Global Leaders Corp 10-Q for FY2023 Q3
Global Leaders Corp (GLCP)
About this 10-Q
Global Leaders Corp filed this 10-Q on August 30, 2023, covering the quarter ended July 31, 2023 (FY2023 Q3).
Headline figures
Quarter ended July 31, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $3828
- Net loss
- $132.84K
- compared with a net loss of $33.64K a year earlier
- Diluted EPS
- $0.00
- compared with $0.00 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For
the quarterly period ended
OR
For the transition period from_________to_________
Commission
File No.
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
(Address of principal executive offices, zip code)
Tel:
(
(Registrant’s telephone number, including area code)
Indicate
by check mark whether the issuer (1) has 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 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 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 (§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).
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” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (check one):
Large
Accelerated Filer ☐ Accelerated Filer ☐
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate
by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2 of the Exchange Act): Yes ☐
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate
by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12,13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes
APPLICABLE ONLY TO CORPORATE ISSUERS
As of August 30, 2023, there were shares of Common Stock, $0.0001 par value per share, outstanding.
GLOBAL LEADERS CORP.
QUARTERLY
REPORT ON FORM 10-Q FOR THE PERIOD
ENDED JULY 31, 2023
INDEX
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q of Global Leaders Corp., a Nevada corporation (the “Company”), contains “forward-looking statements,” as defined in the United States Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by terminology such as “may”, “will”, “should”, “could”, “expects”, “plans”, “intends”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of such terms and other comparable terminology. These forward-looking statements include, without limitation, statements about our market opportunity, our strategies, competition, expected activities and expenditures as we pursue our business plan, and the adequacy of our available cash resources. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Actual results may differ materially from the predictions discussed in these forward-looking statements. The economic environment within which we operate could materially affect our actual results.
Our management has included projections and estimates in this Form 10-Q, which are based primarily on management’s experience in the industry, assessments of our results of operations, discussions and negotiations with third parties and a review of information filed by our competitors with the SEC or otherwise publicly available. We caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. We disclaim any obligation subsequently to revise any forward - looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.
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PART I. FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
GLOBAL LEADERS CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF JULY 31, 2023 AND OCTOBER 31, 2022
(Expressed in U.S. Dollars)
July 31, 2023 | October 31, 2022 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable | ||||||||
| Prepaid expenses | ||||||||
| Prepaid expense to related party | ||||||||
| Total currents assets | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||
| Current liabilities | ||||||||
| Accrued liabilities | $ | $ | ||||||
| Due to officer/principal shareholder | ||||||||
| Total current liabilities | ||||||||
| Commitments and Contingencies | ||||||||
| STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||
| Preferred stock, $ par value; shares authorized; shares issued and outstanding at July 31, 2023 and October 31, 2022 | ||||||||
| Common Stock, $ par value, shares authorized; shares outstanding at July 31, 2023, and shares outstanding at October 31, 2022 | ||||||||
| Additional paid in capital | ||||||||
| Accumulated other comprehensive income | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ equity (deficit) | ( | ) | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | $ | $ | ||||||
See accompanying notes to the condensed consolidated financial statements.
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GLOBAL LEADERS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
FOR THE THREE AND NINE MONTHS ENDED JULY 31, 2023 AND 2022
(Expressed in U.S. Dollars)
(Unaudited)
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
Three months ended July 31, | Nine months ended July 31, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Revenues: | ||||||||||||||||
| $ | $ | $ | $ | |||||||||||||
| Total revenue | ||||||||||||||||
| Operating expenses: | ||||||||||||||||
| General and administrative-related parties | ||||||||||||||||
| General and administrative-other | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Loss from continuing operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Discontinued operations: | ||||||||||||||||
| Loss from discontinued operations | ( | ) | ( | ) | ||||||||||||
| Loss on sale of discontinued operations | ( | ) | ( | ) | ||||||||||||
| Discontinued operations | ( | ) | ( | ) | ||||||||||||
| Net loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other comprehensive income: | ||||||||||||||||
| -Foreign currency translation income | ||||||||||||||||
| Comprehensive loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Basic and diluted net loss per share | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Weighted average number of shares outstanding | ||||||||||||||||
See accompanying notes to the condensed consolidated financial statements.
