UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For
the quarterly period ended
OR
For the transition period from_________to_________
Commission
File No.
(Exact name of registrant as specified in its charter)
| None | ||
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
Hong Kong
(Address of principal executive offices, zip code)
Tel:
(Registrant’s telephone number, including area code)
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by check mark whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act
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been subject to such filing requirements for the past 90 days.
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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 filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (check one):
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If
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APPLICABLE ONLY TO CORPORATE ISSUERS
As of August 30, 2022, there were shares of common stock, $0.0001 par value per share, outstanding.
GLOBAL LEADERS CORP.
QUARTERLY
REPORT ON FORM 10-Q FOR THE PERIOD
ENDED JULY 31, 2022
INDEX
| 2 |
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q of Global Leaders Corp., a Nevada corporation (the “Company”), contains “forward-looking statements,” as defined in the United States Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by terminology such as “may”, “will”, “should”, “could”, “expects”, “plans”, “intends”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of such terms and other comparable terminology. These forward-looking statements include, without limitation, statements about our market opportunity, our strategies, competition, expected activities and expenditures as we pursue our business plan, and the adequacy of our available cash resources. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Actual results may differ materially from the predictions discussed in these forward-looking statements. The economic environment within which we operate could materially affect our actual results.
Our management has included projections and estimates in this Form 10-Q, which are based primarily on management’s experience in the industry, assessments of our results of operations, discussions and negotiations with third parties and a review of information filed by our competitors with the SEC or otherwise publicly available. We caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. We disclaim any obligation subsequently to revise any forward - looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.
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PART I. FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
GLOBAL LEADERS CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF July 31, 2022 AND OCTOBER 31, 2021
(Expressed in U.S. Dollars)
| July 31, 2022 | October 31, 2021 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Prepaid expense | ||||||||
| Current assets from discontinued operations | ||||||||
| Total currents assets | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
| Current liabilities | ||||||||
| Accrued liabilities and customer deposit | $ | $ | ||||||
| Accrued expenses due to related party | ||||||||
| Due to officer | ||||||||
| Current liabilities from discontinued operations | ||||||||
| Total current liabilities | ||||||||
| Commitments and Contingencies | ||||||||
| STOCKHOLDERS’ DEFICIT | ||||||||
| Preferred stock, $ par value; shares authorized; shares issued and outstanding | ||||||||
| Common stock, $ par value, shares authorized; shares issued and outstanding | ||||||||
| Additional paid in capital | ||||||||
| Accumulated other comprehensive income | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ deficit | ( | ) | ( | ) | ||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT | $ | $ | ||||||
See accompanying notes to the condensed consolidated financial statements.
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GLOBAL LEADERS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
FOR THE THREE AND NINE MONTHS ENDED JULY 31, 2022 AND 2021
(Expressed in U.S. Dollars)
(Unaudited)
Three months ended July 31, | Nine months ended July 31, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Revenues: | $ | $ | $ | $ | ||||||||||||
| Operating expenses: | ||||||||||||||||
| General and administrative-related party | ||||||||||||||||
| General and administrative-other | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Interest income | ||||||||||||||||
| Loss from continuing operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Discontinued operations: | ||||||||||||||||
| Loss from discontinued operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Loss on sale of discontinued operations | ( | ) | ( | ) | ||||||||||||
| Discontinued operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other comprehensive income: | ||||||||||||||||
| -Foreign currency translation income | ||||||||||||||||
| Comprehensive loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Basic and diluted net loss per share | ||||||||||||||||
| Loss from continuing operations | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Loss from discontinued operations | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Net loss per share applicable to common shareholders | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Weighted average number of shares outstanding | ||||||||||||||||
See accompanying notes to the condensed consolidated financial statements.
