Starguide Group, Inc 10-Q for FY2024 Q3
Starguide Group, Inc. (STRG)
About this 10-Q
Starguide Group, Inc filed this 10-Q on December 13, 2023, covering the quarter ended October 31, 2023 (FY2024 Q3).
Headline figures
Quarter ended October 31, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $375
- compared with $0 a year earlier
- Net loss
- $26.93K
- compared with a net loss of $6173 a year earlier
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
Mark One
For the quarterly period ended
For the transition period from ______ to _______
COMMISSION FILE NO.
(Exact name of registrant as specified in its charter) |
(State or other jurisdiction of incorporation)
5199
(Primary Standard Industrial Classification Code Number)
(IRS Employer Identification No.)
Tel:
(Address and telephone number of registrant’s principal executive offices)
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 registrant has submitted electronically every Interactive Data File required to be submitted 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 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 | ☐ |
☐ | Smaller reporting company | ||
Emerging growth company |
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 to Section 7(a)(2)(B) of the Securities Act:
Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
Applicable Only to Issuer Involved in Bankruptcy Proceedings During the Preceding Five Years. N/A
Indicate by checkmark whether the issuer has filed all documents and reports required to be filed by Section 12, 13 and 15(d) of the Securities Exchange Act of 1934 after the distribution of securities under a plan confirmed by a court. Yes ☐ No ☐
Applicable Only to Corporate Registrants
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the most practicable date:
| STARGUIDE GROUP, INC. |
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Management’s Discussion And Analysis Of Financial Condition And Results Of Operations |
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| Table of Contents |
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
STARGUIDE GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF OCTOBER 31, 2023 AND JANUARY 31, 2023
(Unaudited)
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Assets |
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Current assets: |
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Cash |
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Total current assets |
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Property and equipment, net |
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Goodwill |
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Total Assets |
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Liabilities and Stockholders’ Equity |
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Current liabilities: |
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Accounts payable and accrued liabilities |
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Accrued interest |
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Due to related parties |
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Convertible notes |
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Total Liabilities |
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Stockholders’ Deficit: |
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Common stock, $ |
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Additional paid-in capital |
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Accumulated deficit |
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Accumulated other comprehensive income (loss) |
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Total deficit attributed to Starguide Group, Inc. |
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Deficit attributed to non-controlling interest |
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Total Stockholders' Deficit |
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Total Liabilities and Stockholders' Deficit |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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| Table of Contents |
STARGUIDE GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED OCTOBER 31 2023 AND 2022
(Unaudited)
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Revenue |
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Operating expenses |
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General and administrative expenses |
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Management salaries - related party |
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Total operating expenses |
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Loss from operations |
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Other income (expense): |
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Other income |
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Interest Expense |
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Foreign exchange transaction gain (loss) |
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Total other income (expense) |
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Loss before income taxes |
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Income tax provision |
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Net Loss |
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Less: Net loss attributable to non-controlling interest |
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Net loss attributable to Starguide Group, Inc. |
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Comprehensive loss |
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Net loss |
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Foreign currency adjustment |
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Total comprehensive loss |
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Less: Comprehensive income attributable to noncontrolling interests |
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Net comprehensive loss attributed to stockholders of Starguide Group, Inc. |
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Basic and diluted net income per common share: |
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Net loss per common share |
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Weighted average number of common shares outstanding |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements
| 4 |
| Table of Contents |
STARGUIDE GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT
FOR THE NINE MONTHS ENDED OCTOBER 31, 2023 AND 2022
(Unaudited)
Nine Months Ended October 31, 2023
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| Other |
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| Paid-in Capital |
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| Accumulated Deficit |
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| Comprehensive Loss |
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| Total |
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| controlling Interest |
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Balance - January 31, 2023 |
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Foreign currency translation adjustments |
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Net loss |
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Balance - April 30, 2023 |
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Foreign currency translation adjustments |
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Net loss |
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Balance - July 31, 2023 |
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Foreign currency translation adjustments |
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Net loss |
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Balance - October 31, 2023 |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 5 |
| Table of Contents |
Nine Months Ended October 31, 2022
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| Accumulated |