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GLOBAL LEADERS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)
FOR THE THREE AND NINE MONTHS ENDED JULY 31, 2023 AND 2022
(Expressed in U.S. Dollars)
Three months ended July 31, 2023 (Unaudited)
| Number | Amount | Capital | Income | Deficit | Equity | |||||||||||||||||||
| Common Stock | Additional Paid-in | Accumulated Other Comprehensive | Accumulated | Total Stockholders’ | ||||||||||||||||||||
| Number | Amount | Capital | Income | Deficit | Equity | |||||||||||||||||||
| Balance, April 30, 2023 (Unaudited) | $ | $ | $ | | $ | ( | ) | $ | | |||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||||||
| Balance, July 31, 2023 (Unaudited) | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||
Nine months ended July 31, 2023 (Unaudited)
| Common Stock | Additional Paid-in | Accumulated Other Comprehensive | Accumulated | Total Stockholders’ Equity’ | ||||||||||||||||||||
| Number | Amount | Capital | Income | Deficit | (Deficit) | |||||||||||||||||||
| Balance, October 31, 2022 | $ | $ | $ | | $ | ( | ) | $ | ( | ) | ||||||||||||||
| Common Stock issued for cash in private placements | ||||||||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||||||
| Balance, July 31, 2023 (Unaudited) | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||
Three months ended July 31, 2022 (Unaudited)
| Common Stock | Additional Paid-in | Accumulated Other Comprehensive | Accumulated | Total Stockholders’ | ||||||||||||||||||||
| Number | Amount | Capital | Income | Deficit | Deficit | |||||||||||||||||||
| Balance, April 30, 2022 (Unaudited) | $ | $ | $ | | $ | ( | ) | $ | ( | ) | ||||||||||||||
| Capital contribution due to forgiveness of debt from officer/principal shareholder | - | |||||||||||||||||||||||
| Foreign currency translation | - | |||||||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||||||
| Balance, July 31, 2022 (Unaudited) | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||
Nine months ended July 31, 2022 (Unaudited)
| Common Stock | Additional Paid-in | Accumulated Other Comprehensive | Accumulated | Total Stockholders’ | ||||||||||||||||||||
| Number | Amount | Capital | Income | Deficit | Deficit | |||||||||||||||||||
| Balance, October 31, 2021 | $ | $ | $ | | $ | ( | ) | $ | ( | ) | ||||||||||||||
| Balance, value | $ | $ | $ | | $ | ( | ) | $ | ( | ) | ||||||||||||||
| Capital contribution due to forgiveness of debt from officer/principal shareholder | - | |||||||||||||||||||||||
| Foreign currency translation | - | |||||||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||||||
| Balance, July 31, 2022 (Unaudited) | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||
| Balance, value | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||
See accompanying notes to the condensed consolidated financial statements.