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GLOBAL LEADERS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ (DEFICIT) EQUITY
FOR THE THREE AND NINE MONTHS ENDED JULY 31, 2022 AND 2021
(Expressed in U.S. Dollars)
Three months ended July 31, 2022 (Unaudited)
| Common Stock | Additional Paid-in | Accumulated Other Comprehensive | Accumulated | Total Stockholders’ | ||||||||||||||||||||
| Number | Amount | Capital | Income | Deficit | Deficit | |||||||||||||||||||
| Balance, April 30, 2022 (Unaudited) | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||
| Capital contribution due to forgiveness of debt from officer/principal shareholder | - | |||||||||||||||||||||||
| Foreign currency translation | - | |||||||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||||||
| Balance, July 31, 2022 (Unaudited) | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||
Nine months ended July 31, 2022 (Unaudited)
| Common Stock | Additional Paid-in | Accumulated Other Comprehensive | Accumulated | Total Stockholders’ | ||||||||||||||||||||
| Number | Amount | Capital | Income | Deficit | Deficit | |||||||||||||||||||
| Balance, October 31, 2021 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||
| Capital contribution due to forgiveness of debt from officer/principal shareholder | - | |||||||||||||||||||||||
| Foreign currency translation | - | |||||||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||||||
| Balance, July 31, 2022 (Unaudited) | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||
Three months ended July 31, 2021 (Unaudited)
| Common Stock | Additional Paid-in | Shares To Be | Accumulated Other Comprehensive | Accumulated | Total Stockholders’ Equity | |||||||||||||||||||||||
| Number | Amount | Capital | Issued | Income | Deficit | (Deficit) | ||||||||||||||||||||||
| Balance, April 30, 2021 (Unaudited) | $ | $ | $ | $ | | $ | ( | ) | $ | |||||||||||||||||||
| Cash received from sale of shares | ||||||||||||||||||||||||||||
| Shares to be issued - deposit received for share subscription | - | |||||||||||||||||||||||||||
| Foreign currency translation | - | |||||||||||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||||||||||
| Balance, July 31, 2021 (Unaudited) | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||
Nine months ended July 31, 2021 (Unaudited)
| Common Stock | Additional Paid-in | Shares To Be | Accumulated Other Comprehensive | Accumulated | Total Stockholders’ Equity | |||||||||||||||||||||||
| Number | Amount | Capital | Issued | Income | Deficit | (Deficit) | ||||||||||||||||||||||
| Balance, October 31, 2020 | $ | $ | $ | $ | | $ | ( | ) | $ | |||||||||||||||||||
| Cash received from sale of shares | ||||||||||||||||||||||||||||
| Shares to be issued - deposit received for share subscription | - | |||||||||||||||||||||||||||
| Foreign currency translation | - | |||||||||||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||||||||||
| Balance, July 31, 2021 (Unaudited) | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||
See accompanying notes to the condensed consolidated financial statements.
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GLOBAL LEADERS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED JULY 31, 2022 AND 2021
(Expressed in U.S. Dollars)
(Unaudited)
| Nine months ended July 31, | ||||||||
| 2022 | 2021 | |||||||
| Cash Flows From Operating Activities | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Loss from discontinued operations | ||||||||
| Loss on sale of discontinued operations | ||||||||
| Change in operating assets and liabilities: | ||||||||
| Accounts receivable | ||||||||
| Prepaid expense | ( | ) | ||||||
| Accrued liabilities and customer deposit | ( | ) | ||||||
| Accrued expenses due to related party | ( | ) | ||||||
| Net cash used in operations - continuing operations | ( | ) | ( | ) | ||||
| Net cash used in operating activities - discontinued operations | ( | ) | ( | ) | ||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash Flows From Investing Activities | ||||||||
| Disposal of subsidiary, net of cash disposal of | ( | ) | ||||||
| Net cash used in investing activities - continuing operations | ( | ) | ||||||
| Cash Flows From Financing Activities | ||||||||
| Advances from officer | ||||||||
| Shares to be issued - deposit received for share subscription | ||||||||
| Proceeds from shares issued for cash | ||||||||
| Net cash provided by financing activities - continuing operations | ||||||||
| Net cash provided by financing activities - discontinued operations | ||||||||
| Net cash provided by financing activities | ||||||||
| Effect of exchange rate changes in cash and cash equivalents | ||||||||
| Net change in cash and cash equivalents | ( | ) | ( | ) | ||||
| Cash and cash equivalents, beginning of period | ||||||||
| Cash and cash equivalents, ending of period | $ | $ | ||||||
| Supplementary Cash Flow Information | ||||||||
| Cash paid for: | ||||||||
| Interest | $ | $ | ||||||
| Income taxes | $ | $ | ||||||
| Non-Cash Financing Activities: | ||||||||
| Capital contribution due to forgiveness of debt from officer/principal shareholder | $ | $ | ||||||
See accompanying notes to the condensed consolidated financial statements.
