UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period ended
or
For the transition period from __________ to __________
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mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange
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State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: common shares issued and outstanding as of June 23, 2025.
TOFLA MEGALINE INC.
TABLE OF CONTENTS
Forward-Looking Statements
The discussions in this Quarterly Report on Form 10-Q (this “Report”) contain forward-looking statements reflecting our current expectations that involve risks and uncertainties. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. When used in this Report, the words “anticipate,” “expect,” “plan,” “believe,” “seek,” “estimate” and similar expressions are intended to identify forward-looking statements. These are statements that relate to future periods and include, but are not limited to, statements about the features, benefits and performance of our products or services, our ability to introduce new product and service offerings and increase revenue from existing products, expected expenses including those related to selling and marketing, product development and general and administrative, our beliefs regarding the health and growth of the market for our products, expected revenue levels if any and sources of revenue, expected impact, if any, of legal proceedings, the adequacy of our liquidity and capital resources, the likelihood of us obtaining financing in the immediate future and the expected terms of such financing, and expected growth in business. Forward-looking statements are statements that are not historical facts. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from the forward-looking statements contained in this Report. Factors that could cause actual results to differ materially include, but are not limited to: our ability to attract and retain customers for our existing and new products; the possible implementation of changes to the existing tariff regime by the Presidential Administration; limited availability of additional capital to fund our operations and business plan; our ability to obtain financing to meet our immediate liquidity needs and the potential costs, dilution and restrictions imposed by any such financing; our ability to protect our intellectual property; market acceptance of our products; our ability to obtain sufficient liquidity from operations and financing activities to continue as a going concern and, our ability to control our expenses; potential competition, including without limitation shifts in technology; volatility in and deterioration of national and international capital markets and economic conditions; global and local business conditions; acts of war (including without limitation the conflicts in Ukraine and Israel) and/or terrorism; the prices being charged by our competitors; our inability to retain key members of our management team; the outcome of any regulatory or legal proceedings; and other risks and uncertainties and other factors discussed from time to time in our filings with the Securities and Exchange Commission (“SEC”), including under the “Risk Factors” section of our filings with the SEC, including our Annual Report on Form 10-K for the year ended July 31, 2024 (“2024 Form 10-K”). Forward-looking statements speak only as of the date hereof. We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based, except as required by law.
All references in this Report that refer to the “Company”, “TOFLA”, “we,” “us” or “our” are to TOFLA Megaline Inc.
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PART I - FINANCIAL INFORMATION
| Item 1. | Financial Statements. |
The accompanying interim financial statements of Tofla Megaline Inc. (the “Company”, ”we”, ”us” or ”our”), have been prepared without audit pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with United States generally accepted principles have been condensed or omitted pursuant to such rules and regulations.
The interim financial statements are condensed and should be read in conjunction with the Company’s latest annual financial statements.
In the opinion of management, the financial statements contain all material adjustments, consisting only of normal adjustments considered necessary to present fairly the financial condition, results of operations, and cash flows of the Company for the interim periods presented.
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TOFLA MEGALINE INC.
CONDENSED BALANCE SHEETS
| April 30, 2025 | July 31, 2024 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash and Cash Equivalents | $ | $ | ||||||
| Related Party Receivables | ||||||||
| Prepaid Expenses | ||||||||
| Total Current Assets | ||||||||
| Intangible Assets, Net | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES & STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||
| Liabilities | ||||||||
| Current Liabilities | ||||||||
| Accounts Payable | $ | $ | ||||||
| Convertible Notes | ||||||||
| Loans Payable | ||||||||
| Related Party Loan | ||||||||
| Total Current Liabilities | ||||||||
| Total Liabilities | ||||||||
| Stockholders’ Equity (Deficit) | ||||||||
| Common Stock, $ par value, shares authorized, and shares issued and outstanding as of April 30, 2025 and July 31, 2024, respectively | ||||||||
| Additional Paid-in Capital | ||||||||
| Accumulated Deficit | ( | ) | ( | ) | ||||
| Total Stockholders’ Equity (Deficit) | ( | ) | ( | ) | ||||
| TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY (DEFICIT) | $ | $ | ||||||
The accompanying notes are an integral part of these condensed financial statements.
