On January 1, 2017, the Company adopted the accounting pronouncement issued by the FASB to simplify the accounting for goodwill impairment. This guidance eliminates the requirement that an entity calculate the implied fair value of goodwill when measuring an impairment charge. Instead, an entity would record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value. The Company adopted this pronouncement on a prospective basis. The adoption of this guidance did not have a material impact on the Company’s unaudited condensed combined financial position and/or results of operations.

Gripevine, Inc. Notes to Interim Condensed Combined Financial Statements For the Quarterly Period Ended August 31, 2018 (Expressed in US dollars)

At grant date the fair value of these warrants werewas determined at $2,110,333. As the issuance of warrants related to past services, therefore, this amount was recorded as stock basedstock-based compensation in the combined statements of operations during the year (fourth quarter) ended February 28, 2017.

As at November 30, 2017August 31, 2018 and February 28, 2017,2018, there were 18,275,000 warrants were outstanding, fully vested and with a remaining contractual life term of 2.001.25 and 2.751.75 years, respectively.

Stock Based Options

On August 16, 2017 (Tranche 1), the Company approved a Directors, Officers, Employees and Consultants Stock Option Plan, under which it authorized 50,000,000 options and issued 5,486,500 options. This plan was established to enable the Company to attract and retain the services of highly qualified and experience directors, officers, employees and consultants and to give such personpersons an interest in the success of the Company.

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Gripevine, Inc. Notes to Interim Condensed Combined Financial Statements For The Three and Nine Months Ended November 30, 2017 (Expressed in US dollars)

On November 27, 2017 (Tranche 2), the Company approved the issue of a second tranche of 120,000 options to a new Director of the Company pursuant to the Directors, Officers, Employees and Consultants Stock Option Plan, under which it authorized 50,000,000 options.

On May 14, 2018 (Tranche 3), the Company issued a third tranche of 2,000,000 options to a new Consultant of the Company pursuant to the Directors, Officers, Employees and Consultants Stock Option Plan, under which it authorized 50,000,000 options. On July 31, 2018, this contract with the Consultant was terminated and the 2,000,000 options were forfeited.

As at November 30, 2017,August 31, 2018 and February 28, 2018, the companyCompany has issued 5,606,500 options.options respectively.

The fair value of each option granted is estimated at the time of grant using Black-Scholes option pricing model with the following assumptions:

 

		Tranche 1				Tranche 2				Tranche 3
Forfeiture rate			0.00	%			0.00	%			0.00	%
Stock price		$	0.200			$	0.200			$	0.200
Exercise price		$	0.200			$	0.200			$	0.235
Volatility			291	%			259	%			136	%
Market price		$	0.200			$	0.200			$	0.200
Risk free interest rate			1.49	%			1.62	%			2.70	%
Expected life			5Years				5Years				5Years
Expected dividend rate			0.00	%			0.00	%			0.00	%
Fair value of options		$	0.200			$	0.200			$	0.200

For Tranche 1, 50% of the grants will vest immediately and 50% will vest one year from grant date, and for Tranche 2, 100% of the grants vest immediately.immediately, for Tranche 3, 25% of the grants vest on October 14, 2018 and thereafter 12.5% every quarter. 100% of the options for Tranche 3 have been forfeited.

All grants will expire on the fifth anniversary of the grant date. The risk-free interest rate is based on the yield of U.S. Treasury securities that correspond to the expected holding period of the options. The volatility was determined based on company’sthe Company’s historical stock prices. The expected forfeiture (attrition) rates were based on the position of the consultants receiving the options. The dividend yield was based on an expected future dividend rate for the period at the time of grant.

The following table summarizes the stock option activities of the Company:

		Number of options				Weighted average exercise price ($)
Granted			5,606,500				0.200
Excercised			—				0.200
Outstanding as of November 30, 2017			5,606,500				0.200

The fair value of tranche 1 options at the issuance date was determined at $1,087,917 out of which $136,076 and $725,046 were expensed during the three and nine months ended November 30, 2017 respectively based on vesting period and were included in stock based compensation with corresponding credit to additional paid-in-capital.

