UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
[X] Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended August 31, 2011
[ ] Transition Report pursuant to 13 or 15(d) of the Securities Exchange
Act of 1934
For the transition period __________ to __________
Commission File Number: 000-54329
ORGENESIS INC.
(Exact name of small business issuer as specified in its charter)
NEVADA 98-0583166
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
|
1001 SW 5th Avenue, Suite 1100, Portland, Oregon, 97204
(Address of principal executive offices)
(503) 206-0935
(Registrant's telephone number, including area code)
BUSINESS OUTSOURCING SERVICES, INC.
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the issuer was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days [X] 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 (ss.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 [X]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer, "accelerated filer,"
"non-accelerated filer," and "smaller reporting company" in Rule 12b-2 of the
Exchange Act.
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
(Do not check if a smaller reporting company)
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Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). [X] Yes [ ] No
State the number of shares outstanding of each of the issuer's classes of common
stock, as of the latest practicable date: 80,500,000 common shares as of October
17, 2011
TABLE OF CONTENTS
Page
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements 3
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 13
Item 3. Quantitative and Qualitative Disclosures About Market Risk 17
Item 4. Controls and Procedures 17
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 20
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 20
Item 3. Defaults Upon Senior Securities 20
Item 4. (Removed and Reserved) 20
Item 5. Other Information 20
Item 6. Exhibits 21
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2
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
These financial statements have been prepared in accordance with accounting
principles generally accepted in the United States of America for interim
financial information and the SEC instructions to Form 10-Q. In the opinion of
management, all adjustments considered necessary for a fair presentation have
been included. Operating results for the interim period ended August 31, 2011
are not necessarily indicative of the results that can be expected for the full
year.
3
ORGENESIS INC.
(formerly Business Outsourcing Services, Inc.)
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS (unaudited)
August 31, November 30,
2011 2010
-------- --------
ASSETS
Current assets
Cash and cash equivalents $ 5,125 $ 1,464
Prepaid expenses -- 153
-------- --------
Total Current Assets 5,125 1,617
-------- --------
Total Assets $ 5,125 $ 1,617
======== ========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Liabilities
Current liabilities
Accounts payable $ 7,382 $ 6,838
Accrued professional fees 3,000 4,600
Due to related party 15,500 500
-------- --------
Total Liabilities 25,882 11,938
-------- --------
Stockholders' Deficit
Common stock, par value $0.0001, 1,750,000,000 shares authorized,
80,500,000 shares issued and outstanding 8,050 8,050
Additional paid-in capital 46,950 46,950
Deficit accumulated during the development stage (75,757) (65,321)
-------- --------
Total Stockholders' Deficit (20,757) (10,321)
-------- --------
Total Liabilities and Stockholders' Deficit $ 5,125 $ 1,617
======== ========
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The accompanying notes are an integral part of these financial statements.
4
ORGENESIS INC.
(formerly Business Outsourcing Services, Inc.)
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS (unaudited)
FOR THE THREE AND NINE MONTHS ENDED AUGUST 31, 2011 AND 2010 AND
FOR THE PERIOD FROM APRIL 29, 2008 (INCEPTION) TO AUGUST 31, 2011
Period from
Three Months Three Months Nine Months Nine Months April 29, 2008
Ended Ended Ended Ended (Inception) To
August 31, August 31, August 31, August 31, August 31,
2011 2010 2011 2010 2011
------------ ------------ ------------ ------------ ------------
REVENUES $ -- $ -- $ -- $ -- $ --
------------ ------------ ------------ ------------ ------------
OPERATING EXPENSES
Accounting and legal 1,750 1,750 7,754 8,172 46,724
Transfer agent and filing fees 540 -- 1,815 5,009 8,593
General & administrative expenses 445 3,762 867 -- 4,940
Write off website development costs -- -- -- -- 15,000
Incorporation costs -- -- -- -- 500
------------ ------------ ------------ ------------ ------------
TOTAL OPERATING EXPENSES 2,735 5,512 10,436 13,181 75,757
------------ ------------ ------------ ------------ ------------
LOSS BEFORE PROVISION FOR INCOME TAXES (2,735) (5,512) (10,436) (13,181) (75,757)
PROVISION FOR INCOME TAXES -- -- -- -- --
------------ ------------ ------------ ------------ ------------
NET LOSS $ (2,735) $ (5,512) $ (10,436) $ (13,181) $ (75,757)
============ ============ ============ ============ ============
NET LOSS PER SHARE: BASIC AND DILUTED $ (0.00) $ (0.00) $ (0.00) $ (0.00)
============ ============ ============ ============
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING: BASIS AND DILUTED 80,500,000 80,500,000 80,500,000 80,500,000
============ ============ ============ ============
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The accompanying notes are an integral part of these financial statements.