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TOFLA MEGALINE INC.
CONDENSED STATEMENT OF OPERATIONS
For the three and nine months ended April 30, 2025 and 2024
(Unaudited)
| Three months ended April 30, 2025 | Three months ended April 30, 2024 | Nine months ended April 30, 2025 | Nine months ended April 30, 2024 | |||||||||||||
| Revenues | ||||||||||||||||
| Software Sales | $ | $ | $ | $ | ||||||||||||
| Total Revenues | ||||||||||||||||
| Operating Expenses | ||||||||||||||||
| Amortization Expense | ||||||||||||||||
| General and Administrative Expenses | ||||||||||||||||
| Server Rental | ||||||||||||||||
| Total Operating Expenses | ||||||||||||||||
| Net Income (Loss) from Operations | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Other Income | ||||||||||||||||
| Provision for Income Taxes | ||||||||||||||||
| Net Income (Loss) | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
| Income (Loss) per Common Share – Basic & Diluted | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
| Weighted Average Number of Common Shares Outstanding-Basic & Diluted | ||||||||||||||||
The accompanying notes are an integral part of these condensed financial statements.
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TOFLA MEGALINE INC.
CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)
For the three and nine months ended April 30, 2025 and 2024
(Unaudited)
| Common Stock | Additional Paid-in- | Share Subscriptions | Accumulated | |||||||||||||||||||||
| Shares | Amount | Capital | Receivable | Deficit | Total | |||||||||||||||||||
| Balance as of July 31, 2023 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||
| Net loss for the period | — | ( | ) | ( | ) | |||||||||||||||||||
| Balance as of October 31, 2023 | ( | ) | ( | ) | ||||||||||||||||||||
| Net income for the period | — | |||||||||||||||||||||||
| Balance as of January 31, 2024 | ( | ) | ( | ) | ||||||||||||||||||||
| Net loss for the period | — | ( | ) | ( | ) | |||||||||||||||||||
| Balance as of April 30, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||
| Balance as of July 31, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||
| Net loss for the period | — | ( | ) | ( | ) | |||||||||||||||||||
| Balance as of October 31, 2024 | ( | ) | ( | ) | ||||||||||||||||||||
| Net loss for the period | — | ( | ) | ( | ) | |||||||||||||||||||
| Balance as of January 31, 2025 | ( | ) | ( | ) | ||||||||||||||||||||
| Common shares issued for services | ||||||||||||||||||||||||
| Common shares issued for cash not collected | ||||||||||||||||||||||||
| Net loss for the period | — | ( | ) | ( | ) | |||||||||||||||||||
| Balance as of April 30, 2025 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||
The accompanying notes are an integral part of these condensed financial statements.
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TOFLA MEGALINE INC.
CONDENSED STATEMENTS OF CASH FLOWS
For the nine months ended April 30, 2025 and 2024
(Unaudited)
| Nine months ended April 30, 2025 | Nine months ended April 30, 2024 | |||||||
| OPERATING ACTIVITIES | ||||||||
| Net Income (Loss) | $ | ( |
) | $ | ( |
) | ||
| Adjustments to Reconcile Net Income to net cash provided by operations: | ||||||||
| Stock Based Compensation | ||||||||
| Stock Issued for Cash not Collected | ||||||||
| Amortization | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Related Party Receivable | ( |
) | ||||||
| Prepaid Expenses | ||||||||
| Accounts Payable | ( |
) | ||||||
| Cash Flows Provided by (Used in) Operating Activities | ( |
) | ( |
) | ||||
| INVESTING ACTIVITIES | ||||||||
| Purchase of Intangible Assets | ( |
) | ||||||
| Cash Flows Used in Investing Activities | ( |
) | ||||||
| FINANCING ACTIVITIES | ||||||||
| Proceeds from Convertible Note | ||||||||
| Proceeds from Related Party Advances | ||||||||
| Repayments on Related Party Loan | ( |
) | ( |
) | ||||
| Proceeds from Related Party Loan | ||||||||
| Cash Flows Provided by Financing Activities | ||||||||
| Net cash increase (decrease) for period | ( |
) | ||||||
| Cash at beginning of period | ||||||||
| Cash at end of period | $ | $ | ||||||
| SUPPLEMENTAL CASH FLOW INFORMATION | ||||||||
| Cash paid during the period for: | ||||||||
| Interest | $ | $ | ||||||
| Income taxes | $ | $ | ||||||
| Non-cash investing and financing activities: | ||||||||
| Intangible Assets Reclassified from Prepaid Expenses | $ | $ | ||||||
| Loan Payable Reclassified from Related Party Loan | $ | $ | ||||||
The accompanying notes are an integral part of these condensed financial statements.
