13949 Ramona Aave.

There were 52,000,000 shares of Common Stock outstanding as of July 17, 2015.

 

- 2 -

The following interim unaudited financial statements of KollagenX Corp. (the "Company") for the three month period ended May 31, 2015 are included with this Quarterly Report on Form 10-Q:

- 3 -

 

- 4 -

 

 

 

KollagenX Corp

Condensed Consolidated Statements of Operations

(Unaudited)

		For the three months ended May 31,
		2015				2014
Revenues, net		$	97,743			$	74,692
Cost of sales
Purchases			22,359				9,260
Freight			1,448				2,368
Total cost of sales			23,807				11,628
Gross profit			73,936				63,064
Operating expenses
Advertising and promotion			-				1,589
General and administrative			74,537				21,300
Management salaries			15,000				19,500
Trade shows			52,729				24,379
Wages			8,420				8,380
Total operating expenses			150,687				75,148
Loss from operations			(76,751	)			(12,085	)
Other expenses
Interest			14,775				1,001
Net loss		$	(91,526	)		$	(13,086	)
Loss per common share - basic and diluted		$	(0.00	)		$	(0.00	)
Weighted average common shares
outstanding - basic and diluted			54,000,000				10,000,000
See accompanying notes to condensed consolidated unaudited financial statements

- 5 -

---

KollagenX Corp. (formerly known as Integrated Electric Systems Corp. and previously Raider Ventures, Inc.) was incorporated in the State of Nevada on March 5, 2007 as Northern Minerals, Inc. Our original business was to engage in the acquisition, exploration and development of natural resource properties. On July 17, 2014 our board of directors approved, both, a letter of intent and the preparation of an agreement and plan to acquire 100% of the outstanding common shares of KollagenX, Inc. a California corporation, and to effect a name change from Integrated Electric Systems Corp. to KollagenX Corp., for the sole purpose of expanding the KollagenX, Inc. business plan for the distribution of personal beauty products.

 

KollagenX, Inc., a California corporation, was incorporated on May 15, 2009 as QWR, Inc. and changed its name to KollagenX Inc. on October 8, 2013.

 

- 7 -

 

 

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

 

- 8 -

KOLLAGENX CORP.

Notes to Unaudited Condensed Consolidated Financial Statements

May 31, 2015

 

 

Level 1:

Valuations consist of unadjusted quoted prices in active markets for identical assets and liabilities and has the highest priority;

Level 2:

Valuations rely on quoted prices in markets that are not active or observable inputs over the full term of the asset or liability;

Level 3:

Valuations are based on prices or third party or internal valuation models that require inputs that are significant to the fair value measurement and are less observable and thus have the lowest priority.

 

Management analyzes all financial instruments with features of both liabilities and equity under ASC 480, "Distinguishing Liabilities From Equity" and ASC 815, "Derivatives and Hedging." Derivative liabilities are adjusted to reflect fair value at each period end, with any increase or decrease in the fair value being recorded in results of operations as adjustments to fair value of derivatives. The effects of interactions between embedded derivatives are calculated and accounted for in arriving at the overall fair value of the financial instruments. In addition, the fair values of freestanding derivative instruments such as warrant and option derivatives are valued using the Black-Scholes model.

 

On June 10, 2014, the Financial Accounting Standards Board ("FASB") issued update ASU 2014-10, Development Stage Entities (Topic 915).   Amongst other things, the amendments in this update removed the definition of development stage entity from Topic 915, thereby removing the distinction between development stage entities and other reporting entities from US GAAP.  In addition, the amendments eliminate the requirements for development stage entities to (1) present inception-to-date information on the statements of income, cash flows and shareholders' equity, (2) label the financial statements as those of a development stage entity;  (3) disclose a description of the development stage activities in which the entity is engaged and (4) 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 amendments are effective for annual reporting periods beginning after December 31, 2014 and interim reporting periods beginning after December 15, 2015, however entities are permitted to early adopt for any annual or interim reporting period for which the financial statements have yet to be issued.  The Company has elected to early adopt these amendments and accordingly have not labeled the financial statements as those of a development stage entity and have not presented inception-to-date information on the respective financial statements.

