Axiologix Education Corp - FORM 10-Q

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EX-31.2 - CERTIFICATION OF CFO PURSUANT TO SECTION 302 - Axiologix Education Corp	v219062_ex31-2.htm
EX-31.1 - CERTIFICATION OF CEO PURSUANT TO SECTION 302 - Axiologix Education Corp	v219062_ex31-1.htm
EX-32.1 - CERTIFICATION OF CEO AND CFO PURSUANT TO SECTION 906 - Axiologix Education Corp	v219062_ex32-1.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended February 28, 2011

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

For the transition period from _________ to _________

Commission File Number: 333-161321

AXIOLOGIX EDUCATION CORPORATION

(Name of Small Business Issuer in its charter)

Nevada		61-1585332
(state or other jurisdiction of incorporation or organization)		(I.R.S. Employer I.D. No.)

501 Scarborough Dr., Suite 308E Egg Harbor Township, New Jersey		08234
(Address of principal executive offices)		(Zip Code)

(609) 646-2005

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (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 require to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  Accelerated filer  Non-accelerated filer  Smaller reporting company þ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  No þ

APPLICABLE ONLY TO CORPORATE ISSUERS

As of April 18, 2011 the registrant had 159,477,050 shares of common stock outstanding.

Table of Contents

PART I - FINANCIAL INFORMATION	2
Item 1. Financial Statements	2
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	3
Item 3. Quantitative and Qualitative Disclosures About Market Risk .	9
Item 4 Controls and Procedures	9

PART II – OTHER INFORMATION	10
Item 1. Legal Proceedings.	10
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.	10
Item 3. Defaults Upon Senior Securities.	10
Item 4. [Removed and Reserved].	10
Item 5. Other Information.	10
Item 6. Exhibits	11
SIGNATURES	12

PART I - FINANCIAL INFORMATION

Safe Harbor Statement

This report on Form 10-Q contains certain forward-looking statements. All statements other than statements of historical fact are “forward-looking statements” for purposes of these provisions, including any projections of earnings, revenues, or other financial items; any statements of the plans, strategies, and objectives of management for future operation; any statements concerning proposed new products, services, or developments; any statements regarding future economic conditions or performance; statements of belief; and any statement of assumptions underlying any of the foregoing. Such forward-looking statements are subject to inherent risks and uncertainties, and actual results could differ materially from those anticipated by the forward-looking statements.

These forward-looking statements involve significant risks and uncertainties, including, but not limited to, the following: growth and anticipated operating results; developments in our markets and strategic focus; product development and reseller relationships and future economic and business conditions. Our actual results could differ materially from those anticipated in such forward-looking statements as a result of a number of factors. These forward-looking statements are made as of the date of this filing, and we assume no obligation to update such forward-looking statements. The following discusses our financial condition and results of operations based upon our consolidated financial statements which have been prepared in conformity with accounting principles generally accepted in the United States. It should be read in conjunction with our financial statements and the notes thereto included elsewhere herein.

ITEM 1. Financial Statements

The unaudited interim condensed financial statements of Axiologix Education Corporation (the “Company”, “Axiologix”, “we”, “our”, “us”) follow. All currency references in this report are in U.S. dollars unless otherwise noted.

Axiologix Education Corporation

(A Development Stage Company)

Unaudited

(Expressed in U.S. Dollars)

February 28, 2011

Unaudited Condensed Balance Sheets	F-1
Unaudited Condensed Statements of Operations	F-2
Unaudited Condensed Statement of Stockholders Deficit	F-3
Unaudited Condensed Statements of Cash Flows	F-4
Unaudited Notes to the Financial Statements	F-5

- 2 -

Axiologix Education Corporation
(A Development Stage Company)
Condensed Balance Sheets
(Unaudited)

ASSETS

	February 28, 2011			May 31, 2010

Current Assets
Cash	$	11,379		$	4,011
Accounts receivable		400			—
Prepaid expense and other current assets		5,000			—
Total Current Assets		16,779			4,011

Other intangibles, net		1,163,500			—

Total Assets	$	1,180,279		$	4,011

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current Liabilities
Accounts payable and accrued expenses	$	98,682		$	78,912
Accrued interest		14,690			31,101
Notes payable		117,500			—
Convertible notes payable, net of debt discount of $14,434 and $0, respectively		205,566			117,000
Due to related party		11,221			16,900
Total Liabilities		447,659			243,913

Stockholders' Deficit

Common stock, $0.001 par value; 750,000,000 shares authorized,
159,477,050 and 96,871,385 shares issued and outstanding, as of February 28, 2011 and May 31, 2010, respectively		159,477			96,871
Common stock payable, 0 and 7,800,000 shares issueable, as of February 28, 2011 and May 31, 2010, respectively		—			156,000
Common stock subscription receivable		—			(36,000	)
Additional paid-in capital		6,967,359			1,959,645
Accumulated deficit during the development stage		(6,394,216	)		(2,416,418	)
Total Stockholders' Deficit		732,620			(239,902	)
Total Liabilities and Stockholders' Deficit	$	1,180,279		$	4,011

See notes to financial statements

F-1

Axiologix Education Corporation
(A Development Stage Company)
Condensed Statements of Operations
(Unaudited)
													For the Period From
	For the Three Months Ended						For the Nine Months Ended						April 29, 2009(Inception)
	February 28, 2011			February 28, 2010			February 28, 2011			February 28, 2010			to February 28, 2011

Revenue	$	400		$	—		$	400		$	—		$	400

Cost of Revenue		—			—			—			—			—

Gross Profit		400			—			400			—			400

Operating expenses
Selling, general and administrative		597,318			370,660			2,976,785			540,691			5,142,646
Depreciation and Amortization		6,500			—			6,500			—			6,500
Research and development		12,500			35,250			550,095			65,950			742,045
Total operating expenses		616,318			405,910			3,533,380			606,641			5,891,191

Loss from operations		(615,918	)		(405,910	)		(3,532,980	)		(606,641	)		(5,890,791	)

Other (income) expense
Interest income		—			—			—			(1,847	)		(2,100	)
Interest expense		139,223			1,467			346,196			3,734			406,903
Loss on settlement of debt		—			—			98,622			—			98,622


Net loss	$	(755,141	)	$	(407,377	)	$	(3,977,798	)	$	(608,528	)	$	(6,394,216	)

Net loss per share - basic and diluted	$	(0.01	)	$	(0.02	)	$	(0.04	)	$	(0.01	)

Weighted average number of shares outstanding
- basic and diluted		147,376,162			19,052,620			98,350,467			42,336,650

See notes to financial statements

F-2

Axiologix Education Corporation
(A Development Stage Company)
Condensed Statement of Changes in Stockholders' Deficit
(Unaudited)

																			Deficit
	Common stock						Common stock payable									Additional			accumulated during			Total
													Subscription			Paid-in			development			Stockholders'
	Shares			Amount			Shares			Amount			Receivable			Capital			stage			Deficit

Balance April 29, 2009 (Inception)		—		$	—			—		$	—		$	—		$	—		$	—		$	—

Common stock issued to founders ($0.02/Sh)		43,700,000			43,700			—			—			—			(43,700	)		—			—

Common stock issued for cash ($0.02/Sh)		6,395,000			6,395			—			—			—			121,505			—			127,900

Common stock issued for services ($0.02/Sh)		18,000			18			—			—			—			342			—			360