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TOFLA MEGALINE INC.
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
APRIL 30, 2025
(Unaudited)
NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS
Tofla Megaline Inc. (“the Company” or “we”) was incorporated under the laws of the State of Nevada, U.S. on August 31, 2018 (Inception). We are a development-stage company operating in the business of developing software for security systems.
NOTE 2 - GOING CONCERN
The unaudited condensed financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future.
The Company incurred net loss of $
The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management expects revenue growth to continue over the next twelve months. In the event that revenue is not available to cover all expenses, the Company intends to finance operating costs with loans from directors and/or private placement of common stock.
NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The financial statements of the Company are presented in US dollars and the Company has adopted a July 31 fiscal year-end.
The accompanying unaudited condensed financial statements have been prepared in accordance with the rules and regulations (Regulation S-X) of the Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The results of operations for the nine months ended April 30, 2025, are not necessarily indicative of the operating results that may be expected for the year ending July 31, 2025. These unaudited condensed financial statements should be read in conjunction with the July 31, 2024 audited financial statements and notes thereto.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.
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Cash and Cash Equivalents
The Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes. As of April 30, 2025 and July 31, 2024, the Company had no cash equivalents.
Fair Value of Financial Instruments
ASC 820 “Fair Value Measurements and Disclosures” establishes a three-tier fair value hierarchy, which prioritizes the inputs in measuring fair value. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market.
These tiers include:
Level 1: defined as observable inputs such as quoted prices in active markets;
Level 2: defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and
Level 3: defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.
The carrying value of the Company’s assets and liabilities approximate fair value due to their short-term maturity.
Impairment of Long-Lived Assets
The Company continually monitors events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell.
Property and Equipment
Property and equipment are stated at cost and depreciated on the straight-line method over the estimated life of the asset.
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Intangible Asset
The Company accounts for its intangible assets in accordance with ASC Subtopic 350-40, Internal-Use Software-Computer Software Developed or Obtained for Internal Use, and ASC Subtopic 360-10, Accounting for the Impairment or Disposal of Long-Lived Assets. ASC Subtopic 350-40 requires assets to be recorded at the cost to develop the asset and requires an intangible asset to be amortized over its useful life and for the useful life to be evaluated every reporting period to determine whether events or circumstances warrant a revision to the remaining period of amortization. If the estimate of useful life is changed, the remaining carrying amount of the intangible asset is amortized prospectively over the revised remaining useful life. Costs incurred to renew or extend the life of an intangible asset are expensed as incurred. The Company recognizes amortization in the month after the asset is placed in service.
In September 2021 the Company capitalized website
development costs of $6,325 and during the nine months ended April 30, 2025 the Company capitalized $27,400 for additional website development,
for a total cost of $
In June 2022 the Company also purchased video recording
software at a cost of $
In November 2022 the Company purchased software for
solutions for designing a perimeter security system at a cost of $
In January 2023 the Company purchased a global brandmauer
for remote management via the internet at a cost of $
In August 2023 the Company bought navigation and mapping software at a cost of $ which will be amortized over three years. As of April 30, 2025, the accumulated amortization for the software was $.
