QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 31, 2020
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to _______
Commission File No. 333-213553
BOXXY INC.
(Exact name of registrant as specified in its charter)
Nevada
5960
32-0500871
(State or Other Jurisdiction of
Incorporation or Organization)
(Primary Standard Industrial
Classification Number)
(IRS Employer
Identification Number)
WATTOVA 10
OSTRAVA 70200
CZECH REPUBLIC
+420228881919
boxxyinc@protonmail.com
(Address and telephone number of principal executive offices)
Indicate by checkmark whether the issuer: (1) has 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, 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. (Check one)
Large accelerated filer
☐
Accelerated filer
☐
Non-accelerated filer
☐
Smaller reporting company
☒
(Do not check if a smaller reporting company)
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☒ No ☐
Applicable Only to Issuer Involved in Bankruptcy Proceedings During the Preceding Five Years. N/A
Indicate by checkmark whether the issuer has filed all documents and reports required to be filed by Section 12, 13 and 15(d) of the Securities Exchange Act of 1934 after the distribution of securities under a plan confirmed by a court. Yes ☐ No ☒
Indicate the number of shares outstanding of each of the registrant’s classes of common stock as of the latest practicable date.
4,190,000 Shares of common stock as of February 8, 2021
Boxxy Inc. (the “Company”) was incorporated in Nevada on April 19, 2018. We were a development stage company that intended to develop an online beauty sample subscription service.
We are currently in the process of acquiring claims for mining properties and will focus on mining business.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited interim financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the six months ended October 31, 2020 are not necessarily indicative of the results that may be expected for the year ending April 30, 2021. Notes to the unaudited interim financial statements that would substantially duplicate the disclosures contained in the audited financial statements for fiscal year 2020 have been omitted. This report should be read in conjunction with the audited financial statements and the footnotes thereto for the fiscal year ended April 30, 2020 included in the Company’s Form 10-K as filed with the Securities and Exchange Commission on December 28, 2020.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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 the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Fair Value of Financial Instruments
ASC 820 “Fair Value Measurements and Disclosures” establishes a three-tier fair value hierarchy, which prioritizes the inputs in measuring fair value. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market.
These tiers include:
Level 1: defined as observable inputs such as quoted prices in active markets;
Level 2: defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and
Level 3: defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.
The carrying value of accounts payable and accrued liabilities, accrued interest, current portion of long-term debt, other party loan and loan from director approximates its fair value due to their short-term maturity.
The Company recognizes revenue from the online beauty sample subscription services in accordance with ASC 606,”Revenue Recognition” following the five steps procedure:
Step 1: Identify the contract(s) with customers
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to performance obligations
Step 5: Recognize revenue when the entity satisfies a performance obligation
Start-Up Costs
In accordance with ASC 720, “Start-up Costs”, the Company expenses all costs incurred in connection with the start-up and organization of the Company.
Related Party Balances and Transactions
The Company follows FASB ASC 850, “Related Party Disclosures,” for the identification of related parties and disclosure of related party transaction. (See Note 4)
Recent accounting pronouncements
Management has considered all recent accounting pronouncements issued. The Company’s management believes that these recent pronouncements will not have a material effect on the Company’s financial statements.
NOTE 3 – GOING CONCERN
The Company’s financial statements have been prepared assuming that it will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business.
As reflected in the financial statements, the Company had an accumulated deficit of $87,640, and working capital deficit of $53,867 at October 31, 2020.
The Company is attempting to commence operations and generate sufficient revenue; however, the Company’s cash position may not be sufficient to support the Company’s daily operations. Management intends to raise additional funds by way of a private or public offering. While the Company believes in the viability of its strategy to commence operations and generate sufficient revenue and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate sufficient revenue and its ability to raise additional funds by way of a public or private offering.
The financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
NOTE 4 – RELATED PARTY TRANSACTIONS
The Company has received capital from the former director and current director of the Company to pay for the Company expenses. The advance is unsecured non-interest bearing, and due on demand. During the six months ended October 31, 2020 and 2019, the director advanced $4,223 and $nil to the Company for paying operating expenses.
As of October 31, 2020 and April 30, 2020, the loan from director was $4,223 and $22,482 as of October 31, 2020 and April 30, 2020, respectively. Loan from former director in the amount of $22,482 was forgiven as of September 28, 2020.
