Quarterly Report (10-q)

Date : 12/06/2018 @ 4:37PM
Source : Edgar (US Regulatory)
Stock : Avra, Inc. (PN) (AVRN)
Quote : 0.0132  0.0 (0.00%) @ 2:33PM
Avra, Inc. share price Chart

Quarterly Report (10-q)

U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-Q

 

Mark One

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

 

For the quarterly period ended July 31, 2017

 

[   ]  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. 333-182130

 

AVRA INC.
(Exact name of registrant as specified in its charter)

 

Nevada

(State or Other Jurisdiction of Incorporation or Organization)

3651

(Primary Standard Industrial Classification Number)

EIN 36-4789798

(IRS Employer

Identification Number)

 

 

Plaza Compostela 4D2, Av. John F Kennedy,

Ensanche Paraiso, Santo Domingo, Dominican Republic

1-855-290-3195

 

(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 [X ]   No[   ]

Indicate by check mark whether the registrant is a large accelerated filed, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

Large accelerated filer [  ] Accelerated filer [   ] Non-accelerated filer [   ] Smaller reporting company [X] 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 7(a)(2)(B) 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 [ X ]


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At December 6, 2018, the number of shares of the Registrant’s common stock outstanding was 63,397,067.


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PART 1   

FINANCIAL INFORMATION

 

Item 1

Condensed Financial Statements (Unaudited)

4

   

Condensed Balance Sheets as of July 31, 2017 (unaudited) and January 31, 2017

4

      

Condensed Statements of Operations for the Three and Six months Ended July 31, 2017 and 2016 (unaudited)

5

 

Condensed Statements of Cash Flows for the Six months Ended July 31, 2017 and 2016 (unaudited)

6

 

Notes to the Condensed Financial Statements (unaudited)

7

Item 2.   

Management’s Discussion and Analysis of Financial Condition and Results of Operations

10

Item 3.   

Quantitative and Qualitative Disclosures About Market Risk

12

Item 4.

Controls and Procedures

12

 

 

 

PART II.

OTHER INFORMATION

 

Item 1   

Legal Proceedings

13

Item 2.  

Unregistered Sales of Equity Securities and Use of Proceeds

13

Item 3   

Defaults Upon Senior Securities

13

Item 4      

Mine safety disclosures

13

Item 5  

Other Information

13

Item 6      

Exhibits

13

 

Signatures

14


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                    AVRA INC.

 

 

 

BALANCE SHEETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

July

 

January

 

 

31, 2017

 

31, 2017

 

 

(Unaudited) 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

Cash

$                    -   

 

$            -   

 

Prepaid Expenses

-   

 

600   

 

Total Current Assets

-   

 

600   

Total assets

-   

 

600   

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' DEFICIT

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

Accounts Payable and Accrued Liabilities

135,358   

 

162,804   

 

Accounts Payable-Related Party

145,031   

 

115,039   

    Accrued Interest

36,103   

 

-   

 

Notes Payable

174,946   

 

169,946   

 

Stock Payable

115,496   

 

115,496   

Total liabilities

606,934   

 

563,285   

 

 

 

 

 

Stockholders' deficit:

 

 

 

 

Preferred Stock Authorized 100,000,000 Par Value $0.00001

 

 

 

 

As of July 31, 2017 and January 31, 2017

-   

 

-   

 

Common stock; authorized 300,000,000; 63,397,067 shares at $0.00001 par value

 

 

 

 

As of July 31, 2017 and January 31, 2017

634   

 

634   

 

Additional Paid in Capital

194,062   

 

194,062   

 

Deficit accumulated

(801,630)  

 

(757,381)  

 

Total stockholders' deficit

(606,934)  

 

(562,685)  

 

 

 

 

 

Total liabilities and stockholders' equity

$                    -   

 

$            600   

 

 

 

 

 

 

 

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

 

 

 

 

 


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     AVRA INC.

