Summary of financial condition Table 2 summarizes and compares our financial condition at October 31, 2013 and 2012. Table 2: Comparison of financial condition October 31, 2013 October 31, 2012 Working capital $(67,227) $81,697 Current assets $6,226 $120,253 Unproved mineral property $11,697 $15,000 Total liabilities $73,453 $38,556 Common stock and additional paid in capital $445,820 $444,820 Deficit $(501,287) $(348,123) Results of operations YEARS ENDED OCTOBER 31, 2013 AND OCTOBER 31, 2012 Our operating results for the years ended October 31, 2013 and 2012 and the changes between them are summarized in Table 3. 14 -------------------------------------------------------------------------------- Table 3: Changes in operating results Changes between the Year years ended ended October 31, Percentage October 31, Increase 2013 2012 (Decrease) 2013 and 2012 Operating expenses: Administration $ 18,143 $ 6,773 168% $ 11,370 Accounting 11,876 26,048 (54%) (14,172) Bank charges 517 484 7% 33 Consulting 18,278 25,988 (30%) (7,710) Corporate communications 1,042 - 100% 1,042 Management fees 27,950 67,218 (58%) (39,268) Mineral exploration 14,220 10,000 42% 4,220 Office 13,241 11,725 13% 1,516 Professional fees 20,159 50,771 (60%) (30,612) Regulatory and filing 23,931 12,214 96% 11,717 Travel and entertainment 1,039 2,990 (65%) (1,951) Foreign exchange 1,128 290 289% 838 Loss before other items (151,524 ) (214,501 ) (29%) (62,977 ) Other items Exploration tax credit 1,960 - 100% 1,960 Interest income - 18,180 (100%) (18,180) Write-down of unproved mineral properties (3,600 ) - 100% (3,600) Net loss $ (153,164 ) $ (196,321 ) (22%) $ (43,157) Revenues During the years ended October 31, 2013 and 2012 we did not generate any revenue and we do not anticipate generating revenue from business operations until such time as we secure contracts for our web portals. There can be no assurance that we will be successful in securing such contracts. We are presently a development stage company engaged in the development and marketing of our web portals based on correlation technology. We can provide no assurances that we will be able to generate enough funds from our operations to support our ongoing operations. Operating expenses. Our operating expenses decreased by $62,977 , or 29%, from $214,501 for the year ended October 31, 2012 to $151,524 for the year ended October 31, 2013 . The most significant year-to-date changes were: · Our administrative expenses increased by $11,370 from $6,773 for the year ended October 31, 2012 to $18,143 for the year ended October 31, 2013 . The increase was associated with elevated exploration activity on our mineral claims as well as due diligence we conducted on acquiring a license for our new correlation technology. · Our accounting fees decreased by $14,172 , from $26,048 for the year ended October 31, 2012 to $11,876 for the year ended October 31, 2013 . The higher accounting and audit costs during the year ended October 31, 2012 were associated mainly with preparation of our Registration Statement on Form S-1 that we filed on June 12, 2012 and which was declared effective on September 11, 2009 . · Our management fees and consulting fees decreased by $39,268 and $7,710 , respectively. These decreases resulted from the restructuring of our internal operations. · During the year ended October 31, 2013 , we spent $14,220 on the exploration program on our OS Gold mineral claim an increase of $4,220 from the $10,000 we spent during the year ended October 31, 2012 . · Due to increased expenses related to the preparation and filing of our Registration Statement on Form S-1, filed by us on June 12, 2012 , our professional fees for the year ended October 31, 2012 were $30,612 higher compared to the year ended October 31, 2013 . · Due to expenses associated with listing of our common shares on the OTC Bulletin Board, our regulatory and filing fees for the year ended October 31, 2013 increased by $11,717 , from $12,214 for the year ended October 31, 2012 to $23,931 for the year ended October 31, 2013 . 15 -------------------------------------------------------------------------------- Liquidity GOING CONCERN The audited financial statements included in this Annual Report have been prepared on a going concern basis, which implies that we will continue to realize our assets and discharge our liabilities in the normal course of business. We have not generated any revenues from operations since inception, have never paid any dividends and are unlikely to pay dividends or generate significant earnings in the immediate or foreseeable future. Our continuation as a going concern depends upon the continued financial support of our shareholders, our ability to obtain necessary debt or equity financing to continue operations, and the attainment of profitable operations. Our ability to achieve and maintain profitability and positive cash flow depends upon our ability to secure contracts for our Correlation Technology, generate revenue from advertising, and control our operating costs. Based upon our current plans, we expect to incur operating losses in future periods. At October 31, 2013 , we had a working capital deficit of $67,227 and accumulated losses of $501,287 since inception. These factors raise substantial doubt about our ability to continue as a going concern. We cannot assure you that we will be able to generate significant revenues in the future. Our audited financial statements do not give effect to any adjustments that would be necessary should we be unable to continue as a going concern and therefore be required to realize our assets and discharge our liabilities in other than the normal course of business and at amounts different from those reflected in our financial statements. INTERNAL AND EXTERNAL SOURCES OF LIQUIDITY Working Capital At October At October 31, 31, 2013 2012 Current assets $ 6,226 $ 120,253 Current liabilities 73,453 38,556 Working capital (deficit)/surplus $ (67,227 ) $ 81,697 Cash Flows Year ended October 31 2013 2012 Net cash used in operating activities $ (112,494 ) $ (114,878 ) Net cash provided by (used in) investing activities (297 ) 210,038 Net cash from financing activities - - Effect of exchange rate changes on cash (63 ) - Net increase in cash during period $ (112,854 ) $ 95,160 During the year ended October 31, 2013 , our working capital decreased by $148,924 , from a working capital surplus of $81,697 for the year ended October 31, 2012 to a working capital deficit of $67,227 for the year ended October 