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| Common Stock |
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| Other |
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| Number of Shares |
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| Paid-in Capital |
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| Accumulated Deficit |
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| Comprehensive Loss |
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| Total |
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| controlling Interest |
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Balance - January 31, 2022 |
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Loan forgiveness by related party |
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Net loss |
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Balance - April 30, 2022 |
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Net loss |
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Balance - July 31, 2022 |
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Net loss |
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Balance - October 31, 2022 |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 6 |
| Table of Contents |
STARGUIDE GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED OCTOBER 31, 2023 AND 2022
(Unaudited)
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Cash Flows from Operating Activities |
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Net loss |
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Adjustments to reconcile net income to net cash used in operating activities: |
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Depreciation |
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Changes in operating assets and liabilities: |
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Accounts payable and accrued liabilities |
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Accrued interest |
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Management salary payable |
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Net cash used in operating activities |
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Cash Flows from Financing Activities |
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Proceeds from issuance of convertible notes to non-affiliate |
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Proceeds from related parties |
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Net cash provided by financing activities |
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Effect of exchange rate changes on cash |
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Net change in cash and cash equivalents |
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Cash and cash equivalents - beginning of period |
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Cash and cash equivalents - end of period |
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Supplemental cash flow disclosures: |
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Cash paid for interest |
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Cash paid for income taxes |
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Non-cash investing and financing activity: |
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Debt forgiven by related party |
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| 7 |
| Table of Contents |
STARGUIDE GROUP, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
OCTOBER 31, 2023
NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS
Starguide Group, Inc. was incorporated in the State of Nevada on February 21, 2017 and established a fiscal year end of January 31. We are still in the development stage and as of today we have no revenues, have minimal assets and have incurred losses since inception. We were formed to engage in the distribution of Indian traditional art and crafts from India to individuals and wholesalers around the world. As of today, we have not identified any party to sell our products. Initially, our sole officer and director, Vicky Sharma will market our products. We intend to hire salespersons with good knowledge and connections in our market. The salesperson’s job would be to find potential customers, and to set up agreements with them. We intend to focus on direct marketing efforts whereby our representative will directly contact. We plan to advertise our service and products on different websites and social networks using context ad. We plan to use internet catalogs and use many online marketing tools to direct traffic to our website and identify potential customers. In addition, we are going to issue monthly printed catalog and send it to our clients.
On May 16, 2022, Vicky Sharma, the previous majority shareholder of the Company, entered into a stock purchase agreement for the sale of
As a result of the acquisition, Northeast International Holdings Limited holds approximately
Also on May 16, 2022, the previous sole officer and director of the company, Vicky Sharma, resigned his positions with the Company. Upon such resignations, Lu Mei Xian was appointed as Chief Executive Officer, Treasurer and Secretary, and sole Director of the Company.
The Company intends to be an incubator of Software as a Service (Saas) startups and is in active discussions with multiple SaaS businesses. The Company’s goal is to identify and locate SaaS businesses with the potential to grow, and to bring them under the Starguide corporate umbrella.
On December 8, 2022, the Company acquired
NOTE 2 – GOING CONCERN UNCERTAINTY
As reflected in the accompanying consolidated financial statements, the Company’s current liabilities exceeded its current assets by $
Management believes that the current actions to obtain additional funding and implement its strategic plans provide the opportunity for the Company to continue as a going concern. There are no assurances that additional funds will be available when needed from any source or, if available, will be available on terms that are acceptable to us.
| 8 |
| Table of Contents |
NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited condensed interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the nine months ended October 31, 2023 are not necessarily indicative of the results that may be expected for the year ending January 31, 2024. Notes to the unaudited condensed interim consolidated financial statements that would substantially duplicate the disclosures contained in the audited financial statements for fiscal year 2023 have been omitted. This report should be read in conjunction with the audited financial statements and the footnotes thereto for the fiscal year ended January 31, 2023 included in the Company’s Form 10-K as filed with the Securities and Exchange Commission on May 15, 2023.
Basis of Consolidation
These consolidated financial statements include the accounts of the Company and its
Foreign Currency Translations
The Company’s functional and reporting currency is the U.S. dollar. The functional currency of Live Investments Holdings Ltd. and Live Lead Tech Ltd. is the Great British Pounds (GBP). All transactions initiated GBP are translated into U.S. dollars in accordance with ASC 830-30, ”Translation of Financial Statements,” as follows:
| 1) | Monetary assets and liabilities at the rate of exchange in effect at the balance sheet date. |
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| 2) | Equity at historical rates. |
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| 3) | Revenue and expense items at the average rate of exchange prevailing during the period. |
Adjustments arising from such translations are deferred until realization and are included as a separate component of stockholders’ equity as a component of comprehensive income or loss. Therefore, translation adjustments are not included in determining net income (loss) but reported as other comprehensive income. Gains and losses from foreign currency transactions are included in earnings in the period of settlement.
