UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report under Section 13 or 15 (d) of
Securities Exchange Act of 1934
For the quarterly period ended May 31, 2015
Commission File Number 000-54667
KOLLAGENX CORP.
(Exact name of small business issuer as specified in its charter)
INTEGRATED ELECTRIC SYSTEMS CORP.
(Former Name of small business issuer)
NEVADA | 20-8624019 |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) |
13949 Ramona Aave.
Chino Ca 91710 (Address of Principal Executive Offices & Zip Code)
(800) 641-8004
(Telephone Number)
Registered Agents of Nevada, Inc.
711 S Carson St. Ste. 4
Carson, NV 89701
(775) 882-4641
(Name, Address and Telephone Number of Agent for Service)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 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 [ X ] No [ ]
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes [ X ] No [ ]
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes [ ] No [ X ]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.
Large accelerated filer [ ] Accelerated Filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
(Do not check if smaller reporting company)
There were 52,000,000 shares of Common Stock outstanding as of July 17, 2015.
KOLLAGENX CORP.
TABLE OF CONTENTS
| | | | Page No. |
| | Part I | | |
| | | | |
| Item 1. | Condensed Consolidated Financial Statements | | 4 |
| Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | | 15 |
| Item 3. | Quantitative and Qualitative Disclosures about Market Risk | | 17 |
| Item 4. | Controls and Procedures | | 17 |
| | | | |
| | Part II | | |
| | | | |
| Item 1. | Legal Proceedings | | 18 |
| Item 1A. | Risk Factors | | 18 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds. | | 18 |
| Item 3. | Defaults Upon Senior Securities | | 18 |
| Item 4. | Mine Safety Disclosures | | 19 |
| Item 5. | Other Information | | 19 |
| Item 6 | Exhibits | | 19 |
| | | | |
| Signatures | | 20 |
Item 1. Financial Statements.
The following interim unaudited financial statements of KollagenX Corp. (the "Company") for the three month period ended May 31, 2015 are included with this Quarterly Report on Form 10-Q:
| (a) | Condensed Consolidated Unaudited Balance Sheets as at May 31, 2015 and February 28, 2015. |
| | |
| (b) | Condensed Consolidated Unaudited Statements of Operations for the three months ended May 31, 2015 and 2014. |
| | |
| (c) | Condensed Consolidated Unaudited Statements of Cash Flows for the three months ended May 31, 2015 and 2014. |
| | |
| (d) | Notes to Condensed Consolidated Unaudited Financial Statements. |
| KollagenX Corp |
| Condensed Consolidated Balance Sheets |
| (Unaudited) |
| | | May 31, | | | February 28, | |
| | | 2015 | | | 2015 | |
| Assets | |
| Current assets | | | | | | |
| Cash and cash equivalents | | $ | 8,038 | | | $ | 145 | |
| Accounts receivable - net | | | 10,793 | | | | 29,987 | |
| Inventory | | | 63,495 | | | | 68,043 | |
| Advance to vendor | | | 10,362 | | | | 6,600 | |
| Prepaid expenses and other current assets | | | 104,442 | | | | 130,385 | |
| | | | | | | | | |
| Total current assets | | | 197,130 | | | | 235,160 | |
| | | | | | | | | |
| Property and equipment | | | | | | | | |
| Property and equipment | | | | | | | | |
| Equipment | | | 19,581 | | | | 18,781 | |
| Computer equipment | | | 13,904 | | | | 13,904 | |
| | | | 33,485 | | | | 32,685 | |
| Less: accumulated depreciation | | | (31,355 | ) | | | (31,226 | ) |
| Property and equipment, net | | | 2,130 | | | | 1,459 | |
| | | | | | | | | |
| Total assets | | $ | 199,260 | | | $ | 236,619 | |
| | | | | | | | | |
| Liabilities and Stockholders' Deficit | |
| Current liabilities | | | | | | | | |
| Accounts payable and accrued expenses | | $ | 89,961 | | | $ | 59,676 | |
| Loans payable | | | 179,578 | | | | 184,845 | |
| Notes payable | | | 447,886 | | | | 415,871 | |
| Related party payable | | | 164,654 | | | | 167,520 | |
| Total current liabilities | | | 882,079 | | | | 827,912 | |
| | | | | | | | | |
| Stockholders' deficit | | | | | | | | |
| Common stock, $0.001 par value, 750,000,000 shares authorized; | | | | | | | | |
