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EX-31 - CYBERMESH INTERNATIONAL CORP.exhibit311.htm
EX-32 - CYBERMESH INTERNATIONAL CORP.exhibit321.htm

                                                                                                                                                                                          
U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549
________________
FORM 10-Q
________________

x     QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended November 30, 2010

¨     TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from                 to                  

Commission file number 000-52207
________________

CYBERMESH INTERNATIONAL CORP.

(Exact name of small business issuer as specified in its charter)

________________

NEVADA
(State or other jurisdiction of
 incorporation or organization)

98-0512139
(IRS employer
Identification No.)


#200-245 East Liberty Street, Reno NV, 89501
(Address of principal executive offices)

1-888-597-8899
(Issuer’s telephone number)
________________

Check whether the issuer (1) 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.   Yes No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or 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 Accelerated filer ¨ Non-accelerated Smaller reporting
filer ¨   filer ¨ company x
    (Do not check if a smaller  
    reporting company)  


Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.):   Yes x  No ¨

As of November 30, 2010, 11,985,400 shares of the issuer’s Common Stock, $ 0.001 par value per share, were outstanding.

Transitional Small Business Disclosure Format Yes ¨  No x

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INDEX
PART I. FINANCIAL INFORMATION  
Item 1. Consolidated Financial Statements 3
  Consolidated Balance Sheets – May 31, 2010 (Audited) and November 30, 2010
  (Unaudited) – F-1 4
  Consolidated Statements of Operations - For the Three and Six Month Periods Ended
  November 30, 2010 and 2009 (Unaudited) – F-2 5
  Consolidated Statements of Cash Flows - For the Three and Six Month Periods Ended November
  30, 2010 and 2009 (Unaudited) – F-3 6
  Notes to Consolidated Financial Statements (Unaudited) – F-4 7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 9
Item 3. Quantitative and Qualitative Disclosures About Market Risk 12
Item 4T. Controls and Procedures 12
PART II. OTHER INFORMATION  
Item 1. Legal Proceedings 13
Item 1A. Risk Factors 13
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 13
Item 3. Defaults upon Senior Securities 13
Item 4. Submission of Matters to a Vote of Security Holders 13
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K 14
  Signatures 15

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Item 1. FINANCIAL STATEMENTS

     CYBERMESH INTERNATIONAL CORP.
CONSOLIDATED FINANCIAL STATEMENTS

November 30, 2010
(Unaudited)

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CYBERMESH INTERNATIONAL CORP.  
CONSOLIDATED BALANCE SHEETS  
 
 
 
  November 30, 2010 May 31,2010
  (Unaudited) (Audited)
ASSETS    
 
Current Assets:    
Cash $     3,890 $     3,935
                            Total Current Assets 3,890 3,935
 
                            Total Assets $     3,890 $     3,935
 
LIABILITIES AND SHAREHOLDER’S DEFICIENCY    
 
Current Liabilities:    
Accrued liabilities $   69,254 $   65,000
Amounts due to shareholders - 26,500
Accrued interest payable - 22,775
Advances from consultants 10,234 61,113
Shareholder note payable 100,000 100,000
                            Total Current Liabilities 179,488 275,388
 
Stockholders’ Deficiency:    
Common stock: authorized 200,000,000 shares of $0.001 par 11,985 118
 value; issued and outstanding, 11,985,400 shares, respectively    
Capital in excess of par value 392,330 227,526
Paid in capital – warrants - 58,000
Accumulated deficit (579,913) (557,097)
                             Total Stockholder’s Deficiency (175,598) (271,453)
 
                             Total Liabilities and Stockholders’ Deficiency $     3,890 $     3,935
 
                             These accompanying notes are an integral part of these financial statements.    
-F1-      

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  CYBERMESH INTERNATIONAL CORP.    
  CONSOLIDATED STATEMENTS OF OPERATIONS    
  FOR THE THREE AND SIX MONTH PERIODS ENDED NOVEMBER 30, 2010 AND 2009  
  (unaudited)      
 
 
 