5
ORGENESIS INC.
(formerly Business Outsourcing Services, Inc.)
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' DEFICIT (unaudited)
AS OF AUGUST 31, 2011
Deficit
Accumulated Total
Common Stock Additional During the Stockholders'
---------------------- Paid in Development Equity
Shares Amount Capital Stage (Deficit)
------ ------ ------- ----- ---------
Inception, April 29, 2008 -- $ -- $ -- $ -- $ --
Shares issued to founder
on June 5, 2008 56,000,000 5,600 14,400 -- 20,000
Private placement @ $0.05
per share 24,500,000 2,450 32,550 -- 35,000
Net loss for the year ended
November 30, 2008 -- -- -- (3,500) (3,500)
---------- ------- -------- --------- ---------
Balance, November 30, 2008 80,500,000 8,050 46,950 (3,500) 51,500
Net loss for the year ended
November 30, 2009 -- -- -- (25,658) (25,648)
---------- ------- -------- --------- ---------
Balance, November 30, 2009 80,500,000 8,050 46,950 (29,148) 25,852
Net loss for the year ended
November 30, 2010 -- -- -- (36,173) (36,173)
---------- ------- -------- --------- ---------
Balance, November 30, 2010 80,500,000 8,050 46,950 (65,321) (10,321)
Net loss for the period ended
August 31, 2011 -- -- -- (10,436) (10,436)
---------- ------- -------- --------- ---------
Balance, August 31, 2011 80,500,000 $ 8,050 $ 46,950 $ (75,757) $ (20,757)
========== ======= ======== ========= =========
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The accompanying notes are an integral part of these financial statements.
6
ORGENESIS INC.
(formerly Business Outsourcing Services, Inc.)
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS (unaudited)
FOR THE NINE MONTHS ENDED AUGUST 31, 2011 AND 2010
FOR THE PERIOD FROM APRIL 29, 2008 (INCEPTION) TO AUGUST 31, 2011
Period from
Nine Months Nine Months April 29, 2008
Ended Ended (Inception) To
August 31, August 31, August 31,
2011 2010 2011
-------- -------- --------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for the period $(10,436) $(13,181) $(75,757)
Adjustments to Reconcile Net Loss to Net
Cash Used in Operating Activities:
Write-off of website development costs -- -- 15,000
Changes in operating assets and liabilities:
(Increase) decrease in prepaid expenses 153 190 --
Increase (decrease) in accounts payable 544 -- 7,382
Increase (decrease) in accrued professional fees (1,600) 1,050 3,000
Increase in due to related party 15,000 -- 15,500
-------- -------- --------
CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES 3,661 (11,941) (34,875)
-------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Website development costs -- -- (15,000)
-------- -------- --------
CASH FLOWS (USED IN) INVESTING ACTIVITIES -- -- (15,000)
-------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of common stock -- -- 55,000
-------- -------- --------
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES -- -- 55,000
-------- -------- --------
NET INCREASE (DECREASE) IN CASH 3,661 (11,941) 5,125
CASH, BEGINNING OF PERIOD 1,464 16,424 --
-------- -------- --------
CASH, END OF PERIOD $ 5,125 $ 4,483 $ 5,125
======== ======== ========
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid $ -- $ -- $ --
======== ======== ========
Income taxes paid $ -- $ -- $ --
======== ======== ========
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The accompanying notes are an integral part of these financial statements
7
ORGENESIS INC.
(formerly Business Outsourcing Services, Inc.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2011
NOTE 1 - NATURE OF OPERATIONS
ORGENESIS (formertly Business Outsourcing Services, Inc.) ("the Company"),
incorporated in the state of Nevada on June 5, 2008, is engaged in providing
online bookkeeping services to small and medium sized companies.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
DEVELOPMENT STAGE COMPANY
The accompanying financial statements have been prepared in accordance with
generally accepted accounting principles related to development-stage companies.
A development-stage company is one in which planned principal operations have
not commenced or if its operations have commenced, and there has been no
significant revenues there from.
ACCOUNTING BASIS
The accompanying unaudited interim financial statements have been prepared on
the accrual basis of accounting in accordance with accounting principles
generally accepted in the United States of America and the rules of the
Securities and Exchange Commission ("SEC"), and should be read in conjunction
with the audited financial statements and notes thereto contained in the
Company's annual report filed with the SEC on Form 10-K. In the opinion of
management, all adjustments necessary in order to make the financial statements
not misleading have been reflected herein. The results of operations for interim
periods are not necessarily indicative of the results to be expected for the
full year. Notes to the financial statements which would substantially duplicate
the disclosure contained in the audited financial statements as of and for the
periods ended November 30, 2010 as reported in Form 10-K, have been omitted.
