Boxxy 10Q 2021 Q1 Quarterly report

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

Mark One

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

For the quarterly period ended July 31, 2021

☐	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)

9980 S 300 W Suite 200, Sandy, UT 84070

415-968-5642

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 September 10, 2021

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION

Item 1.	Unaudited Condensed Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	17
Item 4.	Controls and Procedures	17

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	18
Item 1A.	Risk Factor	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	18
Item 5.	Other Information	18
Item 6.	Exhibits	18
SIGNATURES		19

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PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

BOXXY INC.

CONDENSED BALANCE SHEETS

AS OF JULY 31, 2021 AND APRIL 30, 2021

(Unaudited)

	July 31, 2021			April 30, 2021
				(Audited)
ASSETS
Current Assets

Total Current Assets	$	0		$	0

Mining Property Rights		125,000			125,000

TOTAL ASSETS	$	125,000		$	125,000

LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities
Accounts payable and accrued liabilities	$	43,870		$	39,921
Accrued interest		1,385			1,279
Accrued interest - related party		253			0
Loan from director		0			153,913
Total Current Liabilities		45,508			195,113

Loan payable - related party		156,735			0
Loan payable		6,973			6,973

Total Liabilities		209,216			202,086

Stockholders’ Deficit
Common stock, par value $0.001; 75,000,000 shares authorized,
4,190,000 shares issued and outstanding		4,190			4,190
Additional paid-in capital		22,610			22,610
Accumulated deficit		(111,016	)		(103,886	)
Total Stockholders’ Deficit		(84,216	)		(77,086	)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	125,000		$	125,000

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

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BOXXY INC.

CONDENSED STATEMENT OF OPERATIONS

FOR THE THREE MONTHS ENDED JULY 31, 2021 AND 2020

(Unaudited)

	Three Months Ended
	July 31,
	2021			2020

OPERATING EXPENSES
General and administrative expenses	$	6,772		$	2,661
Total Operating Expenses		6,772			2,661
Loss from operations		(6,772	)		(2,661	)

OTHER INCOME (EXPENSES)
Interest expense		(105	)		(262	)
Interest expense - related party		(253	)		0
Gain on extinguishment of debt		0			4,184
Other income (expense), net		(358	)		3,922

Income (Loss) before income taxes		(7,130	)		1,261
Provision for income taxes		0			0
NET INCOME (LOSS)	$	(7,130	)	$	1,261

NET INCOME (LOSS) PER SHARE: BASIC AND DILUTED	$	(0.00	)	$	0.00
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: BASIC AND DILUTED		4,190,000			4,190,000

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

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BOXXY INC.

CONDENSED STATEMENTS OF STOCKHOLDERS’ DEFICIT

FOR THE THREE MONTHS ENDED JULY 31, 2021 AND 2020

(Unaudited)

	Common Stock				Additional					Total
	Number of Shares		Amount		Paid-in Capital		Accumulated Deficit			Stockholders' Deficit

Balance - April 30, 2021		4,190,000	$	4,190	$	22,610	$	(103,886	)	$	(77,086	)

Net loss		-		0		0		(7,130	)		(7,130	)
Balance - July 31, 2021		4,190,000	$	4,190	$	22,610	$	(111,016	)	$	(84,216	)

	Common Stock				Additional					Total
	Number of Shares		Amount		Paid-in Capital		Accumulated Deficit			Stockholders' Deficit

Balance - April 30, 2020		4,190,000	$	4,190	$	22,610	$	(109,688	)	$	(82,888	)
			��
Net income		-		0		0		1,261			1,261
Balance - July 31, 2020		4,190,000	$	4,190	$	22,610	$	(108,427	)	$	(81,627	)

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

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BOXXY INC.

CONDENSED STATEMENT OF CASH FLOWS

FOR THE THREE MONTHS ENDED JULY 31, 2021 AND 2020

(Unaudited)

	Three Months Ended
	July 31,
	2021			2020

CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$	(7,130	)	$	1,261
Adjustments to reconcile net loss to net cash from operating activities:
Gain on extinguishment of debt		0			(4,184	)
Changes in operating assets and liabilities:
Accounts payable and accrued liabilities		3,949			2,611
Accrued interest		359			262
Net cash used in operating activities		(2,822	)		(50	)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of promissory note from director		2,822			50
Net cash provided by financing activities		2,822			50

Net change in cash and cash equivalents		0			0
Cash and cash equivalents - beginning of period		0			0
Cash and cash equivalents - end of period	$	0		$	0

Supplemental Cash Flow Disclosures
Cash paid for interest	$	0		$	0
Cash paid for income taxes	$	0		$	0

Supplemental Disclosures of Non-Cash Investing and Financing Activities
Issuance of promissory note - related party	$	153,913		$	0

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

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BOXXY INC.