NOTE 5 – LOAN PAYABLE
The Company has outstanding loans payable of $nil and $6,336 as of October 31, 2020 and April 30, 2020, respectively. The loans payable is unsecured with annual interest rate of 6%. On July 1, 2020, the loan of $3,736 and accrued interest of $448 was forgiven. On September 15, 2020, the loan of $2,600 and accrued interest of $312 was forgiven.
The Company has outstanding long-term loan payable of $6,973 and $6,973 as of October 31, 2020 and April 30, 2020, respectively. The loan payable is unsecured with annual interest rate of 6% and had an original maturity date of April 15, 2020. The maturity date is extended through April 15, 2025.
The Company has outstanding other party loan of $4,050 and $4,050 as of October 31, 2020 and April 30, 2020, respectively. The loan payable is unsecured with annual interest rate of 6% and original maturity date of November 10, 2019. The maturity date is extended through November 10, 2020.
Interest expenses were $448 and $525 for the six months ended October 31, 2020 and 2019, respectively. As of October 31, 2020 and April 30, 2020, accrued interest was $1,548 and $1,860, respectively.
NOTE 6 – STOCKHOLDER’S EQUITY
The Company has 75,000,000, $0.001 par value shares of common stock authorized.
As of October 31, 2020 and April 30, 2020, the Company had 4,190,000 shares issued and outstanding.
NOTE 7 – SUBSEQUENT EVENTS
In accordance with ASC 855-10, the Company has analyzed its operations subsequent to the October 31, 2020 to the date these financial statements were issued and has determined the following subsequent events:
Pursuant to an agreement signed on November 26, 2020, the Company agreed to acquire 100% right, title and interest in mining claims in Quebec for consideration of $125,000.
On November 10, 2020, other party loan of $4,050 and accrued interest of $243 was forgiven.
This annual report contains forward-looking statements. These statements relate to future events or our future financial performance. These statements often can be identified by the use of terms such as "may," "will," "expect," "believe," "anticipate," "estimate," "approximate" or "continue," or the negative thereof. We intend that such forward-looking statements be subject to the safe harbors for such statements. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statements represent management's best judgment as to what may occur in the future. However, forward-looking statements are subject to risks, uncertainties and important factors beyond our control that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events.
GENERAL
We were incorporated in the State of Nevada on April 16, 2018. In December 2020, we acquired several gold mining claims in Canada as we have switched our focus to the mining industry. We plan to begin exploration on the properties later in 2021.
EMPLOYEES AND EMPLOYMENT AGREEMENTS
At present, we have no employees other than our officer and director. We presently do not have pension, health, annuity, insurance, stock options, profit sharing or similar benefit plans; however, we may adopt such plans in the future. There are presently no personal benefits available to any officers, directors or employees.
We have incurred recurring losses to date. Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation.
We expect we will require additional capital to meet our long-term operating requirements. We expect to raise additional capital through, among other things, the sale of equity or debt securities.
The following summary of our operations should be read in conjunction with our unaudited condensed financial statements for the six months ended October 31, 2020 and 2019, which are included herein.
Three Months Ended October 31, 2020 and 2019
Three Months Ended
October 31,
Changes
2020
2019
Amount
%
Operating Expenses
$
4,421
$
5,747
$
(1,326
)
(23
)%
Other income (expenses)
25,208
(263
)
25,471
(9685
)%
Net Income (Loss)
$
20,787
$
(6,010
)
$
24,145
(402
)%
During the three months ended October 31, 2020 and 2019, the Company did not earn any revenue.
Net income for the three months ended October 31, 2020 was $20,787 compared to net loss of $6,010 for the three months ended October 31, 2019. The increase in net income during the three months ended October 31, 2020 was due to an increase in other income of $25,471 in relation to forgiveness of long term debt and accrued interest.
Six Months Ended October 31, 2020 and 2019
Six Months Ended
October 31,
Changes
2020
2019
Amount
%
Operating expenses
$
(7,082
)
$
(8,330
)
$
1,248
(15
)%
Other income (expenses)
29,130
(525
)
29,655
(5649
)%
Net Income (Loss)
$
22,048
$
(8,855
)
$
30,903
(349
)%
During the six months ended October 31, 2020 and 2019, the Company did not earn any revenue.
Net income for the six months ended October 31, 2020 was $22,048 compared to net loss of $8,855 for the six months ended October 31, 2019. The increase in net income during the six months ended October 31, 2020 was due to an increase in other income of $29,655 in relation to forgiveness of long term debt and accrued interest.
