Forward-Looking Statements
This Quarterly Report on Form 10-Q contains "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995 that are
subject to risks and uncertainties. All statements other than statements of
historical or current facts included in this Quarterly Report on Form 10-Q are
forward-looking statements. Forward looking statements refer to our current
expectations and projections relating to our financial condition, results of
operations, plans, objectives, strategies, future performance, and business. You
can identify forward-looking statements by the fact that they do not relate
strictly to historical or current facts. These statements may include words such
as "anticipate," "could," "estimate," "expect," "project," "plan," "potential,"
"intend," "believe," "may," "might," "will," "objective," "should," "would,"
"can have," "likely," and other words and terms of similar meaning in connection
with any discussion of the timing or nature of future operating or financial
performance or other events. For example, all statements we make relating to our
estimated and projected earnings, revenue, costs, expenditures, cash flows,
growth rates and financial results, our plans and objectives for future
operations, growth initiatives, or strategies are forward-looking statements.
All forward-looking statements are subject to risks and uncertainties, including
the risks and uncertainties described in our Form 8-K dated January 20, 2021,
filed with the Securities and Exchange Commission (the "SEC") on the same date,
as well as our other SEC filings, as applicable, which factors are incorporated
by reference herein. We operate in an evolving environment, new risk factors and
uncertainties emerge from time to time, and it is not possible for management to
predict all risk factors and uncertainties, nor can we assess the impact of all
factors on our business or the extent to which any factor, or combination of
factors, may cause actual results to differ materially from those contained in
any forward-looking statement. We qualify all of our forward-looking statements
by these cautionary statements.
We undertake no obligation to update or revise these forward-looking statements,
except as required under the federal securities laws.
Corporate History
On April 17, 2012, Mr. Vagner Gomes Tome, our former president, and sole
director, incorporated the Company in the State of Nevada under the name Line Up
Advertisement, Inc. On May 23, 2013, the Company accepted the resignation of
Vagner Gomes Tome as the sole director and officer of the Company and appointed
Joelyn Alcantara to serve in his stead. Thereafter, on April 25, 2017, Ms.
Joelyn Alcantara resigned from all positions with the Company, including those
of President, Chief Executive Officer, Chief Financial Officer, Treasurer,
Secretary and Sole-Director. The resignation was not the result of any
disagreement with the Company on any matter relating to the Company's
operations, policies, or practices.
On April 25, 2017, Mr. Francisco Ariel Acosta was appointed as the sole member
of the Company's Board of Directors and as the Company's President, Chief
Executive Officer, Chief Financial Officer, Treasurer, and Secretary.
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On January 23, 2017, the Company closed on an Asset Acquisition Agreement (the
"Original Agreement") with Thomas Li, an individual and Nathan Xian, an
individual (collectively Mr. Li and Mr. Xian are refereed to hereinafter as the
"Inventors"). The Company purchased those assets owned by Inventors relating to
Inventor's development, sales, marketing, and distribution of Unmanned Ariel
Vehicles ("UAV" or "Drones") including but not limited to patents, trademarks,
know-how, trade secrets, supply lists and other assets and intellectual property
of any kind, relating directly or indirectly to the manufacturing, sales, and
distribution of the Drones (the "Acquired Assets"). The Company was to acquire
one hundred percent (100%) of the Acquired Assets in exchange for the issuance
of an aggregate of 60,000,000 restricted shares of the Company's common stock
("TACC Shares") to the Inventors (the "Purchase Price").
Additionally, pursuant to the terms and conditions of the Original Agreement,
the following changes to the Management of the Company occurred:
· As of January 23, 2017, Francisco Ariel Acosta resigned from all positions
with the Company, including but not limited to those of President, Chief
Executive Officer, Secretary and Director.
· As of January 23, 20017, Thomas Li was appointed a member of the Company's
Board of Directors and as the Company's President, Chief Executive
Officer.
· As of January 23, 20017, Nathan Xian was appointed a member of the
Company's Board of Directors and Chief Financial Officer and Secretary.
On January 4, 2017, the Company changed its name from Line Up Advertisement,
Inc. to Tactical Services, Inc. to reflect the new business direction of the
Company.
However, on August 24, 2018, the Company and the Inventors entered into a
Termination Agreement (the "Termination Agreement"), terminating the Original
Agreement. The Termination Agreement was the direct result of a material breach
of the terms and conditions of the Original Agreement. Specifically, the
Inventors, pursuant to Section 2.01 of the Original Agreement, were to "sell,
transfer, convey, assign and deliver…" various assets to the Company. As of the
date thereof, the Inventors were unsuccessful in fulfilling their obligations
under the terms and conditions of the Original Agreement. The effect of the
Termination Agreement was that the Original Agreement was rendered null and void
and of no legal effect whatsoever, without any liability or obligation on the
part of the parties to the Original Agreement.
