UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON,Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒

[X]QUARTERLY REPORT PURSUANT TOUNDER SECTION 13 OR 15(D)15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.1934

For the Quarterly Period Ended quarterly period endedDecember 31, 20162017

or[   ]

☐      TRANSITION REPORT PURSUANT TOUNDER SECTION 13 OR 15(D)15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 333-199040For the transition period from _______ to ______

Commission File Number 333-107179 & 000-51210

LEGACY VENTURES INTERNATIONAL, INC.INC

(Exact name of registrant as specified in its charter)

2215-B Renaissance Drive

Las Vegas, Nevada 89119

(Address of principal executive offices)(Zip Code)

1-800-918-3362

(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)15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter periodsperiod that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.Yes ☐[X]    No ☒[  ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant 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).  Yes ☒[X]    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 filer.or, an emerging growth company. See definitionthe definitions of “large"large accelerated filer,” “accelerated filer”" "accelerated filer", "smaller reporting company", and “smaller reporting company”"emerging growth company", in ruleRule 12b-2 of the Exchange Act.

(Do not check if a smaller reporting company)Emerging growth company [ ]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  [ ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐[]    No ☒[X]

As of February 8, 2017, the registrant had 65,064April 29, 2019, there were 315,064 outstanding shares of itsthe registrant's common stock, issued and outstanding.$0.0001 par value per share.

LEGACY VENTURES INTERNATIONAL INC.

QUARTERLY REPORT ON FORM 10-Q

December 31, 2016

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

The following unaudited interim consolidated financial statements of Legacy Ventures International Inc. (referred to herein as the "Company," "we," "us" or "our") are included in this quarterly report on Form 10-Q:

PART I

FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS REQUIRED BY FORM 10-Q

The Interim Condensed Financial Statements (Unaudited)of the Company are prepared as of December 31, 2017.

LEGACY VENTURES INTERNATIONAL INC.

For the Period Ended December 31, 2016

LEGACY VENTURES INTERNATIONAL INC.

For the Period Ended December 31, 2016

Interim Condensed Financial Statements (Unaudited)

LEGACY VENTURES INTERNATIONAL, INC.

INTERIM CONDENSED BALANCE SHEETS (Unaudited)(unaudited)

(Expressed in US dollars)

Going concern(Note 2)

Subsequent events(Note 13)

See accompanying notes

to the unaudited interim condensed financial statements

LEGACY VENTURES INTERNATIONAL INC.

CONDENSED STATEMENTS OF OPERATIONS ANDCOMPREHENSIVE LOSS (Unaudited)

See accompanying notes

LEGACY VENTURES INTERNATIONAL, INC.

INTERIM CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)OPERATIONS AND COMPREHENSIVE LOSS

(unaudited)

(Expressed in US dollars)

See accompanying notes to the unaudited interim condensed financial statements

LEGACY VENTURES INTERNATIONAL, INC.

INTERIM CONDENSED STATEMENT OF CASH FLOWS

(unaudited)

(Expressed in US dollars)

See accompanying notes to the unaudited interim condensed financial statements

LEGACY VENTURES INTERNATIONAL, INC.

Notes to the Interim Condensed Financial Statements NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS

(Expressed in US dollars)

(Unaudited)

As at December 31, 2016

1.   NATURENOTE 1 - ORGANIZATION AND DESCRIPTION OF OPERATIONSBUSINESS

Legacy Ventures International, Inc. (the(“Legacy” or the “Company”) is a Management Company, was incorporated on March 4, 2014 whose principal place of business is located at 2215-B Renaissance Drive, Las Vegas, Nevada, 89119 USA. Upon its acquisition of RM Fresh Brands Inc. [“RM Fresh”], it was engaged in the food and beverage distribution. 

On September 30, 2015, the Company entered into a Share Exchange Agreement (the “Agreement”) with and among RM Fresh and its stockholders. Pursuant to the Agreement, the Company acquired 100% of the issued and outstanding shares of RM Fresh in exchange for the issuance of 2,000,000 of the Company’s common stock. As a result of this transaction, RM Fresh became a wholly owned subsidiary of the Company and the former stockholders of RM Fresh owned approximately 7% of the Company’s common stock. RM Fresh was incorporated on July 29, 2008 under the laws of the ProvinceState of Ontario,Nevada. Since September 15, 2015, the Company operated through a wholly-owned subsidiary RM Fresh Brands Inc. (“RM Fresh”), who services food and beverage retailers and distributors who are looking for innovative, trend-setting products across North America and in international markets. With a focus on sustainable, category changing consumables, RM Fresh acquired the rights to distribute an extensive portfolio of highly desirable brands, including Boxed Water, Cleansify, Uncle Si’s Iced Tea, Chef 5-Minute Meals, Gurkha Cigars, Shimla Foods, Aloe Gloe and Arriba Horchata. Through a network of sub-distribution partners across Canada, RM Fresh provides national product distribution and is engaged inbrokerage services. RM Fresh has an emerging focus on the businessUnited States and Middle East through the establishment of trading and distribution of food, beverages and body care products.sub-distribution partners.

On August 31, 2016, the Company entered into a group of transactions related to RM Fresh. Inin order to fund the ongoing operation and further development of RM, Fresh, the Company consented to new third party investments into RM Fresh in the approximate total amount of $175,000, made in the form of cash and retirement of indebtedness owed to it.by RM. As result of these new investments the Company’sinto RM, our ownership percentage of RM Fresh has beenthe Company was reduced to twenty percent (20%). In addition, the Company entered into a new Shareholder Agreement with RM, Fresh, under which the Company’s shares in RM Freshowned by the Company are subject to certain restrictions on transfer until such time as the Company declareswe declare a stockholdershareholder dividend of itsour RM Fresh shares following a going public transaction by RM, Fresh, or in the alternative, for one (1) year after RM Fresh completes a going public transaction. Further, the Company disposed of an inter-company liability owed to us by RM in the amount of CDN$166,961.70. The liability was documented under a Demand Promissory Note issued to us by RM. The Company then assigned the note to an investor in RM in exchange for $3,000. Finally, the Company entered into a mutual Release agreement with RM. Under the Release, the Company released and discharged all liabilities owed to us by RM (with the exception of the Demand Promissory Note). RM in turn released us of all liabilities owing to RM and released us all ongoing contractual and financial responsibilities to RM, including our contractual obligation to further fund management fees or other expenses to be incurred by RM.

2.   GOING CONCERN

LEGACY VENTURES INTERNATIONAL, INC.

NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS

(Expressed in US dollars)

(Unaudited)

On June 28, 2017, Randall Letcavage entered into a stock purchase agreement for the acquisition of an aggregate of 286,720 shares of Common Stock of the Company, representing approximately 91% of the issued and outstanding shares of Common Stock of the Company as of such date, from Rehan Saeed, the previous majority shareholder of the Company (the “Purchase Agreement”). The Purchase Agreements were fully executed and delivered, and the transaction consummated as of and at July 7, 2017. Consequently, Mr. Letcavage was able to unilaterally control the election of our Board of Directors, all matters upon which shareholder approval is required and, ultimately, the direction of the Company.