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| Nine Months Ended |
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| Nine Months Ended |
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| October 31, |
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| October 31, |
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| 2023 |
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| 2022 |
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Spot GBP: USD exchange rate |
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| n/a |
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Average GBP: USD exchange rate |
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| n/a |
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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 and disclosure of contingent assets and liabilities at the date the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.
| 9 |
| Table of Contents |
Business Combinations
In accordance with ASC 805-10, “Business Combinations”, the Company accounts for all business combinations using the acquisition method of accounting. Under this method, assets and liabilities, including any remaining non-controlling interests, are recognized at fair value at the date of acquisition. The excess of the purchase price over the fair value of assets acquired, net of liabilities assumed, and non-controlling interests is recognized as goodwill. Certain adjustments to the assessed fair values of the assets, liabilities, or non-controlling interests made subsequent to the acquisition date, but within the measurement period, which is up to one year, are recorded as adjustments to goodwill. Any adjustments subsequent to the measurement period are recorded in income. Any cost or equity method interest that the Company holds in the acquired company prior to the acquisition is re-measured to fair value at acquisition with a resulting gain or loss recognized in income for the difference between fair value and the existing book value. Results of operations of the acquired entity are included in the Company’s results from the date of the acquisition onward and include amortization expense arising from acquired tangible and intangible assets.
Cash and Cash Equivalents
Cash and cash equivalents include cash in banks, money market funds, and certificates of term deposits with maturities of less than three months from inception, which are readily convertible to known amounts of cash and which, in the opinion of management, are subject to an insignificant risk of loss in value. The Company had cash of $117 and $2,933 as of October 31, 2023 and January 31, 2023.
Reclassification
Certain amounts from prior period have been reclassified to conform to the current period presentation. These reclassifications had no impact on reported operating and net loss.
Related Parties
We follow ASC 850, “Related Party Disclosures”, for the identification of related parties and disclosure of related party transactions. (see Note 6)
Fair Value of Financial Instruments
The Company adopted the provisions of ASC Topic 820, “Fair Value Measurements and Disclosures,” which defines fair value as used in numerous accounting pronouncements, establishes a framework for measuring fair value and expands disclosure of fair value measurements.
The estimated fair value of certain financial instruments, including accounts payable and accrued liabilities. are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments. The carrying amounts of our short and long term credit obligations approximate fair value because the effective yields on these obligations, which include contractual interest rates taken together with other features such as concurrent issuances of warrants and/or embedded conversion options, are comparable to rates of returns for instruments of similar credit risk.
ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value:
Level 1 - | quoted prices in active markets for identical assets or liabilities |
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Level 2 - | quoted prices for similar assets and liabilities in active markets or inputs that are observable |
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Level 3 - | inputs that are unobservable (for example cash flow modeling inputs based on assumptions) |
| 10 |
| Table of Contents |
Revenue Recognition
The Company recognizes revenue in accordance with ASC 606,”Revenue Recognition” following the five steps procedure:
Step 1: Identify the contract(s) with customers
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to performance obligations
Step 5: Recognize revenue when the entity satisfies a performance obligation
The Company’s revenue derives from marketing, subscription fees and one-time license keys. During the nine months ended October 31, 2023 and 2022, the Company recognized revenue of $
Property, Plant and Equipment
Property and equipment are stated at cost. Depreciation is computed using the straight-line method. The depreciation and amortization methods are designed to amortize the cost of the assets over their estimated useful lives, in years, of the respective assets as follows:
Office Equipment | |
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Computer Equipment | |
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Computer Software |
Maintenance and repairs are charged to expense as incurred. Improvements of a major nature are capitalized. At the time of retirement or other disposition of property and equipment, the cost and accumulated depreciation are removed from the accounts and any gains or losses are reflected in income.
The long-lived assets of the Company are reviewed for impairment in accordance with ASC 360, “Property, Plant and Equipment,” whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. During the nine months ended October 31, 2023 and 2022, no impairment losses have been identified.