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GLOBAL LEADERS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED JULY 31, 2023 AND 2022
(Expressed in U.S. Dollars)
(Unaudited)
| 2023 | 2022 | |||||||
| Nine months ended July 31, | ||||||||
| 2023 | 2022 | |||||||
| Cash Flows From Operating Activities | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Loss from discontinued operations | ||||||||
| Loss on sale of discontinued operations | ||||||||
| Change in operating assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ||||||
| Prepaid expenses | ( | ) | ( | ) | ||||
| Prepaid expense to related party | ( | ) | ||||||
| Accrued liabilities and customer deposit | ( | ) | ( | ) | ||||
| Accrued expense due to related party | ( | ) | ||||||
| Net cash used in operating activities - continuing operations | ( | ) | ( | ) | ||||
| Net cash used in operating activities - discontinued operations | ( | ) | ||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash Flows From Investing Activities | ||||||||
| Disposal of subsidiary, net of cash disposed of | ( | ) | ||||||
| Net cash used in investing activities - continuing operations | ( | ) | ||||||
| Cash Flows From Financing Activities | ||||||||
| (Repayment to) advances from officer/principal shareholder | ( | ) | ||||||
| Proceeds from shares issued for cash in private placements | ||||||||
| Net cash provided by financing activities - continuing operations | ||||||||
| Net cash provided by financing activities - discontinued operations | ||||||||
| Net cash provided by financing activities | ||||||||
| Effect of exchange rate changes in cash and cash equivalents | ||||||||
| Net change in cash and cash equivalents | ( | ) | ||||||
| Cash and cash equivalents, beginning of period | ||||||||
| Cash and cash equivalents, ending of period | $ | $ | ||||||
| Supplementary Cash Flow Information | ||||||||
| Cash paid for: | ||||||||
| Interest | $ | $ | ||||||
| Income taxes | $ | $ | ||||||
| Non-Cash Financing Activities: | ||||||||
| Capital contribution due to forgiveness of debt from officer/principal shareholder | $ | $ | ||||||
See accompanying notes to the condensed consolidated financial statements.
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GLOBAL LEADERS CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED JULY 31, 2023 AND 2022
(Expressed in U.S. Dollars)
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Description of business
Global Leaders Corporation, a Nevada corporation (the “Company”), was incorporated in the State of Nevada on July 20, 2020.
Mr. Yip Hoi Hing Peter (“Mr. Peter Yip”), founder of the Company, is Chief Executive Officer, President and sole director of the Company. The Company plans to develop professional consultancy services to management executives of small and medium enterprises in Hong Kong.
Basis of Presentation and Principles of Consolidation
The accompanying unaudited condensed consolidated financial statements as of and for the three and nine months ended July 31, 2023 and 2022, have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC. The consolidated balance sheet as of October 31, 2022, included herein was derived from the audited consolidated financial statements as of that date, included in the Company’s Annual Report on Form 10-K filed with the SEC on February 7, 2023. These financial statements should be read in conjunction with that report.
In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods have been included. The results of operations for the interim periods presented are not necessarily indicative of the results of operations to be expected for the full fiscal year ending October 31, 2023.
The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiary Global Leaders Corporation, a company incorporated in Anguilla. All intercompany balances and transactions have been eliminated in consolidation.
Going Concern
The
accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization
of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying condensed
consolidated financial statements, for the nine months ended July 31, 2023, the Company has generated limited revenue of $
At
July 31, 2023, our cash balance was $
COVID-19
The COVID-19 pandemic has negatively impacted the global economy. The Company continues to monitor guidance from national and local public health authorities and has implemented health and safety precautions and protocols in response to such guidance.
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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, disclosures 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. Significant estimates include estimates for the accruals of potential liabilities.
Revenue recognition
The Company recognizes revenues when its customer obtains control of promised services, in an amount that reflects the consideration the Company expects to receive in exchange for those services, following the guidance of Accounting Standards Codification (ASC) 606, “Revenue from Contracts with Customers”.
Cash and cash equivalents
Cash consists of funds on hand and held in bank accounts. Cash equivalents includes demand deposits placed with banks or other financial institutions and all highly liquid investments with original maturities of three months or less, including money market funds.
SCHEDULE OF CASH AND CASH EQUIVALENTS
| As of July 31, 2023 | As of October 31, 2022 | |||||||
| (Unaudited) | ||||||||
| Cash and cash equivalents | ||||||||
| Denominated in United States Dollars | $ | $ | ||||||
| Denominated in Hong Kong Dollars | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
Financial instruments that potentially subject the Company to a significant concentration of credit risk consist primarily of cash. As of July 31, 2023, substantially all the Company’s cash was held by a major financial institution located in Hong Kong, which management believes is of high credit quality.