In addition, on June 28, 2017, Rehan Saeed submitted his resignation from all executive officer positions with the Company, including Chief Executive Officer and President, effective on the 10th day following the filing of a Schedule 14f-1 with the U.S. Securities and Exchange Commission. On June 28, 2017, Randall Letcavage was appointed as Chief Executive Officer, Chief Financial Officer, Director, effective immediately. 

On June 28, 2017, the Company entered into a non-binding letter of intent to enter into a business combination with Nexalin Technology, Inc., a Nevada corporation (“Nexalin”).

On June 6, 2018, the Company reported that Matthew Milonas entered into an agreement for the acquisition of an aggregate of 286,720 shares of Common Stock of the Company, representing approximately 91% of the issued and outstanding shares of Common Stock of the Company (the “Shares”) as of such date, from Randall Letcavage, the majority shareholder of the Company (the “Agreement”). However, Mr. Milonas claims that he did not fully execute and deliver the Agreement and has disclaimed ownership of the subject shares. Mr. Letcavage will not contest Mr. Milonas’ claims and as a result, Mr. Letcavage’s ownership of the shares did not change as disclosed.

On August 9, 2018, Mr. Letcavage, as the holder of 91% of the outstanding shares of common stock of the Company, approved the appointment of Peter Sohn as the Chief Executive Officer and Chief Financial Officer and Director of the Company. Effective December 17, 2018, Mr. Sohn accepted the appointments as Chief Executive Officer and Chief Financial Officer and Director of the Company.

On December 17, 2018, Mr. Letcavage delivered to Peter Sohn an agreement for the acquisition by Mr. Sohn of the Shares from Mr. Letcavage, which agreement is dated August 9, 2018, but was delivered and deemed effective on December 17, 2018 (the “Agreement”). As a result Mr. Sohn is now able to unilaterally control the election of our board of directors, all matters upon which shareholder approval is required and, ultimately, the direction of the Company.

LEGACY VENTURES INTERNATIONAL, INC.

NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS

(Expressed in US dollars)

(Unaudited)

Share Exchange Agreement and Subscriptions

Effective September 11, 2017 (the “Closing Date”), Legacy Ventures International, Inc., (the “Company”) entered into a certain Share Exchange Agreement (the “Share Exchange Agreement”), dated as of September 1, 2017, by and among the Company, Nexalin and shareholders of Nexalin holding a majority of the issued and outstanding shares of Nexalin common stock (the “Nexalin Shareholders”). Pursuant to the Share Exchange Agreement, the Company agreed to exchange the outstanding equity stock of Nexalin held by the Nexalin Shareholders for units (the “Units”) consisting of an aggregate of approximately 25,000,000 newly issued shares of the Common Stock, $0.001 par value, of the Company and warrants (the “Warrants”) to purchase an aggregate of approximately 25,000,000 newly issued shares of the Common Stock, $0.001 par value, of the Company. The warrants are two-year warrants exercisable at the end of one year for exercise prices between $1.50 and $1.75 per share, payable in cash. The warrants must be promptly exercised, and subject to forfeiture if not so exercised, if the Company’s shares achieve a trading price of $3.00 or more for 30 consecutive days. At the Closing Date, the Company approved the issuance of approximately 15,500,000 shares of common stock to the Nexalin shareholders, together with warrants for the purchase of an additional 15,500,000 shares and reserved approximately 9,500,000 additional shares, together with the related warrants, for the issuance to remaining Nexalin shareholders who are expected to execute and deliver the Share Exchange Agreement, including approximately 1,100,000 shares and related warrants issuable immediately to consultants in connection with the transactions contemplated by the Share Exchange Agreement. On September 15, 2017, Legacy Ventures International, Inc., (the “Company”), filed a Current Report on Form 8-K (the “09/15/17 Form 8K”) announcing that effective September 11, 2017 (the “Closing Date”), the Company, on the one hand, and Nexalin Technology, Inc., a Nevada corporation (“Nexalin”), and shareholders of Nexalin holding a majority of the issued and outstanding shares of Nexalin common stock (the “Nexalin Shareholders”), on the other hand, entered into a Share Exchange Agreement (the “Share Exchange Agreement”), dated as of September 1, 2017.  In the Share Exchange Agreement the Company agreed to issue units in exchange for all the outstanding equity stock of Nexalin held by the Nexalin Shareholders. The “Units” were to consist of an aggregate of approximately 25,000,000 newly issued shares of the Company’s Common Stock, $0.001 par value, and warrants (the “Warrants”) to purchase an aggregate of approximately 25,000,000 newly issued shares of the Company’s Common Stock, $0.001 par value.

On November 29, 2017, the Company filed an amendment to its 09/15/17 Form 8-K (the “11/29/17 Amended Form 8K”) announcing that the “Closing Date” as defined in the Share Exchange Agreement was September 30, 2017, and, further, that as of the date of the of the 11/29/17 Amended Form 8K, the holders of approximately 90% of the equity securities of Nexalin had exchanged their shares into shares of the Company’s Common Stock.

On December 26, 2017, the Company filed a Current Report on Form 8K (the “12/26/17 Form 8K”) announcing that on December 21, 2017, the Company’s sole officer and director, Randy Letcavage, who was at the time Nexalin’s sole officer and director, resigned all officer and director positions with the Company and Nexalin. It was also announced that Mark White was appointed as the Interim Chief Executive Officer and Interim Chief Financial Officer of both the Company and Nexalin. Finally, it was announced that Rick Morad was appointed as the sole director of the Company and Nexalin.

On February 1, 2018, the Company filed a Current Report on Form 8K (the “02/01/18 Form 8K”) announcing that Mark White was appointed as a Company director.

On February 28, 2018, the Company filed a Current Report on Form 8K (the “02/28/18 Form 8K”) wherein the Company filed (i) the Nexalin audited financial statements for the twelve months ended June 30, 2017 and 2016; (ii) the Nexalin unaudited financial statements for the three months ended September 30, 2017 and 2016; and (iii) the Nexalin unaudited condensed pro forma financial statements for the Company for the twelve months ended June 30, 2017 and as of and for the three months ended September 30, 2017.

On March 30, 2018, the Company filed a Current Report on Form 8K (the “03/30/18 Form 8K”) announcing the appointment of Dr. Benjamin V. Hue as a director of the Company.

LEGACY VENTURES INTERNATIONAL, INC.

NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS

(Expressed in US dollars)

(Unaudited)

Notwithstanding the disclosure made in the 09/15/17 Form 8K and the11/29/17 Amended Form 8K, the consummation of the acquisition of Nexalin was subject to a number of contractual conditions and legal requirements. These included:

Once new management and a new Board of Directors were in place, they conducted a review of the Company and the steps taken and to be taken to consummate the acquisition of Nexalin.  After the due diligence review was performed, including legal, accounting and business investigations of the Company, the new management and new Board of Directors became aware of a series of issues that put into question whether there had been or could be completion of the acquisition transaction and that put into issue whether past actions by the Company complied with applicable legal requirements and better business practice. After performing this due diligence  review, the new Board of Directors determined that many of the requirements of and pre-conditions to the Share Exchange Agreement were not completed and condition of the Company was not satisfactory to accomplish the objectives of the Share Exchange Agreement.

After careful consideration, the current management and Board of Directors believe that the previously announced share exchange, in fact, had not closed, and because of the many issues identified in its due diligence review, some of which cannot ever be satisfied or adequately remedied, it considers that the Share Exchange Agreement is null and void ab initio.

