UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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| For the quarterly period ended May 31, 2020 |
or
☐ | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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| For the transition period from ____________to ____________ |
Commission File Number 333-208237
FELLAZO CORP. |
(Exact name of registrant as specified in its charter) |
Nevada |
| 30-0840869 |
(State or other jurisdiction of incorporation or organization) |
| (IRS Employer Identification No.) |
8th Floor, Wisma Huazong, Lot 15285, 0.7km Lebuhraya Sungei Besi, 43300 Seri Kembangan, Selangor Darul Ehsan, Malaysia |
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(Address of principal executive offices) |
| (Zip Code) |
+603 89638 5638 http://fellazo.com |
(Registrant’s telephone number, including area code) |
N/A |
(Former name, former address and former fiscal year, if changed since last report) |
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Securities registered pursuant to Section 12(b) of the Act: |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
None | None | None |
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 ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). YES ☒ NO ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ | Accelerated filer | ☐ |
Non-accelerated filer | ☒ | Smaller reporting company | ☒ |
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| Emerging growth company | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) YES ☐ NO ☒
Fellazo Corp has 86,264,000 common shares issued and outstanding as of November 23, 2020.
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Management’s Discussion and Analysis of Financial Condition or Plan of Operation |
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2 |
PART I - FINANCIAL INFORMATION
FELLAZO CORP.
Consolidated Balance Sheets
(Unaudited)
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| May 31, |
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| August 31, |
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| 2020 |
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| 2019 |
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ASSETS |
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Current Assets |
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Cash and cash equivalent |
| $ | 12,049 |
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| $ | 54,467 |
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Prepaid expense and deposit |
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| 9,317 |
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| 19,105 |
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Total Current Assets |
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| 21,366 |
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| 73,572 |
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TOTAL ASSETS |
| $ | 21,366 |
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| $ | 73,572 |
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LIABILITIES AND STOCKHOLDERS' DEFICIT |
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Current Liabilities |
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Accounts payable and accrued liabilities |
| $ | 16,248 |
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| $ | 27,000 |
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Due to related party |
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| 998,373 |
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| 824,699 |
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Total Current Liabilities |
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| 1,014,621 |
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| 851,699 |
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TOTAL LIABILITIES |
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| 1,014,621 |
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| 851,699 |
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Stockholders' Deficit |
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Common stock, $0.001 par value, 1,000,000,000 shares authorized; |
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86,264,000 shares issued and outstanding as of May 31, 2020 and August 31, 2019, respectively |
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| 86,264 |
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| 86,264 |
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Additional paid-in capital |
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| 36,122 |
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| 36,122 |
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Accumulated deficit |
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| (1,069,954 | ) |
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| (889,870 | ) |
Accumulated other comprehensive loss |
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| 1,190 |
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| (209 | ) |
Total Fellazo Corp. Stockholders' Deficit |
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| (946,378 | ) |
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| (767,693 | ) |
Non-controlling interest |
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| (46,877 | ) |
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| (10,434 | ) |
Total Stockholders' Deficit |
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| (993,255 | ) |
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| (778,127 | ) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT |
| $ | 21,366 |
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| $ | 73,572 |
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The accompanying notes are an integral part of these unaudited consolidated financial statements.
3 |
Table of Contents |
FELLAZO CORP.
Consolidated Statements of Operations and Comprehensive Loss
(Unaudited)
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| Three months ended |
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| Nine Months Ended |
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| May 31, |
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| May 31, |
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| 2020 |
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| 2019 |
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| 2020 |
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| 2019 |
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Revenues |
| $ | - |
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| $ | - |
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| $ | 56,138 |
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| $ | - |
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Cost of Goods Sold |
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| - |
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| - |
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| (40,531 | ) |
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Gross profit |
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| - |
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| - |
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| 15,607 |
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| - |
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Operating Expenses |
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General and administrative expenses |
| $ | 80,353 |
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| $ | 52,012 |
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| $ | 233,591 |
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| $ | 140,836 |
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Total operating expenses |
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| 80,353 |
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| 52,012 |
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| 233,591 |
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| 140,836 |
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Loss from operations |
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| (80,353 | ) |
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| (52,012 | ) |
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| (217,984 | ) |
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| (140,836 | ) |
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Loss before taxes |
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| (80,353 | ) |
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| (52,012 | ) |
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| (217,984 | ) |
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| (140,836 | ) |
Provision for income tax |
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| - |
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| - |
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| - |
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| - |
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Net loss |
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| (80,353 | ) |
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| (52,012 | ) |
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| (217,984 | ) |
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| (140,836 | ) |
Net loss attributable to the non-controlling interest |
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| (15,665 | ) |
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| (131 | ) |
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| (37,900 | ) |
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| (482 | ) |
Net Loss Attributable to The Shareholders of Fellazo Corp. |
| $ | (64,688 | ) |
| $ | (51,881 | ) |
| $ | (180,084 | ) |
| $ | (140,354 | ) |
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Other comprehensive loss |
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Foreign currency translation gain (loss) |
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| 2,093 |
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| (616 | ) |
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| 2,856 |
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| (411 | ) |
Total comprehensive loss |
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| (78,260 | ) |
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| (52,628 | ) |
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| (215,128 | ) |
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| (141,247 | ) |
Comprehensive Loss attributable to the non-controlling interest |
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| (14,597 | ) |
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| (314 | ) |
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| (36,443 | ) |
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| (692 | ) |
Comprehensive Loss Attributable to The Shareholders of Fellazo Corp. |
| $ | (63,663 | ) |
| $ | (52,314 | ) |
| $ | (178,685 | ) |
| $ | (140,555 | ) |
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Basic and dilutive net loss per common share |
| $ | (0.00 | ) |
| $ | (0.00 | ) |
| $ | (0.00 | ) |
| $ | (0.00 | ) |
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Weighted average number of common shares outstanding - basic and diluted |
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| 86,264,000 |
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| 86,264,000 |
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| 86,264,000 |
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| 81,230,118 |
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The accompanying notes are an integral part of these unaudited consolidated financial statements.
4 |
Table of Contents |
FELLAZO CORP.