The fair value of tranche 2 options at the issuance date was determined at $19,353 and expensed entirely in the quarter ended November 30, 2017.

As at November 30, 2017 there were 5,606,500 stock options outstanding, 2,863,250 vested and with a remaining contractual life term of 4.71 years

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Gripevine, Inc. Notes to Interim Condensed Combined Financial Statements For The Three and Nine Monthsthe Quarterly Period Ended November 30, 2017August 31, 2018 (Expressed in US dollars)

The following table summarizes the stock option activities of the Company:

		Number of options				Weighted average exercise price
Granted			7,606,500				0.209
Excercised			—				0.209
Forfeited			(2,000,000	)			0.235
Outstanding as of August 31, 2018			5,606,500				0.200

The fair values of options relating to Tranche 1, Tranche 2 and Tranche 3 at the issuance dates were determined at $1,087,917, $19,353 and $308,668 respectively, which are to be expensed based on vesting conditions.

During the quarter ended August 31, 2018, the Company recorded $154,153 relating to the above Tranches (2017: $588,970) and were included in stock-based compensation in the statement of operations with corresponding credit to additional paid-in-capital.

As at August 31, 2018, there were 5,606,500 stock options outstanding and vested, with remaining contractual life term ranges from 4.00 to 4.25 years.

8. RELATED PARTY TRANSACTIONS AND BALANCES

The Company’s transactions with related parties were carried out on normal commercial terms and in the normal course of the Company’s business. Other than disclosed elsewhere in the unaudited condensed combined financial statements, the related party transactions and balances are as follows:

Research and development expenses for the three and nine months ended November 30,August 31, 2018 and 2017 include consulting charges from shareholders and related parties of $54,524$45,804 and $182,619, respectively (2016: $104,267 and $273,335 respectively).$64,843, respectively.

9. COMMITMENTS

On March 8, 2016, the Company entered into an operating lease contract for its office premises in Oakville, Ontario for a three year and eight months term which commenced fromon May 1, 2016. The monthly lease payment is between $3,350$2,566 to $4,890$3,746 plus applicable taxes.

On December 6, 2016, the Company entered into a second operating lease contract for its additional office premises in Oakville, Ontario for a three yearthree-year term commencing from January 1, 2017. The monthly lease payment is between $2,500$1,915 to $3,800$2,911 plus applicable taxes.

10. SUBSEQUENT EVENTS

The Company’s management has evaluated subsequent events up to January 16,October 15, 2018, the date the interim condensed combined financial statements were issued, pursuant to the requirements of ASC 855 and has determined the following materialthere were no subsequent events:

During December 2017, the Company sold 428,571 shares of common stockevents to one investor through a private placement at a price of $0.35 per common stock and received gross proceeds of $150,000.

During December 2017, our Board of Directors (the “Board”) approved an aggregate of 5,674,944 shares of our restricted common stock to certain non-affiliated consultants (the “Consultants”) in consideration of various services rendered to the Company. As of the date of this Quarterly Report, these shares are not issued.report.

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

The following discussion provides an analysis of the Company’s financial condition and results of operations and should be read in conjunction with the Interim Condensed Combined Financial Statements and notes thereto included in Item 1 of Part I of this Quarterly Report on Form 10-Q and with the Company’s Annual Report on Form 10-K filed for the fiscal year ended February 28, 2017.2018. The discussion contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors.