Stock based compensation to founders		—			—			—			—			—			8,740			—			8,740

Net loss for the period April 29, 2009 (Inception ) to May 31, 2009		—			—			—			—			—			—			(174,179	)		(174,179	)

Balance May 31, 2009		50,113,000			50,113			—			—			—			86,887			(174,179	)		(37,179	)

Shares rescinded		(43,263,000	)		(43,263	)		—			—			—			43,263			—			—

Common stock issued for cash and subscription receivable ($0.02/Sh)		18,720,000			18,720			—			—			(30,000	)		355,673			—			344,393

Common stock issued for executive compensation ($0.02/Sh)		35,990,980			35,991			—			—			—			683,829			—			719,820

Common stock issued for services ($0.02/Sh)		13,817,190			13,817			—			—			—			262,527			—			276,344

Common stock payable for services ($0.02/Sh)		—			—			7,500,000			150,000			—			—			—			150,000

Common stock payable for conversion of note payable and accrued interest ($0.02/Sh)		—			—			300,000			6,000			—			—			—			6,000

Common stock issued for cash ($0.066/Sh)		166,670			166			—			—			(6,000	)		10,834			—			5,000

Units consisting of common stock and warrants issued for cash ($0.01/unit)		12,000,000			12,000			—			—			—			416,702			—			428,702

Common stock issued for services ($0.066/Sh)		250,000			250			—			—			—			16,250			—			16,500

Common stock issued pursuant to resellership agreement ($0.02/Sh and $0.066/Sh)		4,700,000			4,700			—			—			—			106,550			—			111,250

Common stock issued for services related to equity offering		454,545			455			—			—			—			(455	)		—			—

Common stock issued for notes payable and accrued interest converted to stock		5,395,485			5,395			—			—			—			102,511			—			107,906

Common stock redeemed and cancelled		(1,473,485	)		(1,473	)		—			—			—			(96,427	)		—			(97,900	)

Equity offering costs		—			—			—			—			—			(28,498	)		—			(28,498	)

Net loss for the year ended May 31, 2010		—			—			—			—			—			—			(2,242,239	)		(2,242,239	)

Balance, May 31, 2010		96,871,385		$	96,871			7,800,000		$	156,000		$	(36,000	)	$	1,959,645		$	(2,416,418	)	$	(239,902	)

Cash received for subscription receivable		—			—			—			—			31,000			—			—			31,000

Uncollectible subscription receivable		—			—			—			—			5,000			—			—			5,000

Common stock issued for common stock payable		7,800,000			7,800			(7,800,000	)		(156,000	)		—			148,200			—			—

Common stock issued for conversion of note payable and accrued interest ($0.02/Sh)		7,704,560			7,705			—			—			—			146,336			—			154,041

Common stock issued for conversion of note payable and accrued interest ($0.066/Sh)		2,277,323			2,277			—			—			—			148,026			—			150,303

Common stock issued for cash ($0.066/Sh)		6,253,941			6,254			—			—			—			406,506			—			412,760

Common stock issued for cash ($0.04/Sh)		1,500,000			1,500			—			—			—			58,500			—			60,000

Common stock issued for services ($0.066/Sh)		13,523,700			13,524			—			—			—			879,040			—			892,564

Units consisting of common stock and warrants issued for cash ($0.033/unit)		2,206,060			2,206			—			—			—			414,627			—			416,833

Common stock issued for services ($0.11/Sh)		1,874,245			1,874			—			—			—			204,293			—			206,167

Common stock issued for services		3,465,836			3,466			—			—			—			534,867			—			538,333

Common stock issued pursuant to resellership agreement ($0.11/Sh)		6,000,000			6,000			—			—			—			654,000			—			660,000

Common stock issued pursuant to asset purchase agreement ($0.105/Sh)		10,000,000			10,000			—			—			—			1,040,000			—			1,050,000

Loss on settlement of debt		—			—			—			—			—			98,622			—			98,622

Beneficial conversion feature of convertible note payable		—			—			—			—			—			274,697			—			274,697

Net loss for the nine months ended February 28, 2011		—			—			—			—			—			—			(3,977,798	)		(3,977,798	)

Balance, February 28, 2011		159,477,050		$	159,477			—		$	—		$	—			6,967,359		$	(6,394,216	)	$	732,620

See notes to financial statements

F-3

Axiologix Education Corporation
(A Development Stage Company)
Condensed Statements of Cash Flows
(Unaudited)


							For the Period From
	For the Nine Months Ended						April 29, 2009 (Inception)
	February 28, 2011			February 28, 2010			to February 28, 2011
Cash Flows From Operating Activities:
Net Loss	$	(3,977,798	)	$	(608,528	)	$	(6,394,216	)
Adjustment to reconcile net loss to net cash used in operations
Non-cash stock based compensation		1,981,097			22,343			3,311,561
Common stock issued pursuant to reseller agreement		660,000			—			771,250
Common stock issuable for services		—			244,000			150,000
Amortization of debt discount		260,263			—			260,263
Loss on debt settlement		98,622			—			98,622
Depreciation and amortization		6,500						6,500
Bad debt expense		5,000			—			5,000
Non-cash consulting services		200,000			—			200,000
Changes in operating assets and liabilities:								—
Prepaid expense		—			1,918			—
Due from related party		—			—			—
Accounts receivable		(400	)					(400	)
Accounts payable and accrued expenses		19,770			29,035			98,682
Accrued Interest		85,933			—			151,641
Net Cash Used In Operating Activities		(661,013	)		(311,232	)		(1,341,097	)

Cash Flows From Financing Activities:
Equity offering costs		—			—			(28,498	)
Overdraft on bank account					1,947			—
Net borrowings from related parties		(5,679	)		10,000			16,221
Repayments from related party loan		—			(5,000	)		(5,000	)
Cash received from subscription receivable		31,000			—			31,000
Proceeds from issuance of note payable		100,000			55,000			299,500
Payment of note payable		(2,500	)		—			(5,700	)
Proceeds from issuance of units		72,800			—			192,800
Proceeds from the sales of common stock payable		—			—			—
Common stock redeemed and cancelled		—			(57,100	)		(97,900	)
Proceeds from sale of common stock		472,760			301,393			950,053
Net Cash Provided by Financing Activities		668,381			306,240			1,352,476

Net Increase (Decrease) in Cash		7,368			(4,992	)		11,379

Cash at Beginning of Period		4,011			4,992			—

Cash at End of Period	$	11,379		$	—		$	11,379

Supplemental disclosure of cash flow information:

Cash paid for interest	$	—		$	—		$	—
Cash paid for taxes	$	—		$	—		$	—

Supplemental disclosure of non-cash investing and financing activities:

Common shares rescinded	$	—		$	8,653		$	8,653
Common stock issued for conversion of notes payable and accrued interest	$	304,344		$	—		$	418,250
Common stock issued for common stock payable	$	156,000		$	—		$	156,000
Subscription receivable for common shares issued	$	—		$	—		$	36,000
Beneficial conversion feature of convertible note payable	$	274,697		$	—		$	274,697
Issuance of notes and common stock for purchase of assets	$	1,170,000		$	—		$	1,170,000

See notes to financial statements

F-4

AXIOLOGIX EDUCATION CORPORATION

(A Development Stage Company)

NOTES TO UNAUDITED FINANCIAL STATEMENTS

NOTE 1 – ORGANIZATION AND BUSINESS OPERATIONS

Axiologix Education Corporation was incorporated under the laws of Nevada, USA, on April 29, 2009. The Company has limited operations and in accordance with ASC 915, is considered a development stage company that has had no material revenues from inception to date.