Consolidated Statements of Changes in Stockholders’ Deficit
(Unaudited)
For the three and nine months ended May 31, 2020
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| Accumulated |
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| Common Stock |
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| Additional Paid in |
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| Accumulated |
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| other comprehensive |
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| Non controlling |
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| Shares |
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| Amount |
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| Capital |
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| Deficit |
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| loss |
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| Interest |
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| Total |
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Balance, August 31, 2019 |
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| 86,264,000 |
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| $ | 86,264 |
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| $ | 36,122 |
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| $ | (889,870 | ) |
| $ | (209 | ) |
| $ | (10,434 | ) |
| $ | (778,127 | ) |
Net loss |
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| - |
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| - |
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| - |
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| (54,481 | ) |
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| - |
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| (8,072 | ) |
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| (62,553 | ) |
Foreign currency translation gain |
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| - |
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| - |
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| - |
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| - |
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| (64 | ) |
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| (66 | ) |
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| (130 | ) |
Balance, November 30, 2019 |
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| 86,264,000 |
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| $ | 86,264 |
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| $ | 36,122 |
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| $ | (944,351 | ) |
| $ | (273 | ) |
| $ | (18,572 | ) |
| $ | (840,810 | ) |
Net loss |
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| - |
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| - |
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| - |
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| (60,915 | ) |
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| - |
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| (14,163 | ) |
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| (75,078 | ) |
Foreign currency translation gain |
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| - |
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| - |
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| - |
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| - |
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| 438 |
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| 455 |
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| 893 |
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Balance, February 29, 2020 |
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| 86,264,000 |
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| $ | 86,264 |
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| $ | 36,122 |
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| $ | (1,005,266 | ) |
| $ | 165 |
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| $ | (32,280 | ) |
| $ | (914,995 | ) |
Net loss |
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| - |
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| - |
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| - |
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| (64,688 | ) |
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| - |
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| (15,665 | ) |
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| (80,353 | ) |
Foreign currency translation loss |
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| - |
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| - |
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| - |
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| - |
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| 1,025 |
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| 1,068 |
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| 2,093 |
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Balance, May 31, 2020 |
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| 86,264,000 |
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| $ | 86,264 |
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| $ | 36,122 |
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| $ | (1,069,954 | ) |
| $ | 1,190 |
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| $ | (46,877 | ) |
| $ | (993,255 | ) |
For the three and nine months ended May 31, 2019
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| Accumulated |
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| Common Stock |
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| Additional Paid in |
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| Accumulated |
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| other comprehensive |
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| Non controlling |
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| Shares |
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| Amount |
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| Capital |
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| Deficit |
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| loss |
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| Interest |
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| Total |
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Balance, August 31, 2018 |
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| 75,000,000 |
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| $ | 75,000 |
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| $ | 47,386 |
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| $ | (651,637 | ) |
| $ | (284 | ) |
| $ | 11,035 |
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| $ | (518,500 | ) |
Net loss |
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| - |
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| - |
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| - |
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| (44,459 | ) |
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| - |
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| (351 | ) |
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| (44,810 | ) |
Foreign currency translation gain |
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| - |
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| - |
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| - |
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| - |
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| (188 | ) |
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| (196 | ) |
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| (384 | ) |
Balance, November 30, 2018 |
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| 75,000,000 |
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| 75,000 |
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| 47,386 |
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| (696,096 | ) |
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| (472 | ) |
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| 10,488 |
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| (563,694 | ) |
Acquisition of subsidiary under common control |
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| 11,264,000 |
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| 11,264 |
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| (11,264 | ) |
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| - |
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| - |
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| - |
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| - |
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Net loss |
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| - |
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| - |
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| - |
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| (43,883 | ) |
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| - |
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| (131 | ) |
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| (44,014 | ) |
Foreign currency translation gain |
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| - |
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| - |
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| - |
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| - |
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| 289 |
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| 300 |
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| 589 |
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Balance, February 28, 2019 |
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| 86,264,000 |
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| $ | 86,264 |
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| $ | 36,122 |
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| $ | (739,979 | ) |
| $ | (183 | ) |
| $ | 10,657 |
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| $ | (607,119 | ) |
Net loss |
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| - |
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| - |
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| - |
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| (52,012 | ) |
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| - |
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| - |
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| (52,012 | ) |
Foreign currency translation loss |
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| - |
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| - |
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| - |
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| - |
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| (302 | ) |
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| (314 | ) |
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| (616 | ) |
Balance, May 31, 2019 |
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| 86,264,000 |
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| $ | 86,264 |
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| $ | 36,122 |
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| $ | (791,991 | ) |
| $ | (485 | ) |
| $ | 10,343 |
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| $ | (659,747 | ) |
The accompanying notes are an integral part of these unaudited consolidated financial statements
5 |
Table of Contents |
FELLAZO CORP.
Consolidated Statements of Cash Flows
(Unaudited)
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| Nine Months Ended |
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| May 31, |
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| 2020 |
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| 2019 |
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Cash Flows from Operating Activities: |
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Net loss |
| $ | (217,984 | ) |
| $ | (140,836 | ) |
Adjustments to reconcile net loss to net cash used in operations: |
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Expenses paid by related party |
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| 222,090 |
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| 39,777 |
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Changes in operating assets and liabilities: |
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Prepaid |
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| 16,101 |
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| - |
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Deposit |
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| (6,578 | ) |
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| - |
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Accounts payable and accrued liabilities |
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| (10,752 | ) |
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| (1,010 | ) |
Net Cash Provided by Operating Activities |
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| 2,877 |
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| (102,069 | ) |
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Cash Flows from Financing Activities: |
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Expenses paid for related party |
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| (350,642 | ) |
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| - |
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Advance from related party |
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| 309,249 |
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| 120,625 |
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Repayment to related party |
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| (4,368 | ) |
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| - |
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Net Cash Provided by Financing Activities |
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| (45,761 | ) |
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| 120,625 |
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Effects on changes in foreign exchange rate |
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| 466 |
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| (411 | ) |
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Net change in cash and cash equivalents |
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| (42,418 | ) |
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| 18,145 |
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Cash and cash equivalents, beginning of period |
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| 54,467 |
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| 2,503 |
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Cash and cash equivalents, end of period |
| $ | 12,049 |
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| $ | 20,648 |
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Supplemental cash flow information |
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Interest paid |
| $ | - |
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| $ | - |
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Income taxes paid |
| $ | - |
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| $ | - |
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Non-cash financing transactions: |
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Stock issued for acquisition of subsidiary under common control |
| $ | - |
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| $ | 11,264 |
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The accompanying notes are an integral part of these unaudited consolidated financial statements
6 |
Table of Contents |
FELLAZO CORP.