 

 

 

 

 

 

 

 

STATEMENTS OF OPERATIONS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Month Period Ended July 31, 2017

 

For the Three Month Period Ended July 31, 2016

 

For the Six Month Period Ended July 31, 2017

 

For the Six Month Period Ended July 31, 2016

 

 

 

 

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

$         22,600   

 

$       15,000   

 

$        37,600   

 

$         32,902   

Total Operating Expenses

 

22,600   

 

15,000   

 

37,600   

 

32,902   

 

 

 

 

 

 

 

 

 

 

Other Expenses

 

 

 

 

 

 

 

 

 

Interest Expense, net

 

3,375   

 

3,274   

 

6,649   

 

6,708   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss for the period

 

$        (25,975)  

 

$     (18,274)  

 

$     (44,249)  

 

$      (39,610)  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per share:

 

 

 

 

 

 

 

 

 

Basic and diluted

 

$                  -   

 

$               -   

 

$               -   

 

$                -   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares outstanding:

 

 

 

 

 

 

 

 

 

Basic and diluted

 

63,397,067   

 

63,397,067   

 

63,397,067   

 

63,397,067   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

statements

 

 

 

 

 

 

 

 

 

 

 

 

 

 


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         AVRA INC.

 

 

 

STATEMENTS OF CASH FLOWS

 

 

 

 

 

 

 

 

For the Six Month Period Ended July 31, 2017

 

For the Six Month Period Ended July 31, 2016

 

 

 

 

 

 

Cash flow from operating activities:

 

 

 

 

Net loss

$          (44,249)  

 

$        (39,610)  

Adjustmenttoreconcilenetlosstonetcashusedinoperatingactivities

   

 

 

 

Accrued Interest

4,119   

 

6,708   

Changes in operating assets and liabilities:

 

 

 

 

Prepaid expenses

600   

 

-   

 

Accounts Payable

4,538   

 

-   

 

Accounts Payable-related party

29,992   

 

32,902   

Net Cash (Used) in Operating activities

$            (5,000)  

 

$                   -   

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

Proceeds from note payable

5,000   

 

-   

Net cash provided by financing activities

5,000   

 

-   

 

 

 

 

 

 

Decrease in cash during the period

-   

 

-   

 

 

 

 

 

 

Cash, beginning of period

-   

 

7   

 

 

 

 

 

 

Cash, end of period

$                  -   

 

$                7   

 

 

 

 

 

 

Supplemental disclosure of cash flow information:

 

 

 

 

Cash paid during the period

 

 

 

 

 

Taxes

$                 -   

 

$                -   

 

 

Interest

$                 -   

 

$                -   

 

 

 

 

 

 

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

 

 

 

 

 

 


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Avra Inc.

July 31, 2017 and 2016

Notes to the Condensed Financial Statements

(Unaudited)

 

 

Note 1 - Organization and Operations

 

Nature of Business and Continuance of Operations

 

Avra Inc. (the “Company”) was incorporated in the State of Nevada on December 1, 2010. The Company, with offices in the United States, is focused on solutions in the cryptocurrency and digital currency markets, particularly in offering payment solutions to businesses worldwide. The Company also has a business in marketing and distributing of Smart TV boxes to home consumers throughout the United States. Smart TV boxes are hardware devices that allow consumers to combine all of the benefits of the Internet with the large size and high definition capabilities of TV screens; however, this is not the Company’s focus.

 

The Company’s business model can be broken down into four distinct categories, as follows: AvraPay: To develop a complete, turn-key and painless way for merchants to accept Bitcoin as payment; AvraATM: To promote usage and acceptance of digital currencies through the Company's proposed network of ATMs; AvraTourism: To provide cryptocurrency payment processing solutions for merchants such as hotels and casinos; AvraNews: To provide a news portal focusing on digital currency news.

These financial statements have been prepared on a going concern basis, which assumes the Company will continue to realize its assets and discharge its liabilities in the normal course of business.

 

These consolidated financial statements have been prepared on a going concern basis, which assumes the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing to continue operations, and the attainment of profitable operations. As of July 31, 2017, the Company has working capital deficit of $606,934 and has an accumulated deficit totaling $801,630 since inception, and has not yet generated any revenue from operations. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

The Company’s management plans to raise funds in the next 12 months through a combination of debt financing and equity financing by way of private placement.

 

Note 2 - Significant and Critical Accounting Policies and Practices

 

 

a) Basis of Presentation

 

These consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States and are expressed in US dollars. The Company’s fiscal year end is January 31.

