THIS QUARTERLY REPORT, THE FOLLOWING RISKS AND UNCERTAINTIES COULD MATERIALLY ADVERSELY AFFECT OUR BUSINESS, FINANCIAL CONDITION AND RESULTS OF OPERATIONS.  ADDITIONAL RISKS AND UNCERTAINTIES NOT PRESENTLY KNOWN TO US OR THAT WE CURRENTLY DEEM IMMATERIAL ALSO MAY IMPAIR OUR BUSINESS OPERATIONS AND FINANCIAL CONDITION.


We lack an operating history and have losses which we expect to continue into the future. As a result, we may have to suspend or cease our operations and if we do not obtain sufficient financing, our business will fail.


We were incorporated on August 4, 2010 and have been involved primarily in the acquisition and exploration of the mineral properties.  On December 2, 2013 we entered into a license agreement to market the Correlation Technology to English and Spanish education users, which resulted in the change of our business direction.


Our ability to achieve and maintain profitability and positive cash flow is dependent upon: (i) our ability to secure advertising contracts for our web portals, (ii) generate traffic to our web portals, and (iii) our ability to generate revenues.


For the next twelve months, management anticipates that the minimum cash requirements to fund our marketing and development programs and to support our continued operations will be approximately $1,605,000. Accordingly, we don’t have sufficient funds to meet our planned expenditures over the next twelve months and we will be required to raise additional financing.


Although our board of directors has approved offerings of up to $400,000 under Regulation S and $100,000 under Regulation D, there is no assurance that we will complete the sale of all securities offered under these concurrent offerings.  Obtaining financing would be subject to a number of factors, including the market recognition of the necessity of the type of web search services we provide, and our ability to secure long-term contracts.  These factors may make the timing, amount, terms or conditions of additional financing unavailable to us.   We have not attained profitable operations and are continuously dependent upon obtaining financing to pursue our plan of operation.


Because we are a development stage company, our business has a high risk of failure.


We are a development stage company that has incurred net losses since inception, we have not attained profitable operations and we are dependent upon obtaining adequate financing to carry out our business activities.  The success of our business operations will depend upon our ability to obtain further financing to complete our planned development and marketing programs and to attain profitable operations. Development stage companies encounter difficulties in generating revenue from internet advertising and there is a high risk of failure of these companies.  If we are not able to complete a successful development and marketing programs and attain sustainable profitable operations, then our business will fail.


Our auditors have expressed substantial doubt about our ability to continue as a going concern; as a result we could have difficulty finding additional financing.


Our financial statements have been prepared assuming that we will continue as a going concern.   Except for the interest revenue, we have not generated any revenue from our main operations since inception and have accumulated losses.  As a result, our auditors have expressed substantial doubt about our ability to continue as a going concern.  Our ability to continue our operations depends on our ability to complete equity or debt financings or generate profitable operations.  Such financings may not be available or may not be available on reasonable terms.  Our financial statements do not include any adjustments that could result from the outcome of this uncertainty.

 

We face intense competition.

 

Our business is evolving and intensely competitive, and is subject to changing technology, shifting user needs, and frequent introductions of new products and services.




14




We have many competitors in different industries, including general purpose search engines, vertical search engines and e-commerce sites, social networking sites, traditional media companies, and providers of online products and services.


Our current and potential competitors range from large and established companies to emerging start-ups. Established companies have longer operating histories and more established relationships with customers and users, and they can use their experience and resources against us in a variety of competitive ways, including acquisitions, investing aggressively in research and development, and competing aggressively for advertisers and websites.


If our competitors are more successful than we are in developing compelling products or in attracting and retaining users, advertisers, and content providers, our potential for generating revenues and growth rates could decline.


If we do not continue to innovate and provide products and services that are useful to users, we may not remain competitive, and our revenues and operating results could suffer.