 There are no other recent accounting pronouncements that are expected to have a material effect on the Company's financial statements.

 

Earnings (Loss) per Share -

 

We utilize FASB ASC 260, "Earnings per Share." Basic earnings (loss) per share is computed by dividing earnings (loss) available to common stockholders by the weighted-average number of common shares outstanding. Diluted earnings (loss) per share is computed similar to basic earnings (loss) per share except that the denominator is increased to include additional common shares available upon exercise of stock options and warrants using the treasury stock method, except for periods of operating loss for which no common share equivalents are included because their effect would be anti-dilutive.

- 10 -

 

Income Taxes - Income taxes are accounted for under the asset and liability method. Deferred income tax assets and liabilities are established for temporary differences between the financial reporting basis and the tax basis of the Company's assets and liabilities at tax rates expected to be in effect when such assets or liabilities are realized or settled. Deferred income tax assets are reduced by valuation allowances when necessary.

Assessing whether deferred tax assets are realizable requires significant judgment. The Company considers all available positive and negative evidence, including historical operating performance and expectations of future operating performance. The ultimate realization of deferred tax assets is often dependent upon future taxable income and therefore can be uncertain. To the extent the Company believes it is more likely than not that all or some portion of the asset will not be realized, valuation allowances are established against the Company's deferred tax assets, which increase income tax expense in the period when such a determination is made.

Income taxes include the largest amount of tax benefit for an uncertain tax position that is more likely than not to be sustained upon audit based on the technical merits of the tax position. Settlements with tax authorities, the expiration of statutes of limitations for particular tax positions, or obtaining new information on particular tax positions may cause a change to the effective tax rate. The Company recognizes accrued interest and penalties related to unrecognized tax benefits in the provision for income taxes on the statements of operations.

 

 

- 11 -

 

NOTE 4 – PREPAID EXPENSES

On September 22, 2014 the Company entered into a twenty-four month consulting agreement, with a Company that has expertise in providing management advice and financial services advice.  The entire fee of $160,000 was paid in advance and will be amortized in equal monthly amounts over the twenty-four months.  $55,558 was amortized for the period September 22, 2014 through May 31, 2015. The consulting fee amortization for the three month periods ended May 31, 2015 and 2014 amounted to $20,001 and $0, respectively.

KOLLAGENX CORP.

Notes to Unaudited Condensed Consolidated Financial Statements

As at May 31, 2015

 

		May 31,				February 28,
		2015				2015
Unsecured non interest bearing loan payable, no maturity date			67,409				67,935
Unsecured non interest bearing loan payable, no maturity date			16,957				19,221
Unsecured non interest bearing loan payable, no maturity date			25,000				25,000
Total unsecured non interest bearing loans payable			109,366				112,156
Unsecured non interest bearing note payable, no maturity date			70,212				72,689
Total unsecured non interest bearing loans and notes payable		$	179,578			$	184,845
4% unsecured promissory note payable, dated August 13, 2012 , due August 13, 2014			30,000				30,000
4% unsecured promissory note payable, dated December 18, 2012  due December 18, 2014.			50,000				50,000
4%Unsecured promissory note payable, dated June 13, 2013 , due June 13, 2015.			20,000				20,000
4% unsecured promissory note payable, dated October 7, 2013 , due October 7, 2014.			10,000				10,000
4% unsecured promissory note payable, dated December 18, 2013, due December 18, 2014.			5,000				5,000
4% unsecured promissory note payable, dated February 19, 2014 , due February 19, 2015.			5,000				5,000
4% unsecured promissory note payable, dated April 16, 2014 , due April 16, 2015.			10,000				10,000
4% unsecured promissory note payable, dated June 24, 2014 , due June 24, 2015.			6,000				6,000
			136,000				136,000
3% unsecured promissory note payable dated September 15, 2014, due September 15, 2015			10,000				10,000
6% unsecured promissory note payable dated July 31,  2014 due January 31, 2015			16,562				16,562
6% unsecured promissory note payable dated July 31,  due July 31, 2015			25,000				25,000
			187,562				187,562
18% promissory note guaranteed by 2 directors, dated December 5, 2014 and repayable
in 189 daily payments of $249.74			60,349				28,334
3% convertible due February 21, 2016			199,975				199,975
		$	447,886			$	415,871
Related party debt		$	164,654			$	167,520
Total loans and notes payable		$	792,118			$	768,236