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GLOBAL LEADERS CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED JULY 31, 2022 AND 2021
(Expressed in U.S. Dollars)
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Description of Business
Global Leaders Corporation, a Nevada corporation (the “Company”), was incorporated in the State of Nevada on July 20, 2020.
On July 20, 2020, Mr. Yip Hoi Hing Peter (“Mr. Peter Yip”), founder of the Company, was appointed as Chief Executive Officer, President, and sole director of the Company.
On
August 25, 2020, the Company acquired
On
August 25, 2020, GLC Anguilla, our wholly owned subsidiary, acquired
On
May 1, 2022, GLC Anguilla sold its entire
Basis of Presentation and Principles of Consolidation
The accompanying unaudited condensed consolidated financial statements as of and for the three and nine months ended July 31, 2022 and 2021, have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC. The condensed consolidated balance sheet as of October 31, 2021, included herein was derived from the audited consolidated financial statements as of that date, included in the Company’s Annual Report on Form 10-K filed with the SEC on January 28, 2022. These financial statements should be read in conjunction with that report.
In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods have been included. The results of operations for the interim periods presented are not necessarily indicative of the results of operations to be expected for the full fiscal year ending October 31, 2022.
The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries Global Leaders Corporation (“GLC Anguilla”), a holding company incorporated in Anguilla, and Global Leaders Academy Limited (“GLA”), a company incorporated in Hong Kong up to the date it was sold on May 1, 2022 (see Note 2). All intercompany balances and transactions have been eliminated in consolidation up to GLA was disposed on May 1, 2022.
COVID-19
The COVID-19 pandemic has negatively impacted the global economy, workforces, customers, and created significant volatility and disruption of financial markets. The Company monitors guidance from national and local public health authorities and has implemented health and safety precautions and protocols in response to these guidelines. The extent of the impact of the COVID-19 pandemic has had and will continue to have on the Company’s business is highly uncertain and difficult to predict and quantify at this time.
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Going Concern
The
accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization
of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying condensed
consolidated financial statements, for the nine months ended July 31, 2022, the Company incurred a net loss of $
At
July 31, 2022, our cash balance was $
Use of estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures 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. Significant estimates include estimates for the accruals of potential liabilities.
Revenue recognition
The Company recognizes revenues when services are rendered, in an amount that reflects the consideration the Company expects to receive in exchange for those services. The Company recognizes revenue following the five-step model prescribed by Accounting Standards Codification (ASC) 606, “Revenue from Contracts with Customers (Topic 606).”
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Cash and cash equivalents
Cash consists of funds on hand and held in bank accounts. Cash equivalents includes demand deposits placed with banks or other financial institutions and all highly liquid investments with original maturities of three months or less, including money market funds.
| As of July 31, 2022 | As of October 31, 2021 | |||||||
| (Unaudited) | ||||||||
| Cash and cash equivalents | ||||||||
| Denominated in United States Dollars | $ | $ | ||||||
| Denominated in Hong Kong Dollars | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
Financial instruments that potentially subject the Company to a significant concentration of credit risk consist primarily of cash. As of July 31, 2022, substantially all of the Company’s cash was held by a major financial institution located in Hong Kong, which management believes is of high credit quality
Fair value measurements
The Company follows the guidance of ASC 820-10, “Fair Value Measurements and Disclosures”, with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:
Level 1: Observable inputs such as quoted prices in active markets;
Level 2: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and
Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions
The Company believes the carrying amount reported in the balance sheet for cash and cash equivalents, prepaids and other current assets, accrued liabilities and customer deposit, due to an officer, and due to a related party, approximate their fair values because of the short-term nature of these financial instruments.