In June 2024 the Company bought the threat detection
suite software at a cost of $
In July 2024 the Company bought the route management
software at a cost of $
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The Company had the following intangible assets as of April 30, 2025 and July 31, 2024:
| As of April 30, 2025 | As of July 31, 2024 | |||||||
| Website Development Costs | $ | $ | ||||||
| Video Recording Software | ||||||||
| Software for Solutions for Designing a Perimeter Security System | ||||||||
| Global Brandmauer for Remote Management via the Internet | ||||||||
| Navigation and Mapping Software | ||||||||
| Threat Detection Suite Software | ||||||||
| Route Management Software | ||||||||
| Accumulated Amortization | ( |
) | ( |
) | ||||
| Intangible Assets, Net | $ | $ | ||||||
During the nine months ended April 30, 2025 and 2024
the Company recorded amortization expense of $
The Company expects to recognize amortization expense
of $
Income Taxes
The Company follows the liability method of accounting for income taxes. Under this method, deferred income tax assets and liabilities are recognized for the estimated tax consequences attributable to differences between the financial statement carrying values and their respective income tax basis (temporary differences). The effect on deferred income tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
Revenue Recognition
The Company recognizes revenue in accordance with Accounting Standards Codification (“ASC”) 606, “Revenue from Contracts with Customers”. The core principle of ASC 606 is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. An entity recognizes revenue in accordance with that core principle by applying the following steps:
Step 1: Identify the contract with the customer.
Step 2: Identify the performance obligations in the contract.
Step 3: Determine the transaction price.
Step 4. Allocate the transaction price.
Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.
The Company generates revenue through the sale of software and by providing consulting or technical support services. For the sale of software, revenue is recognized at the point in time when the ownership of software (as approved by the customer) is transferred per the terms of a contract. The Company shall not be liable for any failure to perform its obligations if such failure is due to circumstances beyond its reasonable control. Any liability of the Company shall be limited to the total of all amounts paid by the customer for services under the contract. For consulting or technical support services, revenue is recognized as the services are provided.
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The Company generally collects payment from customers
prior to transferring ownership of software or at the end of any service period and may require deposits from customers at the time an
order is placed. When deposits are collected prior to transferring ownership of software or before services are performed the Company
recognizes deferred revenue until the transfer is made or services are provided. During the nine months ended April 30, 2025 and 2024,
the Company’s revenue was $
During the nine months ended April 30, 2025 one customer made up 100% of our total revenues.
The Company computes earnings (loss) per share in accordance with ASC 260-10-45 ‘Earnings per Share, which requires the presentation of both basic and diluted earnings per share on the face of the statement of operations. Basic earnings (loss) per share is computed by dividing net earnings (loss) available to common stockholders by the weighted average number of outstanding common shares during the period. Diluted earnings (loss) per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive earnings (loss) per share excludes all potential common shares if their effect is anti-dilutive. The Company has no potential dilutive instruments, and therefore, basic and diluted earnings (loss) per share are equal.
Recent Accounting Pronouncements
The Company has reviewed all the recent accounting pronouncements issued to date of the issuance of these financial statements, and does not believe any of these pronouncements will have a material impact on the Company’s financial reporting.
The Company has common shares authorized with a par value of $ per share.
During the nine months ended April 30, 2025, the Company
executed subscription agreements for the issuance of
During the nine months ended April 30, 2025, the Company
issued shares of common stock in exchange for legal services valued at $
As of April 30, 2025 and July 31, 2024 the Company had and shares issued and outstanding, respectively.
NOTE 5 – RELATED PARTY TRANSACTIONS AND LOAN PAYABLE
In support of the Company’s efforts and cash requirements, it may rely on advances from related parties until such time that the Company can support its operations or attains adequate financing through sales of its equity or traditional debt financing. There is no formal written commitment for continued support by shareholders or directors. Amounts represent advances or amounts paid in satisfaction of liabilities.
Prior to January 30, 2025, when a change in management and board composition occurred, the Company relied on advances from its then-Chief Executive Officer, President, Treasurer and Secretary, Rodolfo Guerrero Angulo, (“Former Officer”) to support its operations and cash requirements.
