UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended May 31, 2015

 

or

 

[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from                    to

 

Commission file number: 333-172172

 

GLOBE NET WIRELESS CORP.

(Exact name of registrant as specified in its charter)

 

Nevada		N/A
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

 

2302-3 Pacific Plaza

410 Des Voeux Road West

Hong Kong, China

(Address of principal executive offices) (Zip Code)

 

(852) 37-55-8010

Registrant’s telephone number, including area code

 

N/A

(Former name, former address and former fiscal year, if changed since last report)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [  ] No [X]

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] 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 the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer	[  ]	Accelerated filer	[  ]
Non-accelerated filer (Do not check if a smaller reporting company)	[  ]	Smaller reporting company	[X]

 

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

 

APPLICABLE ONLY TO CORPORATE ISSUERS:

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

 

10,800,000 shares of common stock, $0.001 par value, issued and outstanding as of July 14, 2015.

 

 

 

GLOBE NET WIRELESS CORP.

Financial Statements

(Unaudited)

May 31, 2015

Stated in US Dollars

 

		PAGES
INTERIM BALANCE SHEETS		3
INTERIM STATEMENT OF OPERATIONS		4
INTERIM STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT)		5
INTERIM STATEMENT OF CASH FLOWS		6
NOTES TO THE INTERIM FINANCIAL STATEMENTS		7

 

 

GLOBE NET WIRELESS CORP.

 

INTERIM BALANCE SHEETS

(Unaudited)

 

		May 31, 2015				August 31, 2014
ASSETS
CURRENT ASSETS
Cash and cash equivalents		$	2,021			$	18,066
Total Current Assets			2,021				18,066
Total Assets		$	2,021			$	18,066
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts Payable		$	2,103			$	11,009
Accrued Liabilities			17,427				12,783
Notes Payable – Note 5			30,000				30,000
Convertible Note Payable – Note 6			10,000				10,000
Total Current Liabilities			59,530				63,792
STOCKHOLDER’S EQUITY (DEFICIT)
Common Stock - Note 7
Par Value: $0.001
Authorized 200,000,000 shares
Issued 10,800,000 shares			10,800				10,800
Additional Paid in Capital			72,106				72,106
Deficit Accumulated during the development stage			(140,415	)			(128,632	)
Total Stockholders’ Deficit			(57,509	)			(45,726	)
Total Liabilities and Stockholders’ Equity		$	2,021			$	18,066

 

Going concern – Note 2

 

The accompanying notes are an integral part of the financial statements

 

 

GLOBE NET WIRELESS CORP.

 

INTERIM STATEMENT OF OPERATIONS

For the three and nine months ended May 31, 2015 and 2014

(Unaudited)

 

		For the three				For the three				For the nine				For the nine
		months ended				months ended				months ended				months ended
		May 31, 2015				May 31, 2014				May 31, 2015				May 31, 2014
EXPENSES
General and administrative expenses		$	1,385			$	12,335			$	9,390			$	20,627
Incorporation costs			-				-				-				-
Operating loss before interest			(1,385	)			(12,335	)			(9,390	)			(20,627	)
Interest			(807	)			(807	)			(2,393	)			(2,392	)
Net loss and comprehensive loss		$	(2,192	)		$	(13,142	)		$	(11,783	)		$	(23,019	)
Loss per share of common stock
-Basic and diluted		$	(0.000	)		$	(0.001	)		$	(0.001	)		$	(0.002	)
Weighted average shares of common stock
-Basic and diluted			10,800,000				10,800,000				10,800,000				10,579,121

 

The accompanying notes are an integral part of the financial statements

 

 

GLOBE NET WIRELESS CORP.

