UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

Form 10-Q/A10-Q

☒  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended February 28,November 30, 2017

or

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

For the transition period from         to

Commission File Number333-197756

BEMAX INC.

(Exact name of registrant as specified in its charter)

625 Silver Oak

Dallas, GA 30132

Tel: (770) 401-1809

(Address andRegistrant’s telephone number, of principal executive office)including area code:(707) 401-1809

N/A

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  ☒      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  ☒       No  ☐

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

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  ☒

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date:  As of April 21, 2017,January 10, 2018, the issuer had 301,640,836428,689,775 shares of its common stock issued and outstanding.

Explanatory Note: The May 31, 2016 financial statements were restated to record inventory for purchases previously recorded on a cash basis, eliminate accounts receivable, accounts payable and deferred revenue recorded due to errors; and to account for the embedded conversion feature related to convertible loans.TABLE OF CONTENTS

As a result of the errors related to inventory and recording prior sales and cost of goods sold, the financial statements for the nine months ended February 29, 2016 were restated to reflect these changes.

The statement of operations and cash flows for the nine months ended February 28, 2017 were restated to correct errors made when preparing the financial statement. There were no changes to the balance sheet as of February 28, 2017.

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

BEMAX INC.

Financial StatementsCONTENTS

BEMAX INC

Condensed Balance Sheets

(Unaudited)

The accompanying notes are an integral part of these unaudited condensed financial statements.

BEMAX INC.

Condensed Statements of Operations

(Unaudited)

The accompanying notes are an integral part of these unaudited condensed financial statements.

BEMAX INC.

Condensed Statements of Cash Flows

(Unaudited)

The accompanying notes are an integral part of these unaudited condensed financial statementsstatements..

BEMAX INC.

Notes to the Financial Statements

February 28,November 30, 2017

(Unaudited)

NOTE 1 - NATUREORGANIZATION AND DESCRIPTION OF OPERATIONSBUSINESS

BEMAX INC. (“The Company”) was incorporated in the State of Nevada on November 28, 2012 to engage in the business of exporting disposable baby diapers manufactured in the United States and then distributing them throughout Europe and South Africa. The Company is in the development stage with limited revenues and very limited operating history.

NOTE 2 - GOING CONCERN

TheseThe accompanying unaudited financial statements have been prepared on a going concern basis, which assumescontemplates the Company will be able to realize itsrealization of assets and discharge itsthe satisfaction of liabilities in the normal course of business one year from February 28,business. The Company has had minimal revenue and has an accumulated a deficit of $2,669,597 as of November 30, 2017. The Company has incurred a loss since inception resulting in an accumulated deficitrequires capital for its contemplated operational and marketing activities. The obtainment of $1,427,971 as February 28, 2017and further losses are anticipated inadditional financing, the successful development of the Company’s contemplated plan of operations, and its business raisingtransition, ultimately, to the attainment of profitable operations are necessary for the Company to continue operations. These conditions and the ability to successfully resolve these factors raise substantial doubt about the Company’s ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future, and/or the existing cash on hand, loans from officers/directors and/or private placement of common stock. Obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management intends to finance operating costs over the next twelve months with personal cash, outside loans, or equity issuances. There is no guarantee thatThe unaudited financial statements of the Company will be able to raisedo not include any capital through any typeadjustments that may result from the outcome of offering.these uncertainties.

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The Company’s unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates. The accompanying unaudited condensed financial statements reflect all adjustments, consisting of only normal recurring items, which, in the opinion of management, are necessary for a fair statement of the results of operations for the periods shown and are not necessarily indicative of the results to be expected for the full year ending May 31, 2017.2018. These unaudited condensed financial statements should be read in conjunction with the financial statements and related notes included in the Company’s Annual Report on Form 10-K/A10-K for the year ended May 31, 2016.2017.

Use of Estimates and Assumptions

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates.

Fair Value of Financial InstrumentInventory

The Company’s financial instruments consistedinventory consists of cash, accounts payable, related party advances and convertible notes. Unless otherwise noted, itfinished goods ready for resale. Inventories are stated at the lower of cost or market. Cost is management’s opinionprincipally determined using the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments. Because oflast-in, first-out (LIFO) method. The company periodically reviews the short maturity of such assets and liabilities the fair value of these financial instruments approximate their carrying values, unless otherwise noted.items in inventory and provides write-downs or write-offs of inventory based on its assessment of market conditions.

Derivative Financial Instruments

Derivative liabilities are recognized in the balance sheets at fair value based on the criteria specified in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 815-15– Derivatives and Hedging – Embedded Derivatives(“ASC 815-15”). Pursuant to ASC Topic 815-15 an evaluation of the embedded conversion feature of convertible debt is evaluated to determine if the bifurcated debt conversion feature is required to be classified as a derivative liability. Since the terms of the embedded conversion features of the Company’s convertible debt provides for the issuance of shares of common stock at the election of the holders and the number of shares is subject to adjustment for a decline in the price of the Company’s common stock, the Company determined that the embedded conversion option met the criteria of a derivative liability. The estimated fair value of the embedded conversion feature of debt classified as derivative liabilities are determined using the Black-Scholes option pricing model. The model utilizes Level 3 unobservable inputs to calculate the fair value of the derivative liabilities at each reporting period. The Company determined that using an alternative valuation model such as a Binomial-Lattice model would result in minimal differences. The fair value of the embedded conversion feature of debt classified as derivative liabilities are adjusted for changes in fair value at each reporting period, and the corresponding non-cash gain or loss is recorded as other income or expense in the statement of operations. As of February 28,November 30, 2017, and May 31, 2017, the embedded conversion feature of $0$1,008,011 and $449,975, respectively, of convertible notes payable was classified as a derivative liability. Each reporting period the embedded conversion feature is re-valued and adjusted through the caption “change in fair value of derivative liabilities” on the statements of operations.