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Effective August 31, 2018 the Former Officer formally
agreed to advance funds to the Company to pay for professional fees and operating expenses under a $
On December 2, 2024, the Former Officer assigned $
On December 20, 2024, the Former Officer assigned
$
On January 7, 2025, the Former Officer assigned $
As of January 30, 2025, the Former Officer resigned from his positions with the Company and is no longer considered a related party. The remaining balance of the loan, as reflected in the assignments, is now held by One Life Best Life LLC, REDWERK IT DEVELOPMENT LTD, and Prospera LLC. These entities are not considered related parties; therefore, the Company reclassified all amounts from Related Party Loans to Loan Payable during the nine months ended April 30, 2025.
During the nine months ended April 30, 2025, the Company’s
Director, Katerine Calero, made payments on behalf of the Company of $
During the nine months ended April 30, 2025, the Company’s
Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), Dilip Petigara, made payments on behalf of
the Company of $
During the nine months ended April 30, 2025, the Company
made payments to vendors on behalf of their majority shareholder, Alice Group Limited, of $
NOTE 6 – CONVERTIBLE NOTES
On April 23, 2025, the Company entered into a Securities
Purchase Agreement (the “Purchase Agreement”) with Steven LaForgia and Patricia LaForgia (collectively, the “Buyer”),
pursuant to which the Company issued and sold a Convertible Promissory Note (the “Note”) in the principal amount of $
The Note has a maturity date of April 23, 2026, and bears interest at a rate of 15% per annum, payable at maturity or upon conversion. Any unpaid principal or interest at maturity will accrue default interest at 22% per annum. Beginning 180 days after the issuance date, the Buyer may convert all or any portion of the outstanding principal and accrued interest into shares of the Company’s common stock, $0.001 par value per share (the “Common Stock”), at a conversion price equal to 75% of the average trading price of the Common Stock over the 20 trading days prior to the conversion date, subject to a minimum conversion price of $0.50 per share. The conversion is subject to a beneficial ownership limitation of 4.99% of the outstanding shares of Common Stock, which cannot be waived.
As of April 30, 2025, the convertible note balance
was $
NOTE 7 – COMMITMENTS AND CONTINGENCIES
Contractual Commitments
The Company has entered into
Litigation
The Company was not subject to any legal proceedings during the period from August 31, 2018 (Inception) to April 30, 2025 and no legal proceedings are currently pending or threatened to the best of our knowledge.
NOTE 8 – SUBSEQUENT EVENTS
The Company has evaluated subsequent events from April 30, 2025 to the date the financial statements were issued and is disclosing the Company executed subscription agreements for the issuance of 7,500 common shares in exchange for cash contributions totaling $7,500 but subsequently determined that they would not be collecting the cash, therefore will be recording the issuance as an expense, valued at the $4 market value per share on the subscription dates, or $30,000.
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| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
Overview
Tofla Megaline Inc. (“Tofla” or “we” or the “Company”) was incorporated in the state of Nevada on August 31, 2018. As a development stage company specializing in software for robotic devices, we provide cutting-edge AI solutions that enhance security and efficiency. Our focus is on developing easy-to-use, high-quality, and cost-effective automation solutions for both standalone and integrated applications. Our key feature is developing software for security purposes. We offer a comprehensive suite of software products designed to improve the capabilities of robotic units in surveillance, patrol, and navigation. Our solutions include advanced algorithms for real-time threat detection, intelligent software for precise route planning and management, and predictive maintenance capabilities to minimize downtime and reduce costs. Beyond our software offerings, we also provide comprehensive consulting and technical support services.
Our solutions can be integrated with established control equipment and security systems or used as independent versions. Our current projects involve software integration with security and video surveillance systems, along with the development of customizable solutions that support long-distance navigation, and task completion.
Our technology integrates a modular system of specialized devices for data collection, advanced AI for real-time threat analysis, and sophisticated software for seamless integration and control. The modular system offers flexibility and scalability, allowing for easy updates, troubleshooting, and customization to meet diverse security requirements. AI processes collected data in real-time, detecting potential threats and initiating appropriate responses. Our software coordinates the various components, ensuring smooth communication and operation between the modular devices, AI algorithms, and other system elements.
By harnessing the power of our modular system, AI capabilities, and innovative software, we are redefining the future of security technology and delivering protection to our clients.