Notes to the Consolidated Financial Statements
For the Period Ended May 31, 2020
(Unaudited)
NOTE 1 – ORGANIZATION, DESCRIPTION OF BUSINESS AND GOING CONCERN
Fellazo Corp. (“the Company”, “we”, “us” or “our”) was incorporated in the State of Nevada on May 28, 2014.
During the quarter ending May 31, 2020, the Company had continued its transformation process into an IT based company specialized in Mobile Application Developments with worldwide clientele and a portfolio investment company in primary industries such as healthcare, energy, development and capital market. The Company had commenced to be engaged in the industry of “Healthcare and Personal Wellness” products and related products. Activities include but not limited to sourcing raw materials or partly or fully finished products, manufacturing, wholesale and trading of these products.
Our office is located at 8th Floor, Wisma Huazong, Lot 15285, 0.7 km Lebuhraya SungeiBesi, 43300 Seri Kembangan, Selangor Darul Ehsan, Malaysia.
Going Concern Uncertainties
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the discharge of liabilities in the normal course of business for the foreseeable future.
As of May 31, 2020, the Company had an accumulated deficit of $1,069,954, and net loss of $217,984 for the nine months ended May 31, 2020. Losses have principally occurred as a result of the substantial resources required for general and administrative expenses associated with our operations. The continuation of the Company as a going concern is dependent upon the continued financial support from its stockholders or external financing. Management believes the existing stockholders will provide the additional cash to meet with the Company’s obligations as they become due. However, there is no assurance that the Company will be successful in securing sufficient funds to sustain the operations.
These conditions raise substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to reflect the possible future effect on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the outcome of these uncertainties. Management believes that the actions presently being taken to obtain additional funding and implement its strategic plan provides the opportunity for the Company to continue as a going concern.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial statements and Article 8 of Regulation S-X of the United States Securities and Exchange Commission (“SEC”). Accordingly, they do not contain all information and footnotes required by U.S. GAAP for complete financial statements. However, except as disclosed herein, there has been no material change in the information disclosed in the Notes to Consolidated Financial Statements included in the Annual Report on Form 10-K for the year ended August 31, 2019.
Principles of Consolidation
The accompanying consolidated financial statements include the financial statements of the Company and its 49% owned subsidiary Fellazo Berhad, an entity under common control. All significant inter-company balances and transactions within the Company have been eliminated upon consolidation.
7 |
Table of Contents |
Variable Interest Entities
The Company holds both the power to direct the most significant activities of FB, as well as an economic interest in FB and, as such, is deemed to be the primary beneficiary or consolidator of FB. The determination of the VIE’s primary beneficiary requires an evaluation of the contractual and implied rights and obligations associated with each party’s relationship with or involvement in the entity, an estimate of the entity’s expected losses and expected residual returns and the allocation of such estimates to each party involved in the entity.
Revenue recognition
The Company commenced its operation in mid-October 2019. At this initial stage revenue is earned from the trading of raw bird-nest only.
The Company’s revenue recognition procedures consist of the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations pursuant to each of its sales transactions:
| · | identify the contract with a customer; |
| · | identify the performance obligations in the contract; |
| · | determine the transaction price; |
| · | allocate the transaction price to performance obligations in the contract; and |
| · | recognize revenue as the performance obligation is satisfied. |
However at this initial stage of our operations which started with trading of raw bird-nest, the management is using this initial stage as exposure of the management to the bird-nest business in order to learn and experience with our suppliers whom are bird-nest farmers or their agents, determination of quality of the raw material, the process of raw bird-nest cleaning of the different class of the raw material and market for these clean bird-nest.
Thus at this initial stage we have not entered into any formal contract with our suppliers and purchasers, most of the suppliers and purchasers are known to our management or introduced to the management by closed business friends.
Cost of Goods Sold – Trading of Raw Bird-Nest
At this initial stage of business operations which the management considered as exposure, gaining of knowledge and experience of the overall bird-nest business, our Cost of goods sold only include the actual cost of the raw bird-nest.
Foreign Currency Translation
Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the statement of operations.
The reporting currency of the Company is the United States Dollar (“USD”). The Company’s subsidiary in Malaysia maintains their books and records in their local currency, the Malaysia Ringgit (“RM”), which is the functional currency as being the primary currency of the economic environment in which these entities operate.
In general, for consolidation purposes, assets and liabilities of its subsidiary whose functional currency is not the USD are translated into USD, in accordance with ASC 830, “Translation of Financial Statements”, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiary are recorded as a separate component of accumulated other comprehensive income within the statement of stockholders’ equity.
Exchange Rates |
| May 31, 2020 |
|
| August 31, 2019 |
| ||
Spot rate RM : USD exchange rate |
|
| 0.2300 |
|
|
| 0.2378 |
|
Average period RM : USD exchange rate |
|
| 0.2311 |
|
|
| 0.2415 |
|
8 |
Table of Contents |
NOTE 3 – RELATED PARTY TRANSACTIONS
Our Management Agent, Swipypay Berhad (a company established in Malaysia) is 80% owned by our Director – Mr Yap Kit Chuan. Total outstanding amount due to our Management Agent was $998,373 and $824,699 as at May 31, 2020 and August 31, 2019 respectively. The additional amount of $173,674 incurred in the nine months ended May 31, 2020 consisted of operating expenses paid on behalf of the Company of $222,090 and advance from a related party of $309,249, repayment to related party of $4,368 and expense paid for related party of $350,642. The difference of amount was a result of change of exchange rate.
During the nine months ended May 31, 2020, we had purchased $9,290 (RM38,790.51) worth of raw bird-nest from Swipypay Berhad (also an agent for bird-nest farmers).
NOTE 4 – PREPAID EXPENSES AND DEPOSIT
Prepaid expense and deposit consist of the following:
|
| May 31, |
|
| August 31, |
| ||
|
| 2020 |
|
| 2019 |
| ||
|
|
|
|
|
|
| ||
Prepaid expenses |
| $ | 3,000 |
|
| $ | 19,105 |
|
Deposit |
|
| 6,317 |
|
|
| - |
|
|
| $ | 9,317 |
|
| $ | 19,105 |
|
During the nine months ended May 31, 2020, the Company recorded deposit of $6,317 (RM 27,467), an initial deposit for our OEM personal cleansing and nourishing facial products, these initial batches of the products would generally be used for marketing purposes such as trial samples for potential customers.