 

INTERIM STATEMENT OF SHAREHOLDERS’ EQUITY (DEFICIT)

For the year ended August 31, 2014 and the nine months ended May 31, 2015

(Unaudited)

 

																		Deficit
																		accumulated
										Additional				Common				during the
		Common stock								Paid-in				Stock				development
		Shares				Amount				Capital				subscribed				stage				Total
Balance, August 31, 2013			9,500,000			$	9,500			$	8,406			$	35,000			$	(90,099	)		$	(37,193	)
Sep 07, 2013, issued common stock at $0.05 per share for cash			700,000				700				34,300				(35,000	)			-				-
Nov 08, 2013, issued common stock At $0.05 per share for cash			600,000				600				29,400				-				-				30,000
Net loss and comprehensive loss			-				-				-				-				(38,533	)			(38,533	)
Balance, August 31, 2014			10,800,000			$	10,800			$	72,106			$	-			$	(128,632	)		$	(45,726	)
Net loss and comprehensive loss			-				-				-				-				(11,783	)			(11,783	)
Balance, May 31, 2015			10,800,000			$	10,800			$	72,106			$	-			$	(140,415	)		$	(57,509	)

 

The accompanying notes are an integral part of the financial statements

 

 

GLOBE NET WIRELESS CORP.

 

INTERIM STATEMENT OF CASH FLOWS

For the nine months ended May 31, 2015 and 2014

(Unaudited)

 

		For the nine				For the nine
		months ended				months ended
		May 31, 2015				May 31, 2014
Cash Flows from (used in) Operating Activities
Net Income (Loss)		$	(11,783	)		$	(23,019	)
Adjustments to reconcile net income to net cash provided by (used in) operating activities
Amortization			-				95
Interest on notes and convertible notes payable			2,393				2,393
Increase (Decrease) in Operating Assets and Liabilities
Prepaid Expense			-				10,864
Accounts Payable			(8,905	)			(13,867	)
Accrued Liabilities			2,250				(7,500	)
Net Cash used in Operating Activities			(16,045	)			(31,034	)
Cash Flows from (used in) Financing Activities
Common shares issued			-				65,000
Shares subscribed, not issued			-				(35,000	)
Net Cash provided by Financing Activities			-				30,000
Cash Flows used in Investment Activities
Intangible Assets			-				-
Net Cash used in Investment Activities			-				-
Increase (Decrease) in Cash			(16,045	)			(1,034	)
Cash at Beginning of Period			18,066				19,753
Cash at End of Period		$	2,021			$	18,719
Supplemental cash flow information
Interest		$	2,393			$	2,393
Taxes		$	-			$	-

 

The accompanying notes are an integral part of the financial statements

 

 

GLOBE NET WIRELESS CORP.

NOTES TO THE INTERIM FINANCIAL STATEMENTS

May 31, 2015

(Unaudited)

 

 

1.	Organization and nature of operations

 

Globe Net Wireless Corp. (“the Company”) was incorporated in the State of Nevada, USA on September 4, 2009. The Company is in its early development stage since its formation and has not realized any revenues from its planned operations. The Company is engaged in the development of a telecommunication business to provide internet and related services to both consumers and businesses currently in under serviced or unserviced areas at real broadband speeds through the proprietary wireless technology it acquired.

 

The Company has chosen an August 31 year end.

 

2.	Basis of Presentation - Going Concern Uncertainties

 

These financial statements have been prepared in conformity with generally accepted accounting principles in the United States, which contemplate continuation of the Company as a going concern. However, the Company has limited operations and has sustained operating losses resulting in a deficit.

 

The Company has accumulated a deficit of $140,415 since inception September 4, 2009, has yet to achieve profitable operations and further losses are anticipated in the development of its business. The Company’s ability to continue as a going concern is in substantial doubt and is dependent upon obtaining additional financing and/or achieving a sustainable profitable level of operations. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. The Company may seek additional equity as necessary and it expects to raise funds through private or public equity investment in order to support existing operations and expand the range of its business. There is no assurance that such additional funds will be available for the Company on acceptable terms, if at all.