Overview

Gripevine, Inc., formerly known as Baixo Relocation Services, Inc. (the "Company"“Company”), was incorporated in the state of Nevada on January 7, 2014.2014, to operate as a relocation service provider for clients moving to the State of Goa, India. On May 31, 2016, Rosy Rodrigues, (“Rodrigues”), our prior majority shareholder, sole executive officer and member of the Board of Directors, entered into those certain stock purchase agreements effective October 3, 2016 (collectively, the “Stock Purchase Agreements”) with certain individuals and/or entities, (collectively, the “Investors”). In accordance with the terms and provisions of the Stock Purchase Agreements, Rodrigues sold and transferred the control block of the Company consisting of 5,000,000 shares of restricted common stock, at a per share price of $0.037, representing approximately 62.5% of the total issued and outstanding shares of common stock and resulting in a change in control. The Company operated as a relocation service provider for clients moving to the State of Goa, India.

Effective February 28, 2017, we entered into a share exchange agreement (the “Share Exchange Agreement”) with MBE Holdings Inc., a private corporation organized under the laws of Delaware (“MBE”) and the shareholders of MBE (the “MBE Shareholders”), pursuant to which Share Exchange Agreement we acquired all the technology and assets and assumeassumed all liabilities of MBE, and MBE became our wholly-owned subsidiary. In accordance with the terms and provisions of the Share Exchange Agreement, an aggregate of 5,248,626 shares of our restricted common stock are to bewere issued to the MBE Shareholders in exchange for 157,458,778 of the total issued and outstanding shares of MBE. As of the date of this Quarterly Report, an aggregate 4,720,532 shares of our restricted common stock have been issued to the MBE Shareholders. See “Part II. Item 2. Unregistered Sales of Equity Securities and Use of Proceeds – Share Exchange Agreement”.

MBE was formed as a limited liability company on April 13, 2010, and subsequently converted into a corporation on August 3, 2012, under the laws of the State of Delaware. MBE is engaged in research and development activities to offer an online complaint resolution platform for consumers and business, including ratings, reviews and polling’s. As such, its efforts to date have been devoted in building technology that enables access to this market through the development of a tangible product. The Share Exchange Agreement resulted in a change in overall business operations of the Company bringing potential value to our shareholders. Following the Share Exchange Agreement, we ceased operations as a relocation service provider and engaged in developing and building an online resolution platform.

Since consummation of the Share Exchange Agreement resulting in MBE being our wholly-owned subsidiary, we have been involved in the ongoing development and marketing of “Gripevine”, which is a social customer experiencefeedback platform for social customer service and consumer reviews. “Gripevine” includes a proprietary process to assist companies in resolvingmanaging the customer service complaintsfeedback (the “Gripevine Proprietary Process” or “Gripevine”). The Gripevine Proprietary Process helps consumers achieve resolutions while enabling businesses with a cost-efficient way to manage reputation and improve consumer loyalty. Our platform includes the handlingmanagement of ratings, reviews, complaint resolution statuses while offering market data collection features such as scoring, polling, comments, voting, and credibility points – all with the aim of creating a home for connections, resolution, business improvement, and loyalty enhancement. Consumers with legitimate customer service complaintsfeedback can post it (“plant a gripe”) and connect with companies who in turn can interact with their customers on a level playing field to find an amicable resolution.

Unlike other review sites that cater specifically to accumulating and displaying consumer feedback and creating pay-walls in order to connect directly with consumers, the Gripevine business model offers significant value toa pay-wall free solution so that both consumers and businesses.businesses can connect and resolve freely. Management of the Corporation believes that the Gripevine Proprietary Process brings fairness and balance by: (i) ensuring users are real; (ii) allowing companies to reach out and verify customer identity; (iii) flagging as fake those consumers who are not identifiable; and (iv) providing companies free access to their customers. Gripevine’s unique proposition in this social customer experience space is to create consumer-company connections in order to create brand reputation and drive loyalty through efficient and effective handling of online customer feedback and commentary.

As Gripevine prepares to transition from its current R&D beta stage to marketing its platform to both consumers and businesses it has identify several opportunities in the customer feedback space. Gripevine sees its consumer to business social platform as a powerful social customer feedback engine connecting consumers to companies while its back end proprietary social CRM dashboard holds tremendous possibilities as a stand-alone customer success engine managing the customer feedback cycle.