It is the opinion of current management and the current Board of Directors, based on the nullity of the Share Exchange Agreement, that Nexalin never was and is not now a wholly owned subsidiary of the Company.  

LEGACY VENTURES INTERNATIONAL, INC.

NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS

(Expressed in US dollars)

(Unaudited)

NOTE 2 – GOING CONCERN AND BASIS OF PRESENTATION

The Company’s unaudited interim condensed financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. During the current period, the Company has incurred recurring losses from operations and as at December 31, 2016 has a working capital deficiency of $53,516 and2017 an accumulated deficit of $4,178,320.deficit. Further, as explained in Note 1, on August 31, 2016, the Company’s ownership percentage of RM Fresh has been reduced to 20%. The Company’s continued existence is dependent upon its ability to continue to execute its operating plan and to obtain additional debt or equity financing. These conditions raise substantial doubt about our ability to continue as a going concern. There can be no assurance that the necessary debt or equity financing will be available, or will be available on terms acceptable to the Company, in which case the Company may be unable to meet its obligations. Should the Company be unable to realize its assets and discharge its liabilities in the normal course of business, the net realizable value of its assets may be materially less than the amounts recorded in the interim condensed financial statements. The interim condensed financial statements do not include any adjustments relating to the recoverability of recorded asset amounts that might be necessary should the Company be unable to continue in existence.

LEGACY VENTURES INTERNATIONAL INC.

Notes to the Interim Condensed Financial Statements (Unaudited)

As at December 31, 2016

3.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for interim financial information and the rules and regulations of the SECSecurities and are expressedExchange Commission, and should be read in US dollars. Accordingly,conjunction with the unaudited condensed interimaudited financial statements do not include all information and footnotes required by US GAAPnotes thereto contained in the Company's annual report filed with the SEC on Form 10-K for complete annual financial statements. The unaudited condensed interim financial statements reflectthe year ended June 30, 2017.  In the opinion of management, all adjustments, consisting of only normal recurring adjustments, considered necessary for a fair presentation. Interim operatingpresentation of financial position and the results of operations for the interim periods presented have been reflected herein.  Operating results for the three and six months ended December 31, 2017, are not necessarily indicative of the results that mayto be expected for the year ending June 30, 2018.  Notes to the interim condensed financial statements which would substantially duplicate the disclosures contained in the audited financial statements for the most recent year 2017 or for any other interim period. Theas reported in Form 10-K have been omitted.

NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS

SIGNIFICANT ACCOUNTING POLICIES

These unaudited condensed interim financial statements have been prepared on the same basis as the annual audited financial statements and should be read in conjunction with thethose annual audited consolidated financial statements of the Company and the notes thereto as of andfiled on Form 10-K for the year ended June 30, 2016.

The2017. In the opinion of management, these unaudited interim condensed financial statements ofreflect adjustments, necessary to present fairly the Company as at, December 31, 2016, do not include the assets and liabilities of RM Fresh, which is no longer a wholly-owned subsidiary effective August 31, 2016, as described in Note 4. The comparativeCompany's financial statements included theposition, results of operations and financial positioncash flows for the periods shown. The results of operations for such periods are not necessarily indicative of the wholly owned subsidiary RM Fresh.

Use of Estimatesresults expected for a full year or for any future period.

The preparationCompany's significant accounting policies have not changed from the year ended June 30, 2017, except as described below.

CHANGE IN ACCOUNTING POLICY

The FASB issued ASU No. 2017-11, Earnings Per Share (Topic 260) Distinguishing Liabilities From Equity (Topic 480) Derivatives and Hedging (Topic 815): Accounting for Certain Financial Instruments With Down Round Features II Replacement of the unaudited condensed interimIndefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests With a Scope Exception, allows a financial statements in conformityinstrument with US GAAP requires managementa down-round feature to make estimates and assumptions that affectno longer automatically be classified as a liability solely based on the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dateexistence of the unaudited condensed financial statementsdown-round provision. The update also means the instrument would not have to be accounted for as a derivative and the reported amounts of revenues and expenses during thebe subject to an updated fair value measurement each reporting periods. Estimates may include those pertaining to accruals. Actual results could materially differ from those estimates.period.

Recently Issued Accounting StandardsOn consideration of the above factors, the Company elected to early adopt ASU 2017-11 on July 1, 2017. The ASU is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. For all other organizations, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020.

LEGACY VENTURES INTERNATIONAL, INC.

NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS

(Expressed in US dollars)

(Unaudited)

The early adoption allows the Company to reduce the cost and complexity of updating the fair value measurement each reporting period and eliminate the unnecessary volatility in reported earnings created by the revaluation when the Company’s shares’ value changes.

The Company evaluatedpresented the change in accounting policy through the retrospective application of the new accounting principle to all recentprior periods, as described in ASU No. 250-10-45-5, Accounting Changes and Error Corrections. There was no impact on opening balances from adopting this standard.

Recently issued accounting pronouncements

In November 2015, the FASB issued ASU No. 2015-17, "Balance Sheet Classification of Deferred Taxes," which requires that deferred tax liabilities and determinedassets be classified on our Balance Sheets as noncurrent based on an analysis of each taxpaying component within a jurisdiction. ASU No. 2015-17 is effective for the fiscal year commencing after December 15, 2017. The Company does not anticipate that the adoption of these pronouncements would notASU No. 2015-17 will have a material effect on the financial position,balance sheet or the results of operations or cash flowsoperations.

In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 740): Recognition and Measurement of Financial Assets and Financial Liabilities. This ASU is effective for annual and interim reporting periods beginning after December 15, 2017. ASU 2016-01 enhances the reporting model for financial instruments to provide users of interim condensed financial statements with more decision-useful information. The Company is currently assessing the impact of ASU 2016-01.

NOTE 4 - BASIC AND DILUTED NET LOSS PER SHARE

The Company follows ASC Topic 260 to account for the earnings (loss) per share.  Basic earnings (loss) per common share ("EPS") calculations are determined by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period.  Diluted earnings (loss) per common share calculations are determined by dividing net income (loss) by the weighted average number of common shares and dilutive common share equivalents (if dilutive) outstanding. All dilutive common share equivalents were anti-dilutive for the three and six months ended December 31, 2017 and 2016.

NOTE 5 – PROMISSORY AND CONVERTIBLE NOTES

On September 11, 2017, the Company issued a Convertible Promissory Note ("Convertible Note") to an accredited investor.  The Convertible Note has an aggregate principal amount of $500,000, and is payable on September 11, 2018 (the "Maturity Date"), and bears an interest rate of 4% per annum.  The holder may convert the Convertible Note at any time up to the Maturity Date into shares of the Company.Company's common stock at a conversion price equal to $1.00 per share.  The Company may prepay the Convertible Note prior to the Maturity Date and/or the date of conversion without penalty upon receiving the written consent of the holder.  As the conversion feature is not separable, it has been reflected on the balance sheet as at December 31, 2017. Interest expense for the three and six months ended December 31, 2017, was $5,041 and $6,082, respectively.