9 |
Table of Contents |
Item 2. Management’s Discussion and Analysis of Financial Condition or Plan of Operation
FORWARD-LOOKING STATEMENTS
This quarterly report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
Our unaudited consolidated financial statements are prepared in accordance with United States Generally Accepted Accounting Principles. The following discussion should be read in conjunction with our consolidated financial statements and the related notes that appear elsewhere in this quarterly report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this quarterly report.
In this quarterly report, unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to “common shares” refer to the common shares in our capital stock.
As used in this quarterly report, the terms “we”, “us”, “our”, “our company” or “the Company” mean Fellazo Corp., and Fellazo Berhad, a Malaysian company, of which we own 49%, unless otherwise indicated.
Overview of Corporate History
Fellazo Corp. was incorporated in the State of Nevada on May 28, 2014. The Company’s fiscal year end is August 31.
Overview of Current Business
During the quarter ending May 31, 2020, the Company is still in the process of commencement of its operations with heavy emphasis into healthcare - primarily bird-nest based health supplement and bird-nest related health products, which include manufacturing and retail (retail chain and online). With our expertise in online applications platform, we expect to develop an online network platform to market and sell our products, and also create a system to source and purchase raw materials we required.
Since October 2019, the Company’s 49% subsidiary Fellazo Berhad (FB) started purchasing raw bird-nests directly from bird-nest farmers or their agents and re-selling them to bird-nest processors; wherever possible these raw bird-nests are delivered directly from the farmer to the processor.
Due to outbreak of Covid-19 pandemic and government imposed lockdown, we ceased operations mid-January 2020, and have yet to recover sales, even with partial lifting of lockdown; only total of 17 invoices were issued for the year ending August 31, 2020, and some sales were made to our own directors during the recent quarter.
In view of the still unknown market, economy sentiment and further regional and district lockdowns, and with bird-nest recently being considered a prestige product, the market may take a longer time to recover.
On August 1, 2020; FB had executed an Addendum and Update to the existing Management Agent agreement with Swipypay Berhad to include the additional functions, and the monthly management fee was increased from $5,000 to $10,000; this was in anticipation of FB’s increase in operational volume in the near future.
Our office is located at 8th Floor, Wisma Huazong, Lot 15285, 0.7 km Lebuhraya Sungei Besi, 43300 Seri Kembangan, Selangor Darul Ehsan, Malaysia and the bird-nest show factory is located at Level B1 in the same office building. Our corporate website is http://fellazo.com.
10 |
Table of Contents |
Results of Operations
The following summary of our results of operations should be read in conjunction with our financial statements included elsewhere in this quarterly report.
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.
Comparison of the three months ended May 31, 2020 and 2019
|
| Three months ended |
|
|
|
|
|
| ||||||||
|
| May 31, |
|
|
|
|
|
| ||||||||
|
| 2020 |
|
| 2019 |
|
| Change |
|
| % |
| ||||
Revenue |
| $ | - |
|
| $ | - |
|
| $ | - |
|
|
| - |
|
Cost of Goods Sold |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
General and administrative expenses |
|
| 80,353 |
|
|
| 52,012 |
|
|
| 28,341 |
|
|
| 54 | % |
Net loss |
| $ | 80,353 |
|
| $ | 52,012 |
|
| $ | 28,341 |
|
|
| 54 | % |
For the three months ended May 31, 2020, we had revenue of $0 and cost of revenue of $0, as compared to $0 and $0 for the same period in 2019. We had no revenue for the three months ended May 31, 2020, directly due to the impact of Covid-19 and not being able to offer products.
Our general and administrative expenses were $80,353 for the three months ended May 31, 2020, as compared to $52,012 for the same period in 2019. The increase in general and administrative expenses was primarily due to increased management fees and traveling expense.
Comparison of the nine months ended May 31, 2020 and 2019
|
| Nine Months Ended |
|
|
|
|
|
| ||||||||
|
| May 31, |
|
|
|
|
|
| ||||||||
|
| 2020 |
|
| 2019 |
|
| Change |
|
| % |
| ||||
Revenue |
| $ | 56,138 |
|
| $ | - |
|
| $ | 56,138 |
|
|
| - |
|
Cost of Goods Sold |
|
| 40,531 |
|
|
| - |
|
|
| 40,531 |
|
|
| - |
|
General and administrative expenses |
|
| 233,591 |
|
|
| 140,836 |
|
|
| 92,755 |
|
|
| 66 | % |
Net loss |
| $ | 217,984 |
|
| $ | 140,836 |
|
| $ | 77,148 |
|
|
| 55 | % |
For the nine months ended May 31, 2020, we had revenue of $56,138 and cost of revenue of $40,531, as compared to $0 and $0 for the same period in 2019. The Company started with trading of raw bird-nest and it is an initial stage of our operations.
Our general and administrative expenses were $233,591 for the nine months ended May 31, 2020, as compared to $140,836 for the same period in 2019. The increase in general and administrative expenses was primarily due to increased management fees and traveling expense.
11 |
Table of Contents |
Liquidity and Capital Resources
Working Capital
|
| May 31, |
|
| August 31, |
|
|
|
|
|
|
| ||||
|
| 2020 |
|
| 2019 |
|
| Change |
|
| % |
| ||||
Current assets |
| $ | 21,366 |
|
| $ | 73,572 |
|
| $ | (52,206 | ) |
| (71%) |
| |
Current liabilities |
| $ | 1,014,621 |
|
| $ | 851,699 |
|
| $ | 162,922 |
|
|
| 19 | % |
Working capital deficiency |
| $ | (993,255 | ) |
| $ | (778,127 | ) |
| $ | (215,128 | ) |
|
| 28 | % |
The Company’s current assets consists of cash and cash equivalents of $12,049 and prepaid expense and deposit of $9,317 at May 31, 2020, as compared to cash and cash equivalents of $54,467 and prepaid expense of $19,105 at August 31, 2019.
As at May 31, 2020, current liabilities consisted of accounts payable and accrued liabilities of $16,248 and due to a related party of $998,373, as compared to August 31, 2019, current liabilities consisted of accounts payable and accrued liabilities of $27,000 and due to a related party of $824,699. The increase in current liabilities is primarily due to the operating expenses paid by the related party.