Principal Products and Services
Tofla’s primary business includes developing AI-powered software for robotic security systems. We offer a range of software products designed to enhance the capabilities of these robotic units, including:
| ● | Threat Detection Software: This software utilizes advanced algorithms to analyze video footage in real time, identifying potential security threats such as unauthorized access, suspicious activities, and other violations. |
| ● | Route Optimization Software: Designed to optimize patrol routes for robotic units, ensuring efficient coverage of designated areas and minimizing redundant movements. |
| ● | Predictive Maintenance Software: This software leverages AI to predict potential maintenance issues based on usage patterns and sensor data, allowing for proactive interventions and minimizing downtime. |
| ● | Integration Software: Our solutions can be seamlessly integrated with existing security systems and control equipment, providing a unified and comprehensive security solution. |
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These software products collectively enable robotic security systems to perform their duties more effectively, efficiently, and proactively, enhancing overall security and reducing the burden on human personnel.
Our Company has historically operated in the robotic security software development industry leveraging its investment in AI, autonomy, and efficiency. We have offered a comprehensive suite of solutions designed to enhance the capabilities of robotic units in surveillance, patrol, and threat detection. Our software is tailored to meet the specific needs of both individual users and businesses seeking to improve their security posture.
With the appointment of new management and the reconstituted Board, the Company is evaluating opportunities to expand its strategic focus. While, during the quarter ended April 30, 2025, the Company continued to pursue its existing business line of AI-powered software for robotic security systems, the new leadership may elect to pursue additional business lines to diversify revenue streams and enhance long-term growth. The new leadership has made no definitive decisions as of the date of this filing. Any material developments regarding the pursuit of new business lines, including the allocation of resources or changes to the Company’s operational structure, will be disclosed in future filings as required.
The Company continues to assess the impact of these changes on its operations, financial condition, and strategic objectives.
Additionally, the Company continues to actively evaluate strategic opportunities to enhance long-term shareholder value. These initiatives may include potential acquisitions or investments across a range of areas, including technology platforms, real assets, credit-focused businesses, and regulated bank charters. Management believes that targeted expansion in these sectors could complement existing operations and support the Company’s broader growth objectives.
Employees; Identification of Certain Significant Employees.
On January 30, 2025, Katerine Calero was appointed as a member of the Board of Directors of the Company and as Chief Executive Officer, Chief Financial Officer and Secretary of the Company. Following the appointment of Ms. Calero, Rodolfo Guerrero Angulo resigned as an executive officer and a director of the Company and Marquez Hernandez Maria De Lourdes resigned as a director of the Company.
On March 5, 2025, Dilip R. Petigara was appointed as a member of the Board of Directors of the Company and as Chief Executive Officer, Chief Financial Officer and Secretary of the Company. Following the appointment of Mr. Petigara, Ms. Calero resigned as an executive officer of the Company but continued as a director of the Company.
Offices
Our business office is located at c/o Boca Jom LLC – 1236 N Fairfax, West Hollywood, CA 90046. Our telephone number is (323) 822-1750.
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Government Regulation
We will be required to comply with all regulations, rules, and directives of governmental authorities and agencies applicable to our business in any jurisdiction which we would conduct activities. We do not believe that regulation will have a material impact on the way we conduct our business.
Results of Operations for the three months ended April 30, 2025 and 2024:
Revenue
During the three months ended April 30, 2025 and 2024 we did not generate any revenue.
Operating expenses
Total operating expenses for the three months ended April 30, 2025 and 2024 were $1,826,095 and $12,952, respectively. The operating expenses for the three months ended April 30, 2025 and 2024 included Amortization Expense of $9,659 and $4,902; General and Administrative expenses of $1,816,436 and $3,250; and Server Rental of $0 and $4,800, respectively. The increase in general and administrative expense was due to $1,712,000 recognized as the value of shares issued during the quarter, along with professional fees incurred with no similar cost incurred in the prior period, the increase in amortization expense was due to the Company acquiring more intangible assets over time, and the decrease in server rental costs was due to the Company terminating the use of a server in the current period.
