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[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended August 31, 2012
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______to _______
Commission File Number: 333-175525
Indicate by checkmark whether the issuer: (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Exchange Act during
the past 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.
Indicate by check mark whether the Company has submitted
electronically and posted on its corporate web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation
S-T (§232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the Company was required to submit and post such files).
Indicate by check mark whether the registrant is a large accelerated filed, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [ ] Smaller reporting company [ x ]
Indicate by checkmark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act).
The number of shares outstanding of the Company's Common Stock as of October 9, 2012 was 3,435,000.
See accompanying notes to financial statements
See accompanying notes to financial statements
See accompanying notes to financial statements
NOTE 1- ORGANIZATION AND BUSINESS OPERATIONS
DILMAX CORP. (the Company) was incorporated under the laws of the State of Nevada, U.S. on April 14, 2011. The Companys business is on-line distribution of music for fitness. The Company is in the development stage as defined under Accounting Codification Standard, Development Stage Entities (ASC-915). The Company has not generated any revenue to date and consequently its operations are subject to all risks inherent in the establishment of a new business enterprise. For the period from inception on April 14, 2011 through August 31, 2012 the Company has accumulated losses of $36,679.
NOTE 2 - 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 losses since inception resulting in an accumulated deficit of $36,679 as of August 31, 2012 and further losses are anticipated in the development of its business raising substantial doubt about the Companys ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management intends to finance operating costs over the next twelve months with existing cash on hand and loans from directors and/or private placement of common stock. These financials do not include any adjustments relating to the recoverability and reclassification of recorded asset amounts, or amounts and classifications of liabilities that might result from this uncertainty.
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
Development Stage Company
Cash and Cash Equivalents
Use of Estimates and Assumptions
The Companys financial instruments consist principally of cash and amounts due to related parties. Pursuant to ASC 820 and 825, 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.
Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
Basic and Diluted Net Loss per Share
The Company has no potential dilutive instruments and accordingly basic loss and diluted loss per share are the same.
Recent Accounting Pronouncements
In June 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income, which is effective for annual reporting periods beginning after December 15, 2011. ASU 2011-05 will become effective for the Company on January 1, 2012. This guidance eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders equity. In addition, items of other comprehensive income that are reclassified to profit or loss are required to be presented separately on the face of the financial statements. This guidance is intended to increase the prominence of other comprehensive income in financial statements by requiring that such amounts be presented either in a single continuous statement of income and comprehensive income or separately in consecutive statements of income and comprehensive income. The adoption of ASU 2011-05 is not expected to have a material impact on our financial position or results of operations.
In May 2011, the FASB issued ASU 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs, which is effective for annual reporting periods beginning after December 15, 2011. This guidance amends certain accounting and disclosure requirements related to fair value measurements. Additional disclosure requirements in the update include: (1) for Level 3 fair value measurements, quantitative information about unobservable inputs used, a description of the valuation processes used by the entity, and a qualitative discussion about the sensitivity of the measurements to changes in the unobservable inputs; (2) for an entitys use of a nonfinancial asset that is different from the assets highest and best use, the reason for the difference; (3) for financial instruments not measured at fair value but for which disclosure of fair value is required, the fair value hierarchy level in which the fair value measurements were determined; and (4) the disclosure of all transfers between Level 1 and Level 2 of the fair value hierarchy. ASU 2011-04 will become effective for the Company on January 1, 2012. The Company does not expect that the guidance effective in future periods will have a material impact on its financial statements.
Restructuring is a Troubled Debt Restructuring. This amendment explains which modifications constitute troubled debt restructurings (TDR). Under the new guidance, the definition of a troubled debt restructuring remains essentially unchanged, and for a loan modification to be considered a TDR, certain basic criteria must still be met. For public companies, the new guidance is effective for interim and annual periods beginning on or after June 15, 2011, and applies retrospectively to restructuring occurring on or after the beginning of the fiscal year of adoption. The Company does not expect that the guidance effective in future periods will have a material impact on its financial statements.
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.