 
  Three Month Periods Six Month Periods  
 
  2010 2009 2010 2009
 
Revenue $             - $               - $            - $               -
 
Expenses:        
Administrative Expenses 6,522 6,864 22,816 24,132
Operating Loss (6,522) (6,864) (22,816) (24,132)
 
Other Expense:        
Interest expense -  (2,797) (5,590)
 
Net loss for the period $    (6,522) $      (9,661) $ (22,816) $  (29,722)
 
Loss Per Share -        
   Basic and Diluted $            -   $        (0.08) $            -  $      (0.25)
 
Weighted average        
   number of shares        
    Outstanding 11,985,400 118,300 10,169,669 118,300

These accompanying notes are an integral part of these financial statements.

-F2-

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      CYBERMESH INTERNATIONAL CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTH PERIODS ENDED NOVEMBER 30, 2010 AND 2009
(unaudited)

  2010 2009
CASH FLOWS FROM OPERATIONS:    
 
Net loss $ (22,816) $ (29,722)
Reconciliation of net loss to net cash consumed by operating    
   activities:    
Charges not requiring the outlay of cash:    
     
Changes in assets and liabilities:    
   Increase in accrued liabilities 12,537 18,600 
   Increase in accrued interest - 5,589 
   Decrease in deposits - 1,500 
 
           Net Cash Consumed by Operating Activities (10,279) (4,033)
 
CASH FLOWS FROM FINANCING ACTIVITIES:    
         Advances from consultant 10,234 3,983
 
           Net cash Consumed by Investing Activities: 10,234 3,983
 
 
Net decrease in cash (45) (50)
 
Cash balance, beginning of period 3,935 3,983
 
Cash balance, end of period $ 3,890 $ 3,933

These accompanying notes are an integral part of these financial statements.

-F3-

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CYBERMESH INTERNATIONAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOVEMBER 30, 2010

1. BASIS OF PRESENTATION

The unaudited interim consolidated financial statements of Cybermesh International Corp. and its subsidiary (“the Company”) as of November 30, 2010 and 2009 and for the three and six month periods ended November 30, 2010 and 2009, have been prepared in accordance with U.S. generally accepted accounting principles. In the opinion of management, such information contains all adjustments, consisting only of normal recurring adjustments necessary for a fair presentation of the results for such periods. The results of operations for the six month period ended November 30, 2010 are not necessarily indicative of the results to be expected for the full fiscal year ending May 31, 2011.

Certain information and disclosures normally included in the notes to financial statements have been condensed or omitted as permitted by the rules and regulations of the Securities and Exchange Commission, although the Company believes the disclosure is adequate to make the information presented not misleading. The accompanying unaudited financial statements should be read in conjunction with the financial statements of the Company for the year ended May 31, 2010.

2. ADVANCES FROM CONSULTANTS

The Company has received advances from its consultants totaling $ 10,234. These advances provided for working capital needs. The advances are due on demand. 

3. EXPENSES

Major items included in Administrative Expenses during the six month periods ended November 30, 2010 were the following:

2010  2009
Legal & Accounting $     12,771 $     13,690
Consulting 10,000 10,000
Transfer agent fees - 442
Office and miscellaneous 45 -
   
Total administrative expenses $     22,816 $     24,132

4. SUPPLEMENTAL CASH FLOWS INFORMATION

There was no cash paid for income taxes or interest during any of the periods presented

On June 28, 2010, the Company converted $ 118,671 of debt into common stock at a price of $ .01 per share. As a result, 11,867,100 shares of stock were issued to investors of the Company.

The converted debt was comprised of the following amounts:

Amounts due to shareholders $ 26,500
Accrued interest payable 22,775
Advances from consultants 61,113
Accrued expenses 8,283
   
 Total converted $ 118,671  

-F4-

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CYBERMESH INTERNATIONAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOVEMBER 30, 2010

5. RELATED PARTY TRANSACTIONS

As a result of the debt conversion resulting in the issuance of 11,867,100 shares of common stock, certain investors in the Company now have a 99% interest in the Company

6. SHARE AUTHORIZATION AND STOCK SPLIT

On June 8, 2009, the Company requested a roll back of its authorized and outstanding capital. The authorized common shares were decreased to 15,000,000 and the common shares issued and outstanding was decreased accordingly to 118,300. That reverse split was approved by the Financial Industry Regulatory Authority on August 14, 2009. The split is reflected on the financial statements as if it occurred on earliest date presented.