Fair value of financial instruments

The Company follows Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 825-10-50-10,Financial Instruments—Overall—Disclosure, for disclosures about fair value of our financial instruments and ASC 820-10-35-37,Fair Value Measurement—Overall—Subsequent Measure—Fair Value Hierarchy, to measure the fair value of our financial instruments. ASC 820-10-35-37 establishes a framework for measuring fair value GAAP and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820-10-35-37 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three levels of fair value hierarchy defined by ASC 820-10-35-37 are described below:

Level 1: Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.

Level 2: Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.

Level 3: Pricing inputs that are generally observable inputs and not corroborated by market data.

The following table classifies the Company’s liabilities measured at fair value on a recurring basis into the fair value hierarchy as of February 28, 2017 and May 31, 2016:of:

November 30, 2017:

May 31, 2016:2017:

Revenue Recognition

The Company’sCompany follows ASC 605-10-S99-1,Revenue Recognition,of the FASB Accounting Standards Codification for revenue recognition, policywhich has four basic criteria that must be met before revenue is on a sales-basis method. The Company recognizes and records revenue atrecognized: 1) existence of persuasive evidence that an arrangement exists; 2) delivery has occurred or services have been rendered; 3) the time of sale once payment has been received and disposable baby diapers are deliveredseller’s price to the buyer.buyer is fixed and determinable; and 4) collection is reasonably assured.

Pre-payment Policy: All sales to our customers will be solely on a pre-payment basis. Once the order is completed and payment is received, we will place an order with the North American supplier of disposable baby diapers and arrange shipping directly to our customers. The process is expected to take three weeks to complete. The pre-payment will be recorded as deferred revenue until the delivery is executed.

Reclassifications

Certain reclassifications have been made to the prior year financial information to conform to the presentation used in the unaudited financial statements for the six months ended November 30, 2017.

Recent Accounting Pronouncements

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments. ASU 2016-15 provides guidance for targeted changes with respect to how cash receipts and cash payments are classified in the statements of cash flows, with the objective of reducing diversity in practice. ASU 2016-15 is effective for interim and annual periods beginning after December 15, 2017, with early adoption permitted. The Company is in the process of evaluating the impact of this accounting standard update on its statements of cash flows.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 requires lessees to recognize lease assets and lease liabilities on the balance sheet and requires expanded disclosures about leasing arrangements. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 and interim periods in fiscal years beginning after December 15, 2018, with early adoption permitted. The Company is in the process of evaluating the impact of this accounting standard update on its financial statements.

The Company does not expect the adoption of recently issued accounting pronouncements to have any significant impact on the Company’s results of operations, financial position or cash flow. As new accounting pronouncements are issued, the Company will adopt those that are applicable under the circumstances.

NOTE 4 - PROPERTY AND EQUIPMENT

Furniture, fixtures, and equipment, stated at cost, less accumulated depreciation consisted of the following at:

Depreciation Expense

Depreciation expense for the six months ended November 30, 2017 and 2016, was $1,631 and $0, respectively.

NOTE 5 - OTHER ASSETS

On March 27, 2017, the Company entered into an Option to obtain a Property Lease Agreement (“the lease”) with Simfox Enterprises aka Achievers Nursery School. This is a development property situated in Lagos, Nigeria. The lease is for 30 years with two successive five-year extensions at the option of the Company. Consideration for the Option is $300,000 with $110,000 due immediately and the balance by installments by August 30, 2017. As of November 30, 2017, the Company has paid the full $300,000. In addition, the Company has agreed, subject to the signing of the Definitive Document, to pay Simfox Enterprises, a $390,000 refundable good faith deposit, of which $106,000 has been paid. The definitive document is currently under negotiation. The deposit will be held by Simfox in an interest-bearing account to be returned to Bemax plus interest, on completion of the development of the property by the Company. 

The Company intends to develop the property for its intended purpose over a two to five-year period, as mutually agreed upon. The option payment of $300,000 will be amortized over this period once development begins.

NOTE 46 - RELATED PARTY TRANSACTIONS

The President of the Company provides management feesservices and office premises to the Company for a fee of $1,500 per month, the right to which the President has agreed to assign to the Company until such a time as the Company closes on an Equityequity or Debtdebt financing of not less than $750,000. The assigned rights are valued at $1,000 per month for rent and $500 for executive compensation. A totalAs of $13,500November 30, 2017, and May 31, 2017, there is $54,000 and $45,000, respectively, accrued for donated management fees was charged to Shareholder Loan for the nine months ended February 28, 2017.these fees.

As of February 28,November 30, 2017, and May 31, 2017, there are loans from the majority shareholder of $11,438 and related party totalling $51,736.These$11,438, respectively. These loans were made in order to assist in meeting general and administrative expenses. These advances are unsecured, due on demand and carry no interest or collateral.non-interest bearing.

NOTE 5 - STOCKHOLDER’S EQUITY

On June 5, 2015, the Company decided to increase the authorized amount of common shares that can be issued from 70,000,000 to 500,000,000 with the same par value of $0.0001 per share. The Company also declared a Fifty (50) to One (1) forward stock split effective immediately. The 50-1 stock split has been shown retroactively.

During fiscal year 2016, the Company issued 42,500 Common Shares at $0.0001 par value to an attorney for legal services rendered.NOTE 7 - STOCKHOLDERS’ EQUITY

On December 5, 2016, the Company entered into an initial one year consulting agreement with Adebayo Ladipo. He has been compensated by receivingissued 7,500,000 shares of common stock valued at $75,000 based onper the market priceterms of the common stock on this date. This wasa one-year consulting agreement. The shares were valued at $0.01 per share. At no timeshare for total non-cash expense of $75,000. The expense is he considered an employeebeing amortized over the term of the Company. He is an Independent Contractor and ableagreement. As of November 30, 2017, the full $75,000 has been debited to pursue other interests.consulting expense.