CASH AND CASH EQUIVALENTS
The Company considers all highly liquid investments with maturities of three
months or less to be cash equivalents. At August 31, 2011 and November 30, 2010,
respectively, the Company had $5,125 and $1,464 of unrestricted cash to be used
for future business operations
The Company's bank accounts are deposited in insured institutions. The funds are
insured up to $250,000. At times, the Company's bank deposits may exceed the
insured amount. Management believes it has little risk related to the excess
deposits.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company's financial instruments consist of cash, prepaid expenses, accounts
payable, accrued professional fees, and an amount due to a related party. The
carrying amount of these financial instruments approximates fair value due to
either length of maturity or interest rates that approximate prevailing market
rates unless otherwise disclosed in these financial statements.
CONCENTRATIONS OF CREDIT RISK
The Company maintains its cash in bank deposit accounts, the balances of which
at times may exceed federally insured limits. The Company continually monitors
its banking relationships and consequently has not experienced any losses in
such accounts. The Company believes it is not exposed to any significant credit
risk on cash and cash equivalents.
8
ORGENESIS INC.
(formerly Business Outsourcing Services, Inc.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2011
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
REVENUE RECOGNITION
The Company is in the development stage and has yet to realize revenues from
operations. Once the Company has commenced operations, it will recognize
revenues when delivery of goods or completion of services has occurred provided
there is persuasive evidence of an agreement, acceptance has been approved by
its customers, the fee is fixed or determinable based on the completion of
stated terms and conditions, and collection of any related receivable is
probable.
STOCK-BASED COMPENSATION
The Company accounts for employee stock-based compensation in accordance with
the guidance of FASB ASC Topic 718, COMPENSATION - STOCK COMPENSATION which
requires all share-based payments to employees, including grants of employee
stock options, to be recognized in the financial statements based on their fair
values. There has been no stock-based compensation issued to employees.
The Company follows ASC Topic 505-50, formerly EITF 96-18, "ACCOUNTING FOR
EQUITY INSTRUMENTS THAT ARE ISSUED TO OTHER THAN EMPLOYEES FOR ACQUIRING, OR IN
CONJUNCTION WITH SELLING GOODS AND SERVICES," for stock options and warrants
issued to consultants and other non-employees. In accordance with ASC Topic
505-50, these stock options and warrants issued as compensation for services
provided to the Company are accounted for based upon the fair value of the
services provided or the estimated fair market value of the option or warrant,
whichever can be more clearly determined. The fair value of the equity
instrument is charged directly to compensation expense and additional paid-in
capital over the period during which services are rendered. There has been no
stock-based compensation issued to non-employees.
INCOME TAXES
Income taxes are computed using the asset and liability method. Under the asset
and liability method, deferred income tax assets and liabilities are determined
based on the differences between the financial reporting and tax bases of assets
and liabilities and are measured using the currently enacted tax rates and laws.
A valuation allowance is provided for the amount of deferred tax assets that,
based on available evidence, are not expected to be realized. It is the
Company's policy to classify interest and penalties on income taxes as interest
expense or penalties expense. As of August 31, 2011, there have been no interest
or penalties incurred on income taxes.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date the financial statements and the
reported amount of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
9
ORGENESIS INC.
(formerly Business Outsourcing Services, Inc.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2011
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
BASIC INCOME (LOSS) PER SHARE
Basic income (loss) per share is calculated by dividing the Company's net loss
applicable to common shareholders by the weighted average number of common
shares during the period. Diluted earnings per share is calculated by dividing
the Company's net income available to common shareholders by the diluted
weighted average number of shares outstanding during the year. The diluted
weighted average number of shares outstanding is the basic weighted number of
shares adjusted for any potentially dilutive debt or equity. There were no such
common stock equivalents outstanding as of August 31, 2011.
DIVIDENDS
The Company has not adopted any policy regarding payment of dividends. No
dividends have been paid during the periods shown.
RECENT ACCOUNTING PRONOUNCEMENTS
Business Outsourcing does not expect the adoption of recently issued accounting
pronouncements to have a significant impact on the Company's results of
operations, financial position or cash flows.
NOTE 3 - DUE TO RELATED PARTY
The amount due to a related party is owed to a stockholder, is unsecured,
non-interest bearing and has no specific terms of repayment.
NOTE 4 - STOCKHOLDERS' EQUITY
The Company has 175,000,000 common shares authorized at a par value of $0.0001
per share.
During the period ended November 30, 2008, the company issued 2,300,000 common
shares for total proceeds of $55,000.
As of August 31, 2011, the Company has no warrants or options outstanding.
On August 31, 2011, the Company completed a 35 new to 1 old forward stock split.
10
ORGENESIS INC.