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Results of Operations

The following discussions are based on our interim condensed combined financial statements, including our wholly owned subsidiary. These charts and discussions summarize our financial statements for the threethree- and nine month periodsix-months periods ended November 30, 2017 and November 30, 2016,August 31, 2018, and should be read in conjunction with the Company’s audited combined financial statements for the yearsyear ended February 28, 2017 and February 29, 20162018 and notes thereto included in the Form 10-K filed with the SEC on June 14, 2017.May 29, 2018.

The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. The Corporation’s actual results could differ materially from those discussed in the forward lookingforward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to those discussed below and elsewhere in this Quarterly Report on Form 10-Q. The financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.

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Nine MonthThree-Months Period Ended November 30, 2017August 31, 2018 Compared to Nine MonthThree-Months Period Ended November 30, 2016

Total Revenue. We did not generate any revenue during the nine monththree-months periods ended November 30, 2017August 31, 2018 or November 30, 2016.August 31, 2017. 

Operating expenses. During the nine monththree-months period ended November 30, 2017,August 31, 2018, we incurred operating expenses in the amount of $1,644,983$454,124, compared to operating expenses incurred during the nine monthcomparable 2017 period ended November 30, 2016 of $30,089,716$877,003 (a decrease of $28,444,733)$422,879). Operating expenses include: (i) general and administrative of $300,818 (2016: $290,323)$124,424 (2017: $85,903); (ii) research and development expenses of $599,766 (2016: $778,582)$175,547 (2017: $202,130); and (iii) stock basedstock-based compensation of $744,399 (2016: $29,020,811)$154,153 (2017: $588,970). General and administrative expenses increased by $10,495$38,521 mainly due to the hiring of an increase in professional fees.administrative consultant. Research and development expenses decreased by $178,816 based on streamlining$26,583 due to efforts to streamline the services and scope of work of existing consultants. Stock based compensation also decreased by $28,276,412 mainly relating$434,817 due to (a) thea lower allocation of fair value of $38,694,414 for which a charge for the nine months ended November 30, 2016 was $29,020,811 pertaining to the issuance of 1,000,000 shares of Series A Preferred Stock to Richard Hue, our President/Chief Executive Officer; and (b) the valuation of the grant of 5,606,5005,486,500 stock options resultinggranted in $744,399 expensed2017. 

Net Loss. Thus, during the nine monththree-months period ended November 30, 2017.

Net Loss.OurAugust 31, 2018, a net loss for the nine month period ended November 30, 2017of ($454,124) was $1,644,983incurred, compared to a net loss of $30,089,716 during the nine month period ended November 30, 2016 (a decrease in net loss of $28,444,733). We did not generate any revenue during the nine month periods ended November 30, 2017 and November 30, 2016, respectively.

Translation Adjustment.During the nine month period ended November 30, 2017, we incurred a translation adjustment of ($104,305) compared to ($18,539) incurred during the nine month period ended November 30, 2016 representing change in the foreign exchange rate as a result of translating transaction and balances of Canadian based subsidiary.

Comprehensive income (loss). Thus, this resulted in comprehensive loss of ($1,540,678) or ($0.013) per share for the nine month period ended November 30, 2017 compared to a comprehensive loss of ($30,071,177) or ($0.251) per share for the nine month period ended November 30, 2016. The weighted average number of shares outstanding was 120,909,775 for nine month periods ended November 30, 2017 compared to 120,000,000 for nine months period ended November 30, 2016.

Three Month Period Ended November 30, 2017 Compared to Three Month Period Ended November 30, 2016

Total Revenue.We did not generate any revenue during the three month periods ended November 30, 2017 or November 30, 2016.