Impairment of tangible and intangible assets
Tangible and intangible assets (excluding goodwill) are assessed at each reporting date for indications that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Company makes an estimate of the asset’s recoverable amount. The asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s fair value less costs of disposal and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or a group of assets exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or the group of assets.
| 11 |
| Table of Contents |
Goodwill
We allocate goodwill to reporting units based on the reporting unit expected to benefit from the business combination. We evaluate our reporting units on an annual basis and, if necessary, reassign goodwill using a relative fair value allocation approach. Goodwill is tested for impairment at the reporting unit level (operating segment or one level below an operating segment) on an annual basis and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. These events or circumstances could include a significant change in the business climate, legal factors, operating performance indicators, competition, or sale or disposition of a significant portion of a reporting unit.
Application of the goodwill impairment test requires judgment, including the identification of reporting units, assignment of assets and liabilities to reporting units, assignment of goodwill to reporting units, and determination of the fair value of each reporting unit. The fair value of each reporting unit is estimated primarily through the use of a discounted cash flow methodology. This analysis requires significant judgments, including estimation of future cash flows, which is dependent on internal forecasts, estimation of the long-term rate of growth for our business, estimation of the useful life over which cash flows will occur, and determination of our weighted average cost of capital.
The estimates used to calculate the fair value of a reporting unit change from year to year based on operating results, market conditions, and other factors. Changes in these estimates and assumptions could materially affect the determination of fair value and goodwill impairment for each reporting unit.
On December 8, 2022, the Company acquired 80% shares in Live Investments Holdings, which generated goodwill of $
Based on the Company’s analysis of goodwill as of October 31, 2023, no indicators of impairment exist. No impairment loss on goodwill was recognized for the nine months ended October 31, 2023.
Net Income (Loss) per Share
The Company computes basic and diluted net loss per share amounts in accordance with ASC Topic 260, “Earnings per Share.” Basic loss per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of shares of common stock outstanding during the reporting period. Diluted loss per share reflects the potential dilution that could occur if convertible notes to issue common stock were converted resulting in the issuance of common stock that could share in the loss of the Company.
As of October 31, 2023 and October 31, 2022, convertible notes were dilutive instruments and were not included in the calculation of diluted loss per share as their effect would be antidilutive:
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| October 31, |
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| October 31, |
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| 2023 |
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| 2022 |
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| (Shares) |
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| (Shares) |
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Convertible note payable |
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| - |
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As of October 31, 2023 and October 31, 2022, the total convertible shares from convertible notes totaling $
| 12 |
| Table of Contents |
Lease
The Company entered into an office lease agreement in Great Britain for an one-year term starting from December 2022 and expired in November 2023.
In accordance with ASC 842, “Leases,” we determine if an arrangement is a lease at inception.
The office lease meets the definition of a short-term lease because the lease term is 12 months or less without an automatic extension clause. Consequently, consistent with Company’s accounting policy election, the Company does not recognize the right-of-use asset and the lease liability arising from this lease.
Recently Issued Accounting Pronouncements
Convertible note
In August 2020, the FASB issued ASU 2020-06, ASC Subtopic 470-20 “Debt-Debt with “Conversion and Other Options” and ASC subtopic 815-40 “Hedging-Contracts in Entity’s Own Equity”. The standard reduced the number of accounting models for convertible debt instruments and convertible preferred stock. Convertible instruments that continue to be subject to separation models are (1) those with embedded conversion features that are not clearly and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from derivative accounting; and, (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in capital. ASU2020-06 removes from U.S. GAAP the separation models for (1) convertible debt with a cash conversion feature (“CCF”) and (2) convertible instruments with a beneficial conversion feature (“BCF”). With the adoption of ASU2020-06, entities will not separately present in equity an embedded conversion feature these debts. The amendments in this update are effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years.
The Company has chosen to early adopt this standard on its year ended April 30, 2022 financial statements and did not record BCF on the issuance of convertible notes with conversion rate below the Company’s market stock price on the date of note issuance.