Initial operations have included organization, capital formation, target market identification, and marketing plans. Management is planning to commence operation as educational software and services provider for school systems K-20 by focusing on raising student achievement through its research-based school design, uniquely aligned assessment systems, interactive professional development, integrated use of technology and other proven program features.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

The unaudited financial statements have been prepared in accordance with the instructions to Form 10-Q and Item 8-03 of Regulation S-X. Accordingly, they do not include all footnote disclosures required by accounting principles generally accepted in the United States of America. These financial statements should be read in conjunction with our audited financial statements and notes thereto for the year ended May 31, 2010 included in our Form 10-K filed with the SEC on August 30, 2010. The accompanying financial statements reflect all adjustments, which, in the opinion of management, are necessary for a fair presentation of our financial position, results of operations and cash flows for the interim periods in accordance with accounting principles generally accepted in the United States of America. The results for any interim period are not necessarily indicative of the results for the entire fiscal year.

Forward stock split

On October 4, 2010, the Company completed a five-for-one forward stock split of the Company’s common stock and an increase in the number of authorized shares of common stock from 150,000,000 to 750,000,000. The share and per-share information disclosed within this Form 10-Q reflects the completion of this stock split and all historical periods have been retroactively restated.

Reclassification

Certain amounts from prior periods have been reclassified to conform to the current period presentation. There is no effect on net loss, cash flows or stockholders’ deficit as a result of these reclassifications.

Use of estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make certain estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Estimates are adjusted to reflect actual experience when necessary. Significant estimates and assumptions affect many items in the financial statements. These include estimates of fair value of common stock and related impact to stock-based compensation. Actual results may differ from those estimates and assumptions, and such results may affect income, financial position or cash flows.

F-5

Cash and cash equivalents

The Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents. There were no cash equivalents at February 28, 2011 or May 31, 2010, respectively.

The Company minimizes its credit risk associated with cash by periodically evaluating the credit quality of its primary financial institution. The balance at times may exceed federally insured limits. At February 28, 2011 and May 31, 2010, respectively, the balance did not exceed the federally insured limit.

Risks and Uncertainties

The Company's operations are subject to significant risk and uncertainties including financial, operational, technological, and regulatory risks including the potential risk of business failure.

Also see Note 3 regarding going concern matters.

Loss per share

In accordance with accounting guidance now codified as FASB ASC Topic 260, “Earnings per Share,” basic earnings (loss) per share is computed by dividing net income (loss) by weighted average number of shares of common stock outstanding during each period. Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period.

Since the Company reflected a net loss for the three and nine months ended February 28, 2011 and 2010, respectively, the effect of considering any common stock equivalents, if outstanding, would have been anti-dilutive. A separate computation of diluted earnings (loss) per share is not presented. The company issued 2,206,060 units in the nine months ended February 28, 2011. Each unit consists of one common share and one warrant. The warrants have a strike price of $0.033 per share, vest immediately, and have a one year term. The fair value of the warrants was determined to be $189,930 using the Black-Scholes model. Key inputs used in the Black-Scholes valuation model were a strike price of $0.033, term of one year, volatility of 134% to 209%, and a discount rate of 0.25% to 0.32%. No warrants were issued in 2010. No warrants have been exercised as of February 28, 2011.

	For the Three Months Ended						For the Nine Months Ended
	February 28, 2011			February 28, 2010			February 28, 2011			February 28, 2010
Net loss	$	(755,141	)	$	(407,377	)	$	(3,977,798	)	$	(608,528	)
Net loss per share – basic and diluted	$	(0.01	)	$	(0.02	)	$	(0.04	)	$	(0.01	)
Weighted average number of shares outstanding – basic and diluted		147,376,162			19,052,620			98,350,467			42,336,650

F-6

The securities listed below were not included in the computation of diluted earnings per share as the effect from their conversion would have been anti-dilutive:

	For the Nine Months Ended, February 28,
	2011		2010
Convertible notes payable		7,166,667		3,053,030
Outstanding warrants to purchase common stock		14,206,060		—
Total		21,372,727		3,053,030

A summary of warrant activity is presented below:

	Number Outstanding		Weighted- Average Exercise Price Per Share		Weighted- Average Remaining Contractual Life (Years)
Outstanding at May 31, 2009		—		—		—
Granted		12,000,000	$	0.01		0.01
Exercised		—		—		—
Canceled/forfeited/expired		—		—		—
Outstanding at May 31, 2010		12,000,000	$	0.01		0.1
Granted		2,206,060	$	0.03		0.5
Exercised		—		—		—
Canceled/forfeited/expired		—		—		—
Outstanding at February 28, 2011		14,206,060	$	0.01		0.2

Warrants vested and exercisable at February 28, 2011		14,206,060	$	0.01		0.2

Share Based Payments

Generally, all forms of share-based payments, including stock option grants, restricted stock grants and stock appreciation rights, are measured at their fair value on the awards’ grant date, and based on the estimated number of awards that are ultimately expected to vest. Share-based payment awards issued to non-employees for services rendered are recorded at either the fair value of the services rendered or the fair value of the share-based payment, whichever is more readily determinable. The expense resulting from share-based payments are recorded as non-cash stock based compensation, which is an operating expense.

F-7

Research and Development Costs

The Company is engaged in ongoing research and development ("R&D") activities. The Company accounts for R&D under standards issued by the Financial Accounting Standards Board ("FASB"). Under these standards, all R&D costs must be charged to expense as incurred. Accordingly, internal R&D costs are expensed as incurred. Third-party R&D costs are expensed when the contracted work has been performed or as milestone results have been achieved. The costs associated with equipment or facilities acquired or constructed for R&D activities that have alternative future uses are capitalized and depreciated on a straight-line basis over the estimated useful life of the asset. The amortization and depreciation for such capitalized assets are charged to R&D expenses.

Beneficial conversion features

From time to time, the Company may issue convertible notes that may contain an imbedded beneficial conversion feature. A beneficial conversion feature exists on the date a convertible note is issued when the fair value of the underlying common stock to which the note is convertible into is in excess of the remaining unallocated proceeds of the note after first considering the allocation of a portion of the note proceeds to the fair value of the warrants, if related warrants have been granted. The intrinsic value of the beneficial conversion feature is recorded as a debt discount with a corresponding amount to additional paid in capital. The debt discount is amortized to interest expense over the life of the note using the effective interest method.

Intangible Assets

Intangible assets acquired pursuant to the purchase agreement with Edumedia Software (See Note 7) are reported at their initial fair value less accumulated amortization. The intangible assets are amortized based on estimated useful lives of 15 years.

Impairment of Long-Lived Assets

The Company has adopted Accounting Standards Codification subtopic 360-10, Property, Plant and Equipment ("ASC 360-10"). ASC 360-10 requires that long-lived assets and certain identifiable intangibles held and used by the Company be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company evaluates its long-lived assets for impairment annually or more often if events and circumstances warrant. Events relating to recoverability may include significant unfavorable changes in business conditions, recurring losses or a forecasted inability to achieve break-even operating results over an extended period. The Company evaluates the recoverability of long-lived assets based upon forecasted undiscounted cash flows. Should impairment in value be indicated, the carrying value of long-lived assets will be adjusted, based on estimates of future discounted cash flows resulting from the use and ultimate disposition of the asset. ASC 360-10 also requires assets to be disposed of be reported at the lower of the carrying amount or the fair value less costs to sell.

