UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
x | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. |
For the quarterly period ended May 31, 2007.
or
o | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. |
For the transition period from ______to______.
Commission file number 333-138298
MAXLIFE FUND CORP
(Exact name of registrant as specified in its charter)
Wyoming | |
(State or other jurisdiction of | (I.R.S. Employer Identification No.) |
incorporation or organization) | |
160 Tycos Drive, Unit #12, Toronto, Ontario | M6B 1W8 |
(Address of principal executive offices) | (Zip Code) |
(416) 200-0657
(Registrant’s telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last report)
Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant is a shell company as defined in Rule 12b-2 of the Exchange Act. Yes x No o
State the number of shares outstanding of each of the issuer’s classes of common equity, as of July 16, 2007: 30,127,100 shares of common stock.
MAXLIFE FUND CORP.
FINANCIAL STATEMENTS
INDEX
PART I-- FINANCIAL INFORMATION
Item 1. | Financial Statements |
Item 2. | Management’s Discussion and Analysis or Plan of Operation |
Item 3. | Control and Procedures |
PART II-- OTHER INFORMATION
Item 1. | Legal Proceedings |
Item 2. | Unregistered Sales of Equity securities and Use of Proceeds |
Item 3. | Defaults Upon Senior Securities |
Item 4. | Submission of Matters to a Vote of Security Holders |
Item 5. | Other Information |
Item 6. | Exhibits |
SIGNATURE
Item 1. Financial Information
BASIS OF PRESENTATION
The accompanying reviewed financial statements are presented in accordance with generally accepted accounting principles for interim financial information and the instructions to Form 10-QSB and item 310 under subpart A of Regulation S-B. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting only of normal occurring accruals) considered necessary in order to make the financial statements not misleading, have been included. Operating results for the nine months ended May 31, 2007 are not necessarily indicative of results that may be expected for the year ending August 31, 2007.
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MAXLIFE FUND CORP. AND SUBSIDIARY
CONSOLIDATED FINANCIAL STATEMENTS
Unaudited
31 MAY 2007
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MAXLIFE FUND CORP. AND SUBSIDIARY
(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS
Unaudited
AS AT 31 MAY 2007 AND 31 AUGUST 2006
(Expressed in United States Dollars)
31 May 2007 (Unaudited) | 31 August 2006 (Audited) | |||||||
ASSETS | ||||||||
Current Assets | ||||||||
Cash | $ | 443 | $ | 102,025 | ||||
Short term investments | 95,080 | - | ||||||
Total Current Assets | 95,523 | 102,025 | ||||||
Long Term Assets | ||||||||
Insurance policy | 29,309 | 23,028 | ||||||
Goodwill | 35,269 | 35,269 | ||||||
Total Long Term Assets | 64,578 | 58,297 | ||||||
Total Assets | $ | 160,101 | $ | 160,322 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current Liabilities | ||||||||
Accounts payable and accrued liabilities | $ | 8,497 | $ | 8,964 | ||||
Advances from shareholder | 34,794 | 41,594 | ||||||
Total Liabilities | 43,291 | 50,558 | ||||||
Stockholders' Equity | ||||||||
Capital stock | 30,127 | 30,127 | ||||||
Additional paid in capital | 106,973 | 131,973 | ||||||
Accumulated other comprehensive loss | (1,992 | ) | (5,842 | ) | ||||
Deficit Accumulated During the Development Stage | (18,298 | ) | (46,494 | ) | ||||
Tot Total Stockholders' Equity | 116,810 | 109,764 | ||||||
Total Liabilities and Stockholders' Equity | $ | 160,101 | $ | 160,322 |
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MAXLIFE FUND CORP. AND SUBSIDIARY
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
Unaudited
(Expressed in United States Dollars)
For the Three Months Ended 31 May 2007 | For the Nine Months Ended 31 May 2007 | For the Period From Inception to 31 May 2007 | ||||||||||
REVENUE | ||||||||||||
Interest income | $ | 395 | $ | 1,178 | $ | 1,178 | �� | |||||
Gain on sale of investments | - | 36,855 | 36,855 | |||||||||
395 | 38,033 | 38,033 | ||||||||||
EXPENSES | ||||||||||||
General and administrative | - | 1,258 | 37,259 | |||||||||
Professional fees | 4,500 | 7,558 | 17,766 | |||||||||
Interest and bank charges | 268 | 699 | 984 | |||||||||
(Gain) loss on foreign exchange | (86 | ) | 322 | 322 | ||||||||
4,682 | 9,837 | 56,331 | ||||||||||