Accordingly, Mr. Li and Mr. Xian resigned from all positions with the Company
effective as of August 24, 2018, and Mr. Francisco Ariel Acosta was re-appointed
as the sole member of the Company's Board of Directors and as the Company's
President, Chief Executive Officer, Chief Financial Officer, Treasurer, and
Secretary.
On June 1, 2021, our board of directors approved changing our corporate name
from Tactical Services, Inc. to CGS International, Inc. Additionally, on June 1,
2021, our Board of Directors approved a reverse stock split of our issued and
authorized shares of common stock on the basis of 400 old shares for one (1) new
share. When approved, our issued and outstanding capital will decrease from
76,000,000 shares of common stock to 190,000 shares of common stock. The $0.001
par value of our common shares will remain unchanged.
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The resolutions of our Board of Directors approving the above-described reverse
stock split and name change are subject to the prior approval by the Financial
Industry Regulatory Authority (FINRA). In anticipation of submitting to FINRA,
on June 7, 2021, we filed with the Nevada Secretary of State (i) a Certificate
of Change Pursuant to NRS 78.209 reflecting the reverse stock split and (ii) a
Certificate for Reinstatement via which we also filed an Application for
Reinstatement or Revival form changing our name to CGS International, Inc.,
thereby effectively amending our Articles of Incorporation.
The Reverse Stock Split and Name Change previously announced on June 30, 2021,
by way of Current Report on Form 8-K, became effective with the Financial
Industry Regulatory Authority ("FINRA") and in the marketplace at the open of
business on August 31, 2021, whereupon the shares of the Registrant's common
stock began trading on a split-adjusted basis. On August 31, 2021, the trading
symbol for our common stock changed to "TTSID" for a period of 20 business days,
after which our common stock began to trade under our new trading symbol "CGSI".
The new CUSIP number for our common stock is 125361105.
On September 29, 2021, CGS International, Inc., entered into an Asset Purchase
Agreement (the "Purchase Agreement") with Ramon Mabanta, an individual (d.b.a.
World Agri Minerals) ("WAM"), pursuant to which the Company would acquire all
the assets of WAM. WAM holds the rights to the formulation, manufacturing,
sales, marketing, and distribution of its premiere commercial agriproduct
GENESIS 89™ and GENESIS 89™ Gold, which is a unique formulation and packaging of
a commercial agriproduct using a natural processes whereby minerals are
extracted from deep-ocean deposits and combined with additional organic
ingredients resulting in the GENESIS 89™ and GENESIS 89™ Gold being: (i)
properly balanced, readily bioavailable, formulas that are shipped as
concentrate to commercial growers; (ii) ready-to-use products for the both the
amateur and commercial retail market; and, (iii) Genesis 89™ Gold is being
blended specifically for use and deployment in the cannabis industry. GENESIS
89™ and GENESIS 89™ Gold provide assurance and insurance to the end-user that
crops do not require conventional pesticides, producing an eco-friendlier
organic product for the consumer.
On January 11, 2021 (the "Closing Date"), CGS International, Inc. (the
"Company") and Ramon Mabanta, an individual (d.b.a. World Agri Minerals) ("WAM")
entered into a Bill of Sale and Assignment Agreement effectuating the Closing
that certain Asset Purchase Agreement (the "Purchase Agreement") by and among
the Company and WAM, pursuant to which the Company acquired all the assets of
WAM, (the "Acquisition"). The aggregate purchase price for the assets of WAM is
30,000,000 restricted shares (the "Shares") of the Company's common stock (the
"Purchase Price") which were paid upon the closing of the Purchase Agreement.
Each of Company and WAM have made customary representations, warranties,
covenants, and indemnities in connection with the Acquisition.
A description of the specific terms and conditions of the acquisition are set
forth in the Purchase Agreement, which was originally disclosed on Form 8-K
filed with the Commission on September 29, 2021, as Exhibit 10.01 and the Bill
of Sale and Assignment Agreement which was originally disclosed on Form 8-K
filed with the Commission on January 11, 2021, as Exhibit 10.01, both of which
are incorporated herein by reference.
On November 23, 2021, the Company received certified documents from the
Government of the Philippines confirming the formation on November 19, 2021, of
our wholly owned subsidiary, World Agri Minerals Inc. We anticipate that the
majority of our ongoing operations will be conducted by and through World Agri
Minerals Inc. on a going forward basis.
On December 20, 2021, the "Company ratified and appointed Mr. Virgilio Acuna to
serve as the Independent Chairman of the Company's Board of Directors until the
next annual meeting of the Corporation or until his respective successor is duly
appointed. The Board has also determined that Mr. Acuna is an "independent
director" as defined by Rule 4200(a)(15) of the Marketplace Rules of The Nasdaq
Stock Market, Inc.