Revenue Recognition

The Company recognizes revenue in accordance with accounting principles generally accepted in the United States of America.

F-8

The Company’s current revenue stream consists of marketing consulting services. Consulting services are sold on a fixed fee or time-and-materials basis. Revenue is recognized when the services are performed.

Revenues are recognized when persuasive evidence of an arrangement exists, the fees to be paid by the customer are fixed or determinable, collection of the fees is probable, delivery of the service and or product has occurred, and no other significant obligations on the part of the Company remain.

In future periods, the Company plans to recognize most of its revenue in accordance with software industry specific GAAP.

Prepaid Expenses

The Company has capitalized pre-payments pursuant to consulting agreements. The prepaid expenses are amortized over the term of the consulting agreements.

Income Taxes

The Company accounts for income taxes in accordance with standards of disclosure propounded by the FASB, and any related interpretations of those standards sanctioned by the FASB. Accordingly, deferred tax assets and liabilities are determined based on differences between the financial statement and tax bases of assets and liabilities, as well as a consideration of net operating loss and credit carry forwards, using enacted tax rates in effect for the period in which the differences are expected to impact taxable income. A valuation allowance is established, when necessary, to reduce deferred tax assets to the amount that is more likely than not to be realized.

Recent Accounting Pronouncements

In April 2009, the FASB issued guidance now codified as FASB ASC Topic 820, “Fair Value Measurements and Disclosures,” which amends previous guidance to require disclosures about fair value of financial instruments in interim as well as annual financial statements in the current economic environment. This pronouncement was effective for periods ending after June 15, 2009. The adoption of this pronouncement did not have a material impact on the Company’s business, financial condition or results of operations; however, these provisions of FASB ASC Topic 820 resulted in additional disclosures with respect to the fair value of the Company’s financial instruments.

In May 2009, the FASB issued guidance now codified as FASB ASC Topic 855, “Subsequent Events,” which establishes general standards of accounting for, and disclosures of, events that occur after the balance sheet date but before financial statements are issued or are available to be issued. This pronouncement was effective for interim or fiscal periods ending after June 15, 2009. The adoption of this pronouncement did not have a material impact on the Company’s business, results of operations or financial position; however, the provisions of FASB ASC Topic 855 resulted in additional disclosures with respect to subsequent events.

In June 2009, the Financial Accounting Standards Board (FASB) issued guidance now codified as FASB Accounting Standards Codification (ASC) Topic 105, “Generally Accepted Accounting Principles,” as the single source of authoritative non-governmental U.S. GAAP. FASB ASC Topic 105 does not change current U.S. GAAP, but is intended to simplify user access to all authoritative U.S. GAAP by providing all authoritative literature related to a particular topic in one place. All existing accounting standard documents will be superseded and all other accounting literature not included in the FASB Codification will be considered non-authoritative. These provisions of FASB ASC Topic 105 were effective for interim and annual periods ending after September 15, 2009 and, accordingly, were effective for the Company for the current fiscal reporting period. The adoption of this pronouncement did not have an impact on the Company’s business, financial condition or results of operations, but will impact the Company’s financial reporting process by eliminating all references to pre-codification standards. On the effective date of FASB ASC Topic 105, the Codification superseded all then-existing non-SEC accounting and reporting standards, and all other non-grandfathered non-SEC accounting literature not included in the Codification became non-authoritative.

F-9

In January 2010, the Financial Accounting Standards Board ("FASB") issued updated guidance to amend the disclosure requirements related to recurring and nonrecurring fair value measurements. This update requires new disclosures on significant transfers of assets and liabilities between Level 1 and Level 2 of the fair value hierarchy (including the reasons for these transfers) and the reasons for any transfers in or out of Level 3. This update also requires a reconciliation of recurring Level 3 measurements about purchases, sales, issuances and settlements on a gross basis. In addition to these new disclosure requirements, this update clarifies certain existing disclosure requirements. For example, this update clarifies that reporting entities are required to provide fair value measurement disclosures for each class of assets and liabilities rather than each major category of assets and liabilities. This update also clarifies the requirement for entities to disclose information about both the valuation techniques and inputs used in estimating Level 2 and Level 3 fair value measurements. This update became effective for the Company with the interim and annual reporting period beginning January 1, 2010, except for the requirement to provide the Level 3 activity of purchases, sales, issuances, and settlements on a gross basis, which will become effective for the Company with the interim and annual reporting period beginning January 1, 2011. The Company will not be required to provide the amended disclosures for any previous periods presented for comparative purposes. Other than requiring additional disclosures, adoption of this update will not have a material effect on the Company's consolidated financial statements.

NOTE 3 – GOING CONCERN

As reflected in the accompanying financial statements, the Company has a net loss of $3,977,798 and net cash used in operations of $661,013 for the nine months ended February 28, 2011. The Company had a working capital deficit of $430,880 and an accumulated deficit of $6,394,216 at February 28, 2011.

The Company plans to seek additional funds to finance its immediate and long-term operations through debt and/or equity financing. The successful outcome of future financing activities cannot be determined at this time and there is no assurance that if achieved, the Company will have sufficient funds to execute its intended business plan or generate positive operating results.

These factors, among others, raise doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments related to recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result should the Company be unable to continue as a going concern.

The ability of the Company to emerge from the development stage is dependent upon the Company's successful efforts to raise sufficient capital and then attaining profitable operations.

F-10

In response to these problems, management has planned the following actions:

●

Management intends to raise additional funds through public or private placement offerings.

●

Management has entered into resale or sales agency agreements with an educational software developer to generate sales. There can be no assurances, however, that management’s expectations of future sales will be realized.

NOTE 4 – FAIR VALUE

The Company has categorized its assets and liabilities recorded at fair value based upon the fair value hierarchy specified by GAAP. All assets and liabilities are recorded at historical cost which approximates fair value, and therefore, no items were valued according to these inputs.

The levels of fair value hierarchy are as follows:

Level 1 inputs utilize unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access;

Level 2 inputs utilize other-than-quoted prices that are observable, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, and inputs such as interest rates and yield curves that are observable at commonly quoted intervals; and

Level 3 inputs are unobservable and are typically based on our own assumptions, including situations where there is little, if any, market activity.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the Company categorizes such financial asset or liability based on the lowest level input that is significant to the fair value measurement in its entirety. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.

Both observable and unobservable inputs may be used to determine the fair value of positions that are classified within the Level 3 category. All assets and liabilities are at cost which approximates fair value and there are not items that were required to be valued on a non recurring basis.

NOTE 5 – CONVERTIBLE NOTES PAYABLE

On April 9, 2009, the Company entered into a Secured Promissory Note with an individual for a loan of $20,000. The note carries an annual interest rate of 20%, and was due on August 12, 2010. On August 16, 2010, the Company entered into an amendment of the Note whereby the fixed conversion price was reduced from $0.066 to $0.02 per share. The note holder converted this debt and accrued interest for common shares at $0.02 per share after the amendment. The company recorded a loss on settlement of debt of $98,622 during the nine months ended February 28, 2011 for the fair value of the additional common shares issuable pursuant to this amendment.