Our total current liabilities as of October 31, 2020 were $53,867 as compared to total current liabilities of $75,915 as of April 30, 2020. Our working capital deficiency as of October 31, 2020 was $53,867 as compared to our working capital deficiency of $75,915 as of April 30, 2020. The decrease in current liabilities and working capital deficiency were primarily due to forgiveness of long-term debts and accrued interest of $7,096 and forgiveness of loan from the Company’s former director of $22,482.
Cash Flows
Six Months Ended
October 31,
Changes
2020
2019
Amount
%
Cash flows used in operating activities
$
(4,223
)
$
(6,198
)
$
1,975
-
Cash flows provided by financing activities
4,223
6,198
(1,975
)
-
Net changes in cash
$
-
$
-
$
-
-
Cash Flows from Operating Activities
Net cash used in operating activities was $4,223 for the six months ended October 31, 2020 compared with $6,198 used in operating activities during the six months ended October 31, 2019.
During the six months ended October 31, 2020, the net cash used in operating activities was attributed to net income of $22,048, decreased by forgiveness of loans and accrued interest of 29,578 and increased by an increase in accounts payable and accrued liabilities of $2,859 and an increase in accrued interest of $448.
During the six months ended October 31, 2019, the net cash used in operating activities was attributed to net loss of $8,855, decreased by an increase in accounts payable and accrued liabilities of $2,132 and an increase in accrued interest of $525.
Cash Flows from Investing Activities
We have not generated cash flow from investing activities for the six months ended October 31, 2020 and 2019.
Cash Flows from Financing Activities
During the six months ended October 31, 2020, net cash from financing activities was $4,223 derived from advancement from director compared to $6,198 during the six months ended October 31, 2019.
Going Concern
The Company’s financial statements have been prepared assuming that it will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business.
As reflected in the financial statements, the Company had an accumulated deficit of $87,640, and working capital deficit of $53,867 at October 31, 2020.
The Company is attempting to commence operations and generate sufficient revenue; however, the Company’s cash position may not be sufficient to support the Company’s daily operations. Management intends to raise additional funds by way of a private or public offering. While the Company believes in the viability of its strategy to commence operations and generate sufficient revenue and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate sufficient revenue and its ability to raise additional funds by way of a public or private offering.
The financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
Plan of Operation and Funding
We expect that working capital requirements will continue to be funded through a combination of our existing funds and further issuances of securities. Our working capital requirements are expected to increase in line with the growth of our business.
Existing working capital, further advances and debt instruments, and anticipated cash flow are expected to be adequate to fund our operations over the next six months. We have no lines of credit or other bank financing arrangements. Generally, we have financed operations to date through the proceeds of the private placement of equity and debt instruments. In connection with our business plan, management anticipates additional increases in operating expenses and capital expenditures relating to: (i) acquisition of software; (ii) developmental expenses associated with a start-up business; and (iii) marketing expenses. We intend to finance these expenses with further issuances of securities, and debt issuances. Thereafter, we expect we will need to raise additional capital and generate revenues to meet long-term operating requirements. Additional issuances of equity or convertible debt securities will result in dilution to our current shareholders. Further, such securities might have rights, preferences or privileges senior to our common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, we may not be able to take advantage of prospective new business endeavors or opportunities, which could significantly and materially restrict our business operations.
Contractual Obligations
As a “smaller reporting company”, we are not required to provide tabular disclosure obligations.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.
Critical Accounting Policies
The preparation of financial statements in 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. A change in managements’ estimates or assumptions could have a material impact on our financial condition and results of operations during the period in which such changes occurred. Actual results could differ from those estimates. Our financial statements reflect all adjustments that management believes are necessary for the fair presentation of their financial condition and results of operations for the periods presented.
Management has considered all recent accounting pronouncements issued. Our company’s management believes that these recent pronouncements will not have a material effect on our financial statements.
Our management, with the participation of our Chief Executive Officer (our principal executive officer, principal financial officer and principal accounting officer), has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a- 15(e) and 15d- 15(e) under the Securities Exchange Act of 1934, as amended (Exchange Act)), as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on such evaluation, our Chief Executive Officer has concluded that as of such date, our disclosure controls and procedures were not effective such that the information relating to us required to be disclosed in our Securities and Exchange Commission (“SEC”) reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control Over Financial Reporting
During the period covered by this report there were no changes in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
BOXXY INC.
Dated: February 12, 2021
By:
/s/ Lian Yao Bin
Lian Yao Bin,
President and Chief Executive Officer and
Chief Financial Officer
17
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