Fair value measurements
The Company follows the guidance of ASC 820-10, “Fair Value Measurements and Disclosures”, with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:
Level 1 : Observable inputs such as quoted prices in active markets;
Level 2 : Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and
Level 3 : Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions
The Company believes the carrying amount reported in the balance sheet for cash and cash equivalents, prepaid expenses and other current assets, accrued liabilities, due to officer/principal shareholder, and due from or due to a related party, approximate their fair values because of the short-term nature of these financial instruments.
Foreign currency translation
The reporting currency of the Company is the United States Dollars (“US$”) and the accompanying condensed consolidated financial statements have been expressed in US$. In addition, the Company’s operating subsidiary uses Hong Kong Dollars (“HK$”) as its functional currency and maintains its books and records in the reporting currency US$, respectively.
In general, for consolidation purposes, assets and liabilities of the Company’s subsidiaries whose functional currency is not the US$, are translated into US$ using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of a foreign subsidiary are recorded as a separate component of accumulated other comprehensive loss within stockholders’ equity.
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Translation of amounts from the local currencies of the Company into US$ has been made at the following exchange rates for the period:
SCHEDULE OF FOREIGN CURRENCY TRANSLATION
As of and for the nine months ended July 31, | ||||||||
| 2023 | 2022 | |||||||
| Period-end HK$ : US$1 exchange rate | ||||||||
| Period-average HK$ : US$1 exchange rate | ||||||||
The Company calculates net loss per share in accordance with ASC Topic 260, “Earnings per Share.” Basic net loss per share is computed by dividing the net loss by the weighted-average number of common shares outstanding during the period. Diluted net loss per share is computed like basic net loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common stock equivalents had been issued and if the additional common shares were dilutive. As of July 31, 2023, the Company has no potentially dilutive securities, such as options or warrants, outstanding.
Concentrations
For
the three and nine months ended July 31, 2023, one customer accounted for
For
the three and nine months ended July 31, 2023, one related party vendor accounted for
Recent Accounting Pronouncements
In June 2016, the FASB issued ASU No. 2016-13, Credit Losses – Measurement of Credit Losses on Financial Instruments (“ASC 326”). The standard significantly changes how entities will measure credit losses for most financial assets, including accounts and notes receivables. The standard will replace today’s “incurred loss” approach with an “expected loss” model, under which companies will recognize allowances based on expected rather than incurred losses. Entities will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The standard is effective for the Company beginning on November 1, 2023. The adoption of ASU 2016-13 is not expected to have a material impact on the Company’s financial position, results of operations, and cash flows.
Other recent accounting pronouncements issued by the FASB, its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future financial statements.
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NOTE 2 - DISCONTINUED OPERATIONS
On
May 1, 2022, GLC Anguilla sold its entire
GLA was deconsolidated effective May 1, 2022, and the Company does not have any continuing involvement in the operations of the disposed subsidiary. The disposal is accounted for as discontinued operations and, accordingly, all prior periods presented in the accompanying consolidated balance sheets, statements of operations and statements of cash flows have been adjusted to conform to this presentation; no adjustment has been made to the prior period consolidated balance sheet as a result of the disposal. As of July 31, 2023, only one subsidiary, GLC Anguilla was owned by the Company.