 

3.	Interim reporting and significant accounting policies

 

The interim condensed financial statements are prepared under the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America. While the information presented is unaudited, it includes all adjustments, which are, in the opinion of management, necessary to present fairly the financial position, result of operation and cash flows for the interim periods presented in accordance with accounting principles generally accepted in the United States of America. All adjustments are of a normal recurring nature. It is suggested that the interim condensed financial statements be read in conjunction with the Company’s August 31, 2014 annual financial statements. Operating results for the nine month period ended May 31, 2015 are not necessarily indicative of the results that can be expected for the year ended August 31, 2015.

 

There have been no changes in the accounting policies from those disclosed in the notes to the audited financial statements for the year ended August 31, 2014.

 

 

GLOBE NET WIRELESS CORP.

NOTES TO THE INTERIM FINANCIAL STATEMENTS

May 31, 2015

(Unaudited)

 

 

4.	Recently issued accounting pronouncements

 

In June 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-10 “Development Stage Entities”. (Topic 915), Elimination of Certain Financial Reporting Requirements. The amendments in ASU 2014-10 remove the definition of a development stage entity from the Master Glossary of the Accounting Standards Codification, thereby removing the financial reporting distinction between development stage entities and other reporting entities from accounting principles generally accepted in the United States of America (“U.S. GAAP”). In addition, the amendments eliminate the requirements for development stage entities to: (i) present inception-to-date information in the statements of income, cash flows, and shareholder equity; (ii) label the financial statements as those of a development stage entity; (iii) disclose a description of the development stage activities in which the entity is engaged; and (iv) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage. The presentation and disclosure requirements in ASC Topic 915, “Development Stage Entities” are no longer required for interim and annual reporting periods beginning after December 15, 2014. The revised consolidation standards will take effect in annual periods beginning after December 15, 2015, however, early adoption is permitted. The Company has elected to early adopt the provisions of ASU 2014-10 for these financial statements.

 

The Company adopts new pronouncements relating to generally accepted accounting principles applicable to the Company as they are issued, which may be in advance of their effective date. Management does not believe that any pronouncement not yet effective but recently issued would, if adopted, have a material effect on the accompanying financial statements.

 

5.	Notes payable

 

The company has four notes payable that are unsecured, bear interest at 8% per annum and are due on demand. The interest is classified as accrued liabilities for financial statement purposes.

 

Date		Principal				Interest				Total
September 16, 2011		$	5,000			$	1,483			$	6,483
October 4, 2011			5,000				1,463				6,463
November 4, 2011			10,000				2,858				12,858
December 3, 2012			10,000				1,992				11,992
Total		$	30,000			$	7,796			$	37,796

 

6.	Convertible Note Payable

 

The convertible note payable is unsecured, bearing interest at 8% per annum which is due on demand, and convertible at a conversion price of $0.005 per share at the lender’s option. The interest is classified as accrued liabilities for financial statement purposes.

 

 

GLOBE NET WIRELESS CORP.

NOTES TO THE INTERIM FINANCIAL STATEMENTS

May 31, 2015

(Unaudited)

 

 

6.	Convertible Note Payable – continued

 

In accordance with accounting policy, the carrying value of the financial instrument was bifurcated into debt and equity based on the fair value of the two instruments at the time of issuance. Based on a Black-Scholes option pricing model, the value of the conversion option was determined to be $906, making the value of the debt $9,094. The assumption used were: a 5 year term; volatility of 100%; risk free interest rate of 1.0% and dividends paid of $nil.

 

Because of the demand feature of the note and the relatively small value of the conversion feature, all of the debt discount was amortized and taken into income during the previous year as operating expense.

 

Date		Principal				Interest				Total
May 17, 2013		$	10,000			$	1,631			$	11,631
Total		$	10,000			$	1,631			$	11,631

 

7.	Common stock

 

On September 27, 2013, the Company issued 700,000 common shares at $0.05 each for subscriptions received during the year ended August 31, 2013.

