ITEM 1. FINANCIAL STATEMENTS
FUTURE WORLD GROUP, INC.
(Formerly Betafox Corp.)
CONDENSED BALANCE SHEETS
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February 29,
2016
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May 31,
2015
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(Unaudited)
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(audited)
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ASSETS
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Current Assets:
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Cash
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$
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55,200
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$
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22
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Total current assets
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55,200
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22
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Total Assets
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$
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55,200
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$
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22
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LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
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Current Liabilities:
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Accounts payable
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$
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—
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$
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468
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Due to a related party
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124,653
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—
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Total Liabilities
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124,653
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468
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Stockholders’ Equity:
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Common stock, par value $0.001; 75,000,000 shares authorized, 8,130,000 and 8,130,000 shares issued and outstanding; respectively
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8,130
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8,130
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Additional paid in capital
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27,661
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27,661
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Accumulated deficit
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(105,244
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)
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(36,237
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)
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Total Stockholders’ Equity (Deficit)
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(69,453
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)
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(446
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Total Liabilities and Stockholders’ Equity (Deficit)
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$
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55,200
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$
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22
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The accompanying notes are an integral part of these unaudited condensed financial statements.
3
FUTURE WORLD GROUP, INC.
(Formerly Betafox Corp.)
CONDENSED STATEMENTS OF OPERATIONS
UNAUDITED
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For the three months ended
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For the nine months ended
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February 29,
2016
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February 28,
2015
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February 29,
2016
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February 28,
2015
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Revenue
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$
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—
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$
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—
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$
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—
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$
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—
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Operating Expenses:
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General and administrative
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495
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3,545
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2,124
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17,934
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Professional fees
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9,146
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—
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66,883
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15,514
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Total operating expenses
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9,641
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3,545
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69,007
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33,448
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Loss from operations
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(9,641
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(3,545
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(69,007
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)
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(33,448
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Provision for Income Taxes
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—
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—
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—
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—
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Net Loss
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$
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(9,641
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$
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(3,545
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$
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(69,007
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$
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(33,448
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Net loss per share – basic
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$
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(0.00
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$
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(0.00
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$
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(0.01
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)
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$
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(0.00
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)
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Weighted average shares outstanding, basic & diluted
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8,130,000
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8,130,000
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8,130,000
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6,990,989
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The accompanying notes are an integral part of these unaudited condensed financial statements.
4
FUTURE WORLD GROUP, INC.
(Formerly Betafox Corp.)
CONDENSED STATEMENTS OF CASH FLOWS
UNAUDITED
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For the nine months ended
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February 29,
2016
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February 28,
2015
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CASH FLOWS FROM OPERATING ACTIVITIES
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Net loss
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$
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(69,007
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$
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(33,448
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Changes in assets and liabilities:
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Accounts payable
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(468
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468
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CASH FLOWS USED IN OPERATING ACTIVITIES
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(69,475
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(32,980
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CASH FLOWS FROM INVESTING ACTIVITIES:
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—
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—
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CASH FLOWS FROM FINANCING ACTIVITIES:
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Proceeds from sale of common stock
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—
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20,488
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Loans from a related party
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124,653
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9,673
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CASH FLOWS PROVIDED BY FINANCING ACTIVITIES
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124,653
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30,161
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NET INCREASE (DECREASE) IN CASH:
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55,178
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(2,819
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Cash, beginning of period
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22
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3,495
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Cash, end of period
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$
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55,200
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$
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676
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SUPPLEMENTAL CASH FLOW INFORMATION:
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Interest paid
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$
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—
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$
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—
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Income taxes paid
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$
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—
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$
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—
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The accompanying notes are an integral part of these unaudited condensed financial statements.
5
FUTURE WORLD GROUP, INC.
(Formerly Betafox Corp.)
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
February 29, 2016
(Unaudited)
NOTE 1 – ORGANIZATION AND NATURE OF BUSINESS
Future World Group, Inc. (the “Company”), was incorporated
in the state of Nevada on September 10, 2013 as Betafox Corp., with the initial intent to manufacture and sell color candles. On April 26, 2015, Giorgos Kallides
(the “Seller”), entered into an Agreement for the Purchase of Common Stock (the “Stock Purchase Agreement”) with Future Continental Limited, (“Purchaser”) pursuant to which the Seller agreed to sell to Purchaser, six million (6,000,000) shares of common stock of the Company (the “Shares”) owned by the Seller, constituting approximately 73.8% of the Company’s 8,130,000 issued and outstanding common shares, for $340,000. The sale was consummated on May 11, 2015. As a result of the transfer of the shares, there was a change of control of the Company. On October 7, 2015, Future Continental, Ltd. transferred those 6,000,000 Shares to the Company’s sole officer and director, Lei Pei (the “Transferee”).