NOTE 4 - STOCKHOLDERS EQUITY
The authorized capital of the Company is 75,000,000 common shares with a par value of $ 0.001 per share. On May 10, 2011 the Company issued 2,700,000 shares of common stock at a price of $0.001 per share for total cash proceeds of $2,700 to the Companys founder.
For the year ended May 31, 2012 the Company issued 735,000 shares of common stock at a price of $0.03 per share for total cash proceeds of $22,050.
As of August 31, 2012 the Company had 3,435,000 shares of common stock issued and outstanding.
NOTE 5 - RELATED PARTY TRANSACTONS
On May 10, 2011, a Director purchased 2,700,000 shares of common stock at a price of $0.001 per share for cash of $2,700.
The Director loaned $13,650 to the Company to pay for business expenses relating to banking and incorporation fees. This loan is non-interest bearing, due upon demand and unsecured. Imputed interest of $165 charged to additional paid in capital.
NOTE 6- INCOME TAXES
As of August 31, 2012, the Company had net operating loss carry forwards of $36,679 that may be available to reduce future years taxable income through 2032. Future tax benefits which may arise as a result of these losses have not been recognized in these financial statements, as their realization is determined not likely to occur and accordingly, the Company has recorded a valuation allowance for the deferred tax asset relating to these tax loss carry-forwards.
NOTE 7 PREPAID EXPENSES
On November 2011 the Company prepaid $8,000 to a third party for a service period of a year. As of August 31, 2012, the Company amortized a total of $5,850 and the remaining $2,150 is recorded as prepaid to be applied to future period. For the three month period ended August 31, 2012 the Company amortized total of $1,850.
NOTE 8 - SUBSEQUENT EVENT
On October 1, 2012, Konanstin Kupert, the Registrants principal shareholder, President, Chief Executive Officer, Chief Financial Officer and Director, consummated the sale of Mr. Kuperts 2,700,000 shares (the Shares) of the Registrants Common Stock to Genie OMalley. The acquisition of the Shares, which represent 78.6% of the Registrants shares of outstanding Common Stock, resulted in a change of the Registrant. The purchase price of the Shares was $350,000.
Also on October 1, 2012, in connection with the sale of the Shares, Ms. OMalley was appointed a Director of the Registrant and, upon Mr. Kuperts resignation, was appointed to serve as the Registrants President, Chief Executive Officer, Chief Financial Officer, Secretary and Treasurer.
FORWARD LOOKING STATEMENTS
Statements made in this Form 10-Q that are not historical or current facts are "forward-looking statements" made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 (the "Act") and Section 21E of the Securities Exchange Act of 1934. These statements often can be identified by the use of terms such as "may," "will," "expect," "believe," "anticipate," "estimate," "approximate" or "continue," or the negative thereof. We intend that such forward-looking statements be subject to the safe harbors for such statements. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statements represent management's best judgment as to what may occur in the future. However, forward-looking statements are subject to risks, uncertainties and important factors beyond our control that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
Dilmax Corp. was incorporated in the State of Nevada on April 14, 2011 and established a fiscal year end of May 31. We are a development-stage company formed to distribute music for fitness. To date, we have had limited operations. We have developed our business plan, and executed a DJ Service Agreement with DJ Namornik, who agreed to compose for us 20 original musical tracks and 50 remixes to these tracks. We do not intend to sell music produced by third parties.
Dilmax Corp. hopes to position itself to take full advantage of the fast growing Internet industry. We intend to be a distributor of workout music via Internet. Our concept would allow anyone who had a computer or access to the Internet to purchase and download music for fitness. We intend to offer audio tracks with different tempos for people who like individual sport activities such as jogging, spinning/cycling, cardio/running, weight lifting, dancing, yoga and stretching.
Three month period ended August 31, 2012 compare to the three month period ended August 31, 2011.
Our net loss for the three month period ended August 31, 2012 was $6,315 compared to a net loss of $5,611 for the three month period ended August 31, 2011. During the three month period ended August 31, 2012, we did not generate any revenue.