NET (LOSS) EARNINGS | $ | (4,287 | ) | $ | 28,196 | $ | (18,298 | ) | ||||
FOREIGN CURRENCY TRANSLATION ADJUSTMENT | 2,139 | 3,850 | 1,992 | |||||||||
COMPREHENSIVE (LOSS) EARNINGS | $ | (2,148 | ) | $ | 32,046 | $ | (16,306 | ) | ||||
EARNINGS PER WEIGHTED NUMBER OF SHARES OUTSTANDING - BASIC AND DILUTED | $ | 0.00 | $ | 0.00 | ||||||||
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING - BASIC AND DILUTED | 30,127,100 | 30,127,100 |
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MAXLIFE FUND CORP. AND SUBSIDIARY
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited
(Expressed in United States Dollars)
For the Nine Months Ended 31 May 2007 | For the Period from Inception to 31 May 2007 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
Net earnings (loss) | $ | 28,196 | $ | (18,298 | ) | |||
Adjustment to reconcile net earnings to net cash provided by operating activities | ||||||||
Equity issued to acquire 1255450 Ontario Limited | - | 5,000 | ||||||
Issuance of common stock for services | - | 11,000 | ||||||
Issuance of common stock at inception | - | 30,000 | ||||||
28,196 | 27,543 | |||||||
Changes in operating assets and liabilities: | ||||||||
Short term investments | (95,080 | ) | (95,080 | ) | ||||
Accounts payable and accrued liabilities | (467 | ) | 3,533 | |||||
CASH FLOWS USED IN OPERATING ACTIVITIES | (67,351 | ) | (64,004 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
Acquisition of 1255450 Ontario Limited | - | (21,739 | ) | |||||
Insurance policy | (6,281 | ) | (6,281 | ) | ||||
CASH FLOWS USED IN INVESTING ACTIVITIES | (6,281 | ) | (28,020 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
Advances (from) to shareholder | (6,800 | ) | 3,200 | |||||
Issuance of common stock | - | 116,100 | ||||||
Financing fees | (25,000 | ) | (25,000 | ) | ||||
CASH FLOWS USED IN (PROVIDED BY) FINANCING ACTIVITIES | (31,800 | ) | 94,300 | |||||
EFFECT OF FOREIGN CURRENCY TRANSLATION | 3,850 | (1,833 | ) | |||||
NET (DECREASE) INCREASE IN CASH | (101,582 | ) | 443 | |||||
CASH, BEGINNING OF PERIOD | 102,025 | - | ||||||
CASH, END OF PERIOD | $ | 443 | $ | 443 |
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MAXLIFE FUND CORP. AND SUBSIDIARY
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Unaudited
31 MAY 2007
(Expressed in United States Dollars)
1. NATURE OF OPERATIONS |
MaxLife Fund Corp. (the "Company") was incorporated on 9 January 2006 under the laws of the State of Wyoming.
The Company intends to commence operations in the near future, where they plan to seek, acquire, fund and manage the life insurance policies of individuals. The Company will either hold these policies until maturity or market the policies for sale at an earlier date.
2. ORGANIZATION |
On 31 August 2006, the Company acquired 100% of the issued and outstanding common shares of 1254450 Ontario Ltd. ("1254450") an Ontario, Canada corporation for a purchase price of $25,000 Canadian ($21,739 US) in cash and common shares equal to $5,000 US. The parties agreed to defer the issuance of the common shares until the Company becomes listed on a public market exchange, at which time the shareholders of 1254450 will be issued that number of common shares that have a cash value of $5,000 US. In addition, the shareholders of 1254450 transferred the amounts due to them by 1254450 to the Company.
The purchase price was allocated as follows:
Consideration Exchanged:
Cash | $ | 21,739 | ||
Convertible debenture | 5,000 | |||
$ | 26,739 |
Assets acquired:
Liabilities assumed | $ | (31,558 | ) | |
Estimated fair value of tangible assets acquired | 23,028 | |||
Goodwill | 35,269 | |||
$ | 26,739 |
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MAXLIFE FUND CORP. AND SUBSIDIARY
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Unaudited
31 MAY 2007
(Expressed in United States Dollars)
3. GOING CONCERN |
The Company's financial statements are presented on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company has experienced losses from operations since inception that raise substantial doubt as to its ability to continue as a going concern.
The Company's ability to continue as a going concern is contingent upon its ability to obtain the financing and strategic alliances necessary to attain profitable operations. Management is pursuing various sources of financing and intends to raise further equity financing through a private placement with a private group of investors in the near future.