Our success depends on providing products and services that make using the internet a more useful and enjoyable experience for our users. Our competitors are constantly developing innovations in web search, online advertising, and web-based products and services. As a result, we will be required to continuously invest significant resources in research and development in order to enhance our web portals, and introduce new products and services. In addition, these new products and services may present new and difficult technology challenges, and we may be subject to claims if users of these offerings experience service disruptions or failures or other quality issues. Our operating results would also suffer if our innovations are not responsive to the needs of our users, advertisers, and other network members; are not appropriately timed with market opportunities, or are not effectively brought to market. As search technology continues to develop, our competitors may be able to offer search results that are, or that are seen to be, substantially similar to or better than ours. This may force us to compete in different ways and expend significant resources in order to remain competitive.


Our potential investment in new business strategies and new products, services, and technologies is inherently risky, and could disrupt our ongoing businesses.


Being a development stage company in an online marketing and advertising industry, we may invest significant resources in new business strategies, new products, services, and technologies. Such endeavors may involve significant risks and uncertainties, including, but not limited to, distraction of management from current operations, insufficient revenues to offset liabilities assumed and expenses associated with these new investments, inadequate return of capital on our investments, and unidentified issues not discovered in our due diligence of such strategies and offerings. Because these new ventures are inherently risky, no assurance can be given that such strategies and offerings will be successful and will not materially adversely affect our reputation, financial condition and operating results.


We plan to derive substantially all of our revenue from advertising and any significant reduction in spending by advertisers could harm our business.


Our plan is to derive substantially all of our revenue from advertising.  Most advertisers can generally terminate their contracts on very short notice. Generally, advertisers will not continue to do business if their investment in such advertising does not generate sales leads, customers, bookings, or revenue and profit on a cost-effective basis, or if we do not deliver advertisements in an appropriate and effective manner. If we are unable to remain competitive and provide value to our advertisers, they will likely stop placing ads on our websites, which would harm our revenues and business.


Expenditures by advertisers also tend to be cyclical, subject to variation based on budgetary constraints, project cancellation or delay, and to reflect overall economic conditions and buying patterns. If we are unable to generate advertising revenue due to factors outside of our control, our business and financial performance would be adversely affected.


Our success depends upon the acceptance, and successful measurement, of online advertising as an alternative to offline advertising.


We believe that a significant discrepancy exists between the percentage of the advertising market allocated to online advertising and the percentage of consumer time spent on online media consumption as opposed to offline advertising and media consumption. Long-term growth of our business will depend heavily on this distinction between online and offline advertising narrowing or being eliminated, which may not happen in a manner or to the extent that we currently expect. We compete with traditional media for advertising dollars, in addition to websites with higher levels of traffic. If online advertising ceases to be an acceptable alternative to offline advertising, our business, financial condition and results of operations will be negatively impacted.



15




Because the online marketing industry is relatively new and rapidly evolving, it uses different methods than traditional media to gauge its effectiveness. Potential customers may have little or no experience using the Internet for advertising and marketing purposes and may allocate only limited portions of their advertising and marketing budgets to the Internet. The adoption of Internet advertising, particularly by those entities that have historically relied upon traditional media for advertising, requires the acceptance of a new way of conducting business, exchanging information and evaluating new advertising and marketing technologies and services. As a result, we will need to continually evaluate changes to aspects of our business model to keep pace with the expectations of users and advertisers, and these changes may not yield the benefits we expect. In particular, we are dependent on our clients’ adoption of new metrics to measure the success of online marketing campaigns. We may also experience resistance from traditional advertising agencies who may be advising our clients. Any lack of growth in the market for various online advertising models could have an adverse effect on our business, financial condition and results of operations.


We may be subject to claims that we violated intellectual property rights of others, which claims are extremely costly to defend and could require us to pay significant damages and limit our ability to operate.


Companies in the Internet and technology industries, and other patent and trademark holders seeking to profit from royalties in connection with grants of licenses, own large numbers of patents, copyrights, trademarks and trade secrets and frequently enter into litigation based on allegations of infringement or other violations of intellectual property rights.  We have entered into the MSI License Agreement whereby MSI has granted us a license to commercialize the Correlation Technology in the education market.  However, there may be intellectual property rights held by others, including patents, copyrighted works and/or trademarks, which cover significant aspects of the Correlation Technology and our technologies. Any intellectual property claim against us, regardless of merit, could be time consuming and expensive to settle or litigate and could divert management’s attention and other resources. These claims also could subject us to significant liability for damages and could result in our having to stop using technology or content found to be in violation of another party’s rights. We might be required or may opt to seek a license for rights to intellectual property held by others, which may not be available on commercially reasonable terms, or at all. Even if a license is available, we could be required to pay significant royalties, which would increase our operating expenses. We may also be required to develop alternative non-infringing technology, or content, which could require significant effort and expense and make us less competitive in the relevant market. Any of these results could harm our business and financial performance.