On
May 1, 2022, before the disposal, GLA had net assets of $
SCHEDULE OF SALE OF DISCONTINUED OPERATIONS
| Carrying value of assets disposed | $ | ( | ) | |
| Carrying value of liabilities disposed | ||||
| Carrying value of net assets disposed | ( | ) | ||
| Sales proceeds | ||||
| Loss on sale of discontinued operations | $ | ( | ) |
The following table summarizes certain selected components of discontinued operations for the disposed subsidiary for the three and nine months ended July 31, 2023 and 2022:
SUMMARY OF COMPONENTS OF DISCONTINUED OPERATIONS FOR DISPOSED SUBSIDIARY
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
Three months ended July 31, | Nine months ended July 31, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||
| Loss from discontinued operations | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||
| Loss per share from discontinued operations - Basic and Diluted | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||
| Loss per share from discontinued operations - Basic | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||
| Current and total assets | $ | $ | $ | $ | ||||||||||||
| Current and total liabilities | $ | $ | $ | $ | ||||||||||||
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NOTE 3 - STOCKHOLDERS
Shares issued for cash in private placement
During the three months ended July 31, 2023, the Company did not issue any shares of Common Stock.
During
the nine months ended July 31, 2023, the Company sold shares of restricted Common Stock to eighteen (18) individuals in a private
placement at a price of $ per share, for total proceeds of $
For the three and nine months ended July 31, 2022, the Company did not issue any shares of its Common Stock.
NOTE 4 - RELATED PARTY TRANSACTIONS
Mr. Peter Yip, CEO, is shareholder in the Company. In addition, two companies owned by Mr. Peter Yip, CS Global Consultancy Limited (“CS Global”) and CSG Group Holdings Limited (“CSG Group”), are each % shareholders in the Company.
In
November 2022, the Company entered into two contacts with CS Global that have a term from November 1, 2022 to October 31, 2023. In the
first contract, CS Global provides management services, as defined, to the Company for a monthly fee of $
For
the three months ended July 31, 2023, fees paid to CS Global totaled $
For
the nine months ended July 31, 2023, fees paid to CS Global totaled $
For the three and nine months ended July 31, 2022, the Company did not incur any fees to CS Global.
As
of July 31, 2023 and October 31, 2022, the Company owed Mr. Peter Yip $
Greenpro
Capital Corp., through its wholly owned subsidiaries (collectively “Greenpro”), is a
For
the three months ended July 31, 2023, the Company incurred total fees to Greenpro of $
For
the nine months ended July 31, 2023, the Company incurred total fees to Greenpro of $
During
the three months ended July 31, 2022, the Company incurred total fees to Greenpro of $
During
the nine months ended July 31, 2022, the Company incurred total fees to Greenpro of $
As
of July 31, 2023 and October 31, 2022, the Company prepaid $
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
The following information should be read in conjunction with (i) the financial statements of Global Leaders Corp., a Nevada corporation, and the notes thereto appearing elsewhere in this Form 10-Q together with (ii) the more detailed business information and the October 31, 2022 audited financial statements and related notes included in the Company’s most recent Annual Report on Form 10-K for the year ended October 31, 2022 filed with the SEC on February 7, 2023. Statements in this section and elsewhere in this Form 10-Q that are not statements of historical or current fact constitute “forward-looking” statements.
OVERVIEW
Global Leaders Corp. (the “Company” or “we”) was incorporated in the State of Nevada on July 20, 2020 and has a fiscal year end of October 31.
GOING CONCERN
For the nine months ended July 31, 2023, the Company incurred a net loss of $463,548 and used cash in operating activities of $480,248. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern within one year of the date that these financial statements are issued. In addition, the Company’s independent registered public accounting firm, in its report on the Company’s October 31, 2022, financial statements, raised substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.
At July 31, 2023, our cash balance was $5,581. Management estimates that the current funds on hand will be sufficient to continue operations through the next three months. The Company’s ability to continue as a going concern is dependent upon the Company’s ability to implement its business plans and continue receiving financial support from its officers and shareholders. No assurance can be given that any future financing, if needed, will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company can obtain additional financing, if needed, it may contain undue restrictions on its operations, in the case of debt financing, or cause substantial dilution for its stockholders, in the case of equity financing.
CRITICAL ACCOUNTING POLICIES AND 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, disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting year. Actual results could differ from those estimates. Significant estimates include estimates for the accruals of potential liabilities.