(formerly Business Outsourcing Services, Inc.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2011
NOTE 5 - INCOME TAXES
For the periods ended August 31, 2011 and 2010, the Company has incurred net
losses and, therefore, has no tax liability. The net deferred tax asset
generated by the loss carry-forward has been fully reserved. The cumulative net
operating loss carry-forward is $75,757 at August 31, 2011, and will begin to
expire in the year 2028.
The provision for Federal income tax consists of the following:
August 31, August 31,
2011 2010
-------- --------
Federal income tax benefit attributable to:
Current operations $ 3,548 $ 4,481
Less: valuation allowance (3,548) (4,481)
-------- --------
Net provision for Federal income taxes $ -- $ --
======== ========
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The cumulative tax effect at the expected rate of 34% of significant items
comprising our net deferred tax amount is as follows:
August 31, November 30,
2011 2010
-------- --------
Deferred tax asset attributable to:
Net operating loss carryover $ 25,758 $ 22,210
Less: valuation allowance (25,758) (22,210)
-------- --------
Net deferred tax asset $ -- $ --
======== ========
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Due to the change in ownership provisions of the Tax Reform Act of 1986, net
operating loss carry forwards of $75,757 for federal income tax reporting
purposes are subject to annual limitations. Should a change in ownership occur
net operating loss carry forwards may be limited as to use in future years.
NOTE 6 - COMMITMENTS AND CONTINGENCIES
The officers and directors of the Company are involved in other business
activities and may, in the future, become involved in other business
opportunities that become available. They may face a conflict in selecting
between the Company and other business interests. The Company has not formulated
a policy for the resolution of such conflicts.
NOTE 7 - GOING CONCERN
The accompanying financial statements have been prepared assuming that the
company will continue as a going concern. The Company has no established source
of revenue. This raises substantial doubt about the Company's ability to
continue as a going concern. Without realization of additional capital, it would
be unlikely for the Company to continue as a going concern. The financial
statements do not include any adjustments that might result from this
uncertainty.
The Company's activities to date have been supported by equity financing. It has
sustained losses in all previous reporting periods with an inception to date
loss of $75,757 as of August 31, 2011. Management continues to seek funding from
its shareholders and other qualified investors to pursue its business plan.
11
ORGENESIS INC.
(formerly Business Outsourcing Services, Inc.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2011
NOTE 8 - SUBSEQUENT EVENTS
Management has analyzed its operations through the date on which the financial
statements were issued, October 17, 2011, and has determined it does not have
any material subsequent events to disclose.
12
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
FORWARD-LOOKING STATEMENTS
Certain statements, other than purely historical information, including
estimates, projections, statements relating to our business plans, objectives,
and expected operating results, and the assumptions upon which those statements
are based, are "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of
1933 and Section 21E of the Securities Exchange Act of 1934. These
forward-looking statements generally are identified by the words "believes,"
"project," "expects," "anticipates," "estimates," "intends," "strategy," "plan,"
"may," "will," "would," "will be," "will continue," "will likely result," and
similar expressions. We intend such forward-looking statements to be covered by
the safe-harbor provisions for forward-looking statements contained in the
Private Securities Litigation Reform Act of 1995, and are including this
statement for purposes of complying with those safe-harbor provisions.
Forward-looking statements are based on current expectations and assumptions
that are subject to risks and uncertainties which may cause actual results to
differ materially from the forward-looking statements. Our ability to predict
results or the actual effect of future plans or strategies is inherently
uncertain. Factors which could have a material adverse affect on our operations
and future prospects on a consolidated basis include, but are not limited to:
changes in economic conditions, legislative/regulatory changes, availability of
capital, interest rates, competition, and generally accepted accounting
principles. These risks and uncertainties should also be considered in
evaluating forward-looking statements and undue reliance should not be placed on
such statements. We undertake no obligation to update or revise publicly any
forward-looking statements, whether as a result of new information, future
events or otherwise. Further information concerning our business, including
additional factors that could materially affect our financial results, is
included herein and in our other filings with the SEC.
OVERVIEW
We were incorporated in the state of Nevada on June 5, 2008 and are engaged in
providing online accounting and bookkeeping services to small and medium sized
companies who seek to save money by outsourcing these services. Our offices are
currently located at 1001 SW 5th Avenue, Suite 1100, Portland, Oregon, 97204.
Our telephone number is (503) 206-0935.
We are a development stage company that has not generated any revenue and has
had limited operations to date. From June 5, 2008 (inception) to August 31,
2011, we have incurred accumulated net losses of $75,757. As of August 31, 2011,
we had total assets of $5,125 and total liabilities of $25,882. Based on our
financial history since inception, our independent auditor has expressed doubt
as to our ability to continue as a going concern.