During the nine months ended February 28, 2011, the Company entered into certain Secured Promissory Notes with third parties for a total of $73,500. The notes carry monthly interest rates ranging from 2.45%-10% compounding 30-360 days and are convertible to common stock at the rate of $0.066 per share. The Company has evaluated the conversion feature of the notes and determined that there was a $50,288 beneficial conversion feature on certain notes as the fixed conversion price of $0.066 was less than the fair value of the common stock at the time of issuance. The beneficial conversion feature was recorded as a debt discount on the accompanying balance sheet. These notes were converted to common stock during the nine months ended February 28, 2011.

F-11

During the nine months ended February 28, 2011, the Company entered into a Secured Promissory note with a third party for a total of $11,500. The note carries weekly interest rate of 10% compounding 7 days and is convertible to common stock at the rate of $0.066 per share. The Company has evaluated the conversion feature of the notes and determined that there was a $9,410 beneficial conversion feature on the note as the fixed conversion price of $0.066 was less than the fair value of the common stock at the time of issuance. The beneficial conversion feature was recorded as a debt discount on the accompanying balance sheet. This note was converted to common stock during the nine months ended February 28, 2011.

On September 7, 2010, the Company entered into Convertible Promissory Notes pursuant to two consulting agreements with third parties. The notes carry an annual interest rate of 15% and are convertible into common stock at a variable conversion rate. The variable conversion rate is 50% of the lowest closing price for the Company’s common stock during the previous 20 trading days from the notice of conversion. The note holders agreed that they will not submit conversion notices or enforce conversion rights requiring the Company to issue a number of common shares which exceeds the unissued authorized common shares of the Company. The Company has evaluated the conversion feature of the notes and determined that there was a $200,000 beneficial conversion feature on these notes as the conversion price was less than the fair value of the common stock at the time of issuance. The beneficial conversion feature was recorded as a debt discount on the accompanying balance sheet. The Convertible Promissory Notes have a maturity date of March 15, 2011.

During the nine months ended February 28, 2011, the Company converted $117,000 of Secured Promissory Notes into common stock at a $0.02 conversion price plus accrued interest of $37,041 resulting in the issuance of 7,704,560 common shares. Additionally, the Company converted $85,000 of Secured Promissory Notes into common stock at a $0.066 conversion price plus accrued interest of $65,303 resulting in the issuance of 2,277,323 common shares. Conversions were according to the terms of the convertible note agreements so no gain or loss was recorded at the time of conversion. (See Note 6).

	Principal Balance			Less Discount			Carrying Amount
Convertible notes payable – May 31, 2010	$	117,000		$	—		$	117,000
Issuance of convertible notes		305,000			(274,697	)		30,303
Amortization of debt discount and beneficial conversion feature		—			260,263			260,263
Conversion of notes payable		(202,000	)		—			(202,000	)
Convertible notes payable – February 28, 2011	$	220,000		$	(14,434	)	$	205,566

As of February 28, 2011 and May 31, 2010, the Company had accrued interest payable of $14,690 and $31,101, respectively. Interest expense totaled $346,196 and $3,734 for the nine months ended February 28, 2011 and 2010, respectively.

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NOTE 6 – STOCKHOLDERS’ DEFICIT

On October 4, 2010, the Company completed a five-for-one forward stock split of the Company’s common stock and an increase in the number of authorized shares of common stock from 150,000,000 to 750,000,000. The payment date for the stock split was October 15, 2010 to holders of record as of October 4, 2010.

The Company is authorized to issue up to 750,000,000 shares of its $0.001 common stock. At February 28, 2011, there were 159,477,050 shares issued and outstanding. At May 31, 2010, there were 96,871,385 shares issued and outstanding.

As of May 31, 2009, the Company issued 43,700,000 shares of common stock to its founders at par. 43,263,000 shares were rescinded in fiscal year 2010 and the difference of 437,000 shares were valued at $0.02 and recorded as stock-based compensation during the period ended May 31, 2009.

During the period ended May 31, 2009, the Company entered into stock purchase agreements with various accredited investors for the sale of 6,395,000 shares of its common stock at a purchase price of $0.02 per share generating proceeds of $127,900.

During the period ended May 31, 2009, the Company issued 18,000 shares of common stock for services. The value of the shares was $360 or $0.02 per share which was the price of the most recent sale of the Company’s stock at the time of issuance.

During the year ended May 31, 2010, the Company entered into stock purchase agreements with various accredited investors for the sale of 18,720,000 shares of its common stock at a purchase price of $0.02 per share generating proceeds of $344,393 and a subscription receivable of $30,000.

During the year ended May 31, 2010, the Company issued 35,990,980 shares of common stock for executive compensation. The shares were valued at $0.02 per share at the time issuance which was the price of the most recent sale of the Company’s stock at the time of issuance and accordingly the Company recorded $719,820 of stock based compensation.

During the year ended May 31, 2010, the Company issued 13,817,190 shares of common stock for services. The shares were valued at $0.02 per share at the time issuance which was the price of the most recent sale of the Company’s stock at the time of issuance and accordingly the Company recorded $276,344 of stock based compensation.

During the year ended May 31, 2010, the Company entered into stock purchase agreements with various accredited investor for the sale of 166,670 shares of its common stock at a purchase price of $0.066 per share generating proceeds of $5,000 and a subscription receivable of $6,000.

During the year ended May 31, 2010, the Company entered into unit purchase agreements with Directors and Officers of the Company at $0.01 per unit. Each unit consists of one common share and one warrant. 12,000,000 units were sold generating proceeds of $120,000. The fair value of the common stock was $240,000 or $0.02 per share. The warrants were valued at $188,702 according to the Black-Scholes model. Because the selling price of the unit (common shares and warrants) were determined to be below fair market value and the units were issued to Directors and Officers, the Company recorded stock based compensation expense of $308,702 for the incremental difference between the sales price of the unit and the fair market value of common stock and warrants.

During the year ended May 31, 2010, the Company issued 250,000 shares of common stock for services valued at $0.066 per share. The value of the shares was $0.066 per share which was the price of the most recent sale of the Company’s stock at the time of issuance. The Company recorded $16,500 of stock based compensation for these issuances.

F-13

During the year ended May 31, 2010, the Company issued 4,325,000 shares to Edumedia pursuant to the exclusive resellership agreement. At the time of issuance, it was determined that the fair value of the common stock was $0.02 per share, accordingly, the Company recorded a stock based compensation expense of $86,500. The value of the shares was $0.02 per share which was the price of the most recent sale of the Company’s stock at the time of issuance. The agreement entailed no disincentive for non-performance therefore these shares were expensed upon issuance.

During the year ended May 31, 2010, the Company incurred $28,498 in equity offering costs.

During the year ended May 31, 2010, the Company issued an additional 375,000 shares to Edumedia pursuant to the exclusive resellership agreement. At the time of issuance, it was determined that the fair value of the common stock was $0.066 per share, accordingly, the Company recorded a stock based compensation expense of $24,750. The value of the shares was $0.066 per share which was the price of the most recent sale of the Company’s stock at the time of issuance.