Cash Flows
|
| Nine Months Ended |
|
|
| |||||||
|
| May 31, |
|
|
| |||||||
|
| 2020 |
|
| 2019 |
|
| Change |
| |||
Cash provided by (used in) operating activities |
| $ | 2,877 |
|
| $ | (102,069 | ) |
| $ | 104,946 |
|
Cash provided by (used in) financing activities |
|
| (45,761 | ) |
|
| 120,625 |
|
|
| (166,386 | ) |
Effects on changes in foreign exchange rate |
|
| 466 |
|
|
| (411 | ) |
|
| 877 |
|
Net change in cash and cash equivalents |
| $ | (42,418 | ) |
| $ | 18,145 |
|
| $ | (60,563 | ) |
Cash Flow from Operating Activities
Cash flows provided by operations was $2,877 during the nine months ended May 31, 2020, compared with cash used in operating activities of $102,069 during the same period in 2019. The increase in cash provided by operating activities is mainly due to an expense paid by related party.
Cash Flow from Financing Activities
During the nine months ended May 31, 2020, the Company received $309,249 from a related party, and repaid $4,368 to a related party and paid $350,642 for expenses on behalf of a related party. During the nine months ended May 31, 2019, the Company received $120,625 from a related party,
Off-Balance Sheet Arrangements
We have no 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 is material to stockholders.
Critical Accounting Policies and Estimates
Management’s discussion and analysis of our financial condition and results of operations are based upon our unaudited consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. We review the accounting policies used in reporting our financial results on a regular basis. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, net sales and expenses and related disclosure of contingent liabilities. We base our estimates on historical experience and on various other assumptions that we believe are reasonable for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Our actual results may differ materially from these estimates.
12 |
Table of Contents |
For a complete description of our critical accounting policies and estimates, refer to our 2019 Annual Report on Form 10-K filed with the Securities and Exchange Commission on August 10, 2020.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not applicable to smaller reporting companies.
Item 4. Controls and Procedures
Evaluation of Disclosure 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, 2020. Based on that evaluation, our management concluded that our disclosure controls and procedures were not 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 as a result of the following material weaknesses:
(1) lack of a functioning audit committee and lack of a majority of outside directors on the Company’s board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures;
(2) inadequate segregation of duties consistent with control objectives;
(3) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of U.S. GAAP and SEC disclosure requirements; and
(4) ineffective controls over period end financial disclosure and reporting processes.
The specific material weakness identified by our management was ineffective controls over certain aspects of the financial reporting process because of a lack of a sufficient complement of personnel with a level of accounting expertise and an adequate supervisory review structure that is commensurate with our financial reporting requirements and inadequate segregation of duties. A “material weakness” is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements would not be prevented or detected on a timely basis.
We expect to be materially dependent upon third parties to provide us with accounting consulting services for the foreseeable future which we believe mitigates the impact of the material weaknesses discussed above. Until such time as we have a chief financial officer with the requisite expertise in U.S. GAAP and establish an audit committee and implement internal controls and procedures, there are no assurances that the material weaknesses and significant deficiencies in our disclosure controls and procedures will not result in errors in our financial statements which could lead to a restatement of those financial statements.
Changes in Internal Controls
There have been no changes in our internal controls over financial reporting identified in connection with the evaluation required by paragraph (d) of Securities Exchange Act Rule 13a-15 or Rule 15d-15 that occurred in the quarter ended May 31, 2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
13 |
Table of Contents |
As of the date of this Quarterly Report on Form 10-Q, we are not a party to any legal proceedings that could have a material adverse effect on the Company’s business, financial condition or operating results. Further, to the Company’s knowledge no such proceedings have been threatened against the Company.
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
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not Applicable.
None.
14 |
Table of Contents |
The following exhibits are filed herewith or are incorporated by reference to exhibits previously filed with the SEC:
Incorporated by Reference | ||||||||
Exhibit No. | Title | Form | Exhibit | Filing Date | ||||
S-1 | 3.1 | 11/27/2015 | ||||||
S-1 | 3.2 | 11/27/2015 | ||||||
Certificate of Amendment to Articles of Incorporation, effective as of September 19, 2017 | 8-K | 3.1 | 09/22/2017 | |||||
| 10-Q | 10.1 | 04/23/2019 | |||||
21.1* | Subsidiaries of the Registrant | |||||||
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | ||||||||
Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | ||||||||
| ||||||||
101.INS+ | XBRL Instance Document | |||||||
101.SCH+ |
| XBRL Taxonomy Extension Schema Document |
| |||||
101.CAL+ |
| XBRL Taxonomy Extension Calculation Linkbase Document |
| |||||
101.LAB+ |
| XBRL Taxonomy Extension Label Linkbase Document |
| |||||
101.PRE+ |
| XBRL Taxonomy Extension Presentation Linkbase Document |
| |||||
101.DEF+ |
| XBRL Taxonomy Extension Definition Linkbase Document |
___________
* Filed herewith |
+ In accordance with the SEC Release 33-8238, deemed being furnished and not filed. |
15 |
Table of Contents |
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.