Operating expenses. During the three month period ended November 30, 2017, we incurred operating expenses in the amount of $420,375 compared to operating expenses incurred during the three month period ended November 30, 2016 of $10,069,929 (a decrease of $9,649,554). Operating expenses include: (i) general and administrative of $118,262 (2016: $77,895); (ii) research and development expenses of $146,684 (2016: $318,430); and (iii) stock based compensation of $155,429 (2016: $9,673,604). General and administrative expenses increased by $40,367 mainly due to an increase in professional fees. Research and development expenses decreased by $171,746 based on streamlining the services and scope of work of existing consultants. Stock based compensation also decreased by $9,518,175 relating to: (a) the fair value of $38,694,414 for which a charge877,003) for the three months ended November 30, 2016 was $ 9,673,604 pertaining to the issuance of 1,000,000 shares of Series A preferred stock to Richard Hue, our President/Chief Executive Officer; and (ii) the valuation of the grant of 5,606,500 stock options resulting in $155,429 expensed during the three month period ended November 30,August 31, 2017.

Net Loss.Thus, during the three month period ended November 30, 2017, this resulted in a net loss of ($420,375) compared to a net loss of ($10,069,929) for the three month period ended November 30, 2016.

Translation Adjustment.During the three month period ended November 30, 2017, we incurred a translation adjustment of $79,679 compared to ($21,478) incurred during the three month period ended November 30, 2016 representing change in the foreign exchange rate as a result of translating transaction and balances of Canadian based subsidiary.

Comprehensive loss. Thus, this resulted in comprehensive loss of $500,054 or $0.004 per share for the three month period ended November 30, 2017 compared to a comprehensive loss of $10,048,451 or $0.084 per share for the three month period ended November 30, 2016. The weighted average number of shares outstanding was 122,749,321 for three month periods ended November 30, 2017 compared to 120,000,000 for three month period ended November 30, 2016.

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Translation Adjustment. During the three-months period ended August 31, 2018, we incurred a translation adjustment of $19,932 compared to ($232,279) for the 2017 period, representing change in the foreign exchange rate as a result of translating transaction and balances of our Canadian-based subsidiary.

Comprehensive loss. This resulted in a comprehensive loss of $474,056 or $0.0034 per share for the three-months period ended August 31, 2018 compared to a comprehensive loss of $644,724 or $0.0073 per share for the 2017 period. The weighted average number of shares outstanding was 134,592,150 for three-months period ended August 31, 2018 compared to 120,000,000 for three-months period ended August 31, 2017.

Six-Months Period Ended August 31, 2018 Compared to Six-Months Period Ended August 31, 2017

Total Revenue. We did not generate any revenue during the six-months periods ended August 31, 2018 or August 31, 2017.

Operating expenses. During the six-months period ended August 31, 2018, we incurred operating expenses in the amount of $905,198, compared to operating expenses incurred during the comparable 2017 period of $1,224,608 (a decrease of $319,410). Operating expenses include: (i) general and administrative of $246,968 (2017: $182,556); (ii) research and development expenses of $352,142 (2017: $453,082); and (iii) stock-based compensation of $306,088 (2017: $588,970). General and administrative expenses increased by $64,412 mainly due to the hiring of an administrative consultant. Research and development expenses decreased by $100,940 due to efforts to streamline the services of existing consultants. Stock based compensation also decreased by $282,882 due to a lower allocation of the fair value of 5,486,500 stock options granted in 2017.

Net Loss. Thus, during the six-months period ended August 31, 2018, a net loss of ($905,198) was incurred, compared to a net loss of ($1,224,608) for the six months ended August 31, 2017.

Translation Adjustment. During the six-months period ended August 31, 2018, we incurred a translation adjustment of $52,244 compared to ($183,984) for the 2017 period, representing change in the foreign exchange rate as a result of translating transaction and balances of our Canadian-based subsidiary.