On January 24, 2017, Thethe Company allowed Taiwo Aimasiko, its CEO to retire 150,000,000 shares of common stock in exchange for 50,000,000 Series B preferred shares.

On October 24, 2017, the Company amended its Articles of Incorporation increasing the authorized issue of common stock from 850,000,000 to 950,000,000. The par value remains the same at $0.0001 per share. 

During the year ended May 31, 2017, the Company converted $318,631 of principal and accrued interest into 185,348,336 shares of common stock. All conversions were completed pursuant to the terms of their respective convertible promissory notes. No gains or losses were recognized as a result of the conversions.

During the six months ended November 30, 2017, the Company converted $46,947 and $7,087 of principal and interest, respectively, into 51,043,233 shares of common stock.

On October 10, 2017, the Company executed an Agreement for IR Services. The agreement is for six months and requires a fee of 10 million shares of common stock. The first 5,000,000 shares of common stock are required upon the execution of the agreement and were granted by the Board of Directors on October 10, 2017. The next 2.5 million shares are due in thirty days and the remaining 2.5 million, thirty days after that. The Company issued the 5,000,000 shares valued at $0.0023 per share for total non-cash expense of $11,500. The expense is being amortized over the term of the agreement. As of November 30, 2017, $3,205 has been debited to consulting expense. On November 10, 2017, the Company issued another 2,500,000 shares of common stock valued at $0.0022 per share for total non-cash expense of $5,500. The expense is being amortized over the remaining term of the agreement. As of November 30, 2017, $601 has been debited to consulting expense. As of November 30, 2017, 2,500,000 of shares have not yet been issued by the transfer agent; therefore, they have been credited to the stock payable account.

NOTE 8 - PREFERRED STOCK 

On January 23, 2017, the Board of Directors designated a series of preferred stock titled Series B Preferred Stock consisting of 50,000,000 shares with a $0.0001 par value. Each share of Series B preferred stock has voting rights of 10 votes per share, and will vote alongside the common stock, not as a separate class. Each share of preferred stock can be converted into three shares of common stock at any time after a one-year anniversary. Holders are entitled to dividends, if declared, equivalent to if they had converted to common stock. The Series B preferred stock have no liquidation rights.

On October 24, 2017, the Company amended its Articles of Incorporation increasing the authorized issue of preferred stock from 50,000,000 to 100,000,000. The par value remains the same at $0.0001 per share. 

On January 24, 2017, the Company allowed Taiwo Aimasiko, its CEO to retire 150,000,000 shares of common stock in exchange for 50,000,000 Series B preferred shares.

NOTE 69 - CONVERTIBLE LOANS

On February 16, 2016, the Company issued a Convertible Promissory Note in favor of Crown Bridge Partners, LLC. The principal amount of the loan was $40,000 (forty thousand dollars) with an original issue discount of $4,000 (four thousand dollars) and carries an interest rate of 8% per annum. It became due and payable with accrued interest on February 16, 2017. The Company had the right to prepay any part of the loan plus accrued interest up to 90 days from the issue date, subject to a cash payment of the principal plus 130% interest and 91 days through 180 for a cash payment of the principal plus 150% interest. On July 14, 2016, the Company repaid the $40,000 of principal, $1,307 of accrued interest and a $20,965 early payment penalty. As a result of repayment of the note the Company recognized the remaining debt discount of $2,833. The Company repaid the note prior to when the convertible feature was effective; therefore there are no derivatives related to the embedded conversion feature.

On April 19, 2016, the Company issued a Convertible Promissory Note in favor of Crown Bridge Partners, LLC. The principal amount of the loan was $30,000 (thirty thousand dollars) with an original issue discount of $3,500 (three thousand five hundred dollars) and carried an interest rate of 8% per annum. It becomes due and payable with accrued interest on April 19, 2017. Crown Bridge Partners, LLC. has the option to convert the Note plus accrued interest into common shares of the Company, after 180 days. The conversion rate is at a discount of 48% applied to the lowest price for ten days prior to the actual date of conversion. The company bifurcated the conversion feature and accounted for it as a derivative liability. The Company recorded the derivative liability at its fair value of $124,890 based on the Black Scholes Merton pricing model and a corresponding debt discount of $30,000 to be amortized utilizing the interest method of accretion over the term of the note. As of August 31, 2016, the Company fair valued the derivative at $39,161 resulting in a gain on the change in the fair value for the three months of $85,729. In addition, $11,014 of the debt discount has been amortized to interest expense.

On May 9, 2016, the Company issued a Convertible Redeemable Note in favor of Adar Bays, LLC. The principal amount of the loan was $30,000 (thirty thousand dollars) and carried an interest rate of 8% per annum. It becomes due and payable with accrued interest on May 9, 2017. Adar Bays, LLC. has the option to convert the Note plus accrued interest into common shares of the Company, at any time. The conversion rate will be at a discount of 48% applied to the lowest price for fifteen days prior to the actual date of conversion. The Company recorded the derivative liability at its fair value of $108,800 based on the Black Scholes Merton pricing model and a corresponding debt discount of $30,000 to be amortized utilizing the interest method of accretion over the term of the note. On November 28, 2016, $3,000 of principal was converted into 229,850 shares of common stock. Due to the conversion within the terms of the agreement, no gain or loss was recognized. At the time of conversion, the Company valued the derivative at $40,273 resulting in a gain on the change in the fair value of $8,331. During the third quarter the remaining principal and accrued interest of $27,000 and $1,453, respectively, were fully converted into 22,030,353 shares of common stock resulting in the immediate amortization of the remaining debt discount of $13,159, a $32,001 loss on the change in fair value of the derivative and a $105,878 credit to additional paid in capital.