| FELLAZO CORP. | ||
| (Registrant) | ||
| |||
Dated: November 27, 2020 |
| /s/ YAP KIT CHUAN | |
| YAP KIT CHUAN | ||
| President, CEO, CFO, Treasurer, Secretary and Chairman of the Board of Directors of the Company | ||
| (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer) |
16 |
EXHIBIT 31.1
CERTIFICATION
I, YAP KIT CHUAN, certify that:
1. | I have reviewed this quarterly report on Form 10-Q of Fellazo Corp.; |
|
|
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
|
|
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
|
|
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have: |
| a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the fiscal year that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: November 27, 2020 | By: | /s/ Yap Kit Chuan |
|
|
| YAP KIT CHUAN |
|
| President, CEO, CFO, Treasurer, Secretary and Chairman of the Board of Directors of the Company |
| |
| (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer) |
EXHIBIT 32.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q of FELLAZO CORP. for the quarter ended May 31, 2020, as filed with the Securities and Exchange Commission on the date hereof, the undersigned hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to best of my knowledge and belief:
| (1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| (2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: November 27, 2020 | By: | /s/ Yap Kit Chuan |
|
|
| YAP KIT CHUAN |
|
| President, CEO, CFO, Treasurer, Secretary and Chairman of the Board of Directors of the Company |
| |
| (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer) |
|
A signed original of this written statement required by Section 906, or other documents authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
Cover - shares |
9 Months Ended | |
---|---|---|
May 31, 2020 |
Nov. 23, 2020 |
|
Cover [Abstract] | ||
Entity Registrant Name | Fellazo Corp | |
Entity Central Index Key | 0001659207 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Current Fiscal Year End Date | --08-31 | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | No | |
Document Period End Date | May 31, 2020 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2020 | |
Entity Common Stock Shares Outstanding | 86,264,000 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Interactive Data Current | Yes |
Consolidated Balance Sheets - USD ($) |
May 31, 2020 |
Aug. 31, 2019 |
---|---|---|
Current Assets | ||
Cash and cash equivalent | $ 12,049 | $ 54,467 |
Prepaid expense and deposit | 9,317 | 19,105 |
Total Current Assets | 21,366 | 73,572 |
TOTAL ASSETS | 21,366 | 73,572 |
Current Liabilities | ||
Accounts payable and accrued liabilities | 16,248 | 27,000 |
Due to related party | 998,373 | 824,699 |
Total Current Liabilities | 1,014,621 | 851,699 |
TOTAL LIABILITIES | 1,014,621 | 851,699 |
Stockholders' Deficit | ||
Common stock, $0.001 par value, 1,000,000,000 shares authorized;86,264,000 shares issued and outstanding as of May 31, 2020 and August 31, 2019, respectively | 86,264 | 86,264 |
Additional paid-in capital | 36,122 | 36,122 |
Accumulated deficit | (1,069,954) | (889,870) |
Accumulated other comprehensive loss | 1,190 | (209) |
Total Fellazo Corp. Stockholders' Deficit | (946,378) | (767,693) |
Non-controlling interest | (46,877) | (10,434) |
Total Stockholders' Deficit | (993,255) | (778,127) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ 21,366 | $ 73,572 |
Consolidated Balance Sheets (Parenthetical) - $ / shares |
May 31, 2020 |
Aug. 31, 2019 |
---|---|---|
Stockholders' Deficit | ||
Common stock, shares par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued | 86,264,000 | 86,264,000 |
Common stock, shares outstanding | 86,264,000 | 86,264,000 |
Consolidated Statements of Changes in Stockholders' Deficit (Unaudited) - USD ($) |
Total |
Common Stock [Member] |
Additional Paid-in Capital [Member] |
Accumulated Deficit [Member] |
Accumulated other comprehensive loss [Member] |
Non controlling Interest [Member] |
---|---|---|---|---|---|---|
Balance, shares at Aug. 31, 2018 | 75,000,000 | |||||
Balance, amount at Aug. 31, 2018 | $ (518,500) | $ 75,000 | $ 47,386 | $ (651,637) | $ (284) | $ 11,035 |
Net loss | (44,810) | 0 | 0 | (44,459) | 0 | (351) |
Foreign currency translation gain | (384) | $ 0 | 0 | 0 | (188) | (196) |
Balance, shares at Nov. 30, 2018 | 75,000,000 | |||||
Balance, amount at Nov. 30, 2018 | (563,694) | $ 75,000 | 47,386 | (696,096) | (472) | 10,488 |
Balance, shares at Aug. 31, 2018 | 75,000,000 | |||||
Balance, amount at Aug. 31, 2018 | (518,500) | $ 75,000 | 47,386 | (651,637) | (284) | 11,035 |
Net loss | (140,836) | |||||
Foreign currency translation loss | (411) | |||||
Balance, shares at May. 31, 2019 | 86,264,000 | |||||
Balance, amount at May. 31, 2019 | (659,747) | $ 86,264 | 36,122 | (791,991) | (485) | 10,343 |
Balance, shares at Nov. 30, 2018 | 75,000,000 | |||||
Balance, amount at Nov. 30, 2018 | (563,694) | $ 75,000 | 47,386 | (696,096) | (472) | 10,488 |
Net loss | (44,014) | 0 | 0 | (43,883) | 0 | (131) |
Foreign currency translation gain | 589 | $ 0 | 0 | 0 | 289 | 300 |
Acquisition of subsidiary under common control, shares | 11,264,000 | |||||
Acquisition of subsidiary under common control, amount | 0 | $ 11,264 | (11,264) | 0 | 0 | 0 |
Balance, shares at Feb. 28, 2019 | 86,264,000 | |||||
Balance, amount at Feb. 28, 2019 | (607,119) | $ 86,264 | 36,122 | (739,979) | (183) | 10,657 |
Net loss | (52,012) | 0 | 0 | (52,012) | 0 | 0 |
Foreign currency translation loss | (616) | $ 0 | 0 | 0 | (302) | (314) |
Balance, shares at May. 31, 2019 | 86,264,000 | |||||
Balance, amount at May. 31, 2019 | (659,747) | $ 86,264 | 36,122 | (791,991) | (485) | 10,343 |
Balance, shares at Aug. 31, 2019 | 86,264,000 | |||||
Balance, amount at Aug. 31, 2019 | (778,127) | $ 86,264 | 36,122 | (889,870) | (209) | (10,434) |
Net loss | (62,553) | 0 | 0 | (54,481) | 0 | (8,072) |
Foreign currency translation gain | (130) | $ 0 | 0 | 0 | (64) | (66) |
Balance, shares at Nov. 30, 2019 | 86,264,000 | |||||
Balance, amount at Nov. 30, 2019 | (840,810) | $ 86,264 | 36,122 | (944,351) | (273) | (18,572) |
Balance, shares at Aug. 31, 2019 | 86,264,000 | |||||
Balance, amount at Aug. 31, 2019 | (778,127) | $ 86,264 | 36,122 | (889,870) | (209) | (10,434) |
Net loss | (217,984) | |||||
Foreign currency translation loss | 2,856 | |||||
Balance, shares at May. 31, 2020 | 86,264,000 | |||||
Balance, amount at May. 31, 2020 | (993,255) | $ 86,264 | 36,122 | (1,069,954) | 1,190 | (46,877) |
Balance, shares at Nov. 30, 2019 | 86,264,000 | |||||
Balance, amount at Nov. 30, 2019 | (840,810) | $ 86,264 | 36,122 | (944,351) | (273) | (18,572) |
Net loss | (75,078) | 0 | 0 | (60,915) | 0 | (14,163) |
Foreign currency translation gain | 893 | $ 0 | 0 | 0 | 438 | 455 |
Balance, shares at Feb. 29, 2020 | 86,264,000 | |||||
Balance, amount at Feb. 29, 2020 | (914,995) | $ 86,264 | 36,122 | (1,005,266) | 165 | (32,280) |
Net loss | (80,353) | 0 | 0 | (64,688) | 0 | (15,665) |
Foreign currency translation loss | 2,093 | $ 0 | 0 | 0 | 1,025 | 1,068 |
Balance, shares at May. 31, 2020 | 86,264,000 | |||||
Balance, amount at May. 31, 2020 | $ (993,255) | $ 86,264 | $ 36,122 | $ (1,069,954) | $ 1,190 | $ (46,877) |
ORGANIZATION, DESCRIPTION OF BUSINESS AND GOING CONCERN |
9 Months Ended |
---|---|
May 31, 2020 | |
ORGANIZATION, DESCRIPTION OF BUSINESS AND GOING CONCERN | |
NOTE 1 - ORGANIZATION, DESCRIPTION OF BUSINESS AND GOING CONCERN | Fellazo Corp. (“the Company”, “we”, “us” or “our”) was incorporated in the State of Nevada on May 28, 2014.