Other Income
Our other income for the three months ended April 30, 2025 and 2024 was $24 and $0, respectively. Other income included interest on the cash balance in the Company’s bank account.
Net Income (Loss)
Our net loss for the three months ended April 30, 2025 and 2024 was $1,826,071 and $12,952, respectively, due to the reasons explained above.
Results of Operations for the nine months ended April 30, 2025 and 2024:
Revenue
During the nine months ended April 30, 2025 and 2024 we generated $23,000 and $21,700 of revenue, respectively. There were no significant changes in revenue for the periods compared.
Operating expenses
Total operating expenses for the nine months ended April 30, 2025 and 2024 were $1,892,949 and $45,071, respectively. The operating expenses for the nine months ended April 30, 2025 and 2024 included Amortization Expense of $28,542 and $14,706; General and Administrative expenses of $1,858,007 and $15,965; and Server Rental of $6,400 and $14,400, respectively. The increase in general and administrative expense was due to $1,712,000 recognized as the value of shares issued during the period, along with professional fees incurred with no similar cost incurred in the prior period and website maintenance expenses incurred in the current period with no similar cost incurred in the prior period. The increase in amortization expense was due to the Company acquiring more intangible assets over time and the decrease in server rental costs was due to the Company changing, and eventually eliminating, their server provider in the current period.
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Other Income
Our other income for the nine months ended April 30, 2025 and 2024 was $24 and $0, respectively. Other income included interest on the cash balance in the Company’s bank account.
Net Income (Loss)
Our net loss for the nine months ended April 30, 2025 and 2024 was $1,869,925 and $23,371, respectively, due to the reasons explained above.
Liquidity and Capital Resources and Cash Requirements
As of April 30, 2025, the Company had $9,944 in cash ($0 as of July 31, 2024) and had a negative working capital of $242,585 as of April 30, 2025 (negative $85,801 as of July 31, 2024).
During the nine months ended April 30, 2025 the Company used $118,334 of cash in its operating activities due to its net loss of $1,869,925 and an increase in the related party receivable of $30,000, offset by stock issued for services of $1,500,000, stock issued for cash that wasn’t collected of $212,000, a decrease in prepaid expense of $5,300, an increase in accounts payable of $35,750, and amortization expense of $28,541. During the nine months ended April 30, 2024 the Company had $9,865 of cash used in its operating activities due to its net loss $23,371 and decrease in accounts payable of $6,000, offset by a decrease in prepaid expense of $4,800 and amortization expense of $14,706.
During the nine months ended April 30, 2025 and 2024, the Company used $0 and $20,000 of cash in investing activities to acquire intangible assets, respectively.
During the nine months ended April 30, 2025 the Company generated $128,278 of cash from financing activities due to proceeds from convertible note of $100,000, proceeds from related party advances of $4,707, proceeds from related party loans of $46,571, offset by repayments on related party loans of $23,000. During the nine months ended April 30, 2024 the Company generated $7,855 of cash from financing activities, made up of $31,205 of proceeds from related party loans, offset by $23,350 in repayments to related parties.
To date the Company has had limited revenues and has reported an accumulated deficit of $1,923,376 as of April 30, 2025, as the Company has not yet attained a level of operations which will allow it to meet its current expense obligations and expects to incur further losses in the development of its business. The report of our independent registered public accounting firm on our July 31, 2024 financial statements includes an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. The Company has been funding its operations with related party loans and advances and plans to continue to do that and/or obtain financing through a private placement of common stock.
OFF-BALANCE SHEET ARRANGEMENTS
We have no off-balance sheet arrangements including arrangements that would affect our liquidity, capital resources, market risk support and credit risk support, or other benefits.
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk. |
Not Applicable.
| Item 4. | Controls and Procedures. |
Evaluation of Disclosure Controls and Procedures
We carried out an evaluation as of April 30, 2025, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, who are one and the same, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(f) and 15d–15(e)). Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered in this report, our disclosure controls and procedures were not effective to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the required time periods and is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting during our most recent quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II. OTHER INFORMATION
| Item 1. | Legal Proceedings. |
From time to time, the Company may be involved in various litigation matters, which arise in the ordinary course of business. There is currently no litigation that management believes will have a material impact on the financial position of the Company.
| Item 1A. | Risk Factors. |
As a smaller reporting company, we are not required to provide the information required by this Item.
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds. |
On April 23, 2025, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with Steven LaForgia and Patricia LaForgia (collectively, the “Buyer”), pursuant to which the Company issued and sold a Convertible Promissory Note (the “Note”) in the principal amount of $100,000 to the Buyer. The transaction closed on April 23, 2025 (the “Closing Date”).
The Note has a maturity date of April 23, 2026, and bears interest at a rate of 15% per annum, payable at maturity or upon conversion. Any unpaid principal or interest at maturity will accrue default interest at 22% per annum. Beginning 180 days after the issuance date, the Buyer may convert all or any portion of the outstanding principal and accrued interest into shares of the Company’s common stock, $0.001 par value per share (the “Common Stock”), at a conversion price equal to 75% of the average trading price of the Common Stock over the 20 trading days prior to the conversion date, subject to a minimum conversion price of $0.50 per share (the “Conversion Price”). The conversion is subject to a beneficial ownership limitation of 4.99% of the outstanding shares of Common Stock, which cannot be waived.
The Company is required to reserve five times the number of shares of Common Stock issuable upon full conversion of the Note, based on the Conversion Price in effect from time to time. The Note may be prepaid by the Company during the first 180 days at 100% of the principal plus accrued interest and after 180 days at 105% of the principal plus accrued interest, subject to three trading days’ prior written notice to the Buyer.
The Note contains customary events of default, including failure to pay principal or interest when due, failure to issue shares upon conversion, and breaches of material covenants or representations. Upon an event of default, the Note may become immediately due and payable, and the Company may be required to pay a default amount ranging from 110% to 200% of the outstanding principal, accrued interest, and other amounts, depending on the nature of the default.
The Purchase Agreement includes representations, warranties, and covenants by the Company and the Buyer, including the Company’s obligation to comply with the reporting requirements of the Securities Exchange Act of 1934, as amended, and to issue irrevocable instructions to its transfer agent to facilitate conversions. The Buyer is subject to a 12-month lock-up period on the shares issuable upon conversion (the “Conversion Shares”), with limited leak-out provisions allowing sales of up to 15% of the average daily trading volume over the prior 30 trading days.
During the nine months ended April 30, 2025, the Company executed subscription agreements for the issuance of 53,000 common shares in exchange for cash contributions totaling $53,000 but subsequently determined that they would not be collecting the cash, therefore recorded the issuance as an expense, valued at the $4 market value per share on the subscription dates, or $212,000.
During the nine months ended April 30, 2025, the Company issued 500,000 shares of common stock in exchange for legal services valued at $1,500,000 based on the market value of the shares on the grant date.
Between May 1, 2025 and to the date the financial statements were issued, the Company executed subscription agreements for the issuance of 7,500 common shares in exchange for cash contributions totaling $7,500 but subsequently determined that they would not be collecting the cash, therefore will be recording the issuance as an expense, valued at the $4 market value per share on the subscription dates, or $30,000.
The offers, sales, and issuances of the securities described above were deemed to be exempt from registration under the Securities Act in reliance on Section 4(a)(2) of the Securities Act, or Regulation D promulgated thereunder, as transactions by an issuer not involving a public offering. The recipients of securities in each of these transactions acquired the securities for investment only and not with a view to or for sale in connection with any distribution thereof and appropriate legends were affixed to the securities issued in these transactions. Each of the recipients of securities in these transactions was an accredited or sophisticated person and had adequate access, through employment, business or other relationships, to information about us.
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| Item 3. | Defaults Upon Senior Securities. |
Not Applicable.
| Item 4. | Mine Safety Disclosures. |
Not Applicable.
| Item 5. | Other Information. |
There is
| Item 6. | Exhibits. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| TOFLA MEGALINE INC. | ||
| Date: June 23, 2025 | By: | /s/ Dilip R. Petigara |
Dilip R. Petigara Chief Executive Officer, Secretary (Principal Executive, Financial and Accounting Officer) | ||
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