4.On September 11, 2017, the Company received a Promissory Note payable ("Promissory Note") from Nexalin Technology, Inc.  The Promissory Note has an aggregate principal amount of $500,000 and is payable on December 31, 2017 (the "Maturity Date"), and bears an interest rate of 4% per annum. Interest income for the three and six months ended December 31, 2017 was $5,041 and $6,082, respectively. See note 9 for additional details.

The Convertible Note payable contains a beneficial conversion feature. As a result, the Company recognized a nominal value for the Convertible note, at the September 11, 2017 issuance date, the balance of which will be accreted to the face value at the effective interest rate. For the three and six months ended December 31, 2017, accretion expense was $86 and $90, respectively. The difference between the nominal value ascribed to the Convertible Note on issuance of $499,999, and the face value was recorded in Additional Paid In Capital. As at December 31, 2017, the carrying value of the Convertible Note was $91.

 On June 28, 2017 the Company issued $20,000 of unsecured convertible promissory notes (“Notes”). The Notes matured on June, 27, 2018, and bear interest at a rate of 8% per annum. The Notes are convertible into the Common Stock of the Company at a fixed conversion rate of $0.75 per share at any time prior to the maturity date. The Company evaluated the terms and conditions of the Notes under the guidance of ASC 815, Derivatives and Hedging. The conversion feature met the definition of conventional convertible for purposes of applying the conventional convertible exemption. The definition of conventional contemplates a limitation on the number of shares issuable under the arrangement. The instrument was convertible into a fixed number of shares and there were no down round protection features contained in the contracts. The Company was required to consider whether the hybrid contracts embodied a beneficial conversion feature (“BCF”). The calculation of the effective conversion amount resulted in a BCF because the fair value of the conversion was greater than the Company’s stock price on the date of issuance and a BCF was recorded in the amount of $20,000 and accordingly the amount of $20,000 was credited to Additional Paid in Capital. The BCF which represents debt discount is accreted over the life of the loan using the effective interest rate. Accretion expense for the three and six months ended December 31, 2017, was $1,531 and $2,323, respectively. Interest expense for the three and six months ended December 31, 2017, was $403 and $815, respectively. As at December 31, 2017, the value of the notes were $2,323.

No amounts of principal and interest for the above mentioned notes have been paid to date.

LEGACY VENTURES INTERNATIONAL, INC.

NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS

(Expressed in US dollars)

(Unaudited)

NOTE 6 – RELATED PARTY ADVANCES AND BALANCES, AND ADVANCES FROM THIRD PARTIES

During the three and six month period ended December 31, 2017, the Company was advanced $16,425 and $22,925, respectively, by a third party, the funds were used to pay certain professional fees including auditors, and accountants. The Company is currently in the process of negotiating with the third party with respect to settlement of the amount advanced.

NOTE 7 - COMMON AND PREFERRED STOCK TRANSACTIONS

COMMON STOCK - AUTHORIZED

As at December 31, 2017, the Company was authorized to issue 10,000,000 of preferred stock, with a par value of $0.0001 and 100,000,000 of common stock, with a par value of $0.0001.

There were no common stock transactions in the period ended December 31, 2017.

On October 28, 2016, the Company issued 35,537 shares of common stock to the former CEO, as consideration for management services. These shares were fair valued at $355,370, determined based on the market price on the date of issuance, and recorded in the interim condensed statement of operations and comprehensive loss as management fees during the three and six months ended December 31, 2016.

On November 16, 2016, the Board of Directors and stockholders of the Company approved a 1:1000 reverse split. As a result, the issued and outstanding common stock of the Company decreased from 65,064,000 shares prior to the reverse split to 65,064 shares following the reverse split. Prior period amounts have been restated from the earliest period presented, to reflect the effect of the reverse split.

NOTE 8 – LOSS OF CONTROL IN SUBSIDIARY COMPANY

On September 30, 2015, the Company entered into a Share Exchange Agreement with and among RM Fresh and its shareholders, pursuant to which, the Company acquired 100% of the issued and outstanding shares of RM Fresh in exchange for the issuance of 2,000,000 shares of the Company’s common stock. As a result of this transaction, RM Fresh became a wholly owned subsidiary of the Company and the former shareholders of RM Fresh owned approximately 7% of the Company’s shares of common stock.

LEGACY VENTURES INTERNATIONAL INC.

Notes to the Interim Condensed Financial Statements (Unaudited)

As at December 31, 2016

4.   LOSS OF CONTROL IN SUBSIDIARY COMPANY(continued)

Subsequently, On August 31, 2016, the Company entered into a group of transactions related to RM Fresh. In order to fund the ongoing operation and further development of RM Fresh, the Company consented to new third party investments into RM Fresh in the approximate total amount of $175,000, made in the form of cash and retirement of indebtedness owed by RM Fresh, reducing the Company’s ownership percentage of RM Fresh to twenty percent (20%) and is thus accounted for as an available for sale investment. As a result, the unaudited interim condensed financial statements of the Company as at, December 31, 2016, do not include the assets and liabilities of RM Fresh, which is no longer a wholly-owned subsidiary effective August 31, 2016, while the balance sheet as at June 30, 2016 is consolidated and contains the assets, liabilities and results of operationsaccounts of RM Fresh. The interim condensed statement of operations and comprehensive loss of the Company includes the results of the operations of RM Fresh up to August 31, 2016, which is the effective date of change in control, due to loss of control in RM Fresh and consequent de-consolidation. The fair value of the assets and liabilities as at August 31, 2016 and the carrying value of the investments, which resulted in the Company recording a gain of $84,021 in the interim condensed statement of operations, is as follows:

LEGACY VENTURES INTERNATIONAL, INC.

NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS

(Expressed in US dollars)

(Unaudited)

Management has concluded that the entire available for sale investment in RM Fresh is impaired and hence the investment is written off.

5.   ACCOUNTS AND OTHER RECEIVABLES

NOTE 9 - SUBSEQUENT EVENTS

Accounts and other receivables as at December 31, 2016 are nil. Accounts and other receivables as at June 30, 2016 represent trade accounts receivable of $130,343, net of allowance of $48,943, and other receivable of $134,537. Other receivable relates to a distributor listing fee recoverable from a supplier under an arrangement with the RM Fresh. All these balances related to RM Fresh.

6.   ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts payable and accrued liabilities as at December 31, 2016 include accrued liabilities amountingSubsequent to $16,993 ($20,574 as at JuneSeptember 30, 2016).

LEGACY VENTURES INTERNATIONAL INC.

Notes to the Interim Condensed Financial Statements (Unaudited)

As at December 31, 2016

7.   DUE TO STOCKHOLDER

Amount due to stockholder is unsecured, interest free and is repayable on demand.

8.   NOTES PAYABLE

Outstanding note payable of $51,794 on June 30, 2016 represents unsecured promissory notes amounting to $26,000 and $25,794 issued on April 1, 2015 and March 4, 2016, respectively bearing interest at 20% and 12% per annum, respectively, repayable within a year from issuance date. Interest accrued on these notes during the year ended June 30, 2016 amounted to $6,218. These notes are no longer reported in the balance sheet as they pertained to RM Fresh, as explained in Note 4.