We sometimes hold a significant portion of our cash in United States dollars, which could weaken our purchasing power in other currencies and limit our ability to conduct our exploration programs.


Currency fluctuations could affect the costs of our operations and affect our operating results and cash flows.   The appreciation of Canadian dollar against the U.S. dollar can increase the costs of our operations.


If we are unable to hire and retain key personnel, we may not be able to implement our business plan and our business will fail


Our success will largely depend on our ability to hire highly qualified personnel with experience in marketing, programming, data architecture and web design. These individuals may be in high demand and we may not be able to attract the staff we need. In addition, we may not be able to afford the high salaries and fees demanded by qualified personnel, or may lose such employees after they are hired. Currently, we have not hired any key personnel. Our failure to hire key personnel when needed could have a significant negative effect on our business.


The recently enacted JOBS Act will allow us to postpone the date by which we must comply with certain laws and regulations and to reduce the amount of information provided in reports filed with the SEC. We cannot be certain if the reduced disclosure requirements applicable to “emerging growth companies” will make our common stock less attractive to investors.


We are and we will remain an "emerging growth company" until the earliest of (i) the last day of the fiscal year during which our total annual revenues equal or exceed $1 billion (subject to adjustment for inflation), (ii) the last day of the fiscal year following the fifth anniversary of our initial public offering, (iii) the date on which we have, during the previous three-year period, issued more than $1 billion in non-convertible debt securities, or (iv) the date on which we are deemed a "large accelerated filer" (with at least $700 million in public float) under the Exchange Act. For so long as we remain an "emerging growth company" as defined in the JOBS Act, we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not "emerging growth companies" as described in further detail in the risk factors below. We cannot predict if investors will find our common stock less attractive because we will rely on some or all of these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile. If we avail ourselves of certain exemptions from various reporting requirements, as is currently our plan, our reduced disclosure may make it more difficult for investors and securities analysts to evaluate us and may result in less investor confidence.

 



16




Our election not to opt out of JOBS Act extended accounting transition period may not make its financial statements easily comparable to other companies.

 

Pursuant to the JOBS Act, as an “emerging growth company”, we can elect to opt out of the extended transition period for any new or revised accounting standards that may be issued by the Public Company Accounting Oversight Board (PCAOB) or the SEC. We have elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, our company, as an “emerging growth company”, can adopt the standard for the private company. This may make comparison of our financial statements with any other public company which is not either an “emerging growth company” nor an “emerging growth company” which has opted out of using the extended transition period difficult or impossible as possible different or revised standards may be used.


The recently enacted JOBS Act will also allow our company to postpone the date by which it must comply with certain laws and regulations intended to protect investors and to reduce the amount of information provided in reports filed with the SEC.

 

The recently enacted JOBS Act is intended to reduce the regulatory burden on “emerging growth companies”. We meet the definition of an “emerging growth company” and so long as it qualifies as an “emerging growth company,” it will, among other things:

 

·

be exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that its independent registered public accounting firm provide an attestation report on the effectiveness of its internal control over financial reporting;

·

be exempt from the "say on pay” provisions (requiring a non-binding shareholder vote to approve compensation of certain executive officers) and the "say on golden parachute” provisions (requiring a non-binding shareholder vote to approve golden parachute arrangements for certain executive officers in connection with mergers and certain other business combinations) of The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) and certain disclosure requirements of the Dodd-Frank Act relating to compensation of Chief Executive Officers;

·

be permitted to omit the detailed compensation discussion and analysis from proxy statements and reports filed under the Exchange Act, as amended and instead provide a reduced level of disclosure concerning executive compensation; and

·

be exempt from any rules that may be adopted by the PCAOB requiring mandatory audit firm rotation or a supplement to the auditors report on the financial statements.