Comprehensive loss. This resulted in a comprehensive loss of $957,442 or $0.0068 per share for the six-months period ended August 31, 2018 compared to a comprehensive loss of $1,040,624 or $0.0102 per share for the 2017 period. The weighted average number of shares outstanding was 133,774,136 for six-months period ended August 31, 2018 compared to 120,000,000 for six-months period ended August 31, 2017.

Liquidity and Capital Resources

Nine Month Period Ended November 30, 2017As of August 31, 2018

As at the nine month period ended November 30, 2017,August 31, 2018, our current assets were $184,873$147,862 and our current liabilities were $2,930,553,$2,801,100, which resulted in a working capital deficit of $2,745,680. As at the nine month period ended November 30, 2017,$2,653,238. At August 31, 2018, current assets were comprised of: (i) $153,082$117,439 in cash; and (ii) $31,791$30,423 in prepaid and other receivables. As at the nine month period ended November 30, 2017,receivables, while current liabilities were comprised of: (i) $26,683$41,787 in accounts payable; (ii) $28,083$16,442 in accrued liabilities; (iii) $2,046,526$2,072,221 in loans payable; (iv) $174,904$80,429 due to related parties; and (v) $654,357$590,221 due to shareholder.

As of the nine month period ended November 30, 2017,August 31, 2018, our total assets were $221,882$177,390 comprised of: (i) current assets of $184,873;$147,862; and (ii) equipment, net of depreciation of $37,009.$29,528. The increase in total assets during the nine monthsix-months period ended November 30, 2017August 31, 2018 from fiscal year ended February 28, 20172018 was primarily due to an increase in cash of $120,404.$93,431.

As of the nine month period ended November 30, 2017,August 31, 2018, our total liabilities were $2,930,553$2,801,100 comprised of current liabilities. The increasedecrease of $258,995$75,979 in total liabilities during the nine monthsix-months period ended November 30, 2017August 31, 2018 from fiscal year ended February 28, 20172018 was primarily due to an increasedecreases in loans payableaccrued liabilities of $223,573, accounts payable$12,201, due to related parties of $4,358$95,554, and amounts due to a shareholder of $85,810$36,029, offset by a decreaseincreases in accrued liabilitiesaccounts payable of $50,744$30,255 and due to related partyloans payable of $4,002.$37,550.

Stockholders’ deficit increaseddecreased from ($2,576,944) for fiscal year ended2,793,193) at February 28, 20172018 to ($2,708,671) for the nine month period ended November 30, 2017.2,623,710) at August 31, 2018.

Cash Flows from Operating Activities

We have generated negative cash flows from operating activities. For the nine monthsix-months period ended November 30, 2017,August 31, 2018, net cash flows used in operating activities was ($942,751)576,696) compared to ($1,046,566)655,498) for the nine month period ended November 30, 2016.comparable 2017 period. Net cash flows used in operating activities consisted primarily of net loss of ($1,644,983) (2016: $30,089,716)905,198) (2017: $1,224,608), which was adjusted by stock basedstock-based compensation of $744,399 (2016: $29,020,811)$306,088 (2017: $588,970) and depreciation of $17,780 (2016: $7,963)$6,915 (2017: $11,917). Net cash flows used in operating activities was further changed by: (i) an increase of $11,105 (2016:to $3,206 (2017: ($2,641)7,926)) in prepaid expenses and other receivables; (ii) an increase of $3,836 (2016: $20,841)to $30,629 (2017: $9,345) in accounts payable; and (iii) a decrease ofto ($52,678) (2016:11,924) (2017: ($3,824)49,048)) in accrued liabilities.

Cash Flows from Investing Activities

For the nine monthsix-months period ended November 30, 2017,August 31, 2018, we used cash$4,901 for the purchase of $11,998 (2016: $14,486)equipment, as compared to $9,318 used in investing activities, which consisted of2017 for the purchase of equipment.