On August 5, 2011 we announced we signed a letter of intent with Prof. Sarah
Ferber and Ms. Vered Caplan to have them use their best efforts to negotiate a
license agreement on behalf of our company with the Sheba Medical Center to
acquire the exclusive rights to their functional autologous insulin producing
cells (AIPC) regeneration technology. We intend to close this letter of intent
in the near future.
We plan to use a secure web site for our services and to facilitate the exchange
of information between our clients and ourselves.
Prospective clients who visit our web will find comprehensive information
regarding the services we offer. If they so choose, prospective clients may also
register for our services through the same website. Our products and services
will be delivered and/or rendered through a "Client Portal" on our web site.
Upon registration, we will offer each client a one-hour telephone "Needs
Analysis" to start each client engagement. The Needs Analysis will be conducted
at a pre-arranged time and date before we commence any work for the client. The
Needs Analysis will enable us to assess which services best suit the individual
needs of each client. This will also enable us to provide each client with a
more accurate quote for the services rendered for first three months of
engagement. The initial three month period is further intended to allow us to
develop a foundation for ongoing discussions with the client about what they can
expect from us and the services that we are able to provide.
13
PLAN OF OPERATION
Below is a summary of the various phases of our plan for the next twelve (12)
months in order to execute our business plan. We must complete all the items
listed below in order for us to generate revenues.
SECOND FISCAL QUARTER 2012 - During this time, we intend to conclude discussions
with a development contractor for the establishment and creation of our website,
design the specifications of our system and procure a web hosting company. We
expect that this process will take roughly one month. We also intend to proceed
with acquiring office space, obtain telephone and internet service. At the end
of the fourth quarter of 2012, we intend to complete the "information only"
version of our website in order to build interest in the company during the
development phase and encourage web site visitors to return at a later date.
THIRD FISCAL QUARTER 2012 - During this period, we intend to continue with our
web site development work, including the "Client Portal" and the "Administrative
Module." To further strengthen our future marketing campaign, we intend to study
our Google Adwords marketing program in order to determine whether it is
necessary for the Company to consider alternate marketing programs. We also
anticipate developing an orientation program for our staff members during the
fourth quarter of 2012. Lastly, we anticipate that we will complete the
development of our software during this period.
FOURTH FISCAL QUARTER OF 2012 - During the first quarter of 2013, the Company
will continue the development and testing of all aspects of our website and
complete the orientation and training program of our staff. We also anticipate
using this period to review and modify, if found to be necessary, the benchmarks
set during the last two (2) quarters of 2012 and make any adjustments thereto in
anticipation of our launch in the second quarter of 2013.
FIRST FISCAL QUARTER OF 2013 - We anticipate completing all development work on
our website during the second quarter of 2010. We also intend to initial the
beta testing of our Client Portal with potential clients, as well as test the
Administrative Portal with our contractors. We will make any modifications to
our Client Portals and Administrative Portals based on the outcome of our beta
testing and we anticipate that any such modifications will be completed during
this period. During this time, we also intend to begin hiring the necessary
staff for our operations, as well as launching an aggressive marketing campaign
for our product. Lastly, we anticipate launching our website towards the end of
the second quarter of 2011.
The company's plan relies on being able to obtain sufficient financing either
through debt or the issuance of common shares. To date, the Company has raised
$55,000 which has been insufficient to further its business plan.
RESULTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED AUGUST 31, 2011 AND
2010, AND THE PERIOD FROM INCEPTION (JUNE 5, 2008) TO AUGUST 31, 2011
We did not earn any revenues from inception through the period ending August 31,
2011.
We incurred net operating expenses in the amount of $2,735 for the three months
ended August 31, 2011 compared with $5,512 for the three months ended August 31,
2010. Our operating expenses incurred for the three months ended August 31, 2011
included $1,750 for accounting and legal fees, $540 in transfer agent fees and
$445 in miscellaneous expenses compared with $1,750, $Nil and $3,762 for the
respective expenses for the respective periods ended August 31, 2010.
We incurred net operating expenses in the amount of $10,436 for the nine months
ended August 31, 2011 compared with $13,181 for the nine months ended August 31,
2010. Our operating expenses incurred for the nine months ended August 31, 2011
included $7,754 for accounting and legal fees, $1,815 in transfer agent fees and
$867 in miscellaneous expenses compared with $8,172, $5,009 and $Nil for the
respective expenses for the respective periods ended August 31, 2010.
We incurred net operating expenses of $75,757 for the period from our inception
on June 5, 2008 to August 31, 2011. Our operating expenses incurred for the
14
period from our inception on June 5, 2008 to August 31, 2011 included $46,724
for accounting and legal fees, $8,593 in transfer agent and filing fees, $4,940
in miscellaneous fees and $500 in incorporation costs. In addition, we have
recorded a $15,000 write off of website development costs.