On June 28, 2010, the Company increased its authorized common shares from 15,000,000 to 200,000,000 common shares.

7. REPORTING STATUS CHANGE

During the previous year, the Company was reported as a development stage company. It is no longer reported in that manner as the Company has abandoned development efforts and no longer meets the criteria for a development stage company.

8. GOING CONCERN

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As shown in the financial statements, the Company had a working capital deficiency of $ 175,598 as of November 30, 2010 and an accumulated deficit as of November 30, 2010 in the amount of $ 579,913 and it has experienced continuing losses. These factors raise substantial doubt about the ability of the Company to continue as a going concern. The financial statements do not include adjustments relating to the recoverability of assets and classification of liabilities that might be necessary should the Company be unable to continue in operation. The Company’s present plans, the realization of which cannot be assured, to overcome these difficulties include, but are not limited to, the continuing effort to raise capital in the public and private markets.

-F5-

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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This report contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 (the "Exchange Act"). We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends affecting the financial condition of our business. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including, among other things:

·      general economic and business conditions, both nationally and in our markets,
 
·      our expectations and estimates concerning future financial performance, financing plans and the impact of competition,
 
·      our ability to implement our growth strategy,
 
·      anticipated trends in our business,
 
·      advances in technologies, and
 
·      other risk factors set forth herein.
 

In addition, in this report, we use words such as "anticipates," "believes," "plans," "expects," "future," "intends," and similar expressions to identify forward-looking statements.

Cybermesh International Corp. (the “Company”) undertakes no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise after the date of this prospectus. In light of these risks and uncertainties, the forward-looking events and circumstances discussed in this prospectus may not occur and actual results could differ materially from those anticipated or implied in the forward-looking statements.

History

The Company was incorporated in the State of Nevada on September 27, 2004 as “Asia Projects Corporation”, for the purpose of distributing health supplements worldwide. On May 9, 2006 the Company changed its name to Smokers Lozenge Inc. The Company was previously a distributor of the health supplement “Smokers Lozenge” for smokers, ex smokers and people who have been exposed to second hand smoke. The Lozenge is for smokers, second hand smokers and ex-smokers. Its purpose is to relieve coughing, eradicate phlegm and other associated discomforts experienced with exposure to cigarette smoke. Operations commenced September 30, 2005.

The Company had a distribution agreement entitling us to market and sell the Lozenge on an exclusive basis worldwide and on a non-exclusive basis in China. This agreement and sub distribution agreements were cancelled effective February 28, 2008 as a result of further market research determining that the marketing and distribution of the Smokers Lozenge was not as profitable as previously expected. The Company does not have any intension on continuing or expanding the business of distribution of the Lozenge.

Effective April 3, 2008, the Company completed a merger with its subsidiary, Cybermesh International Corp, a Nevada company with no prior operating history with no assets, liabilities or equity. As a result, the Company changed its name from “Smokers Lozenge Inc.” to Cybermesh International Corp. to better reflect the proposed future direction and business of the company.

On February 28, 2008, the Company entered into an Asset Purchase Agreement with Cyber Mesh Systems Inc. (“CMS BC”), a company incorporated in the province of British Columbia, wherein the Company agreed to purchase all the assets of CMS BC. Consideration for the purchase of the assets was to be the forgiving of a loan from our company to CMS BC in the amount of $100,000. In addition to the forgiving of the loan, the Company agreed to issue 42,500 shares of our company common stock to CMS BC and a further 70,000 shares of common stock to principals of CMS for a total 112,500 shares. The Agreement was subsequently terminated on July 23, 2008 and none of these shares were issued and the loan was not cancelled at that time. Refer to the subsequent section on “Debt Settlement Agreement”.