During the three month period ended August 31, 2012, we incurred general and administrative expenses of $6,315 compared to $5,611 incurred during the three month period ended August 31, 2011. General and administrative expenses incurred during the three month period ended August 31, 2012 were generally related to corporate overhead, financial and administrative contracted services.
The weighted average number of shares outstanding was 3,435,000 for the three month period ended August 31, 2012.
Liquidity and Capital Resources
Three month period ended August 31, 2012
As at August 31, 2012, our current assets were $2,262 compared to $4,112 in current assets at May 31, 2012. As at August 31, 2012, current assets were comprised of $112 in cash and $2,150 in prepaid expenses. As at August 31, 2012, our current liabilities were $13,650. Current liabilities were comprised of $13,650 in advances from director.
Stockholders deficit increased from $5,238 as at May 31, 2012 to $11,388 as at August 31, 2012.
Cash Flows from Operating Activities
We have not generated positive cash flows from operating activities. For the three month period ended August 31, 2012, net cash flows used in operating activities was $4,500 consisting of a net loss of $6,315, prepaid expenses of $1,850, imputed interest of $165 and increase in accounts payable of $200. Net cash flows used in operating activities was $38,288 for the period from Inception on April 14, 2011 to August 31, 2012.
Cash Flows from Financing Activities
We have financed our operations primarily from either advancements or the issuance of equity and debt instruments. For the three month period ended August 31, 2012 net cash provided by financing activities was $4,500 received from Directors loan. For the period from Inception on April 14, 2011 to August 31, 2012 net cash provided by financing activities was $38,400 received from Directors loan and sale of common stock.
Plan of Operation and Funding
We expect that working capital requirements will continue to be funded through a combination of our existing funds and further issuances of securities. Our working capital requirements are expected to increase in line with the growth of our business.
Existing working capital, further advances and debt instruments, and anticipated cash flow are expected to be adequate to fund our operations over the next three months. We have no lines of credit or other bank financing arrangements. Generally, we have financed operations to date through the proceeds of the private placement of equity and debt instruments. In connection with our business plan, management anticipates additional increases in operating expenses and capital expenditures relating to: (i) acquisition of inventory; (ii) developmental expenses associated with a start-up business; and (iii) marketing expenses. We intend to finance these expenses with further issuances of securities, and debt issuances. Thereafter, we expect we will need to raise additional capital and generate revenues to meet long-term operating requirements. Additional issuances of equity or convertible debt securities will result in dilution to our current shareholders. Further, such securities might have rights, preferences or privileges senior to our common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, we may not be able to take advantage of prospective new business endeavors or opportunities, which could significantly and materially restrict our business operations. We will have to raise additional funds in the next twelve months in order to sustain and expand our operations. We currently do not have a specific plan of how we will obtain such funding; however, we anticipate that additional funding will be in the form of equity financing from the sale of our common stock. We have and will continue to seek to obtain short-term loans from our directors, although no future arrangement for additional loans has been made. We do not have any agreements with our directors concerning these loans. We do not have any arrangements in place for any future equity financing.
Off-Balance Sheet Arrangements
As of the date of this Quarterly Report, we do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
No report required.
ITEM 4. CONTROLS AND PROCEDURES
Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that is designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commissions rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuers management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
An evaluation was conducted under the supervision and with the participation of our management of the effectiveness of the design and operation of our disclosure controls and procedures as of August 31, 2012. Based on that evaluation, our management concluded that our disclosure controls and procedures were ineffective as of such date to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. Such officer also confirmed that there was no change in our internal control over financial reporting during the three-month period ended August 31, 2012 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Management is not aware of any legal proceedings contemplated by any governmental authority or any other party involving us or our properties. As of the date of this Quarterly Report, no director, officer or affiliate is (i) a party adverse to us in any legal proceeding, or (ii) has an adverse interest to us in any legal proceedings. Management is not aware of any other legal proceedings pending or that have been threatened against us or our properties.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
ITEM 4. MINE SAFETY DISCLOSURES
ITEM 5. OTHER INFORMATION
ITEM 6. EXHIBITS
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.