On May 9, 2016, the Company issued a Convertible Redeemable Note in favor of Eagle Equities, LLC. The principal amount of the loan was $30,000 (thirty thousand dollars) and carried an interest rate of 8% per annum. It becomes due and payable with accrued interest on May 9, 2017. Eagle Equities, LLC. had the option to convert the Note plus accrued interest into common shares of the Company, at any time. The conversion rate is at a discount of 48% of the lowest trading price for fifteen days prior to the actual date of conversion. The Company cannot prepay any amount outstanding after 180 days. The Company recorded the derivative liability at its fair value of $108,800 based on the Black Scholes Merton pricing model and a corresponding debt discount of $30,000 to be amortized utilizing the interest method of accretion over the term of the note.. During the third quarter principal and accrued interest of $30,000 and $1,459, respectively, were fully converted into 16,845,031 shares of common stock resulting in the immediate amortization of the remaining debt discount of $13,151, a $71,501 loss on the change in fair value of the derivative and a $143,634 credit to additional paid in capital.

On May 10, 2016, the Company issued a Convertible Promissory Note in favor of Auctus Fund, LLC. The principal amount of the loan was $77,750 (seventy-seven thousand, seven hundred and fifty dollars) with an original issue discount of $6,750 (six thousand, seven hundred and fifty dollars) and carried an interest rate of 8% per annum. It becomes due and payable with accrued interest on May 10, 2017. Auctus Fund, LLC. had the option to convert the Note plus accrued interest into common shares of the Company, at any time. The conversion rate will be at a discount of 48% of the lowest trading price for ten days prior to the actual date of conversion. The Company cannot prepay any amount outstanding after 180 days. The company bifurcated the conversion feature and accounted for it as a derivative liability. The Company recorded the derivative liability at its fair value of $261,774 based on the Black Scholes Merton pricing model and a corresponding debt discount of $77,750 to be amortized utilizing the interest method of accretion over the term of the note. During the third quarter principal and accrued interest of $77,750 and $605, respectively, were fully converted into 43,741,990 shares of common stock resulting in the immediate amortization of the remaining debt discount of $20,282, a $295,729 loss on the change in fair value of the derivative and a $467,591 credit to additional paid in capital.

On June 2, 2016, the Company issued a Convertible Promissory Note in favor of JSJ Investments Inc. The principal amount of the loan was $55,000 (fifty-five thousand dollars), with an original issue discount of $3,000 three thousand dollars), a payment of $2,000 (two thousand dollars) in loan fees and it carried an interest rate of 8% per annum. It becomes due and payable with accrued interest on June 2, 2017. JSJ Investments, Inc. has the option to convert the Note plus accrued interest into common shares of the Company, at any time. The conversion rate will be at a discount of 48% applied to the lowest trading price for ten days prior to the actual date of conversion. The Company cannot prepay any amount outstanding after 180 days. The company bifurcated the conversion feature and accounted for it as a derivative liability. The Company recorded the derivative liability at its fair value of $167,895 based on the Black Scholes Merton pricing model and a corresponding debt discount of $55,000 to be amortized utilizing the interest method of accretion over the term of the note. During the third quarter principal and accrued interest of $55,000 and $2,395, respectively, were fully converted into 32,463,378 shares of common stock resulting in the immediate amortization of the remaining debt discount of $34,554, a $65,510 loss on the change in fair value of the derivative and a $190,914 credit to additional paid in capital.

On June 14, 2016, the Company issued a Convertible Promissory Note in favor of Black Forest Capital LLC. The principal amount of the loan was $80,000 (eighty thousand dollars), with an original issue discount of $8,000 (eight thousand dollars), a payment of $2,000 (two thousand dollars) for loan fees and it carried an interest rate of 8% per annum. It becomes due and payable with accrued interest on June 14, 2017. Black Forest Capital, LLC. has the option to convert the Note plus accrued interest into common shares of the Company, at any time. The conversion rate will be at a discount of 48% applied to the lowest trading price for ten days prior to the actual date of conversion. The Company cannot prepay any amount outstanding after 180 days. The company bifurcated the conversion feature and accounted for it as a derivative liability. The Company recorded the derivative liability at its fair value of $228,110 based on the Black Scholes Merton pricing model and a corresponding debt discount of $80,000 to be amortized utilizing the interest method of accretion over the term of the note. During the third quarter principal and accrued interest of $80,000 and $3,254, respectively, were fully converted into 55,208,045 shares of common stock resulting in the immediate amortization of the remaining debt discount of $42,959, a $203,588 loss on the change in fair value of the derivative and a $396,470 credit to additional paid in capital.

On December 28, 2016, the Company issued a Convertible Promissory Note in favor of Crown Bridge Partners, LLC. The principal amount of the loan is $46,000 (forty-six thousand dollars) with an original issue discount of $4,500 (four thousand five hundred dollars)$6,000 and carries an interest rate of 8% per annum. It becomes due and payable with accrued interest on December 28, 2017. Crown Bridge Partners, LLC. has the option to convert the Note plus accrued interest into common shares of the Company, after 180 days. The conversion rate will be at a discount of 45% applied to the lowest trading price for fifteen days prior to the actual date of conversion. On June 8, 2017, the Company repaid the $46,000 of principal, $1,575 of accrued interest and a $23,925 early payment penalty. As a result of repayment of the note the Company recognized the remaining debt discount. The Company hasrepaid the rightnote prior to prepay any partwhen the convertible feature was effective; therefore, there are no derivatives related to the embedded conversion feature.