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Acquisition of Subsidiary

Effective August 23, 2008, the Company completed an acquisition of Omni Research Corporation. The name of Omni Research Corporation was changed to Cybermesh Systems Inc. (“CMS Belize”). CMS Belize is a company incorporated under the laws of Belize and prior to being acquired, had no prior operating history with no assets, liabilities or equity. CMS Belize has an authorized capital of 50,000 common shares of which all 50,000 shares were issued to the Company for consideration of $ 5,000.

Debt Settlement Agreement

On August 27, 2008, the Company entered into a debt settlement agreement with CMS BC. CMS BC owed the Company $ 100,000 under a promissory note. The $100,000 was cancelled in exchange for proprietary technologies which were developed by CMS BC (“Acquired Technologies”). Pursuant to the agreement, these assets were transferred to CMS Belize, the Company’s wholly owned subsidiary.

Acquired Technologies consist of the following:

·      Blast IPTV - high definition streaming video TV
 
·      Free Internet Hot Spots - local advertising supported wireless networks
 
·      Mobile 2 Global Cellular - VOIP Communication Products
 
·      Wireless Network Routers and other telecommunication equipment
 
·      ISP and Website Hosting
 
·      Website and Multi-Media Development
 

And the following proprietary technologies under development:

·      CMS Fiber Optic Router
 
·      SSID Wireless Security Protocol and Certification
 

The Company has put its Acquired Technologies in abeyance as the technical consulting team in charge of developing the technologies has abandoned the development of the technologies without notice, effectively terminating their relationship with the Company. All attempts to settle this matter with the consulting team have been futile. The Company performs a review for potential impairment of long-lived assets at least annually in order to ensure that recorded amounts are recoverable. As of May 31, 2010 those assets were deemed impaired and written off.

The Company currently does not have any business activity.

Debt Settlement – Various Loans

On June 28, 2010, the Company settled $ 118,671 of debt incurred as of May 31, 2010 on shareholder and consultant loans and related accrued interest by issuance of 11,867,100 restricted common shares from treasury of which 5,755,800 was issued to Multi Media Capital Corp. (“Multi Media”) and 6,111,300 was issued to Zhunger Capital Partners Inc. (“Zhunger Capital”), at a price of $0.01 per share.

As a result, there has been a change in control of the Company. As of November 30, 2010, there are 11,985,400 shares of common stock issued and outstanding. Thus, the acquisition by Multi Media and Zhunger Capital of the 5,755,800 and 6,111,300 shares of common stock represents an equity interest of approximately 48% and 51% in the Company, respectively. There are no arrangements or understandings between the Company and Multi Media and Zhunger Capital and their respective agents and associates with respect to election of directors or other matters.

Plan of Operation

The Company’s plan of operation is to further its research and development efforts upon appointing a service provider. It cannot be estimated when a service provider will be appointed or when the Company will be in a position to launch the Acquired Technologies into the market.

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Results of Operations

The following is a discussion on expenses incurred for the three and six month periods ended November 30, 2010, compared to three and six month periods ended November 30, 2009.

Revenues

The Company did not generate any revenues for the three month periods ended November 30, 2010 and 2009. The Company cannot determine at this time when it will be in a position to generate revenues.

Expenses

For the six month periods ended November 30, 2010 and 2009, our administrative expenses totaled $ 22,816 and $ 24,132 as follows. Expenses incurred were to sustain operations at basic minimal levels until such time where we are in a position to expand our research and development and marketing efforts.

2010 2009
Legal & Accounting $     12,771 $     13,690
Consulting 10,000 10,000
Transfer agent fees - 442
Office and miscellaneous 45 -
 
Total administrative expenses $     22,816 $     24,132

Legal and Accounting

For the six month period ended November 30, 2010, we incurred $ 12,771 in legal and accounting fees of which $ 6,000 was incurred for legal fees consisting of preparation of regulatory filings and $ 6,771 for audit and review fees including preparation of records for the quarter.