| 54,000,000 shares issued and outstanding | | | | | | | | |
| as of May 31 and February 28, 2015, respectively | | | 54,000 | | | | 54,000 | |
| Additional paid in capital | | | (181,873 | ) | | | (181,873 | ) |
| Accumulated deficit | | | (554,946 | ) | | | (463,420 | ) |
| Total stockholders' deficit | | | (682,819 | ) | | | (591,293 | ) |
| | | | | | | | | |
| Total liabilities and stockholders' deficit | | $ | 199,260 | | | $ | 236,619 | |
| | | | | | | | | |
| See accompanying notes to condensed consolidated unaudited financial statements | |
| |
| KollagenX Corp |
| Condensed Consolidated Statements of Operations |
| (Unaudited) |
| | | For the three months ended May 31, | |
| | | 2015 | | | 2014 | |
| | | | | | | |
| Revenues, net | | $ | 97,743 | | | $ | 74,692 | |
| | | | | | | | | |
| Cost of sales | | | | | | | | |
| Purchases | | | 22,359 | | | | 9,260 | |
| Freight | | | 1,448 | | | | 2,368 | |
| Total cost of sales | | | 23,807 | | | | 11,628 | |
| | | | | | | | | |
| Gross profit | | | 73,936 | | | | 63,064 | |
| Operating expenses | | | | | | | | |
| Advertising and promotion | | | - | | | | 1,589 | |
| General and administrative | | | 74,537 | | | | 21,300 | |
| Management salaries | | | 15,000 | | | | 19,500 | |
| Trade shows | | | 52,729 | | | | 24,379 | |
| Wages | | | 8,420 | | | | 8,380 | |
| Total operating expenses | | | 150,687 | | | | 75,148 | |
| | | | | | | | | |
| Loss from operations | | | (76,751 | ) | | | (12,085 | ) |
| Other expenses | | | | | | | | |
| Interest | | | 14,775 | | | | 1,001 | |
| | | | | | | | | |
| Net loss | | $ | (91,526 | ) | | $ | (13,086 | ) |
| | | | | | | | | |
| Loss per common share - basic and diluted | | $ | (0.00 | ) | | $ | (0.00 | ) |
| | | | | | | | | |
| Weighted average common shares | | | | | | | | |
| outstanding - basic and diluted | | | 54,000,000 | | | | 10,000,000 | |
| | | | | | | | | |
| See accompanying notes to condensed consolidated unaudited financial statements | |
KollagenX Corp. (formerly known as Integrated Electric Systems Corp. and previously Raider Ventures, Inc.) was incorporated in the State of Nevada on March 5, 2007 as Northern Minerals, Inc. Our original business was to engage in the acquisition, exploration and development of natural resource properties. On July 17, 2014 our board of directors approved, both, a letter of intent and the preparation of an agreement and plan to acquire 100% of the outstanding common shares of KollagenX, Inc. a California corporation, and to effect a name change from Integrated Electric Systems Corp. to KollagenX Corp., for the sole purpose of expanding the KollagenX, Inc. business plan for the distribution of personal beauty products.
KollagenX, Inc., a California corporation, was incorporated on May 15, 2009 as QWR, Inc. and changed its name to KollagenX Inc. on October 8, 2013.
Articles of Merger to effect the merger between the newly created KollagenX Corp. and Integrated, and to change the name, from Integrated to KollagenX, were filed with and became effective with the Nevada Secretary of State on July 23, 2014. The name change was reviewed by the Financial Industry Regulatory Authority (FINRA) and approved for filing with an effective date of July 30, 2014.
A Share Exchange Agreement, between the newly created KollagenX Corp., KollagenX, Inc. and the shareholders of KollagenX, Inc. became effective August 4, 2014. Pursuant to that Share Exchange Agreement, all of the outstanding shares of KollagenX, Inc., (1,000) were traded for 10,000,000 common shares of KollagenX Corp. Simultaneously, the two shareholders of KollagenX, Inc.were elected as Directors and appointed as President and CEO, of KollagenX Corp. The acquisition of KollagenX, INC. has been recorded as a reverse merger since the shareholders of KollagenX retain the control of the new company . The historical statements are those of KollagenX Inc.
KollagenX Corp.'s and KollagenX Inc.'s respective year ends were March 31 and February 28. KollagenX, Corp. has changed its fiscal year end to February 28.