The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets and liabilities that may result from the possible inability of the Company to continue as a going concern.
4. BASIS OF PRESENTATION |
The accompanying unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. for interim financial information and with the instructions to Form 10-QSB and item 310 under subpart A of Regulation S-B. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the nine month period ended May 31, 2007 is not necessarily indicative of the results that may be expected for the year ending August 31, 2007. For further information, refer to the financial statements and footnotes thereto included in the Company’s registration statement on Form SB/2 for the period ended August 31, 2006.
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MAXLIFE FUND CORP. AND SUBSIDIARY
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Unaudited
31 MAY 2007
(Expressed in United States Dollars)
5. RECENT ACCOUNTING PRONOUNCEMENTS |
In February 2006, the FASB issued Statement of Financial Accounting Standards (“SFAS”) No. 155, Accounting for Certain Hybrid Financial Instruments, which amends SFAS No. 133, Accounting for Derivatives Instruments and Hedging Activities and SFAS No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities. SFAS 155 amends SFAS 133 to narrow the scope exception for interest-only and principal-only strips on debt instruments to include only such strips representing rights to receive a specified portion of the contractual interest or principle cash flows. SFAS 155 also amends SFAS 140 to allow qualifying special-purpose entities to hold a passive derivative financial instrument pertaining to beneficial interests that itself is a derivative instrument. Management does not expect the adoption of SFAS 155 to have a material impact on the Company’s financial statements.
In March 2006, the FASB released SFAS No. 156 Accounting for Servicing of Financial Assets: an amendment of FASB Statement No. 140 to simplify accounting for separately recognized servicing assets, servicing liabilities. SFAS No. 156 permits an entity to choose either the amortization method or the fair value measurement method for measuring each class of separately recognized servicing assets and servicing liabilities after they have been initially measured at fair value. SFAS No. 156 applies to all separately recognized servicing assets and liabilities acquired or issued after the beginning of an entity’s fiscal year that begins after 15 September 2006. The Company does not anticipate the adoption of SFAS No. 156 will have a material impact on its consolidated financial statements.
In July 2006, the FASB issued FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement No. 109, which clarifies the accounting for uncertainty in tax positions. This interpretation requires that the Company determine whether it is more likely than not that a tax position will be sustained upon examination based on the technical merits of the position, and measure the amount of benefit to be recognized in the financial statements for a tax position that meets the more- likely-than-not recognition threshold. FIN 48 is effective for fiscal years beginning after 15 December 2006. Management does not expect the adoption of FIN 48 to have a material impact on the Company’s financial statements.
In September 2006, the U.S. Securities and Exchange Commission (the “SEC”) issued Staff Accounting Bulletin (“SAB”) No. 108, which expresses the views of the SEC staff regarding the process of quantifying financial statement misstatements. SAB No. 108 provides guidance on the consideration of the effects of prior year misstatements in quantifying current year misstatements for the purpose of a materiality assessment.
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MAXLIFE FUND CORP. AND SUBSIDIARY
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Unaudited
31 MAY 2007
(Expressed in United States Dollars)
The guidance of this SAB is effective for annual financial statements covering the first fiscal year ending after 15 November 2006, which is 31 December 2006 for the Company. SAB No. 108 did not have an impact on the Company’s consolidated financial statements. In September 2006, the FASB issued SFAS No. 157, Defining Fair Value Measurement, which defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. FAS 157 is effective for financial statements issued for fiscal years beginning after 15 November 2007. The Company is currently evaluating the impact of adopting FAS 157 on its financial statements.
In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities. SFAS 159 permits entities to choose to measure many financial instruments, and certain other items, at fair value. SFAS 159 applies to reporting periods beginning after 15 November, 2007. The adoption of SFAS 159 is not expected to have a material impact on the Company’s financial condition or results of operations.
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Item 2. Management’s Discussion and Analysis or Plan of Operation
Certain statements contained in this quarterly filing, including, without limitation, statements containing the words “believes”, “anticipates”, “expects” and words of similar import, constitute forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.
Such factors include, among others, the following: international, national and local general economic and market conditions: demographic changes; the ability of the Company to sustain, manage or forecast its growth; the ability of the Company to successfully make and integrate acquisitions; raw material costs and availability; new product development and introduction; existing government regulations and changes in, or the failure to comply with, government regulations; adverse publicity; competition; the loss of significant customers or suppliers; fluctuations and difficulty in forecasting operating results; changes in business strategy or development plans; business disruptions; the ability to attract and retain qualified personnel; the ability to protect technology; and other factors referenced in this and previous filings.Given these uncertainties, readers of this prospectus and investors are cautioned not to place undue reliance on such forward-looking statements.