Foreign currency translation
The reporting currency of the Company is the United States Dollars (“US$”) and the accompanying consolidated financial statements have been expressed in US$. In addition, the Company’s operating subsidiary maintains its books and records in its functional currency, Hong Kong Dollars (“HK$”).
In general, for consolidation purposes, assets and liabilities of the Company’s subsidiaries whose functional currency is not the US$, are translated into US$ using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of a foreign subsidiary are recorded as a separate component of accumulated other comprehensive loss within stockholders’ equity.
Translation of amounts from the local currencies of the Company into US$ has been made at the following exchange rates for the period:
| As of and for the nine months ended July 31, | ||||||||
| 2022 | 2021 | |||||||
| Period-end HK$ : US$1 exchange rate | ||||||||
| Period-average HK$ : US$1 exchange rate | ||||||||
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The Company calculates net loss per share in accordance with ASC Topic 260, “Earnings per Share.” Basic net loss per share is computed by dividing the net loss by the weighted-average number of common shares outstanding during the period. Diluted net loss per share is computed similar to basic net loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common stock equivalents had been issued and if the additional common shares were dilutive. As of July 31, 2022, the Company has no potentially dilutive securities, such as options or warrants, outstanding.
Concentrations
For
the three and nine months ended July 31, 2022, one vendor accounted for
For
the three months ended July 31, 2021, two vendors accounted for
Recent Accounting Pronouncements
In June 2016, the FASB issued ASU No. 2016-13, Credit Losses - Measurement of Credit Losses on Financial Instruments (“ASC 326”). The standard significantly changes how entities will measure credit losses for most financial assets, including accounts and notes receivables. The standard will replace today’s “incurred loss” approach with an “expected loss” model, under which companies will recognize allowances based on expected rather than incurred losses. Entities will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The standard is effective for interim and annual reporting periods beginning after December 15, 2022. The adoption of ASU 2016-13 is not expected to have a material impact on the Company’s financial position, results of operations, and cash flows.
Other recent accounting pronouncements issued by the FASB, its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future financial statements.
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NOTE 2 - DISCONTINUED OPERATIONS
On
May 1, 2022, GLC Anguilla sold its entire
GLA was deconsolidated effective May 1, 2022, and the Company does not have any continuing involvement in the operations of the disposed subsidiary. The disposal is accounted for as discontinued operations and, accordingly, all prior periods presented in the accompanying consolidated balance sheets, statements of operations and statements of cash flows have been adjusted to conform to this presentation; no adjustment has been made to the prior period consolidated balance sheet as a result of the disposal. As of July 31, 2022, only one subsidiary, GLC Anguilla was owned by the Company.
On
May 1, 2022, before the disposal, GLA had net assets of $
| Carrying value of assets disposed | $ | ( | ) | |
| Carrying value of liabilities disposed | ||||
| Carrying value of net assets disposed | ( | ) | ||
| Sales proceeds | ||||
| Loss on sale of discontinued operations | $ | ( | ) |
The following table summarizes certain selected components of discontinued operations for the disposed subsidiary for the three and nine months ended July 31, 2022 and 2021:
Three months ended July 31, |
Nine months ended July 31, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||
| Loss from discontinued operations | $ | ( | ) | $ | ( |
) | $ | ( |
) | $ | ( | ) | ||||
| Loss per share from discontinued operations - Basic and Diluted | $ | ( | ) | $ | ( |
) | $ | ( |
) | $ | ( | ) | ||||
| Current and total assets | $ | $ | $ | $ | ||||||||||||
| Current and total liabilities | $ | $ | $ | $ | ||||||||||||
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NOTE 3 - RELATED PARTY TRANSACTIONS
Mr.
Yip Hoi Hing Peter (“Mr. Peter Yip”), Chief Executive Officer and Director of the Company, is a
Effective May 1, 2022, the amount due to Mr. Peter Yip of $ was forgiven and recorded as a capital contribution to the Company.