 

b) Use of Estimates

 

The preparation of financial statements in conformity with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to stock-based compensation and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.


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c) Reclassification

 

Certain prior period amounts have been reclassified to conform to current period presentation.

 

d) Cash and Cash Equivalents

 

The Company considers all highly liquid instruments with an original maturity of six months or less at the time of issuance to be cash equivalents.

 

e) Financial Instruments

 

The Company’s financial instruments consist principally of cash and cash equivalents, accounts payable and accrued liabilities, short-term debts and due to related parties. Pursuant to ASC 820, Fair Value Measurements and Disclosures and ASC 825, Financial Instruments the fair value of the Company’s cash equivalents is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets.

 

f) Loss Per Common Share

 

Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing Diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. At July 31, 2017, the Company has no potentially dilutive securities outstanding.

 

g) Foreign Currency Translation

 

The Company’s planned operations will be in the United States, which results in exposure to market risks from changes in foreign currency exchange rates. The financial risk is the risk to the Company’s operations that arise from fluctuations in foreign exchange rates and the degree of volatility of these rates. Currently, the Company does not use derivative instruments to reduce its exposure to foreign currency risk. The Company's functional currency for all operations worldwide is the U.S. dollar. Nonmonetary assets and liabilities are translated at historical rates and monetary assets and liabilities are translated at exchange rates in effect at the end of the year. Revenues and expenses are translated at average rates for the year. Gains and losses from translation of foreign currency financial statements into U.S. dollars are included in current results of operations.

 

h) Revenue Recognition

 

Revenue Recognition

 

ASU No. 2014-09 Revenue from Contracts with Customers  (“Topic 606”), became effective for the Company on January 1, 2018. The Company’s revenue recognition disclosure reflects its updated accounting policies that are affected by this new standard. The Company applied the “modified retrospective” transition method for open contracts for the implementation of  Topic 606.  As   sales are and have been primarily from IT services, sale of phones, phone card products, prepaid cellular phone minutes and cellular activation, and the Company has no significant post-delivery obligations, this new standard did not   result in a material recognition of revenue on the Company’s accompanying consolidated financial statements for the cumulative impact of applying this new standard. The Company made no adjustments to its previously-reported total revenues, as those periods continue to be presented in accordance with its historical accounting practices under  Topic 605, Revenue Recognition .

 

Revenue from providing IT services, sale of phones, phone card products, prepaid cellular phone minutes and cellular activation services are recognized under  Topic 606  in a manner that reasonably reflects the delivery of its services and products to customers in return for expected consideration and includes the following elements:

 

 

executed contracts with the Company’s customers that it believes are legally enforceable;

 

identification of performance obligations in the respective contract;

 

determination of the transaction price for each performance obligation in the respective contract;

 

allocation the transaction price to each performance obligation; and


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recognition of revenue only when the Company satisfies each performance obligation.

 

These five elements, as applied to each of the Company’s revenue category, is summarized below:

 

 

IT services - revenue is recorded on a monthly basis as services are provided;

 

Sale of phones, phone card products, prepaid cellular phone minutes and cellular activation – revenue is recognized at the time of sale to the customer; and

 

License fees and Royalties – revenue is recognized based on the terms of the agreement with its customer.

 

The Company has not made any sales as of July 31, 2017.

 

i) Income Taxes

 

The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, Income Taxes . The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.

 

j) Stock-Based Compensation

 

We estimate the fair value of each stock option award at the grant date by using the Black-Scholes option pricing model and common shares based on the market price of the Company’s common stock on the date of the share grant.

 

The fair value determined represents the cost for the award and is recognized over the vesting period during which an employee is required to provide service in exchange for the award. As share-based compensation expense is recognized based on awards ultimately expected to vest, we reduce the expense for estimated forfeitures based on historical forfeiture rates. Previously recognized compensation costs may be adjusted to reflect the actual forfeiture rate for the entire award at the end of the vesting period. Excess tax benefits, if any, are recognized as an addition to paid-in capital.

 

k) Subsequent Events

 

The Company’s management reviewed all material events from July 31, 2017, through the issuance date of these financial statements for disclosure consideration.

 

l) Recent Accounting Pronouncements

 

 

In August 2014, the FASB issued ASU No. 2014-15, “Disclosure of Uncertainties About an Entity’s Ability to Continue as a Going Concern” (“ASU 2014-15”), which requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date the financial statements are issued and provides guidance on determining when and how to disclose going concern uncertainties in the financial statements. Certain disclosures will be required if conditions give rise to substantial doubt about an entity’s ability to continue as a going concern. ASU 2014-15 applies to all entities and is effective for annual and interim reporting periods ending after December 15, 2016, with early adoption permitted. This standard has no material effect on our financial statements

 

 

In March 2016, the FASB issued an ASU amending the accounting for stock-based compensation and requiring excess tax benefits and deficiencies to be recognized as a component of income tax expense rather than equity. This guidance also requires excess tax benefits to be presented as an operating activity on the statement of cash flows and allows an entity to make an accounting policy election to either estimate expected forfeitures or to account for them as they occur. The ASU is effective for reporting periods beginning after December 15, 2016, with early adoption permitted This standard has no material effect on our financial statements.

 

In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, which requires restricted cash to be presented with cash and cash equivalents on the statement of cash flows and disclosure of how the statement of cash flows reconciles to the balance sheet if restricted cash is shown separately from cash and cash equivalents on the balance sheet. ASU 2016-18 is effective for interim and annual periods beginning after December 15, 2017, with early adoption permitted. The Company is in the process of evaluating the impact of this ASU on its CFS.


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In January 2017, the FASB issued an ASU 2017-01, Business Combinations (Topic 805) Clarifying the Definition of a Business. The amendments in this update clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation.

The guidance is effective for interim and annual periods beginning after December 15, 2017 and should be applied prospectively on or after the effective date. The Company is in the process of evaluating the impact of this ASU on its CFS.

 

In July 2017, FASB issued ASU 2017-11, Earnings Per Share (Topic 260) Distinguishing Liabilities from Equity (Topic 480) Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features, II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception. Part I of this ASU changes the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features and clarifies existing disclosure requirements. Part II does not have an accounting effect. The ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018 with early adoption permitted. Management is currently evaluating the potential impact of these changes on the CFS of the Company.

 

As of July 31, 2017, there are no recently issued accounting standards not yet adopted that would have a material effect on the Company’s financial statements to have a material impact on the Company’s CFS.

 

 

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 $801,630 at July 31, 2017, a net loss of $44,249 and net cash used in operating activities of $0 for the reporting period then ended. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

 

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 - Notes Payable

 

On August 1, 2013, the Company entered into a loan agreement in which the note holder agreed to provide a loan to the Company in the principal amount of up to $50,000.  The loan is unsecured, bears interest at 8% per annum and payable on August 1, 2014. The loan agreement has been amended when the loan amount was increased to $75,000 with an extension of the maturity date to August 1, 2015. As of July 31, 2017, the maturity date has not been extended and the loan is due on demand. As of July 31, 2017, the note holder has provided $69,946 to the Company. As of July 31, 2017 no payments have been made to the note holder.

 

 

On June 5, 2017 the Company and Note Holder amended the original promissory note by executing a new convertible promissory note with the Note Holder in the principal amount of $69.946 plus accrued interest that provides an interest rate of 8% per annum and a maturity date of June 5, 2018. The note also provides a conversion feature allowing the note holder to convert principal and or accrued interest at a fixed rate of $0.005 per share. The Note also, provides for a default interest rate of 20% if the note is unpaid past the maturity date.

 

On February 3, 2015, the Company entered into a loan agreement in which the note holder agreed to provide a loan to the Company in the principal amount of $25,000. Subsequently, the loan was amended to increase the principal balance to $100,000.


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The loan bears interest at 7.5% per annum and is due on demand. As of July 31, 2017, the note holder has provided $100,000 to the Company. As of July 31, 2017 no payments have been made to the note holder.

 

On July 17, 2017 the Company and Note Holder amended the original promissory note by executing a new convertible promissory note with the Note Holder in the principal amount of $100,000 plus accrued interest that provides an interest rate of 8% per annum and a maturity date of July 17, 2018. The note also provides a conversion feature allowing the note holder to convert principal and or accrued interest at a fixed rate of $0.005 per share. The Note also, provides for a default interest rate of 15% if the note is unpaid past the maturity date.

 

On May 9, 2017 the Company executed a convertible promissory note with an unrelated third party in the amount of $5,000 that provides an interest rate of 8% per annum and a maturity date of May 9, 2018. The note also provides a conversion feature allowing the note holder to convert principal and or accrued interest at a fixed rate of $0.005 per share. The Note also, provides for a default interest rate of 15% if the note is unpaid past the maturity date. As of July 31, 2017, the note holder has provided a total $5,000 to the Company. As of July 31, 2017 no payments have been made to the note holder.

 

 

Note 5 – Stock Payable

 

On November 1, 2014, the Company entered into a consulting agreement with a consultant who will provide consulting services in consideration for $7,000 per month for a 1 year term, ending on December 1, 2015. The consulting agreement is currently month-to-month. The consulting fee is payable as follows:

i. $3,500 per month settled in shares which will be converted at a 50% discount of the lowest 3 trading prices for the Company’s common stock during the last 10 trading days of each month.

 

ii. $3,500 per month payable in cash at the end of each month in which the consultant also has the option to convert into shares at a market price less a 50% discount of the lowest 3 trading prices for the Company’s common stock during the last 10 trading days from the date of conversion.

 

As of July 31, 2017, the consultant is owed 43,995 and issued 0 shares to the consultant, $43,995 and $115,496 has been accrued in accounts payable and stock payable, respectively.

 

Note 6 - Related Party Transactions

 

As of July 31, 2017, the Company is indebted to Stephen Shepherd, CEO of the Company for $145,031. This amount represents non-interest bearing advances payable of $11,410 and unpaid management fees of $133,621. During the quarter ended July 31, 2017, the Company expensed $15,000 of management fees to the CEO of the Company, these fees are ongoing and accrue at $5,000 per month.

 

Note 7 - Stockholders’ Deficit

 

The Company’s authorized capital consisted of 300,000,000 shares of common stock with a par value of $0.00001 per share and 100,000,000 shares of preferred stock with a par value of $0.00001 per share.

 

On December 5, 2014, the Company entered into a subscription agreement whereby the Company issued 600,000 common shares at a purchase price of $0.25 per share for proceeds of $150,000. Pursuant to the agreement, the Company also issued a warrant to purchase 600,000 common shares of the Company with an exercise price of $0.50 per share for a period of one year. The warrants have since expired.


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Note 8– Subsequent Events

 

On August 14, 2017, the Company entered into a convertible note in the principal amount of $20,000, with a third party. The note carries an annual interest rate of 8% with a maturity date of March 14, 2018. The debt is due on the maturity date and can be paid in either cash or with the Company’s common stock at a 50% discount of the lowest 20 day trading price prior to the maturity date. On September 28, 2017 the Promissory Note was subsequently amended to provide a fixed price of $0.005 and to extend the maturity dates to September 28, 2018.

 

On November 1, 2017, the Company entered into a convertible note in the principal amount of $20,000, with an unrelated third party. The note carries an annual interest rate of 8% with a maturity date of October 31, 2018. The debt is due on the maturity date and can be paid in either cash or with the Company’s common stock at a fixed price of $0.005 The Note also, provides for a default interest rate of 15% if the note is unpaid past the maturity date.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


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FORWARD LOOKING STATEMENTS

 

Statements made in this Form 10-Q that are not historical or current facts are "forward-looking statements" made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 (the "Act") and Section 21E of the Securities Exchange Act of 1934. 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.

 

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

 

 

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

 

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.

 

Results of Operations for Six Months Ended July 31, 2017 and 2016

 

Revenue

 

We have not generated any revenues since our inception.

 

Operating Expenses

 

Our operating expenses for the six months ended July 31, 2017 and 2016 are summarized as follows:

 

 

 

For the Six Months Ended July 31, 2017

 

 

 

For the Six Months Ended July 31,2016

General and Administrative

$

22,600

 

 

$

                 15,000

Interest Expense

 

3,375

 

 

 

                    3,274

Total Operating  Expenses

$

(25,975)

 

 

$

    (18,274)

 

 


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In the three-month period ended July 31, 2016, we incurred $22,600 in general and administrative expenses, compared to $15,000 in the three-month period ended July 31, 2017 primarily as a result of accrued operating costs.

 

In the six-month period ended July 31, 2016, we incurred $32,902 in general and administrative expenses, compared to $37,590 in the six-month period ended July 31, 2017 primarily as a result of accrued operating costs.

 

Other Income/Expenses

 

 In the three-month period ended July 31, 2016, we incurred interest expense of $3,274 compared to $3,375 in the three-month period ended July 31, 2017. The increase was primarily due to increase in note payables

 

In the six-month period ended July 31, 2016, we incurred interest expense of $6,708 compared to $6,649 in the six-month period ended July 31, 2017. The increase was primarily due to a reclassification in one of the notes payable.

 

Net Loss

 

In the three months ended July 31, 2016, we incurred net loss of $18,274 compared to $25,975 in the three months ended July 31, 2017.

 

 

In the six months ended July 31, 2016, we incurred net loss of $39,610 compared to $44,249 in the six months ended July 31, 2017.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liquidity and Financial Condition

 

Working Capital

 

 

 

 

At

July 31,

2017

 

 

 

At

January 31,

2017

Current assets

$

-

 

 

$

                    600

Current liabilities

 

606,934

 

 

 

             563,285

Working capital (deficit)

$

(606,934)

 

 

$

  (562,685)

 

Our total current assets as of July 31, 2017 were $0 as compared to total current assets of $600 as of January 31, 2017. Our total current liabilities as of July 31, 2017 were $606,934 as compared to total current liabilities of $563,285 as of


14 | Page


January 31, 2017. The increase in current liabilities was attributed to an increase in accounts payable and accounts payable – related party.

  

 

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 inventory; (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. We will have to raise additional funds in the next twelve months in order to sustain and expand our operations. We currently do not have a specific plan of how we will obtain such funding; however, we anticipate that additional funding will be in the form of equity financing from the sale of our common stock. We have and will continue to seek to obtain short-term loans from our directors, although no future arrangement for additional loans has been made. We do not have any agreements with our directors concerning these loans. We do not have any arrangements in place for any future equity financing.

 

Off-Balance Sheet Arrangements

 

As of the date of this Quarterly Report, we do not have any 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 are material to investors.

 

Going Concern

 

The independent auditors' review report accompanying our July 31, 2017 financial statements contained an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. The financial statements have been prepared "assuming that we will continue as a going concern," which contemplates that we will realize our assets and satisfy our liabilities and commitments in the ordinary course of business.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

 

No report required.

 

 

ITEM 4. CONTROLS AND PROCEDURES

 

Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that is designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be


15 | Page


disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

 

An evaluation was conducted under the supervision and with the participation of our management of the effectiveness of the design and operation of our disclosure controls and procedures as of July 31, 2017. Based on that evaluation, our management concluded that our disclosure controls and procedures were not effective as of such date to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. Such officer also confirmed that there was no change in our internal control over financial reporting during the six-month period ended July 31, 2017 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

 

Management is not aware of any legal proceedings contemplated by any governmental authority or any other party involving us or our properties. As of the date of this Quarterly Report, no director, officer or affiliate is (i) a party adverse to us in any legal proceeding, or (ii) has an adverse interest to us in any legal proceedings. Management is not aware of any other legal proceedings pending or that have been threatened against us or our properties.

 

 

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

 

No report required.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

No report required.

 

 

ITEM 4. MINE SAFETY DISCLOSURES

 

Not applicable.

 

 

ITEM 5. OTHER INFORMATION

 

No report required.

 

 

ITEM 6. EXHIBITS

 

Exhibits:

 

 

31.1 Certification of Chief Executive Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(a) or 15d-14(a).

 

31.2 Certification of Chief Financial Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(a) or 15d-14(a).


16 | Page


 

32.1 Certifications pursuant to Securities Exchange Act of 1934 Rule 13a-14(b) or 15d-14(b) and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002.

 

 

SIGNATURES

 

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.

 

 

Avra Inc.

 

Dated: December 6, 2018

By: /s/ Stephen Shepherd

Stephen Shepherd, Chief Executive Officer and Chief Financial Officer (Principal Executive Officer and Principal Financial Officer)

 

 

 

 


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