Plan of Operations
During the next twelve months, we expect to take the following steps in connection with the further development of our business and the implementation of our plan of operations:
Forth Quarter 2007:
We will continue to make relationships with Insurance Brokers and their clients to seek out opportunistic policies and life settlements situations available. We will attempt to raise additional financing for working capital and to marketing efforts. We will also seek investment partners in order to raise the necessary funds to acquire existing policies. Such partners include banks, hedge funds, investment funds and sophisticated investors.
First Quarter 2008
We will prepare advertisements and information material to disseminate to our network of brokers with the intention of ramping up purchases of policies. With funds obtained from banks and investment funds we will be in a position to purchase and administer 20 - 30 policies.
Second Quarter 2008
The addition of a stronger infrastructure will be required and we intend to hire management personnel and support staff. This will enable us to segregate work responsibilities and meet the ongoing growth of the business. We will be in a position to handle different territories both in Canada and the United States.
Third Quarter 2008:
Additional financings will be available to us through our relationships and performance. This will enable us to continue with our growth plans. The internal organization will be reviewed to see that it can handle the influx of new business. The administration of the policies will be pertinent and we will have to determine if we have sufficient staff to handle this responsibility. We will review in depth the success of purchasing of policies and initiating new policies. Upon review it will be determined if dividends can be paid to shareholders or if funds should be used to further purchase policies.
11
The management team will be strengthened, if need be, to ensure that shareholder value is maximized and the business plan is being implemented properly.
Capital Resources and Liquidity
At May 31, 2007, we had working capital of approximately $443. It is the intent of management and significant stockholders, if necessary, to provide sufficient working capital necessary to support and preserve the integrity of the corporate entity. However, there is no legal obligation for either management or significant stockholders to provide additional future funding. Should this pledge fail to provide financing, we have not identified any alternative sources.
As set forth in the notes to the financial statements, our independent auditors have expressed substantial doubt about our ability to continue as a going concern because we have no viable operations or significant assets and we are dependent upon significant shareholders to provide sufficient working capital to maintain the integrity of the corporate entity,
We are still in the process of developing and implementing its business plan and raising additional capital. As such, we are considered to be a development stage company. Management believes that actions presently being taken to obtain additional funding and implement its business plan provide the opportunity for us to continue as a going concern.
Critical Accounting Policies
MaxLife’s financial statements and related public financial information are based on the application of accounting principles generally accepted in the United States (“GAAP”). GAAP requires the use of estimates, assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenue and expense amounts reported. These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition. We believe our use of estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statements.
Our significant accounting policies are summarized in Note 1 of our financial statements. While all these significant accounting policies impact its financial condition and results of operations, MaxLife views certain of these policies as critical. Policies determined to be critical are those policies that have the most significant impact on MaxLife’s consolidated financial statements and require management to use a greater degree of judgment and estimates. Actual results may differ from those estimates. Our management believes that given current facts and circumstances, it is unlikely that applying any other reasonable judgments or estimate methodologies would cause effect on our consolidated results of operations, financial position or liquidity for the periods presented in this report.
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Item 3. Controls and Procedures
Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (Exchange Act), as of May 31, 2007. Based on this evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that our disclosure and controls are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
There were no changes (including corrective actions with regard to significant deficiencies or material weaknesses) in our internal controls over financial reporting that occurred during the second quarter of fiscal 2007 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
The Company is currently not a party to any pending legal proceedings and no such action by, or to the best of its knowledge, against the Company has been threatened.
Item 2. Changes in Securities.
None
Item 3. Defaults Upon Senior Securities.
None
Item 4. Submission of Matters to a Vote of Security Holders.
No matter was submitted during the quarter ending May 31, 2007, covered by this report to a vote of the Company’s shareholders, through the solicitation of proxies or otherwise.
Item 5. Other Information.
None
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Item 6. Exhibits
(a) | Reports on Form 8-K and Form 8K-A | ||
None. | |||
(b) | Exhibits | ||
Exhibit Number | Exhibit Title | ||
31.1 | Certification of Bennett Kurtz pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||
32.2 | Certification of Bennett Kurtz pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, there unto duly authorized.
MAXLIFE FUND CORP. | |
Registrant | |
Date: July 16, 2007 | By: /s/ Bennett Kurtz |
Bennett Kurtz | |
President, Chief Executive Officer and | |
Chief Financial Officer (Principal Accounting Officer) |