The following plan of operation provides information which management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read along with our financial statements and notes thereto. This section includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our predictions. Plan of Operations Magnolia Lane Income Fund (formerly, Palmerston Stock Agency, Inc. ) was incorporated in the state of Delaware on May 12, 2009 . We were formed to commence business as a stock agent in the wool trade. Our founder and President, Ian Raleigh has numerous years of experience in the wool trade. He was raised on his parent's sheep farming community in New Zealand and owns his own sheep which he has farmed and bred for the wool industry. We intended to buy sheared grease wool direct from farmers in the Manawatu-Wanganui region of New Zealand and eventually expand to Australia as we grow our business operations. We intended to oversee the purchase of the wool, process the wool and separate it for sale at auction or sell direct to the textile manufacturing industry. We anticipated consulting with representatives in Asia and Europe to assist marketing our product to the textile manufacturing industry. We have not commenced business operations. On May 13, 2013 , upon the change of control, we ceased this business operation and changed our business to a business plan that is focused on managing real property. Specifically, we intend to acquire real estate in small markets with high degrees of safety to provide income streams to our shareholders. In addition, we will develop property, syndicate, manage and acquire property for capital appreciation. In connection with this change of control and change of business, we have conducted a name change and reverse stock split. On August 1, 2013 we filed a Certificate of Amendment to our Articles of Incorporation (the "Amendment") to change its name from " Palmerston Stock Agency, Inc. " to " Magnolia Lane Income Fund " (the "Name Change") and to memorialize a 8 to 1 reverse stock split (the "Stock Split"). The Amendment was effective as of August 1, 2013 . A copy of the Amendment is attached to this Quarterly Report on Form 10-Q as Exhibit 3.3. On August 12, 2013 , the Company received approval from the Financial Industry Regulatory Authority ("FINRA") to effectuate the Name Change and Stock Split. FINRA also confirmed that the new stock symbol is MIFC. Limited Operating History We have generated no independent financial history and have not previously demonstrated that we will be able to expand our business. Our business is subject to risks inherent in growing an enterprise, including limited capital resources and possible rejection of our business model and/or sales methods. Going Concern We have negative working capital, negative stockholders' equity and have not earned any revenues from operations to date. These conditions raise substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent upon the Company's ability to further implement our business plan and generate sufficient revenues. -2- -------------------------------------------------------------------------------- Results of Operations For the three months ended October 31, 2013 and 2012 We have not generated any revenue since inception. Operating expenses for the three months ended October 31, 2013 totaled $18,913 resulting in a loss of $18,913 , as compared with operating expenses of $4,849 for the three month period ended October 31, 2012 . Our operating expenses for the three months ended October 31, 2013 , consisted of $18,162 in professional fees, increased by $13,637 , from $4,525 for the three months ended October 31, 2012 . For the six months ended October 31, 2013 and 2012 No revenues have been generated since inception. Operating expenses for the six months ended October 31, 2013 totaled $26,413 resulting in a loss of $26,413 , as compared with operating expenses of $13,921 for the six month period ended October 31, 2012 . Our operating expenses for the six months ended October 31, 2013 , consisted of $25,662 in professional fees, increased by $12,862 , from $12,800 for the six months ended October 31, 2012 . Capital Resources and Liquidity As of October 31, 2013 we have $587 cash on hand. Brian Woodland is the only employee initially as the company seeks contracts. Additionally there will be little if any capital expenditures due to the nature of the business. Finally, it should be noted that materials will be bought on an as needed basis and will be purchased as a part of a contract with either cash on hand or a receivable in place. Based upon the above, we believe that we have enough cash to support our daily operations while we are attempting to commence operations and produce revenues. However, if we are unable to satisfy our cash requirements we may be unable to proceed with our plan of operations. We also do not expect any significant additions to the number of employees. The foregoing represents our best estimate of our cash needs based on current planning and business conditions. In the event we are not successful in reaching our initial revenue targets, additional funds may be required, and we may not be able to proceed with our business plan for the development and marketing of our core services. Should this occur, we will suspend or cease operations. We anticipate that depending on market conditions and our plan of operations, we may incur operating losses in the foreseeable future. Therefore, our auditors have raised substantial doubt about our ability to continue as a going concern. Our liquidity may be negatively impacted by the significant costs associated with our public company reporting requirements, costs associated with newly applicable corporate governance requirements, including requirements under the Sarbanes-Oxley Act of 2002 and other rules implemented by the Securities and Exchange Commission . We expect all of these applicable rules and regulations to significantly increase our legal and financial compliance costs and to make some activities more time consuming and costly. Recent Accounting Pronouncements There are no new accounting pronouncements that are expected to have a material impact on the Company's financial position or results of operations. Critical Accounting Policies and Estimates None. -3- -------------------------------------------------------------------------------- Off Balance Sheet Arrangements We have no off-balance sheet arrangements.
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