 

Although we are still evaluating the JOBS Act, we currently intend to take advantage of all of the reduced regulatory and reporting requirements that will be available to it so long as it qualifies as an “emerging growth company”. We have elected not to opt out of the extension of time to comply with new or revised financial accounting standards available under Section 102(b)(1) of the JOBS Act. Among other things, this means that our independent registered public accounting firm will not be required to provide an attestation report on the effectiveness of our internal control over financial reporting so long as it qualifies as an “emerging growth company”, which may increase the risk that weaknesses or deficiencies in the internal control over financial reporting go undetected. Likewise, so long as it qualifies as an “emerging growth company”, we may elect not to provide certain information, including certain financial information and certain information regarding compensation of executive officers, which would otherwise have been required to provide in filings with the SEC, which may make it more difficult for investors and securities analysts to evaluate us. As a result, investor confidence in our company and the market price of its common stock may be adversely affected.

 

Notwithstanding the above, we are also currently a “smaller reporting company”, meaning that we are not an investment company, an asset-backed issuer, or a majority-owned subsidiary of a parent company that is not a smaller reporting company and have a public float of less than $75 million and annual revenues of less than $50 million during the most recently completed fiscal year. In the event that we are still considered a “smaller reporting company”, at such time we cease being an “emerging growth company”, the disclosure we will be required to provide in our SEC filings will increase, but will still be less than it would be if we were not considered either an “emerging growth company” or a “smaller reporting company”.  Specifically, similar to “emerging growth companies”, “smaller reporting companies” are able to provide simplified executive compensation disclosures in their filings; are exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that independent registered public accounting firms provide an attestation report on the effectiveness of internal control over financial reporting; are not required to conduct say-on-pay and frequency votes until annual meetings occurring on or after January 21, 2013; and have certain other decreased disclosure obligations in their SEC filings, including, among other things, only being required to provide two years of audited financial statements in annual reports.  Decreased disclosures in our SEC filings due to our status as an “emerging growth company” or “smaller reporting company” may make it harder for investors to analyze the Company’s results of operations and financial prospects.

 



17




Because our directors are not independent they can make and control corporate decisions that may be disadvantageous to other common shareholders.

 

Our shares of common stock are listed on OTC Bulletin Board inter-dealer quotation system, which does not have director independence requirements.  For the purpose of determining director independence, we have adopted the independence requirements of Canadian National Instrument 52-110 - Audit Committees (“NI 52-110”) as we are an OTC reporting issuer in the province of British Columbia. NI 52-110 recommends that the Board of Directors of a public company be constituted with a majority of individuals who qualify as “independent” directors. An “independent” director is a director who has no direct or indirect material relationship with us. A material relationship is a relationship, which could, in the view of the Board of Directors, reasonably interfere with the exercise of a director’s independent judgment. Gerald Diakow is considered an independent director. As aside from shares held by him, he has no ongoing interest or relationship with us other than serving as a director. Patrick Fitzsimmons is not an independent director because of his position as CEO and President.

 

 We do not expect to declare or pay dividends in the foreseeable future.


We have never paid cash dividends on our common stock and have no plans to do so in the foreseeable future. We intend to retain any earnings to develop, carry on, and expand our business.


“Penny stock” rules may make buying or selling our common stock difficult, and severely limit its marketability and liquidity.


Because our securities are considered a penny stock, shareholders will be more limited in their ability to sell their shares. The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00, other than securities registered on certain national securities exchanges or quoted on the Nasdaq system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or quotation system. Because our securities constitute “penny stocks” within the meaning of the rules, the rules apply to us and to our securities. The rules may further affect the ability of owners of shares to sell our securities in any market that might develop for them. As long as the trading price of our common shares is less than $5.00 per share, the common shares will be subject to Rule 15g-9 under the Exchange Act. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock, to deliver a standardized risk disclosure document prepared by the SEC, that:


1.

contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading;

2.

contains a description of the broker’s or dealer’s duties to the customer and of the rights and remedies available to the customer with respect to a violation to such duties or other requirements of securities laws;

3.

contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and the significance of the spread between the bid and ask price;

4.

contains a toll-free telephone number for inquiries on disciplinary actions;

5.

defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and

6.

contains such other information and is in such form, including language, type, size and format, as the SEC shall require by rule or regulation.