31, 2013 . The change from a working capital deficit to a working capital surplus was primarily related to (i) a decrease in cash to fund ongoing operations; and (ii) increases in accounts payable and accrued liabilities and amounts due to related parties. Net cash used in operating activities. Our net cash used in operating activities decreased by $2,384 , from $114,878 for the year ended October 31, 2012 , to $112,494 for the year ended October 31, 2012 . Net cash used in investing activities. During the year ended October 31, 2013 , we spent $297 on acquisition of additional mineral claims. During the year ended October 31, 2012 , we did not spend any cash on acquisition of our mineral claims. Net cash provided by financing activities. During the years ended October 31, 2013 and 2012 we did not have any cash generating financing activities. Capital Resources Our ability to continue the development of our services through Correlation Technology is subject to our ability to obtain the necessary funding. We expect to raise funds through sales of our debt or equity securities. We have no committed sources of capital. If we are unable to raise funds as and when we need them, we may be required to curtail, or even to cease, our operations. 16 -------------------------------------------------------------------------------- As of October 31, 2013 , we had cash on hand of $4,266 , which raises substantial doubt about our continuation as a going concern. We plan to mitigate our losses in future years by controlling our operating expenses and actively seeking advertising contracts for our new web portals. In addition, we are also seeking financing of up to $500,000 through the private placement offering which we announced on December 2, 2013 . Despite our current contracts and proposed private placement offering, we cannot provide assurance that we will be successful in generating additional capital to support our development. The financial statements do not include any adjustments that might result from the outcome of these uncertainties. Contingencies and Commitments We had no contingencies at October 31, 2013 . In association with the license agreement dated December 2, 2013 with Make Sence Inc. we have the following commitments: Table 4: License fee payments License Fees April 1, 2014 $ 100,000 August 1, 2014 200,000 January 1, 2015 200,000 $ 500,000 Off-Balance Sheet Arrangements We have no off-balance sheet arrangements and no non-consolidated, special-purpose entities. Critical Accounting Policies The preparation of financial statements in conformity with United States generally accepted accounting principles requires our management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Our management routinely makes judgments and estimates about the effects of matters that are inherently uncertain. The JOBS Act contains provisions that, among other things, reduce certain reporting requirements for qualifying public companies. As an "emerging growth company," we may, under Section 7(a)(2)(B) of the Securities Act, delay adoption of new or revised accounting standards applicable to public companies until such standards would otherwise apply to private companies. We may take advantage of this extended transition period until the first to occur of the date that we (i) are no longer an "emerging growth company" or (ii) affirmatively and irrevocably opt out of this extended transition period. We have elected to take advantage of the benefits of this extended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards. Until the date that we are no longer an "emerging growth company" or affirmatively and irrevocably opt out of the exemption provided by Securities Act Section 7(a)(2)(B), upon issuance of a new or revised accounting standard that applies to our financial statements and that has a different effective date for public and private companies, we will disclose the date on which adoption is required for non-emerging growth companies and the date on which we will adopt the recently issued accounting standard. Our significant accounting policies are disclosed in the notes to the audited financial statements for the year ended October 31, 2013 , included in this Annual Report. The following accounting policies have been determined by our management to be the most important to the portrayal of our financial condition and results of operation: Revenue Recognition Revenue is recognized when pervasive evidence of an agreement exists, when it is received or when the income is determinable and collectability is reasonably assured. 17 -------------------------------------------------------------------------------- Foreign Currency Translation and Transaction Our functional currency is the Canadian dollar and reporting currency is the United States dollar. We translate assets and liabilities to US dollars using year-end exchange rates, translate unproved mineral properties using historical exchange rates, and translate revenues and expenses using average exchange rates during the period. Gains and losses arising on settlement of foreign currency denominated transactions or balances are included in the determination of income. Foreign currency transactions are primarily undertaken in US dollars. We have not to the date of these financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations. Fair Value of Financial Instruments Our financial instruments include cash, accounts receivable, accounts payable and accrued liabilities. We believe the fair value of these financial instruments approximate their carrying values due to their short maturities. Concentration of Credit Risk Financial instruments that potentially subject us to significant concentrations of credit risk consist principally of cash and trade accounts receivable. At October 31, 2013 , we had approximately $4,266 in cash on deposit with a large chartered Canadian bank, of which $2,399 was insured. As part of our cash management process, we perform periodic evaluations of the relative credit standing of this financial institution. We have not experienced any losses in cash balances and do not believe we are exposed to any significant credit risk on our cash. Recent Accounting Standards and Pronouncements Recent accounting pronouncements issued by the Financial Accounting Standards Board or other authoritative standards groups with future effective dates are either not applicable or are not expected to be significant to our financial statements.
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