Credit losses
In June 2016, the FASB issued Accounting Standards Update No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which introduced the expected credit losses methodology for the measurement of credit losses on financial assets measured at amortized cost basis, replacing the previous incurred loss methodology. In November 2019, the FASB issued ASU 2019-10 highlighted the adoption timeline. For smaller reporting entities, Topic 326 is effective for annual periods beginning after December 15, 2022, including interim periods within those fiscal years, of which is effective for the Company on April 1, 2023. The adoption of this standard did not have a material impact on the Company's financial statements.
NOTE 4 – PROPERTY AND EQUIPMENT
As of October 31, 2023 and January 31, 2023, the property and equipment consisted of the following:
Cost |
| Office Equipment |
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| Computer Equipment |
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| Computer Software |
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| Total |
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January 31, 2022 |
| $ |
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| $ |
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Additions |
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January 31, 2023 |
| $ |
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| $ |
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| $ |
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| $ |
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Additions |
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Foreign Exchange Adjustment |
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| ( | ) |
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| ( | ) |
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October 31, 2023 |
| $ |
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| $ |
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| $ |
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| $ |
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Accumulated Depreciation |
| Office Equipment |
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| Computer Equipment |
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| Computer Software |
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| Total |
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January 31, 2022 |
| $ |
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| $ |
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| $ |
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| $ |
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Additions |
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January 31, 2023 |
| $ |
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| $ |
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| $ |
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| $ |
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Additions |
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Foreign Exchange Adjustment |
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| ( | ) |
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October 31, 2023 |
| $ |
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| $ |
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| $ |
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| $ |
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Net book value |
| Office Equipment |
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| Computer Equipment |
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| Computer Software |
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| Total |
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January 31, 2022 |
| $ |
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| $ |
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| $ |
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| $ |
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January 31, 2023 |
| $ |
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| $ |
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| $ |
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| $ |
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October 31, 2023 |
| $ |
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| $ |
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| $ |
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| $ |
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Depreciation expense for the nine months ended October 31, 2023 and 2022 amounted to $
| 13 |
| Table of Contents |
NOTE 5 – ACCOUNTS PAYABLE AND ACCRUED LIABILITES
Accounts payable and accrued liabilities at October 31, 2023 and January 31, 2023 consisted of the following:
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| October 31, 2023 |
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| January 31, 2023 |
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Trade payable |
| $ |
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| $ |
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Due to former director |
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| $ |
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| $ |
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NOTE 6 – RELATED PARTY TRANSACTIONS
In support of the Company’s efforts and cash requirements, the Company has been relying on advances from related parties until such time that the Company can support its operations or attains adequate financing through sales of its equity or traditional debt financing. There is no formal written commitment for continued support by officers, directors, or shareholders. Amounts represent advances or amounts paid in satisfaction of liabilities. The advances are considered temporary in nature and have not been formalized by a promissory note. These loans are due on demand and non-interest bearing.
During the nine months ended October 31, 2023 and 2022, the former director of the Company, who resigned on May 16, 2022, advanced $
During the nine months ended October 31, 2023, Northeast International Holdings Limited, majority shareholder of the Company upon the change of control on May 16, 2022, advanced $
During the nine months ended October 31, 2023, the Company incurred net management salary of $
As of October 31, 2023 and January 31, 2023, the amount due to the director of Live Investments Holding Ltd. was $
As of October 31, 2023 and January 31, 2023, the total amount due to related parties was $
NOTE 7 – EQUITY
Authorized Stock
The Company’s authorized common stock consists of
Common Stock
As of October 31, 2023 and January 31, 2023, the issued and outstanding common stock was
| 14 |
| Table of Contents |
NOTE 8 – CONVERTIBLE NOTES
On July 31, 2023, the Company issued a convertible note to a non-affiliate of $
On October 31, 2023, the Company issued a convertible note to a non-affiliate of $
During the nine months ended October 31, 2023, the note interest was $
As of October 31, 2023 and January 31, 2023, the convertible note was $
NOTE 9 – SUBSEQUENT EVENTS
In accordance with ASC 855, “Subsequent Events,” the Company has analyzed its operations subsequent to October 31, 2023 to the date these financial statements were issued and has determined that it does not have any material subsequent events to disclose in these financial statements.
| 15 |
| Table of Contents |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
FORWARD LOOKING STATEMENTS
This quarterly report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our or our industry’s actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. 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. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
Our unaudited financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles. The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly 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 quarterly report.
In this quarterly report, unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to “common shares” refer to the common shares in our capital stock.