At
July 31, 2022, Mr. Peter Yip had advanced $
During
the three and nine months ended July 31, 2022, the Company had no transactions related to CS Global or CSG Group or any entities wholly
owned by Mr. Peter Yip. During the three months ended July 31, 2021, the Company incurred management fee of $
Greenpro
Capital Corp., through its wholly owned subsidiaries (collectively “Greenpro”), is a
| 13 |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
The following information should be read in conjunction with (i) the financial statements of Global Leaders Corp., a Nevada corporation, and the notes thereto appearing elsewhere in this Form 10-Q together with (ii) the more detailed business information and the October 31, 2021 audited financial statements and related notes included in the Company’s most recent Annual Report on Form 10-K for the year ended October 31, 2021 filed with the SEC on January 28, 2022. Statements in this section and elsewhere in this Form 10-Q that are not statements of historical or current fact constitute “forward-looking” statements.
OVERVIEW
Global Leaders Corp. (the “Company” or “we”) was incorporated in the State of Nevada on July 20, 2020 and has a fiscal year end of October 31.
On July 20, 2020, Mr. Yip Hoi Hing Peter (“Mr. Peter Yip”), founder of the Company, was appointed as Chief Executive Officer, President, and sole director of the Company.
On August 25, 2020, the Company acquired 100% of the equity interests of Global Leaders Corporation (“GLC Anguilla”), an Anguilla company, in consideration of $200 from Mr. Peter Yip.
On August 25, 2020, GLC Anguilla, our wholly owned subsidiary, acquired 100% of the equity interests of Global Leaders Academy Limited (“GLA”), a Hong Kong company, in consideration of HK$1 (approximately $0.13) from Mr. Peter Yip.
On May 1, 2022, GLC Anguilla sold its entire 100% interest in GLA to an unrelated party for HK$1 (approximately $0.13), due to continuing losses incurred by GLA.
Going Concern
For the nine months ended July 31, 2022, the Company incurred a net loss of $75,321 and used cash in operations of $158,860. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern within one year of the date that these financial statements are issued. In addition, the Company’s independent registered public accounting firm, in its report on the Company’s October 31, 2021, financial statements, raised substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.
At July 31, 2022, our cash balance was $6,508. Management estimates that the current funds on hand will be sufficient to continue operations through the next three months. The Company’s ability to continue as a going concern is dependent upon the Company’s ability to implement its business plans and continue receiving financial support from its officers and shareholders. No assurance can be given that any future financing, if needed, will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company can obtain additional financing, if needed, it may contain undue restrictions on its operations, in the case of debt financing, or cause substantial dilution for its stockholders, in the case of equity financing.
CRITICAL ACCOUNTING POLICIES
Use of estimates
In preparing these condensed consolidated financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheets, and revenues and expenses during the periods reported. Actual results may differ from these estimates.
Revenue recognition
The Company recognizes revenues when its customer obtains control of promised services, in an amount that reflects the consideration the Company expects to receive in exchange for those services. The Company recognizes revenue following the five-step model prescribed by Accounting Standards Codification (ASC) 606, “Revenue from Contracts”.
RECENT ACCOUNTING PRONOUNCEMENTS
Refer to Note 1 in the accompanying condensed consolidated financial statements.
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PLAN OF OPERATION
We started our business in 2020 and have a limited operating history. Our business commenced in 2020 and we intend to continue to expand the scope and geographic reach of our services by extending our coverage to service more clients in different regions. Such plans are based on current intentions and assumptions. Our expansion plan may be hindered by factors beyond our control, such as general market conditions, our ability to attract qualified employees, government policies relevant to our industry, our ability to maintain our existing competitive advantages and new market entrants. For example, there may be ownership restrictions in new jurisdictions where we intend to expand. In order for us to operate as a management consultancy services provider in these jurisdictions, we may be required to identify suitable local partners in order to enter into such new markets. If we are unable to successfully implement our growth strategy, our business, financial condition, results of operations and prospects may be materially and adversely affected.