NOTES TO UNAUDITED FINANCIAL STATEMENTS

JULY 31, 2021

NOTE 1 - ORGANIZATION AND BUSINESS OPERATIONS

Boxxy Inc. (the “Company”) was incorporated in Nevada on April 19, 2016. We were a development stage company that intended to develop an online beauty sample subscription service.

On November 26, 2020, the Company completed an acquisition of working interests in certain mining properties as discussed in Note 4 below.

We are currently focusing 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 three months ended July 31, 2021 are not necessarily indicative of the results that may be expected for the year ending April 30, 2022. 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, 2021 included in the Company’s Form 10-K as filed with the Securities and Exchange Commission on July 29, 2021.

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.

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Mining Property

Costs of lease, exploration, carrying and retaining unproven mineral properties are expensed as incurred. The Company expenses all mineral exploration costs as incurred as it is still in the exploration stage. If the Company identifies proven and probable reserves in its investigation of its properties and upon development of a plan for operating a mine, it would enter the development stage and capitalize future costs until production is established. When a property reaches the production stage, the related capitalized costs are amortized on a units-of-production basis over the proven and probable reserves following the commencement of production. Interest expense allocable to the cost of developing mining properties and to construct new facilities is capitalized until assets are ready for their intended use.

To date, the Company has not established the commercial feasibility of any exploration prospects; therefore, all exploration costs are being expensed.

ASC 930-805, “Extractive Activities-Mining: Business Combinations” states that mineral rights consist of the legal right to explore, extract, and retain at least a portion of the benefits from mineral deposits. Mining assets include mineral rights which are considered tangible assets under ASC 930-805. ASC 930-805 requires that mineral rights be recognized at fair value as of the acquisition date. As a result, the direct costs to acquire mineral rights are initially capitalized as tangible assets. Mineral rights include costs associated with acquiring patented and unpatented mining claims.

ASC 930-805 provides that in measuring the fair value of mineral assets, an acquirer should take into account both:

(a) The value beyond proven and probable reserves (“VBPP”) to the extent that a market participant would include VBPP in determining the fair value of the assets.

(b) The effects of anticipated fluctuations in the future market price of minerals in a manner that is consistent with the expectations of market participants.

As of July 31, 2021, the Company has capitalized a total of $125,000 in mining property rights.

Impairment

The Company assesses the carrying costs of the capitalized mineral properties for impairment under ASC 360-10, “Impairment of long-lived assets”, and evaluates its carrying value under ASC 930-360, “Extractive Activities - Mining”, annually. An impairment is recognized when the sum of the expected undiscounted future cash flows is less than the carrying amount of the mineral properties. Impairment losses, if any, are measured as the excess of the carrying amount of the mineral properties over its estimated fair value.

Based on the Company’s evaluation, no impairment has been recorded on the unproven mining property for the three months ended July 31, 2021.

Revenue Recognition

The Company recognized revenue from the sales of mineral products produced from mining operations in accordance with ASC 606,”Revenue Recognition” following the five steps procedure:

Step 1: The contract has been signed by both parties or when the invoice has been generated and provided to the customer

Step 2: The performance obligations are stated or implied in the contract or invoice

Step 3: The transaction price has been identified in the contract or invoice

Step 4: The Company has allocated the transaction price to the performance obligations pursuant to the contract or invoice

Step 5: The Company satisfied the performance obligations when the mineral products delivered to the purchaser

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The Company recognized revenue from the royalty revenue in accordance with ASC 606,”Revenue Recognition” following the five steps procedure:

Step 1: The contract has been signed by both parties for royalty fees

Step 2: The performance obligations are stated or implied in the contract

Step 3: The transaction price has been identified in the contract

Step 4: The Company has allocated the transaction price to the performance obligations pursuant to the contract

Step 5: The Company has satisfied the performance obligations at the same period as the sales that generate the royalty payment

Asset Retirement Obligations

The Company records a liability for asset retirement obligations (“ARO”) associated with its mining properties when those assets are placed in service. The corresponding cost is capitalized as an asset and included in the carrying amount of mining properties and is depleted over the useful life of the properties. Subsequently, the ARO liability is accreted to its then-present value.

