SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

For the Quarterly Period Ended February 28,August 31, 2018

OR

For the transition period from_________________to

(Exact name of registrant as specified in its charter)

(702) 581-4063881-5208

(Registrant’s telephone number, including area code)

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☑þ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes ☑ þNo ☐ Not Applicable

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐o No☑þ

There were 10,995,00011,278,333 shares of Common Stock outstanding as of April 23, 2018.

Table of Contents

Infinity Distribution, Inc.

Index to Form 10-Q

For the Quarterly Period Ended February 28,August 31, 2018

INFINITY DISTRIBUTION, INC.

BALANCE SHEETS

(unaudited)

See Accompanying Notes to Financial Statements.

INFINITY DISTRIBUTION, INC.

STATEMENT OF OPERATIONS

(unaudited)

See Accompanying Notes to Financial Statements.

INFINITY DISTRIBUTION, INC.

STATEMENT OF CASH FLOWS

(unaudited)

See Accompanying Notes to Financial Statements.

INFINITY DISTRIBUTION, INC.

Notes to Financial Statements

(UNAUDITED)

Basis of presentation

The interim financial statements included herein, presented in accordance with United States generally accepted accounting principles and stated in US dollars, have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading.

These statements reflect all adjustments, consisting of normal recurring adjustments, which in the opinion of management, are necessary for fair presentation of the information contained therein. It is suggested that these interim financial statements be read in conjunction with the financial statements of the Company for the year ended May 31, 20172018 and notes thereto included in the Company’s annual report. The Company follows the same accounting policies in the preparation of interim reports.

Results of operations for the interim period are not indicative of annual results.

Organization

The Company was incorporated on May 8, 2015 (Date of Inception) under the laws of the State of Nevada, as Infinity Distribution, Inc.

Nature of operations

The Company is planning to import and export furniture and home goods.

Year end

The Company’s year end is May 31.

Cash and cash equivalents

For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. The carrying value of these investments approximates fair value.

Fixed assets

The Company records all property and equipment at cost less accumulated depreciation.  Improvements are capitalized while repairs and maintenance costs are expensed as incurred.  Depreciation is calculated using the straight-line method over the estimated useful life of the assets or the lease term, whichever is shorter.  Leasehold improvements include the cost of the Company’s internal development and construction department.  Depreciation periods are as follows:

Revenue recognition

We recognize revenue when all of the following conditions are satisfied: (1) there is persuasive evidence of an arrangement; (2) the product or service has been provided to the customer; (3) the amount of fees to be paid by the customer is fixed or determinable; and (4) the collection of our fees is probable.

The Company will record revenue when it is realizable and earned and the services have been rendered to the customers.

INFINITY DISTRIBUTION, INC.

Notes to Financial Statements

(UNAUDITED)

Advertising costs

Advertising costs are anticipated to be expensed as incurred; however there were no advertising costs included in general and administrative expenses for the ninethree months ended February 28,August 31, 2018.

Fair value of financial instruments

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of February 28,August 31, 2018. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash, prepaid expenses and accounts payable. Fair values were assumed to approximate carrying values for cash and payables because they are short term in nature and their carrying amounts approximate fair values or they are payable on demand.

Level 1: The preferred inputs to valuation efforts are “quoted prices in active markets for identical assets or liabilities,” with the caveat that the reporting entity must have access to that market. Information at this level is based on direct observations of transactions involving the same assets and liabilities, not assumptions, and thus offers superior reliability. However, relatively few items, especially physical assets, actually trade in active markets.

Level 2: 2:Financial Accounting Standards Board (“FASB”) acknowledged that active markets for identical assets and liabilities are relatively uncommon and, even when they do exist, they may be too thin to provide reliable information. To deal with this shortage of direct data, the board provided a second level of inputs that can be applied in three situations.

Level 3: If inputs from levels 1 and 2 are not available, FASB acknowledges that fair value measures of many assets and liabilities are less precise. The board describes Level 3 inputs as “unobservable,” and limits their use by saying they “shall be used to measure fair value to the extent that observable inputs are not available.” This category allows “for situations in which there is little, if any, market activity for the asset or liability at the measurement date”. Earlier in the standard, FASB explains that “observable inputs” are gathered from sources other than the reporting company and that they are expected to reflect assumptions made by market participants.

Stock-based compensation

The Company records stock based compensation in accordance with the guidance in FASB Accounting Standards Codification (“ASC”) Topic 505 and 718 which requires the Company to recognize expenses related to