Cash Flows Fromfrom Financing Activities

Net cash flows provided from financing activities during the nine monthsix-months period ended November 30, 2017August 31, 2018 was $1,100,441,$675,512, which consisted of: (i) $873,163$625,000 in proceeds from issuance of shares;shares and $76,376 in proceeds from loans payable, offset by (i) ($1,480) in due to related parties and (ii) $166,687($24,384) due to a shareholder. During the six-months period ended August 31, 2017, cash flows provided by financing activities was $801,480, which consisted of $505,980 in proceeds from the issuance of shares, $240,219 in loans payable;payable, and (iii) $69,552$64,099 due to a shareholder, which was offset by ($8,961) due to a related party. During the nine month period ended November 30, 2016, cash flows provided by financing activities was $1,064,424, which consisted of $951,666 in loans payable and $159,792 due to a shareholder, which was offset by ($47,034)8,818) due to related parties.

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Material Commitments

The balances due to related parties and shareholder are interest free, unsecured and are repayable on demand. The balances due to related parties and shareholders are mainly in connection with the services and financing provided for the development of an online complaint resolution platform.

Off-Balance Sheet Arrangements

There were no off-balance sheet arrangements during the nine month periodquarter ended November 30, 2017August 31, 2018 that have, or are reasonably likely to have, a current or future effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our interests.

 

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Plan of Operation

As at November 30, 2017,August 31, 2018, we had an accumulated deficit of $48,279,952$51,063,799 and we will require additional financing in order to enable us to proceed with our plan of operations.

When we will require additional financing, there can be no assurance that additional financing will be available to us, or that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, we will not be able to meet our other obligations as they become due. We are pursuing various alternatives to meet our immediate and long-term financial requirements.

We anticipate continuing to rely on equity sales of our common stock in order to fund our business operations. Issuances of additional shares will result in dilution to existing stockholders. There is no assurance that we will achieve any additional sales of equity securities or arrange for debt or other financing to fund our planned business activities.

Our auditor has issued a going concern opinion. This means that there is substantial doubt that we can continue as an on-going business for the next twelve months unless we generate sufficient revenues. There is no assurance we will ever reach that point. In the meantime, the continuation of the Company is dependent upon the continued financial support from our shareholders, our ability to obtain necessary equity financing to continue operations and the attainment of profitable operations.

Our operations and financial results are subject to various risks and uncertainties that could adversely affect our business, financial condition and results of operations.

We require approximately $150,000$1,500,000 for the next 12 months as a reporting issuer and additional funds are required. Before generation of revenue, the additional funding may come from equity financing from the sale of our common stock or loans from management or related third parties. In the event we do not raise sufficient capital to implement its planned operations or divest, your entire investment could be lost.

We have not paid any sums for public relations or investor relations.

Recent Accounting Pronouncements

Please see Note 4 — “Recent“Summary of Significant Accounting Standards”Policies” to the Condensed ConsolidatedCombined Financial Statements for a discussion of the effects of recently issued accounting pronouncements.

Critical Accounting Policies

Our financial statements are prepared in accordance with accounting principles generally accepted in the United States. To apply these principles, we must make estimates and judgments that affect our reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. In many instances, we reasonably could have used different accounting estimates and, in other instances, changes in the accounting estimates are reasonably likely to occur from period to period. Accordingly, actual results could differ significantly from our estimates. To the extent that there are material differences between these estimates and actual results, our financial condition or results of operations will be affected. We base our estimates and judgments on historical experience and other assumptions that we believe to be reasonable at the time and under the circumstances, and we evaluate these estimates and judgments on an ongoing basis. We refer to accounting estimates and judgments of this type as critical accounting policies, judgments, and estimates. Management believes there have been no material changes during the three months ended November 30, 2017August 31, 2018 to the critical accounting policies reported in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended February 28, 2017.2018.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Pursuant to Rule 13a-15(b)We have carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer/Principal Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, (“Exchangeas amended (the “Exchange Act”),) as of August 31, 2018. Based on such evaluation, we have concluded that, as of such date and for the Company carried out an evaluation, with the participation of the Company’s management, including the Company’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) (the Company’s principal financial and accounting officer), of the effectiveness of the Company’sreason described below, our disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the Company’s CEO and CFO concluded that the Company’s disclosure controls and procedures arewere not effective as of November 30, 2017 to ensure that information required to be disclosed by the Companyus in the reports that the Company files or submits under theour Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’sapplicable SEC rules and forms, and that such information is accumulated and communicated to the Company’sour management, including the Company’s CEO and CFO,our Chief Executive Officer/Principal Financial Officer, as appropriate, to allow timely decisionsdiscussions regarding required disclosure for the reason described below.disclosure.