Further,2017, on August 21, 20159, 2018, Mr. Letcavage, as the Company issued $180,000 convertible notes payable bearing interest at 10% p.a. repayable on February 21, 2017. The principal amount and accrued interest were convertible intoholder of 91% of the outstanding shares of common stock of the Company, atapproved the optionappointment of Peter Sohn as the Chief Executive Officer and Chief Financial Officer and Director of the holder at any time fromCompany. Effective December 17, 2018, Mr. Sohn accepted the dateappointments as Chief Executive Officer and Chief Financial Officer and Director of issuance at $1. The Company concluded that there is no beneficial conversion feature determined in accordance with the guidance provided in ASC 470. Accordingly, these notes were recognized as liability at the time of issuance. On September 30, 2015, all the Holders exercised their right to convert the outstanding principal amount of these notes, into the Company’s common stock at a price of $1.00 per stock (Note 9).Company.

9.   STOCKHOLDERS’ DEFICIENCYAlso on December 17, 2018, Mr. Letcavage delivered to Peter Sohn an agreement for the acquisition by Mr. Sohn of the Shares from Mr. Letcavage, which agreement is dated August 9, 2018, but was delivered and deemed effective on December 17, 2018 (the “Agreement”). As a result Mr. Sohn is now able to unilaterally control the election of our Board of Directors, all matters upon which shareholder approval is required and, ultimately, the direction of our Company.

COMMON STOCK - AUTHORIZED

As atSubsequent to December 31, 2016,2017, the Company authorized to issue 10,000,000was advanced $50,000 by an arm’s length third party by way of preferred stock, with a par value of $0.0001 and 100,000,000 shares of common stock, with a par value of $0.0001.

COMMON STOCK - ISSUED AND OUTSTANDINGconvertible promissory note.

On September 9, 2015, the Board of Directors and stockholders ofSubsequent to December 31, 2017, on April 11, 2018, the Company approveddetermined that the promissory note receivable and the accrued interest thereon was impaired.  The promissory note receivable was assigned to an arm’s length accredited third party, for a Certificate of Amendment to its Articles of Incorporation to increase the par value of Company’s common stock and preferred stock from no par value to $0.0001 per stock and approved a 1:7 forward split upon the increase of the par value. As a result, the issued and outstanding common stock of the Company increased from 7,400,000 (7,400 post reverse split, as explained below) shares prior to the Forward Split to 51,800,000 (51,800 post reverse split) shares following the Forward Split. Prior year numbers have been adjusted from the earliest period presented, to reflect the effect of the forward split.nominal amount.

On September 30, 2015 the Company issued 2,000,000 (2,000 post reverse split) shares of common stock to the former stockholders of RM Fresh pursuant to Share Exchange Agreement. Further, the Principal stockholder of the Company agreed to cancel 25,800,000 (25,800 post reverse split) shares of common stock in accordance with the Cancellation Agreement.

As explained in Note 8, on September 30, 2015 the holders of convertible notes payable exercised their option to convert the notes payable including interest into shares at a price of $1 per stock with the resultant issuance of 180,000 (180 post reverse split) shares.

LEGACY VENTURES INTERNATIONAL INC.

Notes to the Interim Condensed Financial Statements (Unaudited)

As at December 31, 2016

9.   STOCKHOLDERS’ EQUITY (DEFICIENCY)(continued)

COMMON STOCK - ISSUED AND OUTSTANDING (continued)

During October and December 2015, the Company issued 92,000 (92 post reverse split) shares of common stock to three investors at a price of $1.25 per common stock and received gross proceeds of $115,000.

On October 1, 2015, the Company issued 250,000 (250 post reverse split) shares of common stock to a director in connection with joining the board of directors. These shares were fair valued at $337,500, determined based on the market price on the date of issuance, and recorded as expense under professional fees in the statement of operations.

During October and December 2015, the Company issued 335,000 (335 post reverse split) shares of common stock to various third parties in connection with providing consulting services. These shares were fair valued at $452,350, and expensed during the year ended June 30, 2016. 

During February 2016, the Company issued 70,000 (70 post reverse split) shares of common stock to one investor at a cash price of $0.50 per common stock and received gross proceeds of $35,000.

On January 8, 2016 and March 31, 2016, the Company issued 250,000 (250 post reverse split) shares of common stock each to two directors in connection with joining the board of directors. These shares were fair valued at $290,000 and $22,500 respectively, determined based on the market price on the date of issuance, and expensed during the year ended June 30, 2016.

On January 26, 2016, the Company issued 100,000 (100 post reverse split) shares of common stock to third parties in connection with providing consulting services. These shares were fair valued at $89,000, determined based on the market price on the date of issuance, and expensed during the year ended June 30, 2016.

On October 28, 2016, the Company issued 35,537,000 (35,537 post reverse split) shares of common stock to the CEO, as consideration for management services. These shares were fair valued at $355,370, determined based on the market price on the date of issuance, and recorded in the statement of operations as management fees during the quarter ended June 30, 2016.

On November 16, 2016, the Board of Directors and stockholders of the Company approved a 1:1000 reverse split. As a result, the issued and outstanding common stock of the Company decreased from 65,064,000 shares prior to the reverse split to 65,064 shares following the reverse split. Prior year numbers have been adjusted from the earliest period presented, to reflect the effect of the reverse split.

LEGACY VENTURES INTERNATIONAL INC.

Notes to the Interim Condensed Financial Statements (Unaudited)

As at December 31, 2016

9.   STOCKHOLDERS’ EQUITY (DEFICIENCY)(continued)

COMMON STOCK - ISSUED AND OUTSTANDING (continued)

At December 31, 2016, there were 65,064 shares of common stock issued and outstanding of which 50,247 shares are restricted while 14,817 shares are unrestricted (June 30, 2016 – 29,527 shares of common stock - 15,247 shares restricted and 14,280 shares unrestricted).

The restricted shares have been issued to various parties through private placements, as start-up capital or as consideration for professional services. These restricted shares will be available for sale under Rule 144 of the Securities Act of 1933, as amended, when the conditions of Rule 144 have been met.

10.   GOODWILL AND INTANGIBLE ASSETS

Business Acquisition

ASC Topic 805, “Business Combinations” requires that all business combinations be accounted for using the acquisition method and that certain identifiable intangible assets acquired in a business combination be recognized as assets apart from goodwill. ASC Topic 350, “Intangibles-Goodwill and Other” (“ASC 350”) requires goodwill and other identifiable intangible assets with indefinite useful lives not be amortized, such as trade names, but instead tested at least annually for impairment (which the Company tests each year end, absent any impairment indicators) and be written down if impaired. ASC 350 requires that goodwill be allocated to its respective reporting unit and that identifiable intangible assets with finite lives be amortized over their useful lives.

As detailed in Note 4, the Company acquired control in RM Fresh, giving rise to goodwill and intangible assets.

Goodwill

The Company tests for impairment of goodwill at the reporting unit level. In assessing whether goodwill is impaired, the Company utilizes the two-step process as prescribed by ASC 350. The first step of this test compares the fair value of the reporting unit, determined based upon discounted estimated future cash flows, to the carrying amount, including goodwill. If the fair value exceeds the carrying amount, no further work is required and no impairment loss is recognized. If the carrying amount of the reporting unit exceeds the fair value, the goodwill of the reporting unit is potentially impaired and step two of the goodwill impairment test would need to be performed to measure the amount of an impairment loss, if any. In the second step, the impairment is computed by comparing the implied fair value of the reporting unit’s goodwill with the carrying amount of the goodwill. If the carrying amount of the reporting unit’s goodwill is greater than the implied fair value of its goodwill, an impairment loss in the amount of the excess is recognized and charged to statement of operations.