Inherent in the fair value calculation of an ARO are numerous assumptions and judgments including the ultimate settlement amounts, inflation factors, credit adjusted discount rates, timing of settlement, and changes in the legal, regulatory, environmental and political environments. To the extent future revisions to these assumptions impact the fair value of the existing ARO liability, a corresponding adjustment is made to the mining property balance. Settlements greater than or less than amounts accrued as ARO are recorded as a gain or loss upon settlement.

Income Tax

The Company is governed by the Income Tax Law of the U.S. Internal Revenue Code. ASC 740-10-50, “Accounting for Uncertainty in Income Taxes,” which provides clarification related to the process associated with accounting for uncertain tax positions should be recognized in the Company’s financial statements. Audit periods remain open for review until the statute of limitations has passed. The completion of review or the expiration of the statute of limitations for a given audit period could result in an adjustment to the Company’s liability for income taxes. Any such adjustment could be material to the Company’s results of operations for any given quarterly or annual period based, in part, upon the results of operations for the given period.

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 5)

Basic and Diluted Income (Loss) Per Share

The Company computes income (loss) per share in accordance with FASB ASC 260, “Earnings per Share” which requires presentation of both basic and diluted earnings per share on the face of the statement of operations. Basic loss per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted income (loss) per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive. As of July 31, 2021 and April 30, 2021, the Company has no dilutive instruments.

Recent accounting pronouncements

In December 2019, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (ASU 2019-12), which simplifies the accounting for income taxes. This guidance will be effective for entities for the fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020 on a prospective basis, with early adoption permitted. We do not expect the adoption of this guidance to have a material impact on the Company’s financial statements.

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.

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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 $111,016, and working capital deficit of $45,508 at July 31, 2021.

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 – MINING PROPERTY

On November 26, 2020, the Company entered into an Asset Purchase Agreement with a vendor to acquire undivided 100% right, title and interest in and to unpatented mining claims located in the “Territoire d'Eeyou Istchee Baie-James” Québec, for a purchase price of $125,000. (Note 5)

NOTE 5 – RELATED PARTY TRANSACTIONS

The Company has received capital from the director of the Company to pay for the Company expenses.

On July 1, 2021, the Company issued a promissory note of $153,913 for the amount payable to the director as of April 30, 2021. The note is unsecured with annual interest rate of 2% and will maturity on December 31, 2022.

On July 31, 2021, the Company issued a promissory note of $2,822 for the amount the director pay to the vendors on behalf of the Company during the three months ended July 31, 2021. The note is unsecured with annual interest rate of 2% and will maturity on December 31, 2022.

During the three months ended July 31, 2021, the accrued interest on the notes was $253.

As of July 31, 2021, the loan payable to the director was $156,735 and accrued interest payable was $253.

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NOTE 6 – LOAN PAYABLE

The Company has outstanding long-term loan payable of $6,973 and $6,973 as of July 31, 2021 and April 30, 2021, respectively. The loan payable is unsecured with annual interest rate of 6% and had an original maturity date of April 20, 2020. The maturity date is extended through April 20, 2025.

Interest expense was $105 and $262 for the year ended July 31, 2021 and 2020, respectively. As of July 31, 2021 and April 30, 2021, accrued interest was $1,385 and $1,279, respectively.

NOTE 7 – STOCKHOLDER’S EQUITY

The Company has 75,000,000, $0.001 par value shares of common stock authorized.

As of July 31, 2021 and April 30, 2021, the Company had 4,190,000 shares issued and outstanding.

NOTE 8 – RISK AND UNCERTAINTIES

In early 2020, the World Health Organization declared the rapidly spreading coronavirus disease (COVID-19) outbreak a pandemic. This pandemic has resulted in governments worldwide enacting emergency measures to combat the spread of the virus. The Company considered the impact of COVID-19 on the assumptions and estimates used and determined that there were no retroactive material adverse impacts on the Company’s results of operations and financial position at July 31, 2021. The full extent of the future impacts of COVID-19 on the Company’s operations is uncertain. A prolonged outbreak could have a material adverse impact on financial results and business operations of the Company in the future. The Company is not aware of any specific event or circumstance that would require an update to its estimates or judgments or a revision of the carrying value of its assets or liabilities as of the date of issuance of this Quarterly Report on Form 10-Q. These estimates may change, as new events occur and additional information is obtained.