Our anticipated future growth will likely place significant demand on our management and operational efficiency. Our success in managing our growth will depend, to a significant degree, on our ability to attract more new clients and retain existing clients and launch new services, and successfully monetize them, to increase our revenue. In addition, we will have to successfully adapt our existing services to changing industry and user conditions, and expand, train and manage our employees. The market in which we operate is highly dynamic and may not develop as expected. Our clients may not fully understand the value of our services and potential clients and candidates may have difficulty distinguishing our services from those of our competitors. If we are unable to manage our operations properly and prudently as we continue to grow in this dynamic and evolving market, or if the quality of our services deteriorates due to mismanagement, our brand name and reputation could be severely harmed, which would materially and adversely affect our business, financial condition, and results of operations.
Results of Operations
Three Months Ended July 31, 2022
No service revenue and cost of service revenue were recorded for the three months ended July 31, 2022.
For the three months ended July 31, 2022, general and administrative expense was $32,019.
Nine Months Ended July 31, 2022
No service revenue and cost of service revenue were recorded for the nine months ended July 31, 2022.
For the nine months ended July 31, 2022, general and administrative expense was $71,905.
Liquidity and Capital Resources
At July 31, 2022, our cash balance was $6,508. Management estimates that the current funds on hand will be sufficient to continue operations through the next three months. No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing it may contain undue restrictions on its operations, in the case of debt financing, or cause substantial dilution for its stockholders, in the case of equity financing. We do not have any financing arrangement and we cannot provide investors with any assurance that we will be able to raise sufficient funding to fund our operations and ongoing operational expenses. In the absence of such financing, our business will likely fail. There are no assurances that we will be able to achieve further sales of our Common Stock or any other form of additional financing.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
As a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act), we are not required to provide the information called for by this Item 3.
ITEM 4. CONTROLS AND PROCEDURES.
DISCLOSURE CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures:
We conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of July 31, 2022. This evaluation was carried out by our Chief Executive and Financial Officer, who also serves as our principal executive officer and principal financial and accounting officer. Based upon that evaluation, our Chief Executive and Financial Officer concluded that, as of July 31, 2022, our disclosure controls and procedures were not effective due to the presence of material weaknesses in internal control over financial reporting.
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.
Management has identified the following material weaknesses which have caused management to conclude that, as of July 31, 2022, our disclosure controls and procedures were not effective: Inadequate segregation of duties consistent with control objectives.
Changes in Internal Control over Financial Reporting:
There were no changes in our internal control over financial reporting during the quarter ended July 31, 2022, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
The Company is not currently subject to any legal proceedings. From time to time, the Company may become subject to litigation or proceedings in connection with its business, as either a plaintiff or defendant. There are no such pending legal proceedings to which the Company is a party that, in the opinion of management, is likely to have a material adverse effect on the Company’s business, financial condition or results of operations.
ITEM 1A. RISK FACTORS
As a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act), we are not required to provide the information called for by this Item 1A.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. MINE SAFETY DISCLOSURES.
None.
ITEM 5. OTHER INFORMATION.
None.
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ITEM 6. EXHIBITS.
(a) Exhibits required by Item 601 of Regulation SK.
* Filed herewith.
| (1) | Previously filed and incorporated by reference to the Company’s Registration Statement on Form S-1, as amended (File No. 333-251324), as filed with the Securities and Exchange Commission on December 14, 2020. |
| (2) | Previously filed as an exhibit to the Company’s Current Report on Form 8-K filed with SEC on June 4, 2021. |
| (3) | Previously filed as an exhibit to the Company’s Current Report on Form 8-K filed with SEC on June 23, 2021. |
| (4) | Previously filed as an exhibit to the Company’s Current Report on Form 8-K filed with SEC on September 24, 2021. |
** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
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SIGNATURES
Pursuant to the requirements 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.
| GLOBAL LEADERS CORP. | ||
| (Name of Registrant) | ||
| Date: August 30, 2022 | By: | /s/ Yip Hoi Hing Peter |
| Name: | Yip Hoi Hing Peter | |
| Title: | President, Chief Executive Officer, Chief Financial Officer (Principal Executive Officer and Principal Financial and Accounting Officer) | |
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