On March 20, 2017, the Company issued a Convertible Promissory Note in favor of Crown Bridge Partners, LLC. The principal amount of the loan is $114,000 with an original issue discount of $14,000 and carries an interest rate of 8% per annum. It becomes due and payable with accrued interest on March 20, 2018. Crown Bridge Partners, LLC. has the option to convert the Note plus accrued interest up to 90 days from the issue date, subject to a cash paymentinto common shares of the principal plus 130%Company, after 180 days. The conversion rate will be at a discount of 43% applied to the lowest trading price for ten days prior to the actual date of conversion. The company bifurcated the conversion feature and accounted for it as a derivative liability. The Company recorded the derivative liability at its fair value of $170,236 based on the Black Scholes Merton pricing model and a corresponding debt discount of $114,000 to be amortized utilizing the interest and 91 days through 180 for a cash paymentmethod of accretion over the term of the note. During the three months ended November 30, 2017, the Company converted $12,380 of principal into 15,000,000 shares of common stock. As of November 30, 2017, the Company fair valued the derivative at $199,551. In addition, $56,841 of the debt discount has been amortized to interest expense.

On March 27, 2017, the Company issued a Convertible Promissory Note in favor of JSJ Investments, Inc. The principal amount of the loan is $125,000 with an original issue discount of $9,250 and carries an interest rate of 8% per annum. It becomes due and payable with accrued interest on December 22, 2017. JSJ Investments, Inc. has the option to convert the Note plus 150% interest.accrued interest into common shares of the Company at any time. The conversion rate will be at a discount of 40% applied to the average of the three lowest trading prices for ten days prior to the actual date of conversion. The company bifurcated the conversion feature and accounted for it as a derivative liability. The Company cannot prepay any amount outstanding after 180.recorded the derivative liability at its fair value of $204,373 based on the Black Scholes Merton pricing model and a corresponding debt discount of $125,000 to be amortized utilizing the interest method of accretion over the term of the note. During the three months ended November 30, 2017, the Company converted $34,374 of principal into 22,043,233 shares of common stock. As of February 28,November 30, 2017, $752the Company fair valued the derivative at $131,560. In addition, $112,727 of the debt discount has been amortized to interest expense.

On April 4, 2017, the Company issued a Convertible Promissory Note in favor of Auctus, Fund, LLC. The principal amount of the loan is $145,000 with an original issue discount of $15,000 and carries an interest rate of 8% per annum. It becomes due and payable with accrued interest on December 22, 2017. Auctus Fund, LLC. has the option to convert the Note plus accrued interest into common shares of the Company, at any time. The conversion rate will be at a discount of 40% applied to the lowest trading price for ten days prior to the actual date of conversion. The company bifurcated the conversion feature and accounted for it as a derivative liability. The Company recorded the derivative liability at its fair value of $257,720 based on the Black Scholes Merton pricing model and a corresponding debt discount of $145,000 to be amortized utilizing the interest method of accretion over the term of the note. During the three months ended November 30, 2017, the Company converted $193 and $7,078 of principal and interest, respectively into 9,500,000 shares of common stock. As of November 30, 2017, the Company fair valued the derivative at $266,764. In addition, $130,337 of the debt discount has been amortized to interest expense.

On August 3, 2017, the Company issued a Convertible Promissory Note in favor of JSJ Investments, Inc. The principal amount of the loan is $60,000 with an original issue discount of $5,000 and carries an interest rate of 8% per annum. It becomes due and payable with accrued interest on May 3, 2018. JSJ Investments, Inc. has the option to convert the Note plus accrued interest into common shares of the Company at any time. The conversion rate will be at a discount of 40% applied to the average of the three lowest trading prices for ten days prior to the actual date of conversion. The company bifurcated the conversion feature and accounted for it as a derivative liability. The Company recorded the derivative liability at its fair value of $73,676 based on the Black Scholes Merton pricing model and a corresponding debt discount of $60,000 to be amortized utilizing the interest method of accretion over the term of the note. As of November 30, 2017, the Company fair valued the derivative at $90,037. In addition, $26,154 of the debt discount has been amortized to interest expense.

On June 2, 2017, the Company issued a Convertible Promissory Note in favor of GS Capital Partners, LLC. The principal amount of the loan is $132,000 with an original issue discount of $6,600 and carries an interest rate of 8% per annum. It becomes due and payable with accrued interest on June 2, 2018. GS Capital Partners, LLC. has the option to convert the Note plus accrued interest into common shares of the Company, after 180 days. The conversion rate will be at a discount of 36% applied to the lowest trading price for ten days prior to the actual date of conversion. The company bifurcated the conversion feature and accounted for it as a derivative liability. The Company recorded the derivative liability at its fair value of $172,690 based on the Black Scholes Merton pricing model and a corresponding debt discount of $132,000 to be amortized utilizing the interest method of accretion over the term of the note. As of November 30, 2017, the Company fair valued the derivative at $242,554. In addition, $4,633 of the debt discount has been amortized to interest expense.

On July 18, 2017, the Company issued a Convertible Promissory Note in favor of GS Capital Partners, LLC. The principal amount of the loan is $105,000 with an original issue discount of $5,000 and carries an interest rate of 8% per annum. It becomes due and payable with accrued interest on July 18, 2018. GS Capital Partners, LLC. has the option to convert the Note plus accrued interest into common shares of the Company, after 180 days. The conversion rate will be at a discount of 36% applied to the lowest trading price for ten days prior to the actual date of conversion. As of November 30, 2017, $1,853 of the debt discount has been amortized to interest expense.

On October 19, 2017, the Company issued a Convertible Promissory Note in favor of Einstein Investments. The principal amount of the loan is $36,200 with an original issue discount of $5,200 and carries an interest rate of 8% per annum. It becomes due and payable with accrued interest on July 19, 2018. Einstein Investments has the option to convert the Note plus accrued interest into common shares of the Company, at any time. The conversion rate will be at a discount of 43% applied to the lowest trading price for 15 days prior to the actual date of conversion. The company bifurcated the conversion feature and accounted for it as a derivative liability. The Company recorded the derivative liability at its fair value of $86,715 based on the Black Scholes Merton pricing model and a corresponding debt discount of $36,200 to be amortized utilizing the interest method of accretion over the term of the note. As of November 30, 2017, the Company fair valued the derivative at $77,546. In addition, $6,739 of the debt discount has been amortized to interest expense.