As a result of the transfer on October 7, 2015, there was a change of control of the Company. There is no family relationship between Future Continental, Ltd. and Lei Pei. No cash consideration was paid by Mr.Pei; the consideration was the Mr. Pei’s serving as, and continuing to serve as, the Company’s CEO. Also on October 7, 2015, the Company changed its corporate name to Future World Group, Inc.
As new management has yet to cause the Company to acquire any assets or a business; we are deemed to be a “shell” company, as that term is defined pursuant to Rule 12b-2 under the Securities Exchange Act of 1934.
NOTE 2 – GOING CONCERN
The accompanying unaudited condensed financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern. However, the Company has no revenues to date and an accumulated deficit of $105,244. The Company currently has limited working capital, and has not completed its efforts to establish a stabilized source of revenues sufficient to cover operating costs over an extended period of time.
Management anticipates that the Company will be dependent, for the near future, on additional investment capital to fund operating expenses The Company intends to position itself so that it may be able to raise additional funds through the capital markets. In light of management’s efforts, there are no assurances that the Company will be successful in this or any of its endeavors or become financially viable and continue as a going concern.
NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation
The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
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.
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.
6
FUTURE WORLD GROUP, INC.
(Formerly Betafox Corp.)
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
February 29, 2016
(Unaudited)
NOTE 4 – PROPERTY AND EQUIPMENT
During the year ended May 31, 2014, the Company purchased a candle making machine that was never placed in service. In conjunction with the Stock Purchase Agreement dated April 26, 2015, the property was maintained by the seller. As this was not considered a disposal of an asset no expense was recognized. The $6,000 purchase price of the asset was debited to additional paid in capital.
NOTE 5 – RELATED PARTY LOANS
In the prior year a former Director loaned the Company a total of $15,304. All funds were used for general operating purposes. The loans were unsecured, non-interest bearing and due on demand. On May 11, 2015, in conjunction with the Stock Purchase Agreement the balance due of $15,304 was forgiven by the Seller and credited to additional paid in capital.
During the period ended February 29, 2016, the CEO loaned the Company a total of $53,912. All funds were used for professional fees and other general operating purposes. The loans are unsecured, non-interest bearing and due on demand.
During the period ended February 29, 2016, another company owned by the CEO loaned the Company a total of $70,740. Some of the funds were used for professional fees and other general operating purposes. The loans are unsecured, non-interest bearing and due on demand.
NOTE 6 – COMMON STOCK
The Company has 75,000,000, $0.001 par value shares of common stock authorized.
On May 6, 2014, the Company issued 6,000,000 shares of common stock to a former director for cash proceeds of $6,000 at $0.001 per share.
During the period from June 2014 to February 2015, the Company issued 2,130,000 shares of common stock for net cash proceeds of $20,488 at $0.01 per share.
There were 8,130,000 shares of common stock issued and outstanding as of February 29, 2016.
NOTE 7 – SUBSEQUENT EVENTS
In accordance with SFAS 165 (ASC 855-10) management has performed an evaluation of subsequent events through the date that the financial statements were available to be issued, March 25, 2016 and through the date of the filing, and has determined that it does not have any material subsequent events to disclose in these financial statements.
7
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with our financial statements, including the notes thereto, appearing elsewhere in this annual report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements. Factors that could cause or contribute to such differences include, but are not limited to those discussed below and elsewhere in this Annual Report ". Our audited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.
RESULTS OF OPERATIONS
The financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company has incurred a loss since inception (September 10, 2013) resulting in an accumulated deficit of $105,244 as of February 29, 2016. Accordingly, there is substantial doubt about the Company’s ability to continue as a going concern.
The ability to continue as a going concern is dependent upon the Company acquiring profitable operations in the future and/or obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. New management intends to finance operating costs over the next twelve months with loans from related parties, until we acquire an ongoing business, as to which there is no assurance.
Results of Operations for the Three Months ended February 29, 2016 Compared to the Three Months ended February 28, 2015
Operating Expenses
During the three months ended February 29, 2016, we incurred expenses of $9,641 compared to $3,545 incurred during the three months ended February 28, 2015. During the current period $9,146 of our expenses were for professional fees and the major reason for the increase over the prior period. Professional fees consist of legal, accounting and audit fees.
Net Loss
Our net loss for the three months ended February 29, 2016 was $9,641, compared to a net loss of $3,545 for the prior period ended February 28, 2015. The increase in net loss is a direct result of the increase in professional fees.
Results of Operations for the Nine Months ended February 29, 2016 Compared to the Nine Months ended February 28, 2015
Operating Expenses
During the nine months ended February 29, 2016, we incurred expenses of $69,007 compared to $33,448 incurred during the nine months ended February 28, 2015. During the current period $66,883 of our expenses were for professional fees and the major reason for the increase over the prior year. Professional fees consist of legal, accounting and audit fees.
Net Loss
Our net loss for the nine months ended February 29, 2016 was $69,007, compared to a net loss of $33,448 for the prior period ended February 28, 2015. The increase in net loss is a direct result of the increase in professional fees.
LIQUIDITY AND CAPITAL RESOURCES
Cash Flows from Operating Activities
We have not generated positive cash flows from operating activities. During the nine months ended February 29, 2016, net cash flows used in operating activities was $69,475. For the same period ended c, net cash flows used in operating activities was $32,980.
Cash Flows from Investing Activities
We neither generated, nor used, funds in investing activities during the periods ended February 29, 2016 or February 28, 2015.
8
Cash Flows from Financing Activities
For the nine months ended February 29, 2016, net cash provided by financing activities was $124,653 received by way of related party loans. For the nine months ended February 28, 2015, net cash from financing activities was $30,161, consisting of $20,488 received from proceeds from the sale of shares of our common stock and $9,673 received by way of a loan from our former sole officer, director and principal shareholder.
PLAN OF OPERATION AND FUNDING
Unless and until we acquire an ongoing business, as to which there is no assurance, we expect that working capital requirements will continue to be funded through related party loans and/or further issuances of securities. There is no assurance that we will be able to meet our working capital requirement from either possible source.
We have no lines of credit or other bank financing arrangements. 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, and we might be unable to continue in business.
MATERIAL COMMITMENTS
As of the date of this Quarterly Report, we do not have any material commitments.
PURCHASE OF SIGNIFICANT EQUIPMENT
We do not have any agreements at this time, to purchase any significant equipment during the next twelve months.
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' report accompanying our May 31, 2015 and 2014 financial statements contains an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern.
The financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company has incurred a loss since inception (September 10, 2013), resulting in an accumulated deficit of $105,244 as of February 29, 2016, and further losses are anticipated unless and until we acquire an ongoing business, as to which there is no assurance. Accordingly, there is substantial doubt about the Company’s ability to continue as a going concern.
The ability to continue as a going concern is dependent upon the Company acquiring profitable operations in the future and/or obtaining the necessary financing to meet its obligations arising from normal business operations when they come due. New management intends to finance operating costs over the next twelve months with loans from related parties and/or the private placement of common stock. There is no assurance that funds will be available from either possible source of financing operations.
ITEM 4. CONTROLS AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
The term “disclosure controls and procedures” (defined in SEC Rule 13a-15(e)) refers to the controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files under the Securities Exchange Act of 1934 (the “Exchange Act”) is recorded, processed, summarized and reported within required time periods. “Disclosure controls and procedures” include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
The Company’s Chief Executive Officer and Chief Financial Officer has evaluated the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by this annual report (the “Evaluation Date”). Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer noted the deficiencies in internal controls identified in this Item 9A. Accordingly, the Company’s Chief Executive Officer and Chief Financial Officer has concluded that, as of the Evaluation Date, such controls and procedures were not effective.
Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f)). The Company’s internal control over financial reporting is a process designed 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. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, 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. Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, the Company conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting as of February 29, 2016 using the criteria established in “Internal Control - Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO").
A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. In its assessment of the effectiveness of internal control over financial reporting as of February 29, 2016, the Company determined that there were control deficiencies that constituted material weaknesses, as described below.
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1.
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We do not have an Audit Committee – While not being legally obligated to have an audit committee, it is management’s view that such a committee, including a financial expert member, is an utmost important entity level control over the Company’s financial statement. Currently the single-member Board of Directors acts in the capacity of the Audit Committee, and does not include a member that is considered to be independent of management to provide the necessary oversight over management’s activities.
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2.
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Lack of segregation of duties—We are currently a “shell” corporation, and have no employees other than our CEO and CFO—the same person. Therefore, all accounting information is currently reviewed only by one person.
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Accordingly, the Company concluded that these control deficiencies resulted in a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis by the Company’s internal controls.
As a result of the material weaknesses described above, management has concluded that the Company did not maintain effective internal control over financial reporting as of February 29, 2016, based on criteria established in Internal Control Integrated Framework issued by COSO.
Changes in Internal Control over Financial Reporting
There has been no change in our internal control over financial reporting identified in connection with our evaluation we conducted of the effectiveness of our internal control over financial reporting as of February 29, 2016, that occurred during our fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
10