Because of our limited operations, we have a limited number of employees which prohibits a segregation of duties. In addition, we lack a formal audit committee with a financial expert. As we grow and expand our operations we will engage additional employees and experts as needed. However, there can be no assurance that our operations will expand.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the period covered by this report 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 1.1. LEGAL PROCEEDINGS

The Company currently is not a party to any legal proceedings and, to the Company’s knowledge; no such proceedings are threatened or contemplated.

ITEM 1A.1A. RISK FACTORS

Not applicable.

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

Consulting Agreements

During December 2017, our Board of Directors (the “Board”) approved to issue an aggregate of 5,674,944 shares of our restricted common stock to certain consultants (the “Consultants”) in consideration of various services rendered to the Company. As of the date of this Quarterly Report, these shares are not issued. The shares of restricted common stock are to be issued to the Consultants in reliance on the exemption from registration under by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”).

Private Placement

During the nine monththree-months period ended November 30, 2017August 31, 2018 and to current date, we have engaged in private placements offerings of our shares of restricted common stock in reliance on Regulation S promulgated under the Securities Act.

During the nine monththree-months period ended November 30, 2017August 31, 2018 pursuant to subscription agreements (“Subscription Agreements”), we sold an aggregate 2,494,750714,286 shares of our restricted common stock in a private placement offering to certain non-U.S. investors at a price of $0.35 per share of common stock and received gross proceeds of $873,163. On December 15, 2017, the Board approved to issue an aggregate of 2,494,750 shares of common stock to the investors.$250,000. As of the date of this Quarterly Report, all these shares are nothad been issued.

The foregoing description of the Subscription Agreement is not complete and is qualified in its entirety by reference to the full text of the Subscription Agreement, a form of which is filed as Exhibit 10.1 hereto and is incorporated by reference herein.

The securities referenced above were issued in reliance on the exemption from registration afford by Regulation S promulgated under the Securities Act as a transaction by an issuer not involving a public offering. Such shares of common stock have not been registered under the Securities Act or under any state securities laws and may not be offered or sold without registration with the United States Securities and Exchange Commission or an applicable exemption from the registration requirements. The investors acknowledged that the securities to be issued have not been registered under the Securities Act, that they understood the economic risk of an investment in the securities, and that they had the opportunity to ask questions of and receive answers from our management concerning any and all matters related to acquisition of the securities.

 

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Grant of Options

On November 27, 2017, the Board granted Ms. Helen Bernardino an option to purchase 120,000 shares of common stock of the Company, par value $0.001, at an exercise price of $0.20 per share, in connection with Ms. Bernardino’s appointment as a director of the Company. Such option shall have a term of five (5) years and vested immediately upon the effective date of her appointment, November 27, 2017. The securities were issued in reliance on the exemption from registration under by Section 4(a)(2) of the Securities Act.

Except as set forth in this Item 2, there were no unregistered securities sold by us during the quarter ended November 30, 2017August 31, 2018 that were not otherwise disclosed in a Current Report on Form 8-K.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

See Part II, Item 2 of this Form 10-Q

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ITEM 6. EXHIBITS

The following exhibits are filed as part of this Form 10-Q:

____________

___________

+filed herewith

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Reportreport to be signed on its behalf by the undersigned, thereunto duly authorized.

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