On October 26, 2017, the Company issued a Convertible Promissory Note in favor of GS Capital Partners, LLC. The principal amount of the loan is $125,000 with an original issue discount of $6,250,000 and carries an interest rate of 8% per annum. It becomes due and payable with accrued interest on October 26, 2018. GS Capital Partners, LLC. has the option to convert the Note plus accrued interest into common shares of the Company, after 180 days. The conversion rate will be at a discount of 36% applied to the lowest trading price for ten days prior to the actual date of conversion. As of November 30, 2017, $521 of the debt discount has been amortized to interest expense.

A summary of outstanding convertible notes as of February 28,November 30, 2017 and May 31, 2017 is as follows:

All other reductions were conversions toDuring the year ended May 31, 2017, the Company converted $318,631 of principal and accrued interest into 185,348,336 shares of common stock. During the six months ended November 30, 2017, the Company converted $46,947 and $7,087 of principal and interest, respectively, 51,043,233 shares of common stock.

A summary of the activity of the derivative liability for the notes above is as follows:

A summary of quantitative information about significant unobservable inputs (Level 3 inputs) used in measuring the Company’s derivative liabilities that are categorized within Level 3 of the fair value hierarchy for the ninesix months ended February 28,November 30, 2017 is as follows:

The development and determination of the unobservable inputs for Level 3 fair value measurements and fair value calculations are the responsibility of the Company’s management

NOTE 7 – RESTATEMENT10 - CORRECTION OF ERRORS

The May 31, 2016 financial statementsCompany has discovered that there were restatederrors in prior periods regarding revenue, expense and derivative recognition for derivatives related to record inventory for purchases previously recorded on a cash basis, eliminate accounts receivable, accounts payable and deferred revenue recorded due to accounting errors; and to account for the embedded conversion feature related tofeatures of convertible loans.

The following table summarizes changes made to the May 31, 2016 balance sheet.

notes. As a result, of the errors related to inventory and recording prior sales and cost of goods sold, theperiods in these financial statements for the nine months ended February 29, 2016 were restated to reflect these changes.have been restated.

The statement of operations and cash flows for the nine months ended February 28, 2017 were restated to correct errors made when preparing the financial statement. There were no changes to the balance sheet as of February 28, 2017.

NOTE 811 - SUBSEQUENT EVENTS

The Company has evaluated all events and transactions that occurred after February 28,In accordance with ASC 855-10,Subsequent Events, we have analyzed our operations subsequent to November 30, 2017, up through the date thesethe unaudited financial statements were available for issuance. It has beento be issued, and have determined that we do not have any material subsequent events to disclose in these unaudited financial statements other than the following events need to be reported.following.

On March 20,December 1, 2017, the Company authorizedAuctus Fund, LLC converted $5,676 and issued a Convertible Promissory Note in favor$444 of Crown Bridge Partners for $114,000.principal and interest, respectively, into 17,000,0000 shares of common stock.

On March 27,December 4, 2017, the Company authorizedGS Capital Partners, LLC converted $7,000 and issued a Convertible Promissory Note in favor$284 of JSJ Investments, Inc. for $125,000.principal and interest, respectively into 12,645,555 shares of common stock.

On April 4,December 21, 2017, the Company authorized and issued a Convertible Promissory Note in favor of Auctus Fund, LLC for $145,000.converted $4,680 and $640 of principal and interest, respectively into 19,000,0000 shares of common stock.

Refer On January 3, 2018, JSJ Investments converted $8,050 of principal into 22,360,151 shares of common stock.

On January 8, 2018, the Board of Directors consented to increase the filingCompany’s authorized common shares to 1,700,000,000 from 950,000,000, par value to remain at $0.0001 and to designate 40,000,000 of the 100,000,000 shares of Preferred Stock as Series C Preferred Stock. The Company amended and restated its Articles of Incorporation for the year ended May 31, 2017 for additional subsequent activity.these changes effective January 8, 2018.

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

Forward Looking Statements

This report on Form 10-Q contains certain forward-looking statements. All statements other than statements of historical fact are “forward-looking statements” for purposes of these provisions, including any projections of earnings, revenues, or other financial items; any statements of the plans, strategies, and objectives of management for future operation; any statements concerning proposed new products, services, or developments; any statements regarding future economic conditions or performance; statements of belief; and any statement of assumptions underlying any of the foregoing. Such forward-looking statements are subject to inherent risks and uncertainties, and actual results could differ materially from those anticipated by the forward-looking statements.

Business Overview

Bemax Inc. is a Nevada –basedbased company focusing on the distribution of disposable baby diapers, made in North America and Asia by quality producers, to wholesalers and retailers in Europe and the emerging markets. Our business is focused on expanding current distribution networks for our private labels. We are awill attract more distributors for our products with competitive pricing through lower overhead cost. We continue to invest in the ecommerce space to attract loyal customers and expand within our markets.

The Company is working on several business development stage corporationprojects to increase business and have generated or realized minimalrevenue generation in 2017 and beyond, including but not limited to: product licensing of private labels in some of our African markets, production, and extended distribution of new and existing Bemax private label disposable baby diaper products. There can be no assurance that these will be successful in generating increased revenues from our business operations.in 2017.

Results of Operations for the Three Months Ended November 30, 2017 and 2016

Revenue

Revenue for the three months ended November 30, 2017 and 2016 was $1,083 and $23,031, respectively. The decrease is due to the Company’s temporary focus on plant development.