The Company entered into an Investment Agreement with Dutchess Opportunity Fund, II, L.P. (“Dutchess”) on May 17, 2010 and an amendment to that Agreement on July 13, 2010 (collectively, the “Investment Agreement”). The aggregate number of shares issuable by the Company and purchasable by Dutchess under the Investment Agreement is 18,000,000, which was determined by the Company’s Board of Directors. In connection with the preparation of the Investment Agreement and the Registration Rights Agreement, the Company issued Dutchess 454,545 shares of the Company’s common stock as a document preparation fee. These shares were treated as an equity offering cost and value of such shares was charged to additional paid in capital. On November 29, 2010, the Company terminated its Investment Agreement with Dutchess Opportunity Fund II, L.P. Prior to termination, the Company had not sold any shares of its common stock to Dutchess pursuant to the Investment Agreement.

During the year ended May 31, 2010, the company issued 5,395,485 shares of common stock to convertible note holders reducing its principal obligation by $84,300 and accrued interest of $29,606. All notes were converted at a fixed conversion price of $0.02.

During the year ended May 31, 2010, the Company redeemed and cancelled 1,473,485 shares of its common stock for a total of $97,900. These shares were purchased from one investor at a price of $0.066 per share. This represented a premium on this purchase of $0.046 over the Company’s prior cash sales of common stock at $0.02 per share.

As of May 31, 2010, the Company had $36,000 of subscription receivables related to the sale of 1,500,000 shares at $0.02 per share and 90,910 shares at $0.066 per share.

As of May 31, 2010, the Company was obligated to issue 7,500,000 shares of common stock for $150,000 of services and 300,000 shares were owed for a debt conversion related to fiscal year 2010.

During the nine months ended February 28, 2011, the Company issued 7,800,000 shares of common stock which were payable as of May 31, 2010.

During the nine months ended February 28, 2011, the Company received $31,000 for subscription receivable and $5,000 of the subscription receivable was not collected and charged to expense.

F-14

During the nine months ended February 28, 2011, the Company issued 7,704,560 shares of common stock to convertible note holders reducing its principal obligation by $117,000 and accrued interest of $37,041. All of these notes were converted at a fixed conversion price of $0.02.

During the nine months ended February 28, 2011, the Company issued 2,277,323 shares of common stock to convertible note holders reducing its principal obligation by $85,000 and accrued interest of $65,303. All notes of these notes were converted at a fixed conversion price of $0.066.

During the nine months ended February 28, 2011, the Company entered into stock purchase agreements with various accredited investors for the sale of 6,253,941 shares of its common stock at a purchase price of $0.066 per share generating proceeds of $412,760.

During the nine months ended February 28, 2011, the Company entered into stock purchase agreements with various accredited investors for the sale of 1,500,000 shares of its common stock at a purchase price of $0.04 per share generating proceeds of $60,000.

During the nine months ended February 28, 2011, the Company issued 13,523,700 shares of common stock for services. The shares were valued at $0.066 per share at the time of issuance which was the price of the most recent sale of the Company’s stock and accordingly the Company recorded $892,564 of stock based compensation.

During the nine months ended February 28, 2011, the Company entered into unit purchase agreements with Directors and Officers of the Company at $0.033 per unit. Each unit consists of one common share and one warrant. 2,206,060 units were sold generating proceeds of $72,800. The fair value of the common stock issued ranged from $0.11 to $0.14 per share depending on the varying dates of issuances. The warrants were valued at $189,930 according to the Black-Scholes model and the fair value of the common stock was $226,903. Because the selling price of the unit (common shares and warrants) was determined to be below fair market value and the units were issued to board of directors, the Company recorded stock based compensation expense of $344,033 for the incremental difference between the sales price of the unit and the fair market value of common stock and warrants issued.

During the nine months ended February 28, 2011, the Company issued 1,874,245 shares of common stock for services. The shares were valued at $0.11 per share at the time issuance which was the closing trading price of the Company’s common stock and accordingly the Company recorded $206,167 of stock based compensation.

During the nine months ended February 28, 2011, the Company issued 3,465,836 shares of common stock for services. The shares were valued at the closing trading price of the Company’s common stock at the time of issuance and accordingly the Company recorded $538,333 of stock based compensation.

During September 2010, the Company entered in Amendment #1 to its Exclusive Worldwide Resellership Agreement with Edumedia Software Solutions Corporation (“Edumedia”). Pursuant to the Amendment, the Company issued 4,500,000 shares of common stock to Edumedia. Additionally, the Company made cash payments of $56,354 in second and third fiscal quarter of the current year. These payments are reflected in the statement of operations as of and for the nine months ended February 28, 2011.

On January 24, 2011, the Company issued 10,000,000 shares to Edumedia pursuant to the asset purchase agreement. See Note 7 for further discussion.

F-15

NOTE 7 – INTANGIBLE ASSET PURCHASE AGREEMENT

On January 24, 2011, The Company entered into an asset purchase agreement with Edumedia Software Solutions Corporation to acquire Edumedia’s assets used or held for the Company in connection with its E*Pad software platform in exchange for 10,000,000 shares of the Company’s common stock and $120,000 in cash payable in equal weekly installments of $2,500.

The Company acquired intangible intellectual property including all software related to E*Pad, all intellectual property rights, rights to the name “E*Pad”, and internet domain addresses related to E*Pad. The transaction was deemed to be an asset acquisition of research and development pursuant to the FASB standards.

The following table summarizes the entry recording the intangible assets acquired:

Intellectual property – software	$	1,170,000
Common stock		(10,000	)
Additional paid in capital		(1,040,000	)
Note payable		(120,000	)
	$	—

The useful lives of the acquired intangibles are 15 years. Amortization expense totaled $6,500 and $0 for the nine months ended February 28, 2011 and 2010, respectively.

NOTE 8 – RELATED PARTY TRANSACTIONS

During the year ended May 31, 2010, the Company entered into unit purchase agreements with Directors and Officers of the Company at $0.01 per unit. Each unit consists of one common share and one warrant. Because the selling price of the unit (common shares and warrants) were determined to be below fair market value, the Company recorded stock based compensation expense of $308,702 for the incremental difference between the sales price of the unit and the fair market value of common stock and warrants.

During the nine months ended February 28, 2011, the Company’s Chief Executive Officer, John Daglis loaned the Company $4,285 and was repaid $17,964, of which $16,900 related to prior year borrowings. The balance of $3,221 remains outstanding at February 28, 2011. The outstanding balance is payable upon demand and does not bear interest. Interest expense was not imputed as the amount was deemed to be immaterial.

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NOTE 9 – COMMITMENTS

Consulting Agreement

In September 2010, the Company entered into two four-month consulting agreements with unrelated third parties to provide consulting services. In exchange for the services provided, the Company issued two convertible promissory notes totaling $200,000 due March 15, 2011. See Note 5 for further discussion on the convertible promissory notes.

NOTE 10 – SUBSEQUENT EVENTS

On March 4, 2011, the Company closed on a securities purchase agreement with an accredited investor raising $42,500 in net proceeds. The Company issued a Convertible Promissory Note totaling $45,000 which is due November 28, 2011. The note carries an annual interest rate of 8% and is convertible into common stock at a variable conversion rate. The conversion feature is available 180 days after closing. The variable conversion rate is 58% of the average of the three lowest closing bid prices of the Company’s common stock during the previous 10 trading days from the notice of conversion.

During March 2011, the Company entered into Secured Promissory notes with third parties for a total of $19,000. The notes carry interest rates of 58% per annum and are convertible to common stock at the rate of $0.02 per share.

During March 2011, the Company entered into stock purchase agreements with various accredited investors for the sale of 780,000 shares of its common stock at a purchase price of $0.04 per share generating proceeds of $31,200. These common shares are payable as of April 18, 2011.