During the quarter ending May 31, 2020, the Company had continued its transformation process into an IT based company specialized in Mobile Application Developments with worldwide clientele and a portfolio investment company in primary industries such as healthcare, energy, development and capital market. The Company had commenced to be engaged in the industry of “Healthcare and Personal Wellness” products and related products. Activities include but not limited to sourcing raw materials or partly or fully finished products, manufacturing, wholesale and trading of these products.
Our office is located at 8th Floor, Wisma Huazong, Lot 15285, 0.7 km Lebuhraya SungeiBesi, 43300 Seri Kembangan, Selangor Darul Ehsan, Malaysia.
Going Concern Uncertainties
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the discharge of liabilities in the normal course of business for the foreseeable future.
As of May 31, 2020, the Company had an accumulated deficit of $1,069,954, and net loss of $217,984 for the nine months ended May 31, 2020. Losses have principally occurred as a result of the substantial resources required for general and administrative expenses associated with our operations. The continuation of the Company as a going concern is dependent upon the continued financial support from its stockholders or external financing. Management believes the existing stockholders will provide the additional cash to meet with the Company’s obligations as they become due. However, there is no assurance that the Company will be successful in securing sufficient funds to sustain the operations.
These conditions raise substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to reflect the possible future effect on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the outcome of these uncertainties. Management believes that the actions presently being taken to obtain additional funding and implement its strategic plan provides the opportunity for the Company to continue as a going concern. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
May 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||||||||||||||||||||||||||||||||||||||||
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Basis of Presentation
The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial statements and Article 8 of Regulation S-X of the United States Securities and Exchange Commission (“SEC”). Accordingly, they do not contain all information and footnotes required by U.S. GAAP for complete financial statements. However, except as disclosed herein, there has been no material change in the information disclosed in the Notes to Consolidated Financial Statements included in the Annual Report on Form 10-K for the year ended August 31, 2019.
Principles of Consolidation
The accompanying consolidated financial statements include the financial statements of the Company and its 49% owned subsidiary Fellazo Berhad, an entity under common control. All significant inter-company balances and transactions within the Company have been eliminated upon consolidation.
Variable Interest Entities
The Company holds both the power to direct the most significant activities of FB, as well as an economic interest in FB and, as such, is deemed to be the primary beneficiary or consolidator of FB. The determination of the VIE’s primary beneficiary requires an evaluation of the contractual and implied rights and obligations associated with each party’s relationship with or involvement in the entity, an estimate of the entity’s expected losses and expected residual returns and the allocation of such estimates to each party involved in the entity.
Revenue recognition
The Company commenced its operation in mid-October 2019. At this initial stage revenue is earned from the trading of raw bird-nest only.
The Company’s revenue recognition procedures consist of the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations pursuant to each of its sales transactions:
However at this initial stage of our operations which started with trading of raw bird-nest, the management is using this initial stage as exposure of the management to the bird-nest business in order to learn and experience with our suppliers whom are bird-nest farmers or their agents, determination of quality of the raw material, the process of raw bird-nest cleaning of the different class of the raw material and market for these clean bird-nest.
Thus at this initial stage we have not entered into any formal contract with our suppliers and purchasers, most of the suppliers and purchasers are known to our management or introduced to the management by closed business friends.
Cost of Goods Sold – Trading of Raw Bird-Nest
At this initial stage of business operations which the management considered as exposure, gaining of knowledge and experience of the overall bird-nest business, our Cost of goods sold only include the actual cost of the raw bird-nest.
Foreign Currency Translation
Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the statement of operations.
The reporting currency of the Company is the United States Dollar (“USD”). The Company’s subsidiary in Malaysia maintains their books and records in their local currency, the Malaysia Ringgit (“RM”), which is the functional currency as being the primary currency of the economic environment in which these entities operate.
In general, for consolidation purposes, assets and liabilities of its subsidiary whose functional currency is not the USD are translated into USD, in accordance with ASC 830, “Translation of Financial Statements”, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiary are recorded as a separate component of accumulated other comprehensive income within the statement of stockholders’ equity.
|
RELATED PARTY TRANSACTIONS |
9 Months Ended |
---|---|
May 31, 2020 | |
RELATED PARTY TRANSACTIONS | |
NOTE 3 - RELATED PARTY TRANSACTIONS | Our Management Agent, Swipypay Berhad (a company established in Malaysia) is 80% owned by our Director – Mr Yap Kit Chuan. Total outstanding amount due to our Management Agent was $998,373 and $824,699 as at May 31, 2020 and August 31, 2019 respectively. The additional amount of $173,674 incurred in the nine months ended May 31, 2020 consisted of operating expenses paid on behalf of the Company of $222,090 and advance from a related party of $309,249, repayment to related party of $4,368 and expense paid for related party of $350,642. The difference of amount was a result of change of exchange rate.