Consulting

For the six month period ended November 30, 2010, we incurred $ 10,000 in consulting expenses for preparation of records for this quarter and Edgar filing fees and preparation of various SEC forms. Our expenses for these services are $ 5,000 per quarter.

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Liquidity and Capital Resources

As of November 30, 2010, the Company had a negative working capital of $ 175,598 Based on current operations, over the next 12 months, the Company will require approximately $ 180,000 for settlement of our current liabilities and a further $ 50,000 to sustain operations at basic minimal levels.

There was no cash consumed by investing activities during the nine month periods ended November 30, 2010 and 2009.

During the six month period ended November 30, 2010, cash provided by financing activities was $ 10,234, representing advances obtained from a consultant.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Financial instruments which potentially subject the Company to concentrations of credit risk consist primarily of cash. The Company does not believe that it is significantly exposed to interest rate risk, foreign currency exchange rate risk, commodity price risk, or equity price risk.

Item 4T. CONTROLS AND PROCEDURES

                 (A) Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this report, the Company carried out an evaluation, under the supervision and with the participation of the Company’s Chief Executive Officer/Chief Accounting Officer of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. The Company’s disclosure controls and procedures are designed to provide a reasonable level of assurance of achieving the Company’s disclosure control objectives. The Company’s Chief Executive Officer/Chief Financial Officer has concluded that the Company’s disclosure controls and procedures were effective at this reasonable assurance level as of the period covered. In addition, the Company reviewed its internal controls, and there have been no significant changes in its internal controls or in other factors that could significantly affect those controls subsequent to the date of their last evaluation or from the end of the reporting period to the date of this Form 10-Q.

                 (B) Changes in Internal Controls Over Financial Reporting

In connection with the evaluation of the Company’s internal controls during the Company’s 2nd fiscal quarter ended November 30, 2010 the Company’s Chief Executive Officer/Chief Financial Officer has determined that there are no changes to the Company’s internal controls over financial reporting that has materially affected, or is reasonably likely to materially effect, the Company’s internal controls over financial reporting.

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PART II.

OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 1A. Risk Factors

A description of the risks associated with our business, financial condition, and results of operations is set forth in our Registration statement on Form 10-K for the year ended May 31, 2010 filed simultaneously with this Quarterly Report on Form 10-Q.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Submission of Matters to a Vote of Security Holders

None

Item 5. Other Information

None.

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Item 6.  
Exhibits  
 
Exhibit Number Description
3.1 Certificate of Incorporation, dated September 27, 2004 (1)
3.2 Articles of Incorporation, dated September 27, 2004 (1)
3.3 Certificate Amending Articles of Incorporation dated May 9, 2006 (1)
3.4 Bylaws, effective September 27, 2004 (1)
3.5 Certificate Amending Articles of Incorporation effective June 30, 2009 (4)
3.01 Articles of Merger filed with the Nevada Secretary of State on March 19, 2008,
  effective April 3, 2008 (2)
10.1 Debt Settlement Agreement, dated August 27, 2008(3)
31.1 CEO, CAO Section 302 Certification
32.1 CEO, CAO Section 906 Certification

(1)      Incorporated by reference from our Form SB-2 that was originally filed with the SEC on August 2, 2006.
(2)      Incorporated by reference from Form 8K filled with the SEC on April 7, 2008.
(3)      Incorporated by reference from Form 8K filed with the SEC on September 8, 2008.
(4)      Incorporated by reference from Form 8K filed with the SEC on June 16, 2009.

B) Reports on Form 8-K

July 6, 2010 – Reporting Items 3.02, 5.01, 9.01.

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SIGNATURES

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Quarterly Report to be signed on its behalf by the undersigned thereunto duly authorized.

  CYBERMESH INTERNATIONAL CORP.
Date: January 11, 2011      /s/ Locksley Samuels
  By:                                                          
  Locksley Samuels
  Locksley Samuels, CEO, CAO, Secretary,
  Treasurer and Director

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