During March and April 2011, the Company entered into stock purchase agreements with various accredited investors for the sale of 1,570,000 shares of its common stock at a purchase price of $0.02 per share generating proceeds of $31,400. These common shares are payable as of April 18, 2011.

During March and April 2011, the Company agreed to issue 1,433,198 shares of common stock for services. These common shares are payable as of April 18, 2011.

During March and April 2011, the Company repaid the outstanding balance of amounts due to its Chief Executive Officer.

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ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

In this Quarterly Report on Form 10-Q, unless the context requires otherwise, “we,” “us” and “our” refer to Axiologix Education Corporation, a Nevada corporation. The following Management’s Discussion and Analysis of Financial Condition and Results of Operation provide information that we believe is relevant to an assessment and understanding of our financial condition and results of operations. The following discussion should be read in conjunction with our financial statements and notes thereto included with this Quarterly Report on Form 10-Q, and all our other filings, including Current Reports on Form 8-K, filed with the Securities and Exchange Commission (“SEC”) through the date of this report.

Forward Looking Statements

This Quarterly Report on Form 10-Q includes both historical and forward-looking statements, which include information relating to future events, future financial performance, strategies, expectations, competitive environment and regulations. Words such as “may,” “should,” “could,” “would,” “predicts,” “potential,” “continue,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” and similar expressions, as well as statements in future tense, identify forward-looking statements. Such statements are intended to operate as “forward-looking statements” of the kind permitted by the Private Securities Litigation Reform Act of 1995, incorporated in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). That legislation protects such predictive statements by creating a “safe harbor” from liability in the event that a particular prediction does not turn out as anticipated. Forward-looking statements should not be read as a guarantee of future performance or results and will probably not be accurate indications of when such performance or results will be achieved. Forward-looking statements are based on information we have when those statements are made or our management’s good faith belief as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. You should review carefully the section entitled “Risk Factors” beginning on page 7 of our Annual Report on Form 10-K for a discussion of certain of the risks that could cause our actual results to differ from those expressed or suggested by the forward-looking statements.

The inclusion of the forward-looking statements should not be regarded as a representation by us, or any other person, that such forward-looking statements will be achieved. You should be aware that any forward-looking statement made by us in this Quarterly Report on Form 10-Q, or elsewhere, speaks only as of the date on which we make it. We undertake no duty to update any of the forward-looking statements, whether as a result of new information, future events or otherwise. In light of the foregoing, readers are cautioned not to place undue reliance on the forward-looking statements contained in this Quarterly Report on Form 10-Q.

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Overview

Axiologix Education Corporation ("Axiologix", "the Company", “our” or "we") was incorporated in the State of Nevada as a for-profit company on April 29, 2009. Axiologix is an educational software and services provider for school systems K-20. Management plans to focus on raising student achievement through its research-based school design, uniquely aligned assessment systems, interactive professional development, integrated use of technology and other proven program features. We do not have any subsidiaries.

We currently sell three software on-line managed software applications that were developed by other educational software providers.

In August 2010, we entered into an exclusive reseller agreement with Edumedia Software Solutions Corporation (“Edumedia”) for the sale of E*pad, an on-line managed software application that manages performance assessments for teachers to be deployed among their students. Under the terms of the agreement, we have paid to Edumedia $104,300 as a research and development contribution, issued to Edumedia 940,000 shares of our common stock and agreed to pay to Edumedia 50% of the revenues we collect from the sale of their products. The agreement has an initial term of 18 months. During September 2010, the Company entered in Amendment #1 to its exclusive worldwide resellership agreement with Edumedia. Pursuant to the Amendment, the Company issued an additional 4,500,000 shares of common stock to Edumedia.

On January 24, 2011, we entered into an asset purchase agreement with Edumedia to acquire Edumedia’s assets used or held for us in connection with its E*Pad software platform in exchange for 10,000,000 shares of our common stock and $120,000 in cash payable in equal weekly installments of $2,500. We acquired intangible intellectual property including all software related to E*Pad, all intellectual property rights, rights to the name “E*Pad”, and internet domain addresses related to E*Pad.

In November 2010, we entered into a sales agent agreement with Seacliff Education Solutions. The agreement will allow us to offer for sale two of Seacliff’s products: eBoard and Curricuplan. Under the agreement we will receive an agent fee equal to 50% of the total revenue amount for user licenses and any corresponding services invoiced to a new customer, minus the line-item dollar amount invoiced to cover Seacliff’s initial, one-time customer set-up fee. The agreement may be terminated by either party at any time.

Liquidity and Capital Resources

As of February 28, 2011, we had cash and cash equivalents of $11,379 and a working capital deficiency of $430,880. As of February 28, 2011 our accumulated deficit was $6,394,216. For the nine months ended February 28, 2011 our net loss was $3,977,798.

Our loss has been funded by proceeds from the sale of our common stock and convertible promissory notes. During the nine months ended February 28, 2011, we raised $668,381 of net proceeds through financing activities and our cash position increased by $7,368. During the nine months ended February 28, 2010, we raised $306,240 in net proceeds through financing activities.

We used net cash of $661,013 in operating activities for the nine months ended February 28, 2011 compared to $311,232 for the nine months ended February 28, 2010. We did not use any money in investing activities for the nine months ended February 28, 2011.

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During the nine months ended February 28, 2011 our monthly cash requirement was approximately $73,000 and we expect this to increase in coming months with the hiring of additional personnel.

We intend to meet our cash requirements for the next 12 months through external sources: a combination of debt financing and equity financing through private placements. We are currently not in good short-term financial standing. We anticipate that we may not generate any revenues in the near future and we will not have enough positive internal operating cash flow until we can generate substantial revenues, which may take the next few years to fully realize. There is no assurance we will achieve profitable operations. We have historically financed our operations primarily by cash flows generated from the sale of our securities and through cash infusions from officers and outside investors in exchange for debt and/or common stock.

These financial statements have been prepared on the assumption that we are a going concern, meaning we will continue in operation for the foreseeable future and will be able to realize assets and discharge liabilities in the ordinary course of operations. Different bases of measurement may be appropriate when a company is not expected to continue operations for the foreseeable future. Our continuation as a going concern is dependent upon our ability to attain profitable operations and generate funds there-from, and/or raise equity capital or borrowings sufficient to meet current and future obligations. Management plans to raise equity and debt financings over the next twelve months to finance operations. There is no guarantee that we will be able to complete any of these objectives. We have incurred losses from operations since inception and at February 28, 2011, have a working capital deficiency and an accumulated deficit that creates substantial doubt about our ability to continue as a going concern.

We intend to continue to raise funds to meet our cash requirements from a combination of debt financing and equity financing through private placements. There is no guarantee that we will be successful in raising any additional capital. There is no assurance that we will be able to obtain such additional funds on favorable terms, if at all. If we fail in raising capital, our business may fail and we may curtail or cease our operations.

Results of Operations for the Three Months Ended February 28, 2011 and February 28, 2010.

No Material Revenues

Since our inception on April 29, 2009 to February 28, 2011, we have not earned any material revenues. As of February 28, 2011, we have an accumulated deficit of $6,394,216. At this time, our ability to generate any significant revenues continues to be uncertain. Our financial statements contain an additional explanatory paragraph in Note 3, which identifies issues that raise substantial doubt about our ability to continue as a going concern. Our financial statements do not include any adjustment that might result from the outcome of this uncertainty.

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Expenses

Operating expenses totaled $616,318 for the three months ended February 28, 2011compared to $405,910 for the three months ended February 28, 2010. Since our inception on April 29, 2009 to February 28, 2011, we have incurred total operating expenses of $5,891,191.

Our selling, general and administrative expenses consist of non-cash stock based compensation charges, bank charges, travel, meals and entertainment, office maintenance, communication expenses (internet, fax, and telephone), courier, postage costs, office supplies. Our selling, general and administrative expenses for the three months ended February 28, 2011 totaled $597,318 compared to $370,660 in the comparable period of the prior year. Since our inception on April 29, 2009 until February 28, 2011, selling, general and administrative expenses have totaled $5,142,646.

Non-cash stock based compensation expense totaled $315,000 for the three month period ended February 28, 2011 and consists of shares of common stock issued for services Non-cash stock based compensation expense totaled $256,209 for the three month period ended February 28, 2010 and consists of shares of common stock issued for services

We incurred $12,500 and $35,250 on research and development expenses for the three months ended February 28, 2011 and 2010, respectively.

Net Loss

We incurred a net loss of $755,141 and $407,377 for the three months ended February 28, 2011 and 2010, respectively. From inception on April 29, 2009 to February 28, 2011, we have incurred a net loss of $6,394,216.

Results of Operations for the Nine Months Ended February 28, 2011 and February 28, 2010.

No Revenues

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Expenses

Operating expenses totaled $3,533,380 for the nine months ended February 28, 2011 compared to $606,641 for the nine months ended February 28, 2010. Since our inception on April 29, 2009 to February 28, 2011, we have incurred total operating expenses of $5,891,191.

Our selling, general and administrative expenses consist of non-cash stock based compensation charges, bank charges, travel, meals and entertainment, office maintenance, communication expenses (internet, fax, and telephone), courier, postage costs, office supplies. Our selling, general and administrative expenses for the nine months ended February 28, 2011 totaled $2,976,785 compared to $540,691 in the comparable period of the prior year. Since our inception on April 29, 2009 until February 28, 2011, selling, general and administrative expenses have totaled $5,142,646.

Non-cash stock based compensation expense totaled $2,146,218 for the nine month period ended February 28, 2011 and consists of shares of common stock issued for services totaling $1,802,185 and units consisting of one common share and one warrant issued to Directors and Officers issued at a discount to market resulting in stock-based compensation charges of $344,033.

We incurred $550,095 and $65,950 on research and development expenses for the nine months ended February 28, 2011 and 2010, respectively.

Net Loss

We incurred a net loss of $3,977,798 and $608,528 for the nine months ended February 28, 2011 and 2010, respectively. From inception on April 29, 2009 to February 28, 2011, we have incurred a net loss of $6,394,216.

Critical Accounting Policies

The accounting policies and the use of accounting estimates are set forth in the footnotes to the unaudited financial statements.

In preparing our financial statements, we must select and apply various accounting policies. Our most significant policies are described in Note 2 – Summary of Significant Accounting Policies set forth in the notes to the unaudited financial statements. In order to apply our accounting policies, we often need to make estimates based on judgments about future events. In making such estimates, we rely on historical experience, market and other conditions, and on assumptions that we believe to be reasonable. However, the estimation process is by its nature uncertain given that estimates depend on events over which we may not have control. If market and other conditions change from those that we anticipate, our results of operations, financial condition and changes in financial condition may be materially affected. In addition, if our assumptions change, we may need to revise our estimates, or to take other corrective actions, either of which may also have a material effect on our results of operations, financial condition or changes in financial condition. Members of our senior management have discussed the development and selection of our critical accounting estimates, and our disclosure regarding them, with our board of directors, and do so on a regular basis.

We believe that the following estimates have a higher degree of inherent uncertainty and require our most significant judgments. In addition, had we used estimates different from any of these, our results of operations, financial condition or changes in financial condition for the current period could have been materially different from those presented.

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Share Based Payments

Recently Adopted and Recently Enacted Accounting Pronouncements

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Off-Balance Sheet Arrangements

As of February 28, 2011, we had no off-balance sheet transactions that have or are reasonably likely to have a current or future effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

ITEM 3. Quantitative and Qualitative Disclosure About Market Risks.

Not applicable.

ITEM 4. Control and Procedures.

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rule 15d-15(e) under the Securities Exchange Act of 1934, as amended, as of the end of the period covered by this report (the “Evaluation Date”). Based on this evaluation, our principal executive officer and principal financial officer concluded as of the Evaluation Date that our disclosure controls and procedures were effective such that the information relating to us required to be disclosed in our Securities and Exchange Commission (“SEC”) reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and (ii) is accumulated and communicated to management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. Based on our evaluation, management concluded that our internal control over financial reporting was effective as of February 28, 2011.

Changes in Control Over Financial Reporting

During our most recent fiscal quarter, there has not occurred any change in our internal control over financial reporting (as such term is defined in Rule 15d-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting other than the engagement of Cardiff Partners in July 2010.

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PART II – OTHER INFORMATION

ITEM 1. Legal Proceedings.

None.

ITEM 2. Unregistered Sales of Equity Securities.

On March 4, 2011, we closed on a securities purchase agreement with an accredited investor raising $42,500 in net proceeds. We issued a Convertible Promissory Note totaling $45,000 which is due November 28, 2011. The note carries an annual interest rate of 8% and is convertible into common stock at a variable conversion rate. The conversion feature is available 180 days after closing. The variable conversion rate is 58% of the average of the three lowest closing bid prices of our common stock during the previous 10 trading days from the notice of conversion.

During March 2011, we entered into Secured Promissory notes with third parties for a total of $19,000. The notes carry interest rates of 58% per annum and are convertible to common stock at the rate of $0.02 per share.

From January 14 through April 18, 2011, we sold to accredited investors 325,151 of common stock at a purchase price of $0.066 per share generation proceeds of $21,460.

From January 14 through April 18, 2011, we sold to accredited investors 2,280,000 of common stock at a purchase price of $0.04 per share generation proceeds of $91,200.

From January 14 through April 18, 2011, we sold to accredited investors 1,570,000 of common stock at a purchase price of $0.02 per share generation proceeds of $31,400.

During March and April 2011, we agreed to issue 1,433,198 shares of common stock for services.

All of the above shares were issued pursuant to Section 4(2) of the Securities Act of 1933. In connection with this issuance, all purchasers were provided with access to all material aspects of the company, including the business, management, offering details, risk factors and financial statements. They also represented to us that they were acquiring the shares as a principal for their own account with investment intent. They each also represented that they were sophisticated, having prior investment experience and having adequate and reasonable opportunity and access to any corporate information necessary to make an informed decision. This issuance of securities was not accompanied by general advertisement or general solicitation.

ITEM 3. Defaults Upon Senior Securities.

None.

ITEM 4. [Removed and Reserved]

ITEM 5. Other Information.

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ITEM 6. Exhibits.

Exhibit Number

Description

Exhibit 31.1

Certification by the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*

Exhibit 31.2

Certification by the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*

Exhibit 32.1

Certification by the Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*

*Filed herewith

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SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Axiologix Education Corporation

	By:	/s/ John P. Daglis
Date: April 19, 2011		John P. Daglis
		President, Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer, Treasurer and Director

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Axiologix Education Corp - FORM 10-Q - April 19, 2011

Attached files

Axiologix Education Corp Reports