We anticipate our operating expenses will increase as we undertake our plan of
operations. The increase will be attributable to undertaking operations and the
professional fees that we will incur in connection with becoming a reporting
company under the Securities Exchange Act of 1934.
LIQUIDITY AND CAPITAL RESOURCES
As of August 31, 2011, we had current assets in the amount of $5,125, consisting
of cash. Our current liabilities as of August 31, 2011 were $25,882. Thus our
working capital deficiency on August 31, 2011 was $20,757.
Our cash from operating activities was $3,661 and used in operating activities
was $11,941 for the nine months ended August 31, 2011 and 2010. Our cash used in
operating activities was $34,875 for the period from inception on June 5, 2008
to August 31, 2011.
We did not partake in any investing activities for the nine months ended August
31, 2011 and 2010 and therefore our cash from investing activities for both
periods were $Nil. Our cash used in investing activities was $15,000 for the
period from inception on June 5, 2008 to August 31, 2011.
We did not partake in any financing activities for the nine months ended August
31, 2011 and 2010 and therefore our cash from financing activities for both
periods were $Nil. Our cash provided by operating activities was $55,000 for the
period from inception on June 5, 2008 to August 31, 2011.
We have not attained profitable operations and are dependent upon obtaining
financing to pursue our business plan over the next twelve months. If we do not
generate revenue sufficient to sustain operations, we may not be able to
continue as a going concern.
OFF BALANCE SHEET ARRANGEMENTS
As of August 31, 2011, there were no off balance sheet arrangements.
GOING CONCERN
The accompanying financial statements have been prepared assuming that the
company will continue as a going concern. As discussed in the notes to the
financial statements, we have no established source of revenue. Our auditors
have expressed substantial doubt about our ability to continue as a going
concern. Without realization of additional capital, it would be unlikely for us
to continue as a going concern. The financial statements do not include any
adjustments that might result from this uncertainty.
Our activities to date have been supported by equity financing. We have
sustained losses in all previous reporting periods with an inception to date
loss of $75,757 as of August 31, 2011. Management continues to seek funding from
its shareholders and other qualified investors to pursue our business plan. In
the alternative, we may be amenable to a sale, merger or other acquisition in
the event such transaction is deemed by management to be in the best interests
of the shareholders.
CRITICAL ACCOUNTING POLICIES
In December 2001, the SEC requested that all registrants list their most
"critical accounting polices" in the Management Discussion and Analysis. The SEC
indicated that a "critical accounting policy" is one which is both important to
the portrayal of a company's financial condition and results, and requires
15
management's most difficult, subjective or complex judgments, often as a result
of the need to make estimates about the effect of matters that are inherently
uncertain. We believe that the following accounting policies fit this
definition.
BASIS OF PRESENTATION
The accompanying unaudited interim financial statements have been prepared on
the accrual basis of accounting in accordance with accounting principles
generally accepted in the United States of America and the rules of the
Securities and Exchange Commission ("SEC"), and should be read in conjunction
with the audited financial statements and notes thereto contained in the
Company's annual report filed with the SEC on Form 10-K. In the opinion of
management, all adjustments necessary in order to make the financial statements
not misleading have been reflected herein. The results of operations for interim
periods are not necessarily indicative of the results to be expected for the
full year. Notes to the financial statements which would substantially duplicate
the disclosure contained in the audited financial statements as of and for the
periods ended November 30, 2010 as reported in Form 10-K, have been omitted.
ACCOUNTING BASIS
These financial statements are prepared on the accrual basis of accounting in
conformity with accounting principles generally accepted in the United States of
America.
FINANCIAL INSTRUMENT
The Company's financial instrument consists of amount due to stockholder. The
amount due to stockholder is non interest-bearing. It is management's opinion
that the Company is not exposed to significant interest, currency or credit
risks arising from its other financial instruments and that their fair values
approximate their carrying values except where separately disclosed. See Note 3
below.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles of 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 of the financial
statements and the reported amounts of revenues and expenses during the year.
The more significant areas requiring the use of estimates include asset
impairment, stock-based compensation, and future income tax amounts. Management
bases its estimates on historical experience and on other assumptions considered
to be reasonable under the circumstances. However, actual results may differ
from the estimates.
LOSS PER SHARE
Net income (loss) per common share is computed based on the weighted average
number of common shares outstanding and common stock equivalents, if not
anti-dilutive. The Company has not issued any potentially dilutive common
shares.
Basic loss per share is calculated using the weighted average number of common
shares outstanding and the treasury stock method is used to calculate diluted
earnings per share. For the years presented, this calculation proved to be
anti-dilutive.
DIVIDENDS
The Company has not adopted any policy regarding payment of dividends. No
dividends have been paid during the period shown.
