Overview of Current Operations Results of Operations for the quarter ended August 31, 2013 Since inception on October 30, 2007 , the Company has generated $138,583 in revenues. During the fiscal year ended August 31, 2013 , the Company had $101,484 in cash, prepaid expense of $6,764 , accounts receivable of $138,563 , inventory of $86,494 and deposits of $4,322 for total current assets of $337,627 as compared to cash of $127,988 and $34,560 in prepaid expenses for total current assets of $162,548 for the year ended August 31, 2012 . During the fiscal year ended August 31, 2013 , the Company had total operating expenses of $726,713 , as compared to total operating expenses of $486,339 for the same period last year. The increase in expenses represented operating expenses of $607,099 , accounting fees of $40,056 , advertising fees of $6,000 and operating expenses - related party of $73,558 . The net loss for the fiscal ended August 31, 2013 was $(727,850) as compared to a net loss of $(486,339) for the same period last year. The Company's net and operating expenses increased based on building its infrastructure and moving its operations from Japan to the U.S. The Company used net cash in operations of $662,936 and $1,321,017 during the twelve month period ended August 31, 2013 and the period from inception to August 31, 2013 , respectively, used net cash in investing activities of $298,802 during the twelve month period ended August 31, 2013 ; and generated cash of $935,234 and $1,721,303 from financing activities during the twelve month period ended August 31, 2013 and the period from inception to August 31, 2013 , respectively. The funds generated from financing activities were from related party financing, advances from an office, from a former stockholder and a bank loan. 24 Plan of Operation Management does not believe that the Company will be able to generate any significant profit during the coming year. The Company's need for capital may change dramatically if it can generate additional revenues from its operations. There are no assurances additional capital will be available to the Company on acceptable terms. Future funding could result in potentially dilutive issuances of equity securities, the incurrence of debt, contingent liabilities and/or amortization expenses related to goodwill and other intangible assets, which could materially adversely affect the Company's business, results of operations and financial condition. Any future funding might require the Company to obtain additional equity or debt financing, which might not be available on terms favorable to the Company, or at all, and such financing, if available, might be dilutive. Going Concern The Company experienced operating losses of $(1,355,471) since its inception on October 30, 2007 through the period ended August 31, 2013 . The financial statements have been prepared assuming the Company will continue to operate as a going concern which contemplates the realization of assets and the settlement of liabilities in the normal course of business. No adjustment has been made to the recorded amount of assets or the recorded amount or classification of liabilities which would be required if the Company were unable to continue its operations. (See Financial Footnote 3.) 25 Liquidity and Capital Resources As of August 31, 2013 , the Company had total current assets of $337,627 , total current liabilities of $221,887 . The Company has limited financial resources available, which has had an adverse impact on the Company's liquidity, activities and operations. These limitations have adversely affected the Company's ability to obtain certain projects and pursue additional business. Without realization of additional capital, it would be unlikely for the Company to continue as a going concern. In order for the Company to remain a Going Concern it will need to find additional capital. Additional working capital may be sought through additional debt or equity private placements, additional notes payable to banks or related parties (officers, directors or stockholders), or from other available funding sources at market rates of interest, or a combination of these. The ability to raise necessary financing will depend on many factors, including the nature and prospects of any business to be acquired and the economic and market conditions prevailing at the time financing is sought. Management has been seeking outside funding for the Company with little success. The current economic downturn has made it difficult to find new capital sources for the Company. No assurances can be given that any new financing can be obtained to further the Company's business plan. No officer or director received stock options or other non-cash compensation since the Company's inception through August 31, 2013 . Future Financings We anticipate continuing to rely on loans from one of our officers and/or equity sales of our common shares in order to continue to fund our business operations. Issuances of additional shares will result in dilution to our existing shareholders. There is no assurance that we will achieve any of additional sales of our equity securities or arrange for debt or other financing to fund our research and development activities. Summary of any product research and development that we will perform for the term of our plan of operation. We do not plan any product research nor development, based on our current business operations. Expected purchase or sale of property and significant equipment We do not anticipate the purchase or sale of any property or significant equipment; as such items are not required by us at this time. 26 Significant changes in the number of employees As of December 16, 2013 , we had four employees and two officers. We are dependent upon our officers and directors for our future business development. As our operations expand we anticipate the need to hire additional employees, consultants and professionals; however, the exact number is not quantifiable at this time. Off-Balance Sheet Arrangements We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results or operations, liquidity, capital expenditures or capital resources that is material to investors. Critical Accounting Policies and Estimates Revenue Recognition: The Company recognizes revenue on an accrual basis as it invoices for services. Revenue is generally realized or realizable and earned when all of the following criteria are met: 1) persuasive evidence of an arrangement exists between the Company and our customer(s); 2) services have been rendered; 3) our price to our customer is fixed or determinable; and 4) collectability is reasonably assured. Recent Pronouncements The Company's management has evaluated all the recently issued accounting pronouncements through the filing date of these financial statements and does not believe that any of these pronouncements will have a material impact on the Company's financial position and results of operations.
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