 

- 13 -

KOLLAGENX CORP.

Notes to Unaudited Condensed Consolidated Financial Statements

As at May 31, 2015

As of May 31, 2015, there were 54,000,000 shares of common stock outstanding.

As of December 31, 2014, there were 25,000,000 preferred shares authorized and 1,000,000 preferred shares outstanding.  

 

On January 20, 2015 the Board of Directors resolved to withdraw the Certificate of Designation for the Class A preferred, which shares had been returned to the Company.  Appropriate documents were completed and filed with the State of Nevada to amend the Company's Articles of Incorporation to delete the preferred share designation.

On August 4, 2014 pursuant to the Stock Exchange Agreement, for the acquisition of 100% of the outstanding common shares of KollagenX Inc., the Company agreed to issue 10,000,000 of its Common Shares to the shareholders of KollagenX Inc.  The shares were issued on November 14, 2014.

NOTE 7 - RELATED PARTY TRANSACTIONS

The Company borrows funds from its two directors from time to time for its working capital requirements and sometimes utilizes their credit cards to pay some expenses. These loans are unsecured, non interest bearing and due on demand. As of May 31, 2015 and February 28, 2015 the Company owed $164,654 and $167,520 to the directors and a related third party, respectively.

 NOTE 8 - SUBSEQUENT EVENTS

 On July 17, 2015 the Company cancelled 2,000,000 shares of its restricted common stock.  The Company has evaluated subsequent events through the date the financial statements were issued and has not identified any reportable events.

 

 

- 14 -

The name change has been reviewed by the Financial Industry Regulatory Authority (FINRA) and was approved for filing with an effective date of July 30, 2014.

- 15 -

- 16 -

Although KollagenX Corp. has not generated any revenue, our wholly owned subsidiary KollagenX Inc., recorded $97,743 in net revenue for the three months ended May, 31, 2015 compared to net revenue of $74,692 for the three months ended May 31, 2014. Our loss for the three months ended May 31, 2015 was $91,526 compared to a loss of $13,086 for the same period in 2014.  The loss was due primarily to the added costs of adding KollagenX Corp. and the costs associated with the required filings and audits as well as the total cost of the preparation of the merger agreements and related filings. Our accumulated deficit since inception, including KollagenX Inc. through May 31, 2015 was   $554,946. 

 

We incurred operating expenses of $150,687 during the three months ended May 31, 2015 compared to $75,148 for the same period in 2014. The increase in expenses for the three months ended May 31, 2015 consisted of general operating expenses and professional fees, associated with the operations of KollagenX Inc. and KollagenX Corp.as compared to the general and administrative costs for KollagenX Inc. for the three months ended May 31, 2014.  As a result of attending additional trade shows that cost increased $52,729 for the three months ended May 31, 2015 compared to $24,379 for the three months ended May 31, 2014.

- 17 -

In connection with the preparation of this quarterly report on Form 10-Q, an evaluation was carried out by management, with the participation of the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of May 31, 2015.

As of the end of the period covered by this report, there have been no changes in KollagenX Corp.'s internal controls over financial reporting during the quarter ended May 31, 2015, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting subsequent to the date of management's last evaluation.

There has been no change to the Risk Factors disclosed in our Form 10-K filed with the Securities and Exchange Commission for the year ended February 28, 2015.

- 18 -

- 19 -

 

In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

 

- 20 -