NOTE 9 – SUBSEQUENT EVENTS

In accordance with ASC 855-10, the Company has analyzed its operations subsequent to July 31, 2021 to the date these financial statements were issued and has determined that it does not have any material subsequent events to disclose in these financial statements.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

FORWARD-LOOKING STATEMENTS

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, 2016. 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.

Results of Operations

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 three months ended July 31, 2021 and 2020, which are included herein.

Three Months Ended July 31, 2021 and 2020

	Three Months Ended
	July 31,						Changes
	2021			2020			Amount			%

Operating expenses	$	(6,772	)	$	(2,661	)	$	(4,111	)		154	%
Other income (expenses)		(358	)		3,922			(4,280	)		(109	%)
Net Income (Loss)	$	(7,130	)	$	1,261		$	(8,391	)		(665	%)

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During the three months ended July 31, 2021 and 2020, the Company did not earn any revenue.

Net loss for the three months ended July 31, 2021 was $7,130 compared to net income of $1,261 for the three months ended July 31, 2020. The decrease in net income during the three months ended July 31, 2021 was due to an increase in operating expenses and a decrease in other income.

Liquidity and Capital Resources

Working Capital

	As of			As of
	July 31,			April 30,			Changes
	2021			2021			Amount			%

Current Assets	$	-		$	-		$	-			0	%
Current Liabilities	$	45,508		$	195,113		$	(149,605	)		(77	%)
Working Capital Deficiency	$	(45,508	)	$	(195,113	)	$	149,605			(77	%)

Our total current liabilities as of July 31, 2021 were $45,508 as compared to total current liabilities of $195,113 as of April 30, 2021. Our working capital deficiency as of July 31, 2021 was $45,508 as compared $195,113 as of April 30, 2021. The decrease in current liabilities and working capital deficiency were primarily due to a decrease in loan from director of $153,913 with the issuance of promissory note of $156,735 under long-term liabilities during the three months ended July 31, 2021.

Cash Flows

	Three Months Ended
	July 31,						Changes
	2021			2020			Amount			%

Cash flows used in operating activities	$	(2,822	)	$	(50	)	$	(2,772	)		5,544	%
Cash flows provided by financing activities		2,822			50			2,772			5,544	%
Net changes in cash	$	-		$	-		$	-			-

Cash Flows from Operating Activities

Net cash used in operating activities was $2,822 for the three months ended July 31, 2021 compared with $50 during the three months ended July 31, 2020.

During the three months ended July 31, 2021, the net cash used in operating activities was attributed to net loss of $7,130, decreased by an increase in accounts payable and accrued liabilities of $3,949 and an increase in accrued interest of $359.

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During the three months ended July 31, 2020, the net cash used in operating activities was attributed to net income of $1,261, increased by an increase in accounts payable and accrued liabilities of $2,611 and an increase in accrued interest of $262, and was reduced by gain on extinguishment of debt of $4,184.

Cash Flows from Investing Activities

There were not investing activities during the three months ended July 31, 2021 and 2020.

Cash Flows from Financing Activities

During the three months ended July 31, 2021, net cash from financing activities was $2,822 derived from director loan compared to $50 during the three months ended July 31, 2020.

Going Concern

As reflected in the financial statements, the Company had an accumulated deficit of $111,016, and working capital deficit of $45,508 at July 31, 2021.

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.

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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.

Mining Property

To date, the Company has not established the commercial feasibility of any exploration prospects; therefore, all exploration costs are being expensed.

ASC 930-805 provides that in measuring the fair value of mineral assets, an acquirer should take into account both:

(a) The value beyond proven and probable reserves (“VBPP”) to the extent that a market participant would include VBPP in determining the fair value of the assets.

(b) The effects of anticipated fluctuations in the future market price of minerals in a manner that is consistent with the expectations of market participants.

As of July 31, 2021, the Company has capitalized a total of $125,000 in mining property rights.

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Impairment

Based on the Company’s evaluation, no impairment has been recorded on the unproven mining property for the nine months ended July 31, 2021.