NOTE 2 - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
These statements reflect all adjustments, consisting of normal recurring adjustments, which, in the opinion of management, are necessary for fair presentation of the information contained therein. It is suggested that these condensed consolidated financial statements be read in conjunction with the financial statements and notes thereto included in the Company's annual report on Form 10-K for the year ended February 28, 2015. The Company follows the same accounting policies in preparation of interim reports. Results of operations for the interim periods are not indicative of annual results. All inter-company transactions have been eliminated on consolidation.
For comparative purposes, prior year's condensed consolidated financial statements have been reclassified to conform to report classifications of the current year.
KOLLAGENX CORP.
Notes to Unaudited Condensed Consolidated Financial Statements
As at May 31, 2015
NOTE 2 - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)
Summary of Significant Accounting Policies
Use of estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Cash and cash equivalents
Cash and cash equivalents include all highly liquid debt instruments with original maturities of three months or less which are not securing any corporate obligations.
The Company maintains its cash in bank deposit accounts which, at times, may exceed federal insured limits. The Company has not experienced any losses in such accounts.
Accounts Receivable
Accounts receivable are carried at their estimated collectible amounts. Accounts receivable are periodically evaluated for collectability based on past credit history with customers and their current financial condition. The Company's management determines which accounts are past due and if deemed uncollectible, the Company charges off the receivable in the period the determination is made.
Property and Equipment
Property and equipment consists primarily of office equipment and computer equipment, and is recorded at historical cost. Major additions and improvements are capitalized as additions to the property and equipment accounts, while replacements, maintenance and repairs that do not improve or extend the life of the respective assets, are expensed as incurred. Depreciation and amortization of property and equipment are computed on a straight-line basis over the estimated useful lives ranging from 3 to 5 years.
Inventory
Substantially all inventory consists of finished goods and is valued at the lower of cost (first-in, first-out) or market. The determination of whether the carrying amount of inventory requires a write-down is based on a detailed evaluation of inventory relative to any potential slowing moving products or discontinued items as well as the market conditions for the specific inventory items.
KOLLAGENX CORP.
Notes to Unaudited Condensed Consolidated Financial Statements
May 31, 2015
NOTE 2 - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)
Revenue Recognition
Revenue comprises of product sales at market less any discount afforded to a client or customer, and professional services and products sold.
The Company's revenue recognition policies are in compliance with Staff accounting bulletin (SAB) 104. Sales revenue is recognized at the date of shipment to customers when a formal arrangement exists, the price is fixed or determinable, the delivery is completed, no other significant obligations of the Company exist and collect-ability is reasonably assured. Payments received before all of the relevant criteria for revenue recognition are satisfied are recorded as unearned revenue.
We recognize revenue for product sales upon shipment and when title is transferred to the customer.
Terms of our sales generally provide for Shipment from our facilities to customers FOB point of shipment. Title passes to customers at the time the products leave our warehouse.
Professional and consulting services related to the implementation and use of our products, are generally performed on a fixed fee basis under separate service arrangements.
Fair Value of Financial Instruments
The Company applies the provisions of ASC 820-10, "Fair Value Measurements and Disclosures." ASC 820-10 defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. For certain financial instruments, including cash and cash equivalents, restricted cash, accounts receivable, accounts payable and short-term debt, the carrying amounts approximate fair value due to their relatively short maturities. The carrying amounts of the long-term debt approximate their fair values based on current interest rates for instruments with similar characteristics.
The three levels of valuation hierarchy are defined as follows:
| Level 1: | Valuations consist of unadjusted quoted prices in active markets for identical assets and liabilities and has the highest priority; |
| Level 2: | Valuations rely on quoted prices in markets that are not active or observable inputs over the full term of the asset or liability; |
| Level 3: | Valuations are based on prices or third party or internal valuation models that require inputs that are significant to the fair value measurement and are less observable and thus have the lowest priority. |
KOLLAGENX CORP.
Notes to Unaudited Condensed Consolidated Financial Statements
As at May 31, 2015
NOTE 2 - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)
Management analyzes all financial instruments with features of both liabilities and equity under ASC 480, "Distinguishing Liabilities From Equity" and ASC 815, "Derivatives and Hedging." Derivative liabilities are adjusted to reflect fair value at each period end, with any increase or decrease in the fair value being recorded in results of operations as adjustments to fair value of derivatives. The effects of interactions between embedded derivatives are calculated and accounted for in arriving at the overall fair value of the financial instruments. In addition, the fair values of freestanding derivative instruments such as warrant and option derivatives are valued using the Black-Scholes model.