 

On November 8, 2013, the Company issued 600,000 common shares at $0.05 each for cash.

 

There were no warrants or stock options outstanding as of May 31, 2015.

 

There were no significant non-cash transactions during the period ended May 31, 2015.

 

 

FORWARD LOOKING STATEMENTS

 

Statements made in this Form 10-Q that are not historical or current facts are “forward-looking statements” made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 (the “Act”) and Section 21E of the Securities Exchange Act of 1934. These statements often can be identified by the use of terms such as “may,” “will,” “expect,” “believe,” “anticipate,” “estimate,” “approximate” or “continue,” or the negative thereof. We intend that such forward-looking statements be subject to the safe harbors for such statements. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statements represent management’s best judgment as to what may occur in the future. However, forward-looking statements are subject to risks, uncertainties and important factors beyond our control that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events.

 

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

 

GENERAL

 

Globe Net Wireless Corp. was incorporated under the laws of the State of Nevada, U.S. on September 4, 2009. Our registration statement on Form S-1 was filed with the Securities and Exchange Commission was declared effective on May 15, 2013.

 

Globe Net is a startup company engaged in the development of proprietary wireless broadband technology for the purpose of becoming a rural internet service provider (RISP). Globe Net is a “shell” company as defined by the SEC as a result of only having nominal operations and nominal assets. Globe Net is an “emerging growth company” under the federal securities laws and will be subject to reduced public company reporting requirements. Globe Net’s mission is to provide rural communities with high-speed internet connectivity at speeds equal or better than existing competing services. Through the use of its Internet and wireless connectivity systems, Globe Net will try to provide internet and related services to both consumers and businesses in currently under serviced or unserviceable areas at real broadband speeds. Globe Net plans to offer for sale its GNW Systems to residents and businesses located in under-serviced or non-serviced rural areas worldwide with the initial focus on North America and China.

 

RESULTS OF OPERATIONS

 

Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation. We expect we will require additional capital to meet our long term operating requirements. We expect to raise additional capital through, among other things, the sale of equity or debt securities.

 

Nine-month Period Ended May 31, 2015 Compared to the Nine-month Period Ended May 31, 2014.

 

Our net loss for the nine-month period ended May 31, 2015 was $11,783 (2014: $23,019), which consisted of general and administration expenses and interest on a note payable. We did not generate any revenue during either nine-month period in fiscal 2015 or 2014. The increase in expenses in the current fiscal year relate to an increase in legal fees that we have incurred in connection with our application to have our common shares called to trade on the OTC bulletin board.

 

The weighted average number of shares outstanding was 10,800,000 for the nine-month period ended May 31, 2015 and 10,579,121 for the period ended May 31, 2014.

 

 

Three-month Period Ended May 31, 2015 Compared to the Three-month Period Ended May 31, 2014.

 

Our net loss for the three-month period ended May 31, 2015 was $2,192 (2014: $13,142), which consisted of general and administration expenses and interest on a note payable. We did not generate any revenue during either three-month period in fiscal 2015 or 2014. The increase in expenses in the current fiscal year relate to an increase in legal fees that we have incurred in connection with our application to have our common shares called to trade on the OTC bulletin board.

 

The weighted average number of shares outstanding was 10,800,000 for the three-month periods ended May 31, 2015 and 10,800,000 for May 31, 2014.

 

LIQUIDITY AND CAPITAL RESOURCES

 

As at May 31, 2015, our current assets were $2,021 compared to $18,066 in current assets at August 31, 2014. As at May 31, 2015, our current liabilities were $59,530 compared to $63,792 at August 31, 2014. Current liabilities at May 31, 2015 were comprised of $40,000 in notes payable and $2,103 in accounts payable and $17,427 in accrued liabilities.

 

Stockholders’ deficit increased from $357,509 as of August 31, 2014 to $45,726 as of May 31, 2015.