REVENUE RECOGNITION
The Company recognizes revenues when its customer obtains control of promised services, in an amount that reflects the consideration the Company expects to receive in exchange for those services. The Company recognizes revenue following the guidance of Accounting Standards Codification (ASC) 606, “Revenue from Contracts”.
RECENT ACCOUNTING PRONOUNCEMENTS
Refer to Note 1 in the accompanying condensed consolidated financial statements.
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PLAN OF OPERATION
We started our business in 2020 and have a limited operating history. We intend to continue to expand the scope and geographic reach of our services by extending our service to more clients in different regions. Such plans are based on current intentions and assumptions. Our expansion plan may be hindered by factors beyond our control, such as general market conditions, our ability to attract qualified employees, government policies relevant to our industry, our ability to maintain our existing competitive advantages and new market entrants. For us to operate as a management consultancy services provider in these jurisdictions, we may be required to identify suitable local partners to enter such new markets. If we are unable to successfully implement our growth strategy, our business, financial condition, results of operations and prospects may be materially and adversely affected.
Our anticipated future growth will likely place significant demand on our management and operational efficiency. Our success in managing our growth will depend, to a significant degree, on our ability to attract more new clients and retain existing clients and launch new services, and successfully monetize them, to increase our revenue. In addition, we will have to successfully adapt our existing services to changing industry and user conditions, and expand, train and manage our employees. The market in which we operate is highly dynamic and may not develop as expected. Our clients may not fully understand the value of our services and potential clients and candidates may have difficulty distinguishing our services from those of our competitors. If we are unable to manage our operations properly and prudently as we continue to grow in this dynamic and evolving market, or if the quality of our services deteriorates due to mismanagement, our brand name and reputation could be severely harmed, which would materially and adversely affect our business, financial condition, and results of operations.
Results of Operations
Three Months Ended July 31, 2023 and 2022
We recorded $3,828 of service revenues and $0 of cost-of-service revenues for the three months ended July 31, 2023.
We recorded no revenues and cost of revenues for the three months ended July 31, 2022.
For the three months ended July 31, 2023 and 2022, general and administrative expenses were $136,671 and $32,019 and included $110,957 and $14,910 of general and administrative expenses to related parties for the three months ended July 31, 2023 and 2022, respectively.
Nine Months Ended July 31, 2023 and 2022
We recorded $3,828 of service revenues and $0 of cost-of-service revenues for the nine months ended July 31, 2023.
We recorded no revenues and cost of revenues for the nine months ended July 31, 2022.
For the nine months ended July 31, 2023 and 2022, general and administrative expenses were $467,376 and $71,905 and included $364,857 and $39,982 of general and administrative expenses to related parties for the nine months ended July 31, 2023 and 2022, respectively.
Liquidity and Capital Resources
At July 31, 2023, our cash balance was $5,581. Management estimates that the current funds on hand will be sufficient to continue operations through the next three months. No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is can obtain additional financing it may contain undue restrictions on its operations, in the case of debt financing, or cause substantial dilution for its stockholders, in the case of equity financing. We do not have any financing arrangement and we cannot provide investors with any assurance that we will be able to raise sufficient funding to fund our operations and ongoing operational expenses. In the absence of such financing, our business will likely fail. There are no assurances that we will be able to achieve further sales of our Common Stock or any other form of additional financing.
In November 2022, the Company sold 668,750 shares of restricted Common Stock to eighteen (18) individuals in a private placement at a price of $0.80 per share, for total proceeds of $535,000.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
As a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act), we are not required to provide the information called for by this Item 3.
ITEM 4. CONTROLS AND PROCEDURES.
DISCLOSURE CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures:
We conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of July 31, 2023. This evaluation was carried out by Mr. Yip Hoi Hing Peter (“Mr. Peter Yip”), our Chief Executive Officer and Chief Financial Officer, who also serves as our principal executive officer and principal financial and accounting officer, respectively. Based upon that evaluation, Mr. Peter Yip, our Chief Executive Officer and Chief Financial Officer, concluded that, as of July 31, 2023, our disclosure controls and procedures were not effective due to the presence of material weaknesses in internal control over financial reporting.