The broker-dealer also must provide, prior to effecting any transaction in a penny stock, the customer with: (a) bid and offer quotations for the penny stock; (b) the compensation of the broker-dealer and its salesperson in the transaction; (c) the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such shares; and (d) a monthly account statements showing the market value of each penny stock held in the customer’s account. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules; the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written acknowledgment of the receipt of a risk disclosure statement, a written agreement to transactions involving penny stocks, and a signed and dated copy of a written suitably statement. These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our shares.


Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.


On January 8, 2014, we issued 300,000 common shares to two investors at a price of $0.10 per share for total proceeds of $30,000.  We completed the offering pursuant to the provisions of Regulation S of the Securities Act.  We did not engage in a distribution of this offering in the United States. Each investor represented that they were not a US person as defined in Regulation S of the Securities Act, and that they were not acquiring our securities for the account or benefit of a US person.




18




 

Item 3.  Defaults upon Senior Securities.


None.


Item 4.  Mine Safety Disclosures


Not applicable.


Item 5.  Other Information.


None.


Item 6.  Exhibits.


The following table sets out the exhibits either filed herewith or incorporated by reference.


Exhibit

Description

3.1

Notice of Articles.(1)

3.2

Articles.(1)

3.3

Certificate of Continuation.(2)

10.1

Consulting Agreement dated October 1, 2011 between the Company and Denis Zyrianov. (1)

10.2

Property Purchase Agreement dated April 11, 2012 between the Company and Gerald Diakow.(1)

10.3

Consulting Agreement dated February 1, 2013 between the Company and Ralph Biggar. (4)

10.4

License Agreement between the Company and Make Sence, Inc. dated December 2, 2013. (5)

16.1

Code of Ethics. (3)

31

Certification pursuant to Rule 13a-14(a) and 15d-14(a).(6)

32

Certification pursuant to Section 1350 of Title 18 of the United States Code.(6)

99.1

Audit Committee Charter(3)

101

The following financial statements from the registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended January 31, 2014, formatted in XBRL: (i) Balance Sheets; (ii) Statements of Operations; (iii) Statement of Stockholders’ Deficit (iv) Statements of Cash Flows; (v) Notes to the Interim Financial Statements.

Notes:

(1)  Filed with the SEC as an exhibit to our Registration Statement on Form S-1 filed on June 12, 2012.

(2)  Filed with the SEC as an exhibit to our Registration Statement on Form S-1/A2 filed on August 23, 2012.

(3)  Filed with the SEC as an exhibit to our Annual Report on Form 10-K filed on January 28, 2013.

(4)  Filed with the SEC as an exhibit to our Quarterly Report on Form 10-Q filed on March 8, 2013.

(5)  Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on December 4, 2013.

(6)  Filed herewith.














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SIGNATURES

 

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Dated:   March 17, 2014

 

  

CORECOMM SOLUTIONS INC.

  

  

  

  

  

                                                          

 

By:

/s/ Patrick Fitzsimmons

  

  

Patrick Fitzsimmons, Chief Executive Officer

  

 

 

 

 

 

By:

/s/ James Hyland

 

 

  

James Hyland, Chief Financial Officer

 

  

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

 

Signature

Title

Date

  

  

  

/s/ Patrick Fitzsimmons

President, Chief Executive Officer,

(Principal Executive Officer),

Member of the Board of Directors

March 17, 2014

 

  

  

  

  

  

/s/ James Hyland

Chief Financial Officer,

(Principal Financial Officer and

Principal Accounting Officer)

March 17, 2014

 

  

  

  

  

  

/s/ Gerald Diakow

Member of the Board of Directors

March 17, 2014

 








 

 

 

 

 

 






20