 

Cash Flows from Operating Activities

 

We have not generated positive cash flows from operating activities. For the nine-month period ended May 31, 2015, net cash flows used in operating activities were $16,045 consisting of a net loss of $11,783 and $8,905in accounts payable and. For the nine-month period ended May 31, 2014, net cash flows used in operating activities were $31,034 consisting of a net loss of $23,019 and $21,367 in accounts payable and accrued liabilities.

 

Cash Flows from Financing Activities

 

We have financed our operations primarily from either the issuance of our shares of common stock or notes payable. For the nine-month period ended May 31, 2015, we realized nil in net cash from financing activities. We generated $30,000 cash from financing activities in the comparative period in fiscal 2014.

 

PLAN OF OPERATION AND FUNDING

 

We expect that working capital requirements will continue to be funded through a combination of our existing funds and further issuances of securities. Our working capital requirements are expected to increase in line with the growth of our business.

 

Existing working capital, further advances and debt instruments, and anticipated cash flow are expected to be adequate to fund our operations over the next three months. We have no lines of credit or other bank financing arrangements. Generally, we have financed operations to date through the proceeds of the private placement of equity and debt instruments. In connection with our business plan, management anticipates additional increases in operating expenses and capital expenditures relating to: (i) acquisition of inventory; (ii) developmental expenses associated with a start-up business; and (iii) marketing expenses. We intend to finance these expenses with further issuances of securities and director loans. Thereafter, we expect we will need to raise additional capital and generate revenues to meet long-term operating requirements. Additional issuances of equity or convertible debt securities will result in dilution to our current shareholders. Further, such securities might have rights, preferences or privileges senior to our common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, we may not be able to take advantage of prospective new business endeavors or opportunities, which could significantly and materially restrict our business operations. We will have to raise additional funds in the next twelve months in order to sustain and expand our operations. We currently do not have a specific plan of how we will obtain such funding; however, we anticipate that additional funding will be in the form of equity financing from the sale of our common stock. We have and will continue to seek to obtain short-term loans from our directors, although no future arrangement for additional loans has been made. We do not have any agreements with our directors concerning these loans. We do not have any arrangements in place for any future equity financing.

 

 

OFF-BALANCE SHEET ARRANGEMENTS

 

As of the date of this report, we do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

 

GOING CONCERN

 

The independent auditors’ report accompanying our August 31, 2014 financial statements contained an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. The financial statements have been prepared “assuming that we will continue as a going concern,” which contemplates that we will realize our assets and satisfy our liabilities and commitments in the ordinary course of business.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

 

No report required.

 

ITEM 4. CONTROLS AND PROCEDURES

 

Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that is designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

 

An evaluation was conducted under the supervision and with the participation of our management of the effectiveness of the design and operation of our disclosure controls and procedures as of May 31, 2015. Based on that evaluation, our management concluded that our disclosure controls and procedures were effective as of such date to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. Such officer also confirmed that there was no change in our internal control over financial reporting during the nine-month period ended May 31, 2015 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

 

PART II. OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

Management is not aware of any legal proceedings contemplated by any governmental authority or any other party involving us or our properties. As of the date of this Quarterly Report, no director, officer or affiliate is (i) a party adverse to us in any legal proceeding, or (ii) has an adverse interest to us in any legal proceedings. Management is not aware of any other legal proceedings pending or that have been threatened against us or our properties.

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

None.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

None.

 

ITEM 4. MINE SAFETY DISCLOSURES

 

Not applicable.

 

ITEM 5. OTHER INFORMATION

 

None.

 

 

ITEM 6. EXHIBITS

 

Exhibits:

 

31.1		Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act
32.1		Certification of Chief Executive Officer and Chief Financial Officer Under Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act.
101		Interactive data files pursuant to Rule 405 of Regulation S-T.

 

 

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.

 

	GLOBE NET WIRELESS CORP.
Dated: July 13, 2015	By:	/s/ Ku Wai Li
		Ku Wai Li, President and Chief Executive Officer and Chief Financial Officer