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Results of Operations
Results of Operations for the three months Ended January 31, 2022 and 2021
The following summary of our results of operations should be read in conjunction
with our audited financial statements for the three months ended January 31,
2022 and 2021 which are included herein.
Our operating results for the three months ended January 31, 2022 and 2021 are
summarized as follows:
January 31,
2022 2021
General and administrative $ 18,539 $ 25
Professional fees $ 12,247 $ 22,500
Other expenses $ (4,161 ) $ (1,336 )
Net Loss $ (34,947 ) $ (23,861 )
Operating Revenues
During the three months ended January 31, 2022 and 2021, our company did not
record any revenues.
Operating Expenses
Operating expenses for the three months ended January 31, 2022 were $30,786
compared to $22,525 for the three months ended January 31, 2021. The increase in
operating expenses of $8,261 was primarily attributed to an increase in
professional and regulatory fees during the period ended January 31, 2021.
Other Expense
Other expenses consisting of interest expense for the three months ending
January 31, 2022 was $4,161 and $1,336 for the three months ended January 31,
2021. The imcrease is primarily the result of additional debt incurred during
the nine months ended January 31, 2022 .
Results of Operations for the nine months Ended January 31, 2022 and 2021
The following summary of our results of operations should be read in conjunction
with our audited financial statements for the six months ended January 31, 2022
and 2021 which are included herein.
Our operating results for the nine months ended January 31, 2022 and 2021 are
summarized as follows:
January 31,
2022 2021
General and administrative $ 88,673 $ 22,525
Professional fees $ 45,647 $ 22,500
Interest expense $ 94,734,464 $ (94,738,625 )
Net Loss $ (94,792,351 ) $ (94,827,298 )
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Operating Revenues
During the six months ended January 31, 2022 and 2021, our company did not
record any revenues.
Operating Expenses
Operating expenses for the nine months ended January 31, 2022 was $88,673
compared to $25,525 for the year ended January 31, 2021. The increase in
operating expenses of $66,148 was primarily attributed to an increase in
professional and regulatory fees.
Other Expenses
Other expenses consisting of interest expense, loss on asset acquisitions, and
loss and debt settlements for the nine months ended January 31, 2022 was
$94,738,625 and $2,863 for the nine months ended January 31, 2021. The increase
is primarily the result of the loss on asset acquisition and settlement of debt
that occurred during the nine months ended January 31, 2022.
Liquidity and Capital Resources
Working Capital
January 31,
2022 2021
Current Assets $ 39,556 $ -
Current Liabilities $ 306,595 $ 264,888
Working Capital (deficit) (267,093 ) (264,888 )
As of January 31, 2022 and April 30, 2021, we had current assets of $39,556 and
$0 cash, respectively, consisting of cash and prepaid assets .
As of January 31, 2021, we had total liabilities of $306,595 compared with
$264,888 as of April 30, 2021. The decrease in total liabilities was attributed
to the settlement of debt during the period.
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Cash Flows
Nine months Nine months
Ended Ended
January 31, January 31,
2022 2021
Cash used in Operating Activities $ (92,114 ) $ (25,250 )
Cash used in Investing Activities $
- $ -
Cash provided by Financing Activities $ 126,804 $ 25,250
Net Increase in Cash
$ 34,690 $ -
Cashflow from Operating Activities
During the nine months ended January 31, 2022, we used $92,114 of cash for
operating activities as compared to $25,250 during the nin months ended January
31, 2021. The increase was primarily attributed to increased professional and
regulatory fees.
Cashflow from Financing Activities
During the nine months ended January 31, 2022, the Company received $126,804 of
financing as compared to $25,250 during the nine months ended January 31, 2021.
The increase is due to an increase in debt financing for the period.
Going Concern
These financial statements have been prepared on a going concern basis, which
implies that the Company will continue to realize its assets and discharge its
liabilities in the normal course of business. The Company has a working capital
deficit of $267,039 and has an accumulated deficit of $95,168,186. The
continuation of the Company as a going concern is dependent upon the continued
financial support from its shareholders, the ability to raise equity or debt
financing, and the attainment of profitable operations from the Company's future
business. These factors raise substantial doubt regarding the Company's ability
to continue as a going concern. These financial statements do not include any
adjustments to the recoverability and classification of recorded asset amounts
and classification of liabilities that might be necessary should the Company be
unable to continue as a going concern.
Management is currently looking at various options and investment opportunities.
Additional financing may not be available upon acceptable terms, or at all. If
adequate funds are not available on acceptable terms, the Company may not be
able to take advantage of prospective business endeavours or opportunities which
could significantly and materially restrict the Company's operations. These
financial statements do not include any adjustments to the recoverability and
classification of recorded asset amounts and classification of liabilities that
might be necessary should the Company be unable to continue as a going concern.
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