A material weakness is a deficiency, or a 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.
We continue to have material weaknesses in our internal control over financial reporting disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended October 31, 2022, in that (i) the Company did not maintain a functioning independent audit committee and did not maintain an independent board; (ii) the Company had inadequate segregation of duties; and (iii) the Company had an insufficient number of personnel with an appropriate level of U.S. GAAP knowledge and experience and ongoing training in the application of U.S. GAAP and SEC disclosure requirements commensurate with the Company’s financial reporting requirements.
Changes in Internal Control over Financial Reporting:
There were no changes in our internal control over financial reporting during the quarter ended July 31, 2023, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
The Company is not currently subject to any legal proceedings. From time to time, the Company may become subject to litigation or proceedings in connection with its business, as either a plaintiff or defendant. There are no such pending legal proceedings to which the Company is a party that, in the opinion of management, is likely to have a material adverse effect on the Company’s business, financial condition or results of operations.
ITEM 1A. RISK FACTORS
As a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act), we are not required to provide the information called for by this Item 1A.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. MINE SAFETY DISCLOSURES.
None.
ITEM 5. OTHER INFORMATION.
None.
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ITEM 6. EXHIBITS.
(a) Exhibits required by Item 601 of Regulation SK.
* Filed herewith.
| (1) | Previously filed and incorporated by reference to the Company’s Registration Statement on Form S-1, as amended (File No. 333-251324), as filed with the Securities and Exchange Commission on December 14, 2020. |
| (2) | Previously filed as an exhibit to the Company’s Current Report on Form 8-K filed with SEC on June 4, 2021. |
| (3) | Previously filed as an exhibit to the Company’s Current Report on Form 8-K filed with SEC on June 23, 2021. |
| (4) | Previously filed as an exhibit to the Company’s Current Report on Form 8-K filed with SEC on September 24, 2021. |
** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| GLOBAL LEADERS CORP. | ||
| (Name of Registrant) | ||
| Date: August 30, 2023 | By: | /s/ Yip Hoi Hing Peter |
| Name: | Yip Hoi Hing Peter | |
| Title: | Chief Executive Officer and Chief Financial Officer (Principal Executive Officer and Principal Financial and Accounting Officer) | |
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EXHIBIT 31.1
SECTION 302 CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER OF GLOBAL LEADERS CORP.
I, Yip Hoi Hing Peter, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Global Leaders Corp.;
2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| Date: August 30, 2023 | By: | /s/ Yip Hoi Hing Peter |
| Yip Hoi Hing Peter | ||
| Chief Executive Officer and Chief Financial Officer | ||
| (Principal Executive Officer and Principal Financial and Accounting Officer) |
EXHIBIT 32.1
SECTION 906 CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER AND
PRINCIPAL FINANCIAL OFFICER OF GLOBAL LEADERS CORP.
In connection with the accompanying Quarterly Report on Form 10-Q of Global Leaders Corp. for the quarter ended July 31, 2023, the undersigned, Yip Hoi Hing Peter, Chief Executive Officer, Chief Financial Officer and Chairman of Board of Directors of Global Leaders Corp., does hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) such Quarterly Report on Form 10-Q for the quarter ended July 31, 2023 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(2) the information contained in such Quarterly Report on Form 10-Q for the quarter ended July 31, 2023 fairly presents, in all material respects, the financial condition and results of operations of Global Leaders Corp.
| Date: August 30, 2023 | By: | /s/ Yip Hoi Hing Peter |
| Yip Hoi Hing Peter | ||
| Chief Executive Officer and Chief Financial Officer | ||
| (Principal Executive Officer and Chief Financial and Accounting Officer) |