As used in this quarterly report, the terms “we, “us,” “our” and “our company” mean Starguide Group, Inc., unless otherwise indicated.
General Overview
Starguide Group, Inc. was incorporated in the State of Nevada on February 21, 2017 and established a fiscal year end of January 31. We are still in the development stage and as of today we have no revenues, have minimal assets and have incurred losses since inception. We were formed to engage in the distribution of Indian traditional art and crafts from India to individuals and wholesalers around the world. As of today, we have not identified any party to sell our products. Initially, our sole officer and director, Vicky Sharma will market our products. We intend to hire salespersons with good knowledge and connections in our market. The salesperson’s job would be to find potential customers, and to set up agreements with them. We intend to focus on direct marketing efforts whereby our representative will directly contact. We plan to advertise our service and products on different websites and social networks using context ad. We plan to use internet catalogs and use many online marketing tools to direct traffic to our website and identify potential customers. In addition, we are going to issue monthly printed catalog and send it to our clients.
| 16 |
| Table of Contents |
On May 16, 2022, Vicky Sharma, the previous majority shareholder of the Company, entered into a stock purchase agreement for the sale of 2,000,000 shares of Common Stock of the Company to Northeast International Holdings Limited.
As a result of the acquisition, Northeast International Holdings Limited holds approximately 68% of the issued and outstanding shares of Common Stock of the Company, and as such it is able to unilaterally control the election of our board of directors, all matters upon which shareholder approval is required and, ultimately, the direction of our Company.
Also on May 16, 2022, the previous sole officer and director of the company, Vicky Sharma, resigned his positions with the Company. Upon such resignations, Lu Mei Xian was appointed as Chief Executive Officer, Treasurer and Secretary, and sole Director of the Company.
The Company intends to be an incubator of Software as a Service (Saas) startups and is in active discussions with multiple SaaS businesses. The Company’s goal is to identify and locate SaaS businesses with the potential to grow, and to bring them under the Starguide corporate umbrella.
On December 8, 2022, the Company acquired 80% shares in Live Investments Holdings, a corporation organized in Great Britain located in London, in exchange for sixteen thousand dollars ($16,000) on closing. Live Investments Holdings Ltd. owns 100% of Live Lead Tech Ltd, a cloud-based lead generation software corporation organized in Great Britain located in London. As a result of the acquisition of a majority of the issued and outstanding shares of Live Investments Holdings Ltd, the Company have now assumed Live Investments Holdings Ltd’s business operations as a majority-owned subsidiary and on a consolidated basis.
Results of Operations
The following summary of our results of operations should be read in conjunction with our financial statements for the three months and nine months ended October 31, 2023 and 2022, which are included herein.
Three months ended October 31, 2023 compared to three months ended October 31, 2022
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| Three Months Ended |
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| October 31, |
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Revenue |
| $ | 375 |
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| $ | - |
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| $ | 375 |
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| 100 | % |
Operating Expenses |
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| (26,730 | ) |
|
| (6,173 | ) |
|
| (20,557 | ) |
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| 333 | % |
Other Income |
|
| (575 | ) |
|
| - |
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|
| (575 | ) |
|
| 100 | % |
Net Loss |
| $ | (26,930 | ) |
| $ | (6,173 | ) |
| $ | (20,757 | ) |
|
| 336 | % |
We started to recognize revenue beginning from the three months ended April 30, 2023. During the three months ended October 31, 2023, we recognized revenue of $375 comprised of marketing revenue, subscription fees and one-time license key revenue.
| 17 |
| Table of Contents |
Our financial statements report a net loss of $26,930 for the three months ended October 31 2023 compared to a net loss of $6,173 for the three months ended October 31, 2022. The increase in net loss during the three months ended October 31, 2023 was mainly due to an increase in the operating expenses.
Our operating expenses for the three months ended October 31, 2023 were $26,730 compared to $6,173 for the three months ended October 31 2022. The increase in operating expenses was mainly attributed to increase in professional fees and operating expense from the acquisition of subsidiaries during the year ended January 31, 2023. On December 8, 2022, the Company acquired 80% shares in Live Investments Holdings which owns 100% of Live Lead Tech Ltd, a cloud-based lead generation software corporation organized in Great Britain.