Goodwill amounting to $1,394,135 was immediately impaired based on the implied fair value of goodwill determined based on the enterprise value of the acquiree.

Intangible assets

Amortization expense of $23,450 on these intangible assets were recorded for the six months ended December 31, 2015.

11.   FORGIVENESS OF LOAN

Loan amounting to $17,974 provided by a related party to RM Fresh before acquisition to meet the working capital requirements and was unsecured, interest free and was repayable on demand. During six months ended December 31, 2015 the related party agreed to forgive the loan in favor of the Company

12.   RELATED PARTY TRANSACTIONS AND BALANCES

The Company’s transactions with related parties were, in the opinion of the management, carried out on normal commercial terms and in the ordinary course of the Company’s business.

Other than disclosed elsewhere in the condensed financial statements, the other related party transactions are:

Shares of common stock issued to the CEO, as consideration for management services. These shares were fair valued at $355,370, determined based on the market price on the date of issuance as explained in Note 9.

Management fees of $13,824 charged by entities owned by the stockholders of the Company for providing warehousing and other logistic services up to August 31, 2016, the date of disposal of RM Fresh (quarter ended September 30, 2015: $nil). These were recorded at fair value. Amounts owed to entities owned by the stockholders in respect of these services as at December 31, 2016 was $nil due to de-consolidation of RM Fresh ($60,145 as at June 30, 2016).

13.   SUBSEQUENT EVENTS

The Company’s management has evaluated subsequent events up to February 8, 2017, the date the condensed financial statements were issued, pursuant to the requirements of ASC Topic 855 and has determined that there is no significant subsequent event to report.

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

The information set forth in this Management's Discussion and Analysis of Financial Condition and Results of  Operations (“MD&A”)Forward-Looking Statements

This report contains certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, including, among others (i) expected changes in our revenue and profitability, (ii) prospective business opportunities and (iii) our strategy for financing our business. Forward-looking statements are statements other than historical information or statements of current condition. Some forward-looking statements may be identified bythat involve risks and uncertainties.  We use of termswords such as “believes”, “anticipates”, “intends” or “expects”. Theseanticipate, believe, plan, expect, future, intend and similar expressions to identify such forward-looking statements relate to our plans, liquidity, ability to complete financing and purchase capital expenditures, growth of our business including entering into future agreements with companies, and plans to successfully develop and obtain approval to market our product. We have basedstatements. You should not place too much reliance on these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs.

Although we believe that our expectations with respect to the forward-looking statements are based upon reasonable assumptions within the bounds of our knowledge of our business and operations, in light of the risks and uncertainties inherent in all future projections, the inclusion of forward-looking statements in this Quarterly Report should not be regarded as a representation by us or any other person that our objectives or plans will be achieved.

We assume no obligation to update these forward-looking statements to reflectstatements.  Our actual results or changes in factors or assumptions affecting forward-looking statements.

Our revenues and results of operations couldare likely to differ materially from those projectedanticipated in thethese forward-looking statements as a result of numerous factors, including, but not limited to, the following: the risk of significant natural disaster, the inability of our company to insure against certain risks, inflationary and deflationary conditions and cycles, currency exchange rates, and changing government regulations domestically and internationally affecting our products and businesses.for many reasons.

You should read the following discussion and analysis in conjunction with the Financial Statements and Notes attached hereto, and the other financial data appearing elsewhere in this Quarterly Report.

US Dollars are denoted herein by “USD”, "$" and "dollars".Plan of Operation

Overview

We wereLegacy Ventures International, Inc. (“Legacy” or the “Company”), was incorporated on March 4, 2014 under the laws of the State of Nevada. Since September 15, 2015, we havethe Company operated through a wholly-owned subsidiary RM Fresh Brands Inc. (“RM Fresh”), who services food and beverage retailers and distributors who are looking for innovative, trend-setting products across North America and in international markets. With a focus on sustainable, category changing consumables, RM Fresh acquired the rights to distribute an extensive portfolio of highly desirable brands, including Boxed Water, Cleansify, Uncle Si’s Iced Tea, Chef 5-Minute Meals, Gurkha Cigars, Shimla Foods, Aloe Gloe and Arriba Horchata. Through a network of sub-distribution partners across Canada, RM Fresh provides national product distribution and brokerage services. RM Fresh has an emerging focus on the United States and Middle East through the establishment of sub-distribution partners.

On August 31, 2016, in order to fund the ongoing operation and further development of RM, wethe Company consented to new third party investments into RM in the approximate total amount of $175,000, made in the form of cash and retirement of indebtedness owed by RM. As result of these new investments into RM, our ownership percentage of the company has beenwas reduced to twenty percent (20%). In addition, wethe Company entered into a new Shareholder Agreement with RM, under which ourthe shares in RM owned by the Company are subject to certain restrictions on transfer until such time as we declare a shareholder dividend of our RM shares following a going public transaction by RM, or in the alternative, for one (1) year after RM completes a going public transaction. Further, wethe Company disposed of an inter-company liability owed to us by RM in the amount of CDN$166,961.70. The liability was documented under a Demand Promissory Note issued to us by RM. WeThe Company then assigned the note to an investor in RM in exchange for $3,000. Finally, wethe Company entered into a mutual Release agreement with RM. Under the Release, wethe Company released and discharged all liabilities owed to us by RM (with the exception of the Demand Promissory Note). RM in turn released us of all liabilities owing to RM and released us all ongoing contractual and financial responsibilities to RM, including our contractual obligation to further fund management fees or other expenses to be incurred by RM.

On June 28, 2017, Randall Letcavage entered into a stock purchase agreement for the acquisition of an aggregate of 286,720 shares of Common Stock of the Company, representing approximately 91% of the issued and outstanding shares of Common Stock of the Company as of such date, from Rehan Saeed, the previous majority shareholder of the Company (the “Purchase Agreement”). The Purchase Agreements were fully executed and delivered, and the transaction consummated as of and at July 7, 2017. Consequently, Mr. Letcavage was able to unilaterally control the election of our board of directors, all matters upon which shareholder approval is required and, ultimately, the direction of our Company.

In addition, on June 28, 2017, Rehan Saeed submitted his resignation from all executive officer positions with the Company, including Chief Executive Officer and President, effective on the 10th day following the filing of a Schedule 14f-1 with the U.S. Securities and Exchange Commission. On June 28, 2017, Randall Letcavage was appointed as Chief Executive Officer, Chief Financial Officer, Director, effective immediately.

Going forward, we are continuing

On June 28, 2017, the Company entered into a 20% ownership stake in RM. Our management is also reviewing additional opportunities for new business.non-binding letter of intent to enter into a business combination with Nexalin Technology, Inc., a Nevada corporation (“Nexalin”).