Recent Accounting Pronouncements
On June 10, 2014, the Financial Accounting Standards Board ("FASB") issued update ASU 2014-10, Development Stage Entities (Topic 915). Amongst other things, the amendments in this update removed the definition of development stage entity from Topic 915, thereby removing the distinction between development stage entities and other reporting entities from US GAAP. In addition, the amendments eliminate the requirements for development stage entities to (1) present inception-to-date information on the statements of income, cash flows and shareholders' equity, (2) label the financial statements as those of a development stage entity; (3) disclose a description of the development stage activities in which the entity is engaged and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage. The amendments are effective for annual reporting periods beginning after December 31, 2014 and interim reporting periods beginning after December 15, 2015, however entities are permitted to early adopt for any annual or interim reporting period for which the financial statements have yet to be issued. The Company has elected to early adopt these amendments and accordingly have not labeled the financial statements as those of a development stage entity and have not presented inception-to-date information on the respective financial statements.
There are no other recent accounting pronouncements that are expected to have a material effect on the Company's financial statements.
Earnings (Loss) per Share -
We utilize FASB ASC 260, "Earnings per Share." Basic earnings (loss) per share is computed by dividing earnings (loss) available to common stockholders by the weighted-average number of common shares outstanding. Diluted earnings (loss) per share is computed similar to basic earnings (loss) per share except that the denominator is increased to include additional common shares available upon exercise of stock options and warrants using the treasury stock method, except for periods of operating loss for which no common share equivalents are included because their effect would be anti-dilutive.
KOLLAGENX CORP.
Notes to Unaudited Condensed Consolidated Financial Statements
As at May 31, 2015
NOTE 2 - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)
Income Taxes - Income taxes are accounted for under the asset and liability method. Deferred income tax assets and liabilities are established for temporary differences between the financial reporting basis and the tax basis of the Company's assets and liabilities at tax rates expected to be in effect when such assets or liabilities are realized or settled. Deferred income tax assets are reduced by valuation allowances when necessary.
Assessing whether deferred tax assets are realizable requires significant judgment. The Company considers all available positive and negative evidence, including historical operating performance and expectations of future operating performance. The ultimate realization of deferred tax assets is often dependent upon future taxable income and therefore can be uncertain. To the extent the Company believes it is more likely than not that all or some portion of the asset will not be realized, valuation allowances are established against the Company's deferred tax assets, which increase income tax expense in the period when such a determination is made.
Income taxes include the largest amount of tax benefit for an uncertain tax position that is more likely than not to be sustained upon audit based on the technical merits of the tax position. Settlements with tax authorities, the expiration of statutes of limitations for particular tax positions, or obtaining new information on particular tax positions may cause a change to the effective tax rate. The Company recognizes accrued interest and penalties related to unrecognized tax benefits in the provision for income taxes on the statements of operations.
KOLLAGENX CORP.
Notes to Unaudited Condensed Consolidated Financial Statements
As at May 31, 2015
NOTE 3 - GOING CONCERN
The accompanying financial statements have been prepared on a going concern basis which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the financial statements, during the three months ended May 31, 2015 and 2014, respectively, the Company incurred net losses of $91,526 and $13,086 and as of May 31, 2015 had an accumulated deficit of $554,946. The KollagenX Inc. revenue for the three months ended May 31, 2015 was $97,743 as compared to $74,692 for the same period in 2014. If the Company is unable to generate profits and is unable to continue to obtain financing for its working capital requirements, it may have to curtail its business sharply or cease business altogether. These factors raise substantial doubt about the Company's ability to continue as a going concern.
The financial statements do not include any adjustment relating to the recoverability and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
The Company is taking steps to provide the necessary capital to continue its operations. These steps include, but are not limited to: 1) focus on sales to minimize the need for capital; 2) converting part of the outstanding accounts payable to equity; 3) raising equity financing; 4) continuous focus on reductions in cost where possible.
NOTE 6 - STOCKHOLDERS' DEFICIT
As of May 31, 2015, there were 54,000,000 shares of common stock outstanding.
Preferred Stock
As of December 31, 2014, there were 25,000,000 preferred shares authorized and 1,000,000 preferred shares outstanding.
On January 20, 2015 the Board of Directors resolved to withdraw the Certificate of Designation for the Class A preferred, which shares had been returned to the Company. Appropriate documents were completed and filed with the State of Nevada to amend the Company's Articles of Incorporation to delete the preferred share designation.
Common Stock
On August 4, 2014 pursuant to the Stock Exchange Agreement, for the acquisition of 100% of the outstanding common shares of KollagenX Inc., the Company agreed to issue 10,000,000 of its Common Shares to the shareholders of KollagenX Inc. The shares were issued on November 14, 2014.
NOTE 7 - RELATED PARTY TRANSACTIONS
The Company borrows funds from its two directors from time to time for its working capital requirements and sometimes utilizes their credit cards to pay some expenses. These loans are unsecured, non interest bearing and due on demand. As of May 31, 2015 and February 28, 2015 the Company owed $164,654 and $167,520 to the directors and a related third party, respectively.
NOTE 8 - SUBSEQUENT EVENTS
On July 17, 2015 the Company cancelled 2,000,000 shares of its restricted common stock. The Company has evaluated subsequent events through the date the financial statements were issued and has not identified any reportable events.
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
Forward-Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements within the meaning of Section 21E of the Securities Exchange Act. The words "believes," "anticipates," "plans," "seeks," "expects," "intends" and similar expressions identify some of the forward-looking statements. Forward-looking statements are not guarantees of performance or future results and involve risks, uncertainties and assumptions. The factors discussed elsewhere in this Form 10-Q could also cause actual results to differ materially from those indicated by the Company's forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements.
Business and Plan of Operation
KollagenX Corp. (formerly known as Integrated Electric Systems Corp. and previously Raider Ventures, Inc.) was incorporated in the State of Nevada on March 5, 2007 as Northern Minerals, Inc.
Our original business was to engage in the acquisition, exploration and development of natural resource properties. We received the results of Phase 1 and Phase 1A of the exploration program from the consulting geologist. The findings were not promising and management determined it was in the best interests of the shareholders to allow the claim to lapse.
On July 17, 2014, our board of directors approved an agreement and plan of merger to merge with our wholly-owned subsidiary KollagenX Corp., a Nevada corporation, to effect a name change from Integrated Electric Systems Corp. to KollagenX Corp. KollagenX Corp. was formed solely for the change of name and business plan for the distribution of personal beauty products.
Articles of Merger to effect the merger and change of name were filed and became effective with the Nevada Secretary of State on July 23, 2014.
The name change has been reviewed by the Financial Industry Regulatory Authority (FINRA) and was approved for filing with an effective date of July 30, 2014.
The name change became effective with the Over-the-Counter Bulletin Board at the opening of trading on July 30, 2014 under the symbol "KGNX". Our new CUSIP number is 50043U107.
On August 4, 2014 KollagenX Corp. exchanged 10,000,000 of its Common Shares with the shareholders of KollagenX Inc. in return for 1,000 Common Shares, of KollagenX Inc., which were all the issued and outstanding common shares of KollagenX Inc., whose business plan is based on the distribution of personal beauty products.
The acquisition of KollagenX, Inc. has been recorded as a reverse merger. As such, the historical statements of KollagenX, Corp. have replaced those of KollagenX, Inc., except for the outstanding stock of the Company.
KollagenX Corp.'s and KollagenX, Inc.'s respective year ends were March 31 and February 28, . KollagenX, Corp. has changed their fiscal year end to February 28.
During the next twelve months we anticipate spending approximately $20,000 on professional fees, including fees payable in complying with reporting obligations, and general administrative costs.
Liquidity and Capital Resources
Total current assets at May 31, 2015 were $197,130 a decrease of $38,031 compared to $235,160 at February 28, 2015. Included in current assets were trade accounts receivable of $10,793 the proceeds of which were expected to be collected in the normal course of business, compared to $29,987 accounts receivable at February 28, 2015; inventory of $63,495 compared to $68,043 at February 28, 2015; advances to a vendor for product to be shipped of $10,362 compared to $6,600 at February 28, 2015; and prepaid expenses of $104,442 compared to $130,385 at February 28, 2015. The decrease in prepaid expenses, of $25,943 is the amortization cost resulting from the prepayment of a two year consulting agreement.
Our cash in the bank at May 31, 2015 was $8,038 compared to $145 at February 28, 2015. Outstanding accounts payable were $ 89,961 plus other current liabilities of $792,118 compared to $59,676 and $768,236 in other current liabilities as of February 28, 2015. In both periods the other current liabilities consist of loans from third parties and related parties, none of which have a maturity date nor are being demanded by the lenders.
KollagenX Corp. had $8,038 cash on hand at May 31, 2015, which would be adequate, assuming the current level of sales, to sustain operations for approximately two months. The Company is taking steps to provide the necessary capital to continue its operations. These steps include, but are not limited to: 1) focus on sales to minimize the need for capital; 2) converting part of the outstanding accounts payable to equity; 3) raising equity financing; 4) continuous focus on reductions in cost where possible. Without that funding, the Company will not be able to maintain operations at the current level.
Results of Operations
Although KollagenX Corp. has not generated any revenue, our wholly owned subsidiary KollagenX Inc., recorded $97,743 in net revenue for the three months ended May, 31, 2015 compared to net revenue of $74,692 for the three months ended May 31, 2014. Our loss for the three months ended May 31, 2015 was $91,526 compared to a loss of $13,086 for the same period in 2014. The loss was due primarily to the added costs of adding KollagenX Corp. and the costs associated with the required filings and audits as well as the total cost of the preparation of the merger agreements and related filings. Our accumulated deficit since inception, including KollagenX Inc. through May 31, 2015 was $554,946.
We incurred operating expenses of $150,687 during the three months ended May 31, 2015 compared to $75,148 for the same period in 2014. The increase in expenses for the three months ended May 31, 2015 consisted of general operating expenses and professional fees, associated with the operations of KollagenX Inc. and KollagenX Corp.as compared to the general and administrative costs for KollagenX Inc. for the three months ended May 31, 2014. As a result of attending additional trade shows that cost increased $52,729 for the three months ended May 31, 2015 compared to $24,379 for the three months ended May 31, 2014.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
As a smaller reporting company, as defined in Rule 12b-2 of the Exchange Act, we are not required to provide the information required by this item.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Management maintains "disclosure controls and procedures," as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the "Exchange Act"), that are designed to ensure that information required to be disclosed in KollagenX Corp.'s Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
In connection with the preparation of this quarterly report on Form 10-Q, an evaluation was carried out by management, with the participation of the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of May 31, 2015.
Based on that evaluation, management concluded, as of the end of the period covered by this report, that KollagenX Corp.'s disclosure controls and procedures were ineffective in recording, processing, summarizing, and reporting information required to be disclosed, within the time periods specified in the Securities and Exchange Commission's rules and forms.
Changes in Internal Controls over Financial Reporting
As of the end of the period covered by this report, there have been no changes in KollagenX Corp.'s internal controls over financial reporting during the quarter ended May 31, 2015, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting subsequent to the date of management's last evaluation.
PART II – OTHER INFORMATION
Item 1. Legal Proceedings.
There has been no change to the Risk Factors disclosed in our Form 10-K filed with the Securities and Exchange Commission for the year ended February 28, 2015.
Item 1A. Risk Factors
There has been no change to the Risk Factors disclosed in our Form 10-K filed with the Securities and Exchange Commission for the year ended February 28, 2015.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
There were no sales of unregistered securities during the period covered by this report.
Item 3. Defaults upon Senior Securities.
There were no defaults upon senior securities during the period covered by this report.
Item 4. Mine Safety Disclosures
Not Applicable.
Item 5. Other Information.
None.
Item 6. Exhibits.
The following exhibits are included with this quarterly filing. Those marked with an asterisk and required to be filed hereunder, are incorporated by reference and can be found in their entirety in our original Form SB-2 Registration Statement, filed under SEC File Number 333-144840, at the SEC website at www.sec.gov:
| Exhibit No. | Description |
| | |
| 3.1 | Articles of Incorporation* |
| 3.2 | Bylaws* |
| 31 | Rule 13a-14(a)/15d-14(a) Certification |
| 32 | Certification Pursuant to 18 U.S.C. 1350 |
| 101 | Interactive data files pursuant to Rule 405 of Regulation S-T |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| | | |
| July 30, 2015 | | |
| | By | /s/ Rondell Fletcher |
| | | Rondell Fletcher |
| | | Secretary, Treasurer |
| | | |
| | By | /s/ George Huerta |
| | | George Huerta President |
| | | |
| | | |
| | | |
In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| | | | |
| /s/ Rondell Fletcher | | July 30, 2015 | |
| Rondell Fletcher, Secretary, Treasurer | | Date | |
| | | | |
| /s/ George Huerta | | | |
| George Huerta, President | | | |
| | | | |
| | | | |
| | | | |
| | | | |