Operating Expenses

Consulting fees were $21,250 and $0 for the three months ended November 30, 2017 and 2016, respectively. The increase can be attributed to fees associated with acquiring the property lease with Simfox and the recognition of expense for stock for services issued in the prior period.

Professional fees were $16,423 and $1,100 for the three months ended November 30, 2017 and 2016, respectively, an increase of $15,323, or 139.3%, in 2017. The increase in 2017, as compared to 2016, can be largely attributed to increased legal, audit, and/or accounting fees related to required SEC quarterly filings.

General and administrative expense was $42,341 and $4,025 for the three months ended November 30, 2017 and 2016, respectively, an increase of $38,316, or 951.9%, in the current period. The increase in 2017 can be attributed to increased operational costs including $5,003 for travel, office expense as well as additional filing fees to amend some of our SEC filings.

Other Income and Expense

For the three months ended November 30, 2017, we had total other expense of $646,553, compared to $53,135 for the three months ended November 30, 2016. For the three months ended November 30, 2017, we recorded interest expense of $13,692, compared to $6,079 in the prior period. In addition, as a result of the convertible promissory notes, we recorded amortization of debt discount of $172,990, compared to $82,115 for the prior period, a loss on the issuance of convertible debt of $173,240 compared to $12,086 for the prior period, a loss on settlement of debt of $23,925, and a loss in the change in the fair value of our derivatives of $286,631 compared to a gain of $47,145 in the prior year.

Net Loss

For the three months ended November 30, 2017 and 2016, we incurred a net loss of $727,684 and $42,026, respectively.

Results of Operations for the Six Months Ended November 30, 2017 and 2016

Revenue

Revenue for the six months ended November 30, 2017 and 2016 was $2,725 and $115,153, respectively. The decrease is due to the Company’s temporary focus on plant development.

Operating Expenses

Consulting fees were $48,000 and $0 for the six months ended November 30, 2017 and 2016, respectively. The increase can be attributed to fees associated with acquiring the property lease with Simfox and the recognition of expense for stock for services issued in the prior period.

Professional fees were $28,788 and $9,400 for the six months ended November 30, 2017 and 2016, respectively, an increase of $19,388, or 206%, in 2017. The increase in 2017, as compared to 2016, can be largely attributed to increased legal, audit, and/or accounting fees related to required SEC quarterly filings.

General and administrative expense was $86,211 and $10,584 for the six months ended November 30, 2017 and 2016, respectively, an increase of $75,627, or 714.5%, in the current period. The increase in 2017 can be attributed to increased operational costs including $5,003 for travel, office expense as well as additional filing fees to amend some of our SEC filings.

Other Income and Expense

For the six months ended November 30, 2017, we had total other expense of $691,693, compared to $111,826 for the six months ended November 30, 2016. For the six months ended November 30, 2017, we recorded interest expense of $25,421, compared to $49,289 in the prior period. In addition, as a result of the convertible promissory notes, we recorded amortization of debt discount of $279,387, compared to $162,368 for the prior period, a loss on the issuance of convertible debt of $191,916 compared to $284,091 for the prior period, a loss on settlement of debt of $23,925, and a loss in the change in the fair value of our derivatives of $171,044 compared to a gain of $383,922 in the prior year.

Net Loss

For the six months ended November 30, 2017 and 2016, we incurred a net loss of $856,477 and $135,834, respectively.

Liquidity and Capital Resources

Cash FlowsDuring the six months ended November 30, 2017, we used cash of $368,044 in operating activities, as compared to $205,284 for the six months ended November 30, 2016. Financing activities provided net cash of $384,150 during the six months ended November 30, 2017, as compared to $104,000 for the six months ended November 30, 2016.

As of November 30, 2017, we have the following convertible notes outstanding.

We currently have minimal cash reserves. To date, the Company has covered operating deficits primarily through loans from the sole director, and third-party loans which if not paid with interest are convertible notes.to the Company’s common stock. Accordingly, our ability to pursue our plan of operations is contingent on our being able to obtain funding for the development, marketing and commercialization of our products and services. However, as a result of its lack of operating success, the Company may not be able to raise additional funding to cover operating deficits.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company has an accumulated deficit of $1,427,971$2,669,597 since inception (November 28, 2012) to the period ended February 28, 2017 and is dependent on its ability to raise capital from shareholders or other sources to sustain operations. However, these conditions raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Results of OperationsWe anticipate that we may only generate any limited revenues in the near future and we will not have enough positive internal operating cash flow until we can generate substantial revenues, which may take the next two years to fully realize.  There is no assurance we will achieve profitable operations.

RevenueCritical Accounting Estimates and Policies

The Company had $24,960preparation of financial statements in salesconformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Note 3 to the Financial Statements describes the significant accounting policies and methods used in the preparation of the Financial Statements. Estimates are used for, but not limited to, contingencies and taxes.  Actual results could differ materially from those estimates. The following critical accounting policies are impacted significantly by judgments, assumptions, and estimates used in the three months ended February 28, 2017 compared to $246,119 for period ended February 29, 2016. This reduction is due to inability to secure viable and less dilutive financing to effectively finance purchase orders.

Sales forpreparation of the nine months ended February 28, 2017 is $140,113 compared to $346,338 for the nine months ended February 29, 2016. The reduction is due to less purchase order received from the Company’s distributors during this period.Financial Statements.

The Company follows ASC 605-10-S99-1,Operating ExpenseRevenue Recognition,of the FASB Accounting Standards Codification for revenue recognition, which has four basic criteria that must be met before revenue is recognized: 1) existence of persuasive evidence that an arrangement exists; 2) delivery has occurred or services have been rendered; 3) the seller’s price to the buyer is fixed and determinable; and 4) collection is reasonably assured.