On November 16, 2016,June 6, 2018, the Company amended its Articlesreported that Matthew Milonas entered into an agreement for the acquisition of Incorporation withan aggregate of 286,720 shares of Common Stock of the StateCompany, representing approximately 91% of Nevada in order to effectuatethe issued and outstanding shares of Common Stock of the Company (the “Shares”) as of such date, from Randall Letcavage, the majority shareholder of the Company (the “Agreement”). However, Mr. Milonas claims that he did not fully execute and deliver the Agreement and has disclaimed ownership of the subject shares. Mr. Letcavage will not contest Mr. Milonas’ claims and as a 1 for 1000 reverse stock split and to keepresult, Mr. Letcavage’s ownership of the authorizedshares did not change as disclosed.

On August 9, 2018, Mr. Letcavage, as the holder of 91% of the outstanding shares of common stock at 100,000,000 (the “Amendment”). The board of directors of the Company, approved the Amendmentappointment of Peter Sohn as the Chief Executive Officer and Chief Financial Officer and Director of the Company. Effective December 17, 2018, Mr. Sohn accepted the appointments as Chief Executive Officer and Chief Financial Officer and Director of the Company.

On December 17, 2018, Mr. Letcavage delivered to Peter Sohn an agreement for the acquisition by Mr. Sohn of the Shares from Mr. Letcavage, which agreement is dated August 9, 2018, but was delivered and deemed effective on November 15, 2016. TheDecember 17, 2018 (the “Agreement”). As a result Mr. Sohn is now able to unilaterally control the election of our board of directors, all matters upon which shareholder approval is required and, ultimately, the direction of our Company.

Share Exchange Agreement and Subscriptions

Effective September 11, 2017 (the “Closing Date”), Legacy Ventures International, Inc., (the “Company”) entered into that certain Share Exchange Agreement (the “Share Exchange Agreement”), dated as of September 1, 2017, by and among the Company, Nexalin and shareholders of Nexalin holding a majority of the issued and outstanding shares of Nexalin common stock (the “Nexalin Shareholders”). Pursuant to the Share Exchange Agreement, the Company agreed to exchange the outstanding equity stock of Nexalin held by the Nexalin Shareholders for units (the “Units”) consisting of an aggregate of approximately 25,000,000 newly issued shares of the Common Stock, $0.001 par value, of the Company approvedand warrants (the “Warrants”) to purchase an aggregate of approximately 25,000,000 newly issued shares of the AmendmentCommon Stock, $0.001 par value, of the Company. The warrants are two-year warrants exercisable at the end of one year for exercise prices between $1.50 and $1.75 per share, payable in cash. The warrants are must be promptly exercised, and subject to forfeiture if not so exercised, if the Company’s shares achieve a trading price of $3.00 or more for 30 consecutive days. At the Closing Date, the Company approved the issuance of approximately 15,500,000 shares of common stock to the Nexalin shareholders, together with warrants for the purchase of an additional 15,500,000 shares and reserved approximately 9,500,000 additional shares, together with the related warrants, for the issuance to remaining Nexalin shareholders who are expected to execute and deliver the Share Exchange Agreement, including approximately 1,100,000 shares and related warrants issuable immediately to consultants in connection with the transactions contemplated by written consentthe Share Exchange Agreement. On September 15, 2017, Legacy Ventures International, Inc., (the “Company”), filed a Current Report on November 15, 2016.Form 8-K (the “09/15/17 Form 8K”) announcing that effective September 11, 2017 (the “Closing Date”), the Company, on the one hand, and Nexalin Technology, Inc., a Nevada corporation (“Nexalin”), and shareholders of Nexalin holding a majority of the issued and outstanding shares of Nexalin common stock (the “Nexalin Shareholders”), on the other hand, entered into a Share Exchange Agreement (the “Share Exchange Agreement”), dated as of September 1, 2017.  In the Share Exchange Agreement the Company agreed to issue units in exchange for all the outstanding equity stock of Nexalin held by the Nexalin Shareholders. The “Units” were to consist of an aggregate of approximately 25,000,000 newly issued shares of the Company’s Common Stock, $0.001 par value, and warrants (the “Warrants”) to purchase an aggregate of approximately 25,000,000 newly issued shares of the Company’s Common Stock, $0.001 par value.

ResultsOn November 29, 2017, the Company filed an amendment to its 09/15/17 Form 8-K (the “11/29/17 Amended Form 8K”) announcing that the “Closing Date” as defined in the Share Exchange Agreement was September 30, 2017, and, further, that as of Operations – Three Months Endedthe date of the of the 11/29/17 Amended Form 8K, the holders of approximately 90% of the equity securities of Nexalin had exchanged their shares into shares of the Company’s Common Stock.

On December 31, 201626, 2017, the Company filed a Current Report on Form 8K (the “12/26/17 Form 8K”) announcing that on December 21, 2017, the Company’s sole officer and December 31, 2015director, Randy Letcavage, who was at the time Nexalin’s sole officer and director, resigned all officer and director positions with the Company and Nexalin. It was also announced that Mark White was appointed as the Interim Chief Executive Officer and Interim Chief Financial Officer of both the Company and Nexalin. Finally, it was announced that Rick Morad was appointed as the sole director of the Company and Nexalin.

On February 1, 2018, the Company filed a Current Report on Form 8K (the “02/01/18 Form 8K”) announcing that Mark White was appointed as a Company director.

On February 28, 2018, the Company filed a Current Report on Form 8K (the “02/28/18 Form 8K”) wherein the Company filed (i) the Nexalin audited financial statements for the twelve months ended June 30, 2017 and 2016; (ii) the Nexalin unaudited financial statements for the three months ended September 30, 2017 and 2016; and (iii) the Nexalin unaudited condensed pro forma financial statements for the Company for the twelve months ended June 30, 2017 and as of and for the three months ended September 30, 2017.

On March 30, 2018, the Company filed a Current Report on Form 8K (the “03/30/18 Form 8K”) announcing the appointment of Dr. Benjamin V. Hue as a director of the Company.

Notwithstanding the disclosure made in the 09/15/17 Form 8K and the11/29/17 Amended Form 8K, the consummation of the acquisition of Nexalin was subject to a number of contractual conditions and legal requirements. These included:

Once new management and a new board of directors were in place, they conducted a review of the Company and the steps taken and to be taken to consummate the acquisition of Nexalin.  After the due diligence review was performed, including legal, accounting and business investigations of the Company, the new management and new board of directors became aware of a series of issues that put into question whether there had been or could be completion of the acquisition transaction and that put into issue whether past actions by the Company complied with applicable legal requirements and better business practice. After performing this due diligence  review, the new board of directors determined that many of the requirements of and pre-conditions to the Share Exchange Agreement were not completed and condition of the Company was not satisfactory to accomplish the objectives of the Share Exchange Agreement. 

After careful consideration, the current management and board of directors believe that the previously announced share exchange, in fact, had not closed, and because of the many issues identified in its due diligence review, some of which cannot ever be satisfied or adequately remedied, it considers that the Share Exchange Agreement is null and void ab initio.

It is the opinion of current management and the current board of directors, based on the nullity of the Share Exchange Agreement, that Nexalin never was and is not now a wholly owned subsidiary of the Company.

Liquidity and Capital Resources

For the three months ended

As of December 31, 2016,2017, the Company's primary source of liquidity consisted of $60 in cash.  The Company generated no revenue. For the three months endedfinanced its operations through a combination of short -term advances.