16
INCOME TAXES
The Company provides for income taxes under Statement of Financial Accounting
Standards No. 109,"Accounting for Income Taxes." (ASC 740-10). SFAS No. 109 (ASC
740-10) requires the use of an asset and liability approach in accounting for
income taxes.
SFAS No. 109 (ASC 740-10) requires the reduction of deferred tax assets by a
valuation allowance if, based on the weight of available evidence, it is more
likely than not that some or all of the deferred tax assets will not be
realized. No provision for income taxes is included in the statement due to its
immaterial amount, net of the allowance account, based on the likelihood of the
Company to utilize the loss carry-forward.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
The adoption of recently issued accounting pronouncements is not expected to
have a material effect on our current financial position, results or operations,
or cash flows.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
None.
ITEM 4. CONTROLS AND PROCEDURES
DISCLOSURE CONTROLS AND PROCEDURES
Our management, under the supervision and with the participation of our
Principal Executive Officer ("PEO") and Principal Financial Officer ("PFO"), has
evaluated the effectiveness of our disclosure controls and procedures
("Disclosure Controls") as defined in Rules 13a-15 or 15d-15(f), promulgated
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as
of the end of the period covered by this Quarterly Report (the "Evaluation
Date"). Based on such evaluation, our PEO and PFO has concluded that as of the
Evaluation Date, our Disclosure Controls were not effective to provide
reasonable assurance that information required to be disclosed in our reports
filed or submitted under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified by the SEC, and that material
information relating to the Company is made known to management, including the
PEO and PFO, during the period when our periodic reports are being prepared to
allow timely decisions regarding required disclosure. Further, our PEO and PFO
has concluded that such ineffectiveness is a direct result of the weaknesses in
the Company's Internal Controls over Financial Reporting, as more fully
discussed below.
INTERNAL CONTROL OVER FINANCIAL REPORTING
Our management is responsible for establishing and maintaining adequate internal
control over financial reporting. Internal control over financial reporting is
defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange
Act of 1934 as a process designed by, or under the supervision of, the company's
principal executive and principal financial officers and effected by the
company's board of directors, management and other personnel, to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
accounting principles generally accepted in the United States of America and
includes those policies and procedures that:
- Pertain to the maintenance of records that in reasonable detail
accurately and fairly reflect the transactions and dispositions of the
assets of the company;
17
- Provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in accordance
with accounting principles generally accepted in the United States of
America and that receipts and expenditures of the company are being
made only in accordance with authorizations of management and
directors of the company; and
- Provide reasonable assurance regarding prevention or timely detection
of unauthorized acquisition, use or disposition of the company's
assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting
may not prevent or detect misstatements. Projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate. All internal control systems,
no matter how well designed, have inherent limitations. Therefore, even those
systems determined to be effective can provide only reasonable assurance with
respect to financial statement preparation and presentation. Because of the
inherent limitations of internal control, there is a risk that material
misstatements may not be prevented or detected on a timely basis by internal
control over financial reporting. However, these inherent limitations are known
features of the financial reporting process. Therefore, it is possible to design
into the process safeguards to reduce, though not eliminate, this risk.
As of August 31, 2011 management assessed the effectiveness of our internal
control over financial reporting based on the criteria for effective internal
control over financial reporting established in Internal Control--Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission ("COSO") and SEC guidance on conducting such assessments. Based on
that evaluation, they concluded that, during the period covered by this report,
such internal controls and procedures were not effective to detect the
inappropriate application of US GAAP rules as more fully described below. This
was due to deficiencies that existed in the design or operation of our internal
controls over financial reporting that adversely affected our internal controls
and that may be considered to be material weaknesses.
The matters involving internal controls and procedures that our management
considered to be material weaknesses under the standards of the Public Company
Accounting Oversight Board were: (1) lack of a functioning audit committee due
to a lack of a majority of independent members and a lack of a majority of
outside directors on our board of directors, resulting in ineffective oversight
in the establishment and monitoring of required internal controls and
procedures; (2) inadequate segregation of duties consistent with control
objectives; and (3) ineffective controls over period end financial disclosure
and reporting processes. The aforementioned material weaknesses were identified
by our Chief Executive Officer in connection with the review of our financial
statements as of August 31, 2011.
Management believes that the material weaknesses set forth in items (2) and (3)
above did not have an effect on our financial results. However, management
believes that the lack of a functioning audit committee and the lack of a
majority of outside directors on our board of directors results in ineffective
oversight in the establishment and monitoring of required internal controls and
procedures, which could result in a material misstatement in our financial
statements in future periods.
MANAGEMENT'S REMEDIATION INITIATIVES
In an effort to remediate the identified material weaknesses and other
deficiencies and enhance our internal controls, we have initiated, or plan to
initiate, the following series of measures:
We will create a position to segregate duties consistent with control objectives
and will increase our personnel resources and technical accounting expertise
within the accounting function when funds are available to us. And, we plan to
appoint one or more outside directors to our board of directors who shall be
appointed to an audit committee resulting in a fully functioning audit committee
who will undertake the oversight in the establishment and monitoring of required
internal controls and procedures such as reviewing and approving estimates and
assumptions made by management when funds are available to us.
18
Management believes that the appointment of one or more outside directors, who
shall be appointed to a fully functioning audit committee, will remedy the lack
of a functioning audit committee and a lack of a majority of outside directors
on our Board.
We anticipate that these initiatives will be at least partially, if not fully,
implemented by December 31, 2011. Additionally, we plan to test our updated
controls and remediate our deficiencies by December 31, 2011.
CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING
There was no change in our internal controls over financial reporting that
occurred during the period covered by this report, which has materially
affected, or is reasonably likely to materially affect, our internal controls
over financial reporting.
19
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We are not a party to any pending legal proceeding. We are not aware of any
pending legal proceeding to which any of our officers, directors, or any
beneficial holders of 5% or more of our voting securities are adverse to us or
have a material interest adverse to us.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. (REMOVED AND RESERVED)
ITEM 5. OTHER INFORMATION
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
On September 6, 2011, we held a special meeting of stockholders pursuant to a
Notice of Meeting mailed August 18, 2011, which included a copy of our Proxy
Statement/Prospectus that we filed on EDGAR on August 19, 2011. Our meeting was
adjourned from the September 2, 2011 AGM date for the purpose of complying with
Section 78.370 of the Nevada Revised Statutes.
A total of 2,300,000 (pre-split) or 80,500,000 (post-split) shares of our
company's common stock were entitled to vote at the meeting. Of that total,
1,600,000 (pre split) 56,000,000 (post split) shares, or 69.6%, were present at
the meeting either in person or by proxy. The following tabulations shows the
number of votes cast by our shareholders for and against, as well as those that
abstained or were withheld, as to each of these resolutions. At the meeting our
shareholders were asked to approve the following items:
Proposal 1. To amend the Articles of Incorporation of the Company by filing a
Certificate of Amendment with the Secretary of State of Nevada
Percent of total shares
present in person or
Votes Votes Abstain or Broker represented by proxy
For Against Withheld Non Votes and entitled to vote
--- ------- -------- --------- --------------------
1,600,000 (pre split) Nil Nil Nil 69.6%
56,000,000 (post split)
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Proposal 2. To adopt the Amended and Restated Bylaws
Percent of total shares
present in person or
Votes Votes Abstain or Broker represented by proxy
For Against Withheld Non Votes and entitled to vote
--- ------- -------- --------- --------------------
1,600,000 (pre split) Nil Nil Nil 69.6%
56,000,000 (post split)
|
20
ITEM 6. EXHIBITS
Exhibit
Number Description of Exhibit
------ ----------------------
3.1 Articles of Incorporation. (Attached as Exhibit 3.1 to our Registration
Statement on Form S-1 originally filed with the SEC on April 2, 2009
and incorporated herein by reference.)
3.2 Bylaws. (Attached as Exhibit 3.2 to our Registration Statement on Form
S-1 originally filed with the SEC on April 2, 2009 and incorporated
herein by reference.)
3.3 Articles of Merger dated effective August 31, 2011 attached as an
exhibit to our current report on Form 8-K filed with the SEC on
September 2, 2011 and incorporated by reference
3.3 Certificate of Change dated effective August 31, 2011 attached as an
exhibit to our current report on Form 8-K filed with the SEC on
September 2, 2011 and incorporated by reference
3.4 Certificate of Amendment to Articles of Incorporation attached as an
exhibit to our current report on Form 8-K filed with the SEC on
September 21, 2011 and incorporated by reference
3.5 Amended & Restated Bylaws attached as an exhibit to our current report
on Form 8-K filed with the SEC on September 21, 2011 and incorporated
by reference
10.1 Letter of Intent dated August 4, 2011 with Prof. Sarah Ferber and Ms.
Vered Caplan attached as an exhibit to our current report on Form 8-K
filed with the SEC on August 8, 2011 and incorporated by reference.
31.1* Certification of Chief Executive Officer pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002
31.2* Certification of Chief Financial Officer pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002
32.1* Certification of Chief Executive Officer and Chief Financial Officer
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002
101** Interactive Data Files pursuant to Rule 405 of Regulation S-T.
----------
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* Filed herewith
** To be filed by Amendment
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SIGNATURES
In accordance with the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Orgenesis Inc.
Date: October 17, 2011
By: /s/ Guilbert Cuison
--------------------------------------
Guilbert Cuison
Title: President, Secretary Director
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