During the nine months ended May 31, 2020, we had purchased $9,290 (RM38,790.51) worth of raw bird-nest from Swipypay Berhad (also an agent for bird-nest farmers). |
PREPAID EXPENSES AND DEPOSIT |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
May 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
PREPAID EXPENSES AND DEPOSIT | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTE 4 - PREPAID EXPENSES AND DEPOSIT | Prepaid expense and deposit consist of the following:
During the nine months ended May 31, 2020, the Company recorded deposit of $6,317 (RM 27,467), an initial deposit for our OEM personal cleansing and nourishing facial products, these initial batches of the products would generally be used for marketing purposes such as trial samples for potential customers. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
9 Months Ended | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
May 31, 2020 | |||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||||||||||
Basis of Presentation | The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial statements and Article 8 of Regulation S-X of the United States Securities and Exchange Commission (“SEC”). Accordingly, they do not contain all information and footnotes required by U.S. GAAP for complete financial statements. However, except as disclosed herein, there has been no material change in the information disclosed in the Notes to Consolidated Financial Statements included in the Annual Report on Form 10-K for the year ended August 31, 2019. |
||||||||||||
Principles of Consolidation | The accompanying consolidated financial statements include the financial statements of the Company and its 49% owned subsidiary Fellazo Berhad, an entity under common control. All significant inter-company balances and transactions within the Company have been eliminated upon consolidation. |
||||||||||||
Variable Interest Entities | The Company holds both the power to direct the most significant activities of FB, as well as an economic interest in FB and, as such, is deemed to be the primary beneficiary or consolidator of FB. The determination of the VIE’s primary beneficiary requires an evaluation of the contractual and implied rights and obligations associated with each party’s relationship with or involvement in the entity, an estimate of the entity’s expected losses and expected residual returns and the allocation of such estimates to each party involved in the entity. |
||||||||||||
Revenue recognition | The Company commenced its operation in mid-October 2019. At this initial stage revenue is earned from the trading of raw bird-nest only.
The Company’s revenue recognition procedures consist of the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations pursuant to each of its sales transactions:
· identify the contract with a customer;
· identify the performance obligations in the contract;
· determine the transaction price;
· allocate the transaction price to performance obligations in the contract; and
· recognize revenue as the performance obligation is satisfied.
However at this initial stage of our operations which started with trading of raw bird-nest, the management is using this initial stage as exposure of the management to the bird-nest business in order to learn and experience with our suppliers whom are bird-nest farmers or their agents, determination of quality of the raw material, the process of raw bird-nest cleaning of the different class of the raw material and market for these clean bird-nest.
Thus at this initial stage we have not entered into any formal contract with our suppliers and purchasers, most of the suppliers and purchasers are known to our management or introduced to the management by closed business friends. |
||||||||||||
Cost of Goods Sold - Trading of Raw Bird-Nest | At this initial stage of business operations which the management considered as exposure, gaining of knowledge and experience of the overall bird-nest business, our Cost of goods sold only include the actual cost of the raw bird-nest. |
||||||||||||
Foreign Currency Translation | Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the statement of operations.
The reporting currency of the Company is the United States Dollar (“USD”). The Company’s subsidiary in Malaysia maintains their books and records in their local currency, the Malaysia Ringgit (“RM”), which is the functional currency as being the primary currency of the economic environment in which these entities operate.
In general, for consolidation purposes, assets and liabilities of its subsidiary whose functional currency is not the USD are translated into USD, in accordance with ASC 830, “Translation of Financial Statements”, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiary are recorded as a separate component of accumulated other comprehensive income within the statement of stockholders’ equity.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) |
9 Months Ended | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
May 31, 2020 | |||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||||||||||
Schedule of accumulated other comprehensive income |
|
PREPAID EXPENSES AND DEPOSIT (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
May 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
PREPAID EXPENSES AND DEPOSIT | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of prepaid expense and deposit |
|
ORGANIZATION DESCRIPTION OF BUSINESS AND GOING CONCERN (Details Narrative) - USD ($) |
3 Months Ended | 9 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|
May 31, 2020 |
Feb. 29, 2020 |
Nov. 30, 2019 |
May 31, 2019 |
Feb. 28, 2019 |
Nov. 30, 2018 |
May 31, 2020 |
May 31, 2019 |
Aug. 31, 2019 |
|
ORGANIZATION, DESCRIPTION OF BUSINESS AND GOING CONCERN | |||||||||
Accumulated deficit | $ (1,069,954) | $ (1,069,954) | $ (889,870) | ||||||
Net loss | $ (80,353) | $ (75,078) | $ (62,553) | $ (52,012) | $ (44,014) | $ (44,810) | $ (217,984) | $ (140,836) |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) |
May 31, 2020 |
Aug. 31, 2019 |
---|---|---|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Spot rate RM : USD exchange rate | 0.2300 | 0.2378 |
Average period RM : USD exchange rate | 0.2311 | 0.2415 |
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) |
9 Months Ended | ||
---|---|---|---|
May 31, 2020 |
May 31, 2019 |
Aug. 31, 2019 |
|
Total outstanding amount due to related party | $ 998,373 | $ 824,699 | |
Advance from a related party | 309,249 | $ 120,625 | |
Expenses paid for related party | (350,642) | 0 | |
Repayment to Related Party | 4,368 | $ 0 | |
Mr Yap Kit Chuan [Member] | |||
Advance from a related party | 309,249 | ||
Expenses paid for related party | (350,642) | ||
Additional amount incurred | 173,674 | ||
Operating expenses paid by related party | 222,090 | ||
Repayment to Related Party | 4,368 | ||
Swipypay Berhad [Member] | |||
Purchased raw brid-nest | $ 9,290 | ||
FellazoBerhad [Member] | |||
Ownership percentage hold by yap | 80.00% |
PREPAID EXPENSES AND DEPOSIT (Details) - USD ($) |
May 31, 2020 |
Aug. 31, 2019 |
---|---|---|
PREPAID EXPENSES AND DEPOSIT (Details) | ||
Prepaid expenses | $ 3,000 | $ 19,105 |
Deposit | 6,317 | 0 |
Prepaid expense and deposit | $ 9,317 | $ 19,105 |
PREPAID EXPENSES AND DEPOSIT (Details Narrative) |
9 Months Ended |
---|---|
May 31, 2020
USD ($)
| |
PREPAID EXPENSES AND DEPOSIT | |
Initial deposit | $ 6,317 |
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