The Company has sustained net losses which have resulted in a total stockholders' deficit at December 31, 2015,2017 and is currently experiencing a shortfall in operating capital which raises doubt about the Company generated $37,418 in revenue, which pertained to the previously wholly owned subsidiary company RM Fresh. The Company's financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The financial statements do not include any adjustment relating to recoverability and classification of recorded amounts of assets and liabilities that might be necessary should the Company be unableability to continue as a going concern.

The Company hasanticipates a minimumnet loss for the year ending June 30, 2018 and with the expected cash balance availablerequirements for paymentthe coming months, without additional cash inflows from an increase in revenues combined with continued cost-cutting or a receipt of ongoing operating expenses, has experienced lossescash from operations, and it does not have a source of revenue. Its continued existencecapital investment, there is dependent upon itssubstantial doubt as to the Company's ability to continue operations.

We may seek to execute its operating plan and to obtainsecure additional debt or equity financing.capital to finance substantial business development initiatives.  There is presently no agreement in place with any source of financing for the Company and there can be no assurance that the necessary debt or equity financingCompany will be available,able to raise any additional funds, or that such funds will be available on terms acceptable terms.  Funds raised through future equity financing will likely be substantially dilutive to current shareholders.  Lack of additional funds will materially affect the Company and its business, and may cause the Company to cease operations.  Consequently, shareholders could incur a loss of their entire investment in the Company.

Revenue and gross profit

The Company had no revenue during the three months ended December 31, 2016. The Company had $37,418 in revenue during the three months ended December 31, 2015 from sales made by RM Fresh. The Company made $0 in gross profit during the three months ended December 31, 2016, as compared to ($15,409) gross loss during the three months ended December 31, 2015, pertaining to the operations of RM Fresh.

Operating ExpensesNet Cash Used in Investing Activities

Our total operating expenses were $375,069 and $670,864 forNet cash used in investing activities was $500,000 through the three months ended December 31, 2016 and 2015, respectively. The decrease is primarily due toinvestment in a decrease of $544,079 in professional fees, partially offset by the increase in management fee by $301,455.promissory note.

The high professional expenses during three and six months ended December 31, 2015 pertained to the activities as a result of acquisition of RM Fresh on September 30, 2015. These were attributable to the following factors:

Management fee during the three months ended December 31, 2016 pertained to shares of common stock issued to the CEO, as consideration for management services. These shares were fair valued at $355,370, determined based on the market price on the date of issuance. Management fee during three months ended December 31, 2015, pertained to fees of $53,915 chargedNet Cash Provided by entities owned by the shareholders of the Company for providing warehousing and other logistics services.Financing Activities

Other Income / Expenses

During the three months ended December 31, 2016, we had immaterial other expenses/income. During the three months ended December 31, 2015, other expenses mainly comprised amortization of intangible asset amounting to $23,450, partially offset by income arising from forgiveness of loanNet cash provided by a related party to RM Fresh amounting to $17,974.

Translation Adjustment

Translation adjustment as afinancing activities was $522,925, primarily the result of the currency exchange rate between U.S. Dollarissuance of a Convertible note and Canadian Dollar was $0 for the three months ended December 31, 2016, compared to $20,807 for the three months ended December 31, 2015.

Comprehensive Loss

We reported a comprehensive loss of $375,127 and $657,285 for the three months ended December 31, 2016 and 2015, respectively. The decrease is primarily due to a significant decrease in professional fees partially offset by increase in management fee.

Results of Operations – Six Months Ended December 31, 2016 and December 31, 2015

third-party advances.  For the six months ended December 31, 2016, the Company generated $74,042received $29,002 in revenue, pertaining to operationsfinancing from shareholders.

Results of RM Fresh upto August 31, 2016 (the date of de-consolidation)Operations

Revenues.  For the three and six months ended December 31, 2015,2017, revenue and cost of sales was nil and $nil and $74,042 and $50,665 for the Company generated $37,418 in revenue. The Company's financial statements have been prepared on a going concern basis, which contemplates the realization of assetsthree and satisfaction of liabilities in the normal course of business. The financial statements do not include any adjustment relating to recoverability and classification of recorded amounts of assets and liabilities that might be necessary should the Company be unable to continue as a going concern.

The Company has a minimum cash balance available for payment of ongoing operating expenses, has experienced losses from operations, and it does not have a source of revenue. Its continued existence is dependent upon its ability to continue to execute its operating plan and to obtain additional debt or equity financing. There can be no assurance the necessary debt or equity financing will be available, or will be available on terms acceptable to the Company.

Revenue and gross profit

Revenue of $74,042 during the six months ended December 31, 2016, represents sales made by RM Fresh. Revenue of $37,418 during the six months ended December 31, 2016, represents sales made by RM Fresh. The Company made a gross profit of $23,377 during the six months ended December 31, 2016, as compared to a gross loss of $15,409 during the six months ended December 31, 2015, mainly through increased sales and a relatively favorable exchange rate.

Operating Expenses

Our total operating expenses were $382,207 and $728,583respectively. Results, for the six months ended December 31, 2016, and 2015, respectively. The decrease is primarily due to a decreaseinclude the results of $584,379 in professional fees partially offset by the increase in management fee by $315,279.RM.

The high professionalOperating expenses. Operating expenses duringfor the three and six months ended December 31, 2015 pertained to2017 was $16,453 compared with $375,069 and $405,584 for the activities as a result of acquisition of RM Fresh on September 30, 2015. These were attributable to the following factors:

Management fee during the six months ended December 31, 2016, mainly pertained to shares of common stock issuedrespectively.  Operating expenses in the current year periods were lower largely due to the CEO, as considerationmanagement fees incurred in the 2016 periods.

Other Income (Expenses).Other expenses for management services. These shares were fair valued at $355,370, determined based on the market price on the date of issuance. Management fee duringthree and six months ended December 31, 2015, pertained to fees2017 was $2,035, and $3,257 respectively, compared with other income (expense) of $53,915 charged by entities owned by$(58), and $83,223 for the shareholders of the Company for providing warehousingthree and other logistics services.

Other Income / Expenses

During the six months ended December 31, 2016, we recorded a gain amounting2016.  Included in this category is interest expense related to $84,021, which resulted duepromissory notes issued by the Company.  Additionally, the Company recognized interest income of $5,041 and $6,082, related to the write-offreceipt of our remaining investment in RM Fresh. Duringa promissory note for the three and six months ended December 31, 2015, other expenses mainly comprised immediate impairment2017. Interest expense of goodwill amountingrelated to $1,394,135the issuance of a convertible notes was $5,444 and amortization of intangible asset amounting to $23,450.

Translation Adjustment

Translation adjustment as a result of$6,897 for the currency exchange rate between U.S. Dollarthree and Canadian Dollar was $0 for the six months ended December 31, 2016, compared to $14,103 for the six months ended December 31, 2015.

Comprehensive Loss

We reported a comprehensive loss of $298,984 and $2,117,956 for the six months ended December 31, 2016 and 2015, respectively. The decrease is primarily due to higher level of expense (mainly impairment of goodwill) pertaining to RM Fresh.

Liquidity and Capital Resources

As of December 31, 2016, we had cash balance of $4,405. As of June 30, 2016, we had cash balance of $2,993. Increase in cash is in line with normal business activities.

The following is a summary of the Company's cash flows provided by (used in) operating, investing, and financing activities for the six months ended December 31, 2016 and 2015 respectively: