(The accompanying notes are an integral part of these
condensed consolidated financial statements)
5
APPIPHANY TECHNOLOGIES HOLDINGS CORP.
(A Development Stage Company)
Condensed Consolidated Statements of Cashflow
(Expressed in US dollars)
(unaudited)
|
|
|
|
|
For the six months ended October 31,
2012
$
|
For the six months ended October 31,
2011
$
|
Accumulated from February 24, 2010
(Date of Inception) to October 31,
2012
$
|
|
|
|
|
Operating Activities
|
|
|
|
|
|
|
|
Net income (loss) for the period
|
13,104
|
(49,807)
|
(329,243)
|
|
|
|
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
|
|
|
|
Depreciation
|
311
|
289
|
1,413
|
Shares issued for services
|
|
(742)
|
49,250
|
Gain on settlement of debt
|
(40,000)
|
(1,369)
|
(41,369)
|
|
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
23,374
|
21,325
|
131,794
|
|
|
|
|
Net Cash Used In Operating Activities
|
(3,211)
|
(30,304)
|
(188,155)
|
|
|
|
|
Investing Activities
|
|
|
|
|
|
|
|
Purchase of property and equipment
|
|
|
(1,805)
|
|
|
|
|
Net Cash Used inInvesting Activities
|
|
|
(1,805)
|
|
|
|
|
Financing Activities
|
|
|
|
|
|
|
|
Proceeds from issuance of common shares
|
|
30,751
|
69,752
|
Proceeds from notes payable
|
|
|
27,157
|
Proceeds from related party payable
|
200
|
3,000
|
120,011
|
Repayment on related party payable
|
(5,440)
|
(6,221)
|
(26,949)
|
|
|
|
|
Net Cash Provided by (Used in) Financing Activities
|
(5,240)
|
27,530
|
189,971
|
|
|
|
|
Increase (Decrease) in Cash
|
(8,451)
|
(2,774)
|
11
|
|
|
|
|
Cash Beginning of Period
|
8,462
|
13,259
|
|
|
|
|
|
Cash End of Period
|
11
|
10,485
|
11
|
|
|
|
|
|
|
|
|
Supplemental Disclosures
|
|
|
|
|
|
|
|
Interest paid
|
|
|
|
Income tax paid
|
|
|
|
|
|
|
|
Non-cash investing and financing activities
|
|
|
|
|
|
|
|
Shares issued for founders shares
|
|
|
5,500
|
Common stock issued to settle debt
|
|
27,852
|
27,157
|
|
|
|
|
(The accompanying notes are an integral part of these
condensed consolidated financial statements)
6
APPIPHANY TECHNOLOGIES HOLDINGS CORP.
(A Development Stage Company)
Notes to the Condensed Consolidated Financial Statements
(Expressed in US dollars)
1.
Nature of Operations and Continuance of Business
The Company was incorporated in the State of Nevada on February 24, 2010. The Company is a development stage company as defined by FASB guidelines. On May 1, 2010, the Company entered into a share exchange agreement with Appiphany Technologies Corporation (ATC) to acquire all of the outstanding common shares of ATC in exchange for 1,500,000 common shares of the Company. As the acquisition involved companies under common control, the acquisition was accounted for in accordance with ASC 805-50, Business Combinations Related Issues, and the consolidated financial statements reflect the accounts of the Company and ATC since inception.
Going Concern
These financial statements have been prepared on a going concern basis, which implies that the Company will continue to realize its assets and discharge its liabilities in the normal course of business. As at October 31, 2012, the Company has not recognized significant revenue, has a working capital deficit of $182,781, and has an accumulated deficit of $329,243. The continuation of the Company as a going concern is dependent upon the continued financial support from its management, and its ability to identify future investment opportunities and obtain the necessary debt or equity financing, and generating profitable operations from the Companys future operations. These factors raise substantial doubt regarding the Companys 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.
2.
Summary of Significant Accounting Policies
a)
Basis of Presentation
The consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (US GAAP) and are expressed in U.S. dollars. The Companys fiscal year end is April 30.
b)
Use of Estimates
The preparation of financial statements in conformity with US GAAP 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 the fair value and estimated useful life of long-lived assets 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 Companys estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.
c)
Interim Financial Statements
These interim financial statements have been prepared on the same basis as the annual financial statements and in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Companys financial position, results of operations and cash flows for the periods shown. The results of operations for such periods are not necessarily indicative of the results expected for a full year or for any future period.
7
APPIPHANY TECHNOLOGIES HOLDINGS CORP.
(A Development Stage Company)
Notes to the Condensed Consolidated Financial Statements
(Expressed in US dollars)
2.
Summary of Significant Accounting Policies
(continued)
d)
Cash and cash equivalents
The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents. As at October 31, 2012 and 2011, the Company had no items representing cash equivalents.
e)
Basic and Diluted Net Loss per Share
The Company computes net loss per share in accordance with ASC 260,
Earnings per Share
. ASC 260 requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net 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.
f)
Financial Instruments
Pursuant to ASC 820,
Fair Value Measurements and Disclosures
, an entity is required to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instruments categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value:
Level 1
Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.
Level 2
Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.
Level 3
Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.
The Companys financial instruments consist principally of cash, accounts payable and accrued liabilities and amounts due to related parties. Pursuant to ASC 820, the fair value of our cash is determined based on Level 1 inputs, which consist of quoted prices in active markets for identical assets. We believe that the recorded values of all of our other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations.
g)
Comprehensive Loss
ASC 220,
Comprehensive Income
, establishes standards for the reporting and display of comprehensive loss and its components in the financial statements. As at October 31, 2012 and, 2011, the Company has no items that represent a comprehensive loss and, therefore, has not included a schedule of comprehensive loss in the financial statements.
8
APPIPHANY TECHNOLOGIES HOLDINGS CORP.
(A Development Stage Company)
Notes to the Condensed Consolidated Financial Statements
(Expressed in US dollars)
2.
Summary of Significant Accounting Policies
(continued)
h)
Revenue Recognition
The Company recognizes revenue from online advertising. Revenue will be recognized only when the price is fixed and determinable, persuasive evidence of an arrangement exists, the service has been provided, and collectability is assured. The Company is not exposed to any credit risks as amounts are prepaid prior to performance of services.
i)
Recent Accounting Pronouncements
The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
3.
Property and Equipment
|
|
|
|
|
|
Cost
$
|
Accumulated Depreciation
$
|
October 31,
2012
Net Carrying
Value
$
(unaudited)
|
April 30,
2012
Net Carrying
Value
$
|
Computer hardware
|
1,805
|
1,413
|
392
|
703
|
|
|
|
|
|
|
1,805
|
1,413
|
392
|
703
|
4.
Related Party Transactions
a)
As at October 31, 2012, the Company owed $60,820 (April 30, 2012 - $65,700) to the President and Director of the Company for financing of day-to-day expenditures incurred on behalf of the Company. The amounts owing are unsecured, non-interest bearing, and due on demand.
b)
As at October 31, 2012, the Company owed $32,242 (April 30, 2012 - $32,602) to a former director of the Company for financing of day-to-day expenditures incurred on behalf of the Company. The amounts owing are unsecured, non-interest bearing, and due on demand.
5.
Common Shares
On August 8, 2012, the Company issued 40,000 common shares at $0.05 per share for proceeds of $2,000, which was received as at April 30, 2012.
6.
Subsequent Events
We have evaluated subsequent events through the date of issuance of the financial statements, and did not have any material recognizable subsequent events after October 31, 2012 other than the following:
a)
On November 9, 2012, the Company entered into a consulting agreement with a non-related party for consulting services. Under the terms of the agreement, the Company will issue 800,000 common shares, which were issued on November 14, 2012.
b)
On November 27, 2012, the Company entered into a consulting agreement with a non-related party for consulting services. Under the terms of the agreement, the Company will issue 300,000 common shares, which were issued on November 27, 2012.
9
ITEM
2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FORWARD-LOOKING STATEMENTS
This Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) contains forward-looking statements that involve known and unknown risks, significant uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed, or implied, by those forward-looking statements. You can identify forward-looking statements by the use of the words may, will, should, could, expects, plans, anticipates, believes, estimates, predicts, intends, potential, proposed, or continue or the negative of those terms. These statements are only predictions. In evaluating these statements, you should consider various factors which may cause our actual results to differ materially from any forward-looking statements. Although we believe that the exceptions reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. We undertake no obligation to revise or update publicly any forward-looking statements for any reason.
RESULTS OF OPERATIONS
Working Capital
|
|
|
|
October 31, 2012
$
|
April 30, 2012
$
|
Current Assets
|
11
|
8,462
|
Current Liabilities
|
182,792
|
204,658
|
Working Capital (Deficit)
|
(182,781)
|
(196,196)
|
Cash Flows
|
|
|
|
October 31, 2012
$
|
October 31, 2011
$
|
Cash Flows from (used in) Operating Activities
|
(3,211)
|
(30,304)
|
Cash Flows from (used in) Investing Activities
|
-
|
-
|
Cash Flows from (used in) Financing Activities
|
(5,240)
|
27,530
|
Net Increase (decrease) in Cash During Period
|
(8,451)
|
(2,774)
|
Operating Revenues
For the six months ended October 31, 2012, the Company earned revenues of $389 compared with $837 for the six months ended October 31, 2011.
Operating Expenses and Net Loss
For the six months ended October 31, 2012, the Company incurred operating expenses of $27,285 compared with $51,726 for the six months ended October 31, 2011. The decrease of $24,441 is due to lower general and administrative costs of $19,859 as the Company had limited cash flows for operating activities, as well as $6,000 decrease in professional fees as the Company limited the amounts of legal services required.
For the six months ended October 31, 2012, the Company had a net income of $13,104 compared with a net loss of $49,807 for the six months ended October 31, 2011. In addition to the decrease in operating expenses, the Company recorded a gain on settlement of debt of $40,000 relating to the settlement of outstanding legal fees owed during the current year.
10
Liquidity and Capital Resources
As at October 31, 2012, the Company had cash of $11 and total assets of $403 compared with cash of $8,462 and total assets of $9,165 as at April 30, 2012. The decrease in cash and total assets were attributed to use of existing cash flows to settle outstanding obligations that exceeded the amount of proceeds received from financing activities and the amortization of existing property and equipment.
As at October 31, 2012, the Company had total liabilities of $182,792 compared with total liabilities of $204,658 at April 30, 2012. The decrease in total liabilities was attributed to decrease of $16,626 due to settlement of legal fees during the period , and a decrease of $5,240 in amounts owing to related parties.
As at October 31, 2012, the Company had a working capital deficit of $182,781 compared with a working capital deficit of $196,196 as at April 30, 2012. The decrease in working capital deficit was due to settlement of professional fees owed during the period.
Cash Flow from Operating Activities
During the period ended October 31, 2012, the Company used $3,211 of cash for operating activities compared to the use of $30,304 of cash for operating activities during the period ended October 31, 2011. The decrease in net cash used for operating activities was due to the fact that the Company had limited cash flows during the year.
Cash Flow from Financing Activities
During the period ended October 31, 2012, the Company used $5,240 of cash from financing activities compared to proceeds of $27,530 for the period ended October 31, 2011. During the current period, the Company had limited amounts of cash flow and repaid amounts owed to related parties whereas in the prior year, the Company raised $30,751 in proceeds from the issuance of common shares and had net repayments of $3,221 to related parties.
Going Concern
We have not attained profitable operations and are dependent upon obtaining financing to pursue any extensive acquisitions and activities. For these reasons, our auditors stated in their report on our audited financial statements that they have substantial doubt that we will be able to continue as a going concern without further financing.
Future Financings
We will continue to rely on equity sales of our Common Shares in order to continue to fund our business operations. Issuances of additional shares will result in dilution to existing stockholders. There is no assurance that we will achieve any additional sales of the equity securities or arrange for debt or other financing to fund our operations and other activities.
Off-Balance Sheet Arrangements
We have no significant 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 stockholders.
Critical Accounting Policies
Our financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.
We regularly evaluate the accounting policies and estimates that we use to prepare our financial statements. A complete summary of these policies is included in the notes to our financial statements. In general, management's estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.
11
Recently Issued Accounting Pronouncements
The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
ITEM 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
ITEM 4.
CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by our company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Our management carried out an evaluation under the supervision and with the participation of our Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 ("Exchange Act"). Based upon that evaluation, our Principal Executive Officer and Principal Financial Officer have concluded that our disclosure controls and procedures were not effective as of October 31, 2012, due to the material weaknesses resulting from the Board of Directors not currently having any independent members and no director qualifies as an audit committee financial expert as defined in Item 407(d)(5)(ii) of Regulation S-K, and controls were not designed and in place to ensure that all disclosures required were originally addressed in our financial statements. Please refer to our Annual Report on Form 10-K as filed with the SEC on August 14, 2012, for a complete discussion relating to the foregoing evaluation of Disclosures and Procedures.
Changes in Internal Control over Financial Reporting
Our management has also evaluated our internal control over financial reporting, and there have been no significant changes in our internal controls or in other factors that could significantly affect those controls subsequent to the date of our last evaluation.
The Company is not required by current SEC rules to include, and does not include, an auditor's attestation report. The Company's registered public accounting firm has not attested to Management's reports on the Company's internal control over financial reporting.
12
PART II - OTHER INFORMATION
ITEM 1.
LEGAL PROCEEDINGS.
We know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which our director, officer or any affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.
ITEM 1A.
RISK FACTORS.
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
ITEM 2.
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
1.
Quarterly Issuances:
Other than as previously disclosed, we did not issue any unregistered securities during the quarter.
2.
Subsequent Issuances:
Other than as previously disclosed, we did not issue any unregistered securities subsequent to the quarter.
ITEM 3.
DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4.
MINE SAFETY DISCLOSURES.
Not Applicable.
ITEM 5.
OTHER INFORMATION.
None.
13
ITEM 6.
EXHIBITS
|
|
|
Exhibit
Number
|
Description of Exhibit
|
Filing
|
3.01
|
Articles of Incorporation
|
Filed with the SEC on June 11, 2010 as part of our Registration Statement on Form S-1.
|
3.02
|
Bylaws
|
Filed with the SEC on June 11, 2010 as part of our Registration Statement on Form S-1.
|
4.01
|
2012 Equity Incentive Plan
|
Filed with the SEC on November 9, 2012 as part of our Registration Statement on Form S-8.
|
10.01
|
Share Exchange Agreement between the Company and Appiphany Technologies Corp. dated May 1, 2010
|
Filed with the SEC on June 11, 2010 as part of our Registration Statement on Form S-1.
|
10.02
|
Contract license Agreement between Appiphany Technologies Corp. and Apple, Inc. dated September 25, 2009
|
Filed with the SEC on June 11, 2010 as part of our Registration Statement on Form S-1.
|
10.03
|
Promissory Note between the Company and Scott Osborne dated July 22, 2010
|
Filed with the SEC on November 4, 2010 as part of our Amended Registration Statement on Form S-1/A.
|
10.04
|
Promissory Note between the Company and Fraser Tolmie dated October 28, 2010
|
Filed with the SEC on November 4, 2010 as part of our Amended Registration Statement on Form S-1/A.
|
10.05
|
Promissory Note between the Company and Darren Wright dated October 28, 2010
|
Filed with the SEC on November 4, 2010 as part of our Amended Registration Statement on Form S-1/A.
|
10.06
|
Promissory Note between the Company and Joshua Kostyniuk dated October 28, 2010
|
Filed with the SEC on November 4, 2010 as part of our Amended Registration Statement on Form S-1/A.
|
10.07
|
Consulting Agreement between the Company and Voltaire Gomez dated September 23, 2010
|
Filed with the SEC on November 4, 2010 as part of our Amended Registration Statement on Form S-1/A.
|
10.08
|
Consulting Agreement between the Company and Garth Roy dated January 16, 2012
|
Filed with the SEC on January 18, 2012 as part of our Current Report on Form 8-K.
|
10.09
|
Consulting Agreement between the Company and Brian D. Jones dated November 9, 2012
|
Filed with the SEC on November 19, 2012 as part of our Current Report on Form 8-K.
|
10.10
|
Consulting Agreement between the Company and Jon Trump dated November 27, 2012
|
Filed with the SEC on November 29, 2012 as part of our Current Report on Form 8-K.
|
16.01
|
Letter from M&K CPAS, PLLC dated September 19, 2011
|
Filed with the SEC on September 19, 2011 as part of our Current Report on Form 8-K.
|
21.01
|
List of Subsidiaries
|
Filed with the SEC on November 4, 2010 as part of our Amended Registration Statement on Form S-1/A.
|
31.01
|
Certification of Principal Executive Officer Pursuant to Rule 13a-14
|
Filed herewith.
|
31.02
|
Certification of Principal Financial Officer Pursuant to Rule 13a-14
|
Filed herewith.
|
32.01
|
CEO and CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act
|
Filed herewith.
|
101.INS*
|
XBRL Instance Document
|
To be filed by amendment
|
101.SCH*
|
XBRL Taxonomy Extension Schema Document
|
To be filed by amendment
|
101.CAL*
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
To be filed by amendment
|
101.LAB*
|
XBRL Taxonomy Extension Labels Linkbase Document
|
To be filed by amendment
|
101.PRE*
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
To be filed by amendment
|
101.DEF*
|
XBRL Taxonomy Extension Definition Linkbase Document
|
To be filed by amendment
|
*Pursuant to Regulation S-T, this interactive data file is deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.
14
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
|
|
|
|
|
APPIPHANY TECHNOLOGIES HOLDINGS CORP.
|
|
|
|
Dated: December 19, 2012
|
|
/s/ Jesse Keller
|
|
|
By: Jesse Keller
|
|
|
Its: President & CEO
|
In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the Company and in the capacities and on the dates indicated.
|
|
Dated: December 19, 2012
|
/s/ Jesse Keller
|
|
By: Jesse Keller
Its: Director
|
15