Nine months ended October 31, 2023 compared to nine months ended October 31, 2022
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| Nine Months Ended |
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| October 31, |
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Revenue |
| $ | 3,560 |
|
| $ | - |
|
| $ | 3,560 |
|
|
| 100 | % |
Operating Expenses |
|
| (81,869 | ) |
|
| (19,917 | ) |
|
| (61,952 | ) |
|
| 311 | % |
Other Income |
|
| 280 |
|
|
| - |
|
|
| 280 |
|
|
| 100 | % |
Net Loss |
| $ | (78,029 | ) |
| $ | (19,917 | ) |
| $ | (58,112 | ) |
|
| 292 | % |
We started to recognize revenue beginning from the three months ended April 30, 2023. During the nine months ended October 31, 2023, we recognized revenue of $3,560 comprised of marketing revenue, subscription fees and one-time license key revenue.
Our financial statements report a net loss of $78,029 for the nine months ended October 31 2023 compared to a net loss of $19,917 for the nine months ended October 31, 2022. The increase in net loss during the nine months ended October 31, 2023 was mainly due to an increase in the operating expenses.
Our operating expenses for the nine months ended October 31, 2023 were $81,869 compared to $19,917 for the nine months ended October 31 2022. The increase in operating expenses was mainly attributed to increase in professional fees and operating expense from the acquisition of subsidiaries during the year ended January 31, 2023.On December 8, 2022, the Company acquired 80% shares in Live Investments Holdings which owns 100% of Live Lead Tech Ltd, a cloud-based lead generation software corporation organized in Great Britain.
Liquidity And Financial Condition
Working Capital
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| As of |
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Current Assets |
| $ | 117 |
|
| $ | 2,933 |
|
| $ | (2,816 | ) |
| (96 | %) | |
Current Liabilities |
| $ | 221,521 |
|
| $ | 157,605 |
|
| $ | 63,916 |
|
|
| 41 | % |
Working Capital Deficiency |
| $ | (221,404 | ) |
| $ | (154,672 | ) |
| $ | (66,732 | ) |
|
| 43 | % |
Our total current assets as of October 31, 2023 were $117 as compared to total current assets of $2,933 as of January 31, 2023 due to a decrease in cash.
| 18 |
| Table of Contents |
Our total current liabilities as of October 31, 2023 were $221,521 as compared to total current liabilities of $157,605 as of January 31, 2023. The increase was primarily due to an increase in convertible notes, amount due to related parties and accounts payable and accrued liabilities.
Our working capital deficit at October 31, 2023 was $221,404 as compared to working capital deficit of $154,672 as of January 31, 2023. The increase in working capital deficiency was mainly attributed to an increase in convertible note, amount due to related parties and accounts payable and accrued liabilities as well as a decrease in cash.
Cash Flows
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| Nine Months Ended |
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| October 31, |
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Cash flows used in operating activities |
| $ | (53,243 | ) |
| $ | (19,450 | ) |
| $ | (33,793 | ) |
|
| 174 | % |
Cash flows provided by financing activities |
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| 50,651 |
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|
| 17,645 |
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| 33,006 |
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| 187 | % |
Effect of exchange rate changes on cash |
|
| (224 | ) |
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| - |
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|
| (224 | ) |
| (100 | %) | |
Net changes in cash |
| $ | (2,816 | ) |
| $ | (1,805 | ) |
| $ | (1,011 | ) |
|
| 56 | % |
Operating Activities
Net cash used in operating activities was $53,243 for the nine months ended October 31, 2023 compared with net cash used in operating activities of $19,450 during the nine months ended October 31, 2022.
During the nine months ended October 31, 2023, the net cash used in operating activities was attributed to net loss of $78,029 reduced by depreciation of $9,294 and net changes in operating assets and liabilities of $15,492.
During the nine months ended October 31, 2022, the net cash used in operating activities was attributed to net loss of $19,917 reduced by depreciation of $200 and net changes in operating assets and liabilities of $267.
Investing Activities
We did not have any investing activities during the nine months ended October 31, 2023 and 2022.
Financing Activities
During the nine months ended October 31, 2023 and 2022, net cash from financing activities was $50,651 and $17,645, respectively. During the nine months ended October 31, 2023, we received proceeds from issuance of convertible note to a non-affiliate of $40,261 and proceeds from related parties of $10,390. During the nine months ended October 31, 2022, we received proceeds from the former director of $17,645.
Going Concern
As reflected in the accompanying consolidated financial statements, the Company’s current liabilities exceeded its current assets by $221,404, has an accumulated deficit of $150,730, shareholders’ deficit of $122,135 as of October 31, 2023. For the nine months ended October 31, 2023, the Company suffered a net loss of $78,029 and negative operating cash flow of $53,243. These factors among others raise substantial doubt about our ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent on its ability to raise additional capital and implement its business plan. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
Management believes that the current actions to obtain additional funding and implement its strategic plans provide the opportunity for the Company to continue as a going concern. There are no assurances that additional funds will be available when needed from any source or, if available, will be available on terms that are acceptable to us.
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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.
Critical Accounting Policies
The preparation of financial statements in 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. A change in managements’ estimates or assumptions could have a material impact on our financial condition and results of operations during the period in which such changes occurred. Actual results could differ from those estimates. Our financial statements reflect all adjustments that management believes are necessary for the fair presentation of their financial condition and results of operations for the periods presented.
Recent Accounting Pronouncements
Management has considered all recent accounting pronouncements issued. Our company’s management believes that these recent pronouncements will not have a material effect on our financial statements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
As a “smaller reporting company,” we are not required to provide the information required by this Item.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in the SEC’s rules. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by our company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Our management carried out an evaluation under the supervision and with the participation of our Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of October 31, 2023. Based upon that evaluation, our Principal Executive Officer and Principal Financial Officer have concluded that our disclosure controls and procedures were not effective as of October 31, 2023.
Changes in Internal Control Over Financial Reporting
During the period covered by this report there were no changes in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Limitations on the Effectiveness of Internal Controls
Our management do not expect that our disclosure controls and procedures or our internal control over financial reporting are or will be capable of preventing or detecting all errors or all fraud. Any control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements, due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns may occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risk.
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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 1A. Risk Factors
As a “smaller reporting company,” we are not required to provide the information required by this Item.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
None
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Item 6. Exhibits
Exhibits:
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101.INS |
| Inline XBRL Instance Document |
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101.SCH |
| Inline XBRL Taxonomy Extension Schema Document |
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101.CAL |
| Inline XBRL Taxonomy Extension Calculation Linkbase Document |
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101.DEF |
| Inline XBRL Taxonomy Extension Definition Document |
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101.LAB |
| Inline XBRL Taxonomy Extension Label Linkbase Document |
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101.PRE |
| Inline XBRL Taxonomy Extension Presentation Linkbase Document |
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104 |
| Inline Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereto duly authorized.
| STARGUIDE GROUP, INC. | ||
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Dated: December 12, 2023 | By: | /s/Lu ei Xian | |
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| Lu Mei Xian |
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| President, Chief Executive Officer, |
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| Chief Financial Officer, Treasurer, Secretary and Director |
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| (Principal Executive Officer, Principal Financial Officer and |
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| Principal Accounting Officer) |
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Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Dated: December 12, 2023 | /s/Lu Mei Xian | ||
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| Lu Mei Xian |
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| President, Chief Executive Officer, |
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| Chief Financial Officer, Treasurer, Secretary and Director |
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| (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer) |
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EXHIBIT 31.1
STARGUIDE GROUP, INC.
CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Lu Mei Xian, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of Starguide Group, Inc.; |
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| 2. | Based on my knowledge, this 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 report; |
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| 3. | Based on my knowledge, the financial statements, and other financial information included in this 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 report; |
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| 4. | The registrant’s other certifying officer 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: |
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| (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, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
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| (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; |
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| (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 |
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| (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 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 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): |
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| (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 |
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| (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. |
| By: | /s/ Lu Mei Xian |
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| Lu Mei Xian President, Chief Executive Officer, Chief Financial Officer, Treasurer, Secretary and Director (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer) |
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Dated: December 12, 2023
EXHIBIT 32.1
CERTIFICATION PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with this Annual Report on Form 10-Q of Starguide Group, Inc. (the “Company”) as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, in the capacity and on the date indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:
| 1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
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| 2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company. |
| By: | /s/ Lu Mei Xian |
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| Lu Mei Xian President, Chief Executive Officer, Chief Financial Officer, Treasurer, Secretary and Director (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer) |
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Dated: December 12, 2023