Pre-payment Policy: All sales to our customers will be solely on a pre-payment basis. Once the order is completed and payment is received, we will place an order with the North American supplier of disposable baby diapers and arrange shipping directly to our customers. The total operating expenseprocess is expected to take three weeks to complete. The pre-payment will be recorded as deferred revenue until the delivery is executed.

We are subject to various loss contingencies arising in the ordinary course of business.  We consider the likelihood of loss or impairment of an asset or the incurrence of a liability, as well as our ability to reasonably estimate the amount of loss in determining loss contingencies.  An estimated loss contingency is accrued when management concludes that it is probable that an asset has been impaired or a liability has been incurred and the amount of the loss can be reasonably estimated.  We regularly evaluate current information available to us to determine whether such accruals should be adjusted.

We recognize deferred tax assets (future tax benefits) and liabilities for the three months ended February 28, 2017expected future tax consequences of temporary differences between the book carrying amounts and the tax basis of assets and liabilities.  The deferred tax assets and liabilities represent the expected future tax return consequences of those differences, which are expected to be either deductible or taxable when the assets and liabilities are recovered or settled.  Future tax benefits have been fully offset by a 100% valuation allowance as management is $79,558 comparedunable to $13,859 for the three months ended February 29, 2016 and $102,542 for the nine months ended February 28, 2017 compared to $26,982 for the nine months ended February 29, 2016. The increasedetermine that it is due to increase in general and administrative expenses relating to product bagging, packaging and consulting.

The total costs of goods for the nine-month period ended February 28, 2017 is $279,197 compared to $266,864 for the same nine-month period ending February 29, 2016. The reason for the decrease is due to reduction in sales and write done of inventory.more likely than not that this deferred tax asset will be realized.

Interest ExpensesOff-Balance Sheet Arrangements

Total interest expense and loan fees for the nine months ended February 28, 2017 is $53,001 compared to $1,714 interest on loan during the nine-month period ended February 29, 2016.

Off-Balance Sheet Arrangements

As of February 28, 2017, we had noWe have not entered into any off-balance sheet transactionsarrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.resources and would be considered material to investors.

Recent Accounting Pronouncements

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments. ASU 2016-15 provides guidance for targeted changes with respect to how cash receipts and cash payments are classified in the statements of cash flows, with the objective of reducing diversity in practice. ASU 2016-15 is effective for interim and annual periods beginning after December 15, 2017, with early adoption permitted. The Company is in the process of evaluating the impact of this accounting standard update on its statements of cash flows.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 requires lessees to recognize lease assets and lease liabilities on the balance sheet and requires expanded disclosures about leasing arrangements. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 and interim periods in fiscal years beginning after December 15, 2018, with early adoption permitted. The Company is in the process of evaluating the impact of this accounting standard update on its financial statements.

The Company is working towardhas implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the introductionfinancial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of new products including Diapers with wet indicators, wipes and newer version of pull –ups. The company will introduce better pricing including reduced shipping cost to accommodate larger segment of online customers.operations.

The Company continue working on several business development projects to increase sales and generate revenues, including introducing the Company’s private label brands to other broad online market platforms such as Shopify and Amazon prime. The Company will continue to expand both manufacturing and distribution network with quality manufacturers and established distributors to enhance regional and global expansion strategy.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Not applicable.applicable to smaller reporting companies.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures, (asas defined in RulesRule 13a-15(e) and 15d-15(e) ofpromulgated under the Securities Exchange Act of 1934 as amended (the “Exchange Act”), that are designed to be effective in providing reasonable assuranceensure that information required to be disclosed by us in ourthe reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission (the “SEC”),Commission’s rules and forms and that such information is accumulated and communicated to our managementsole officer, as appropriate to allow timely decisions regarding required disclosure. Our Chief Executive OfficerWe carried out an evaluation, under the supervision and Chief Financial Officer evaluatedwith the participation of our sole officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of November 30, 2017.

Based on the evaluation of these disclosure controls and procedures, our Chief Executive and Chief Financial Officer concluded that as of the end of the periodperiods covered by this report. Based on that evaluation, they concluded thatreport, we have identified the following material weakness of our disclosure controlsinternal controls: Lack of sufficient accounting staff which results in a lack of segregation of duties necessary for a good system of internal control and procedures were not effective for the quarterly period ended February 28, 2017. The following aspectslack of the Company were noted as potential material weaknesses:formal documentation of accounting policies and procedures.

In designing and evaluating disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute assurance of achieving the desired objectives. Also, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs.

Changes in Internal Controls

Based on that evaluation,There were no changes in our Chief Executive Officer and our Chief Financial Officer concluded that no change occurredinternal control or in the Company’s internal controls over financial reportingother factors during the last fiscal quarter ended February 28, 2017covered by this report that hashave materially affected, or is reasonablyare likely to materially affect the Company’s internal controlscontrol over financial reporting.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Management is not aware of any legal proceedings contemplated by any governmental authority or any other party against us. None of our directors, officers or affiliates are (i) a party adverse to us in any legal proceedings, or (ii) have an adverse interest to us in any legal proceedings. Management is not aware of any other legal proceedings that have been threatened against us.

ITEM 1A. RISK FACTORS

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

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

None.During the six months ended November 30, 2017, the Company converted $46,947 and $7,087 of principal and interest, respectively, into 51,043,233 shares of common stock.

On October 10, 2017, the Company issued the 5,000,000 shares valued at $0.0023 per share for total non-cash expense of $11,500. On November 10, 2017, the Company issued another 2,500,000 shares of common stock valued at $0.0022 per share for total non-cash expense of $5,500. As of November 30, 2017, the shares have not yet been issued by the transfer agent; therefore, they have been credited to the stock payable account.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

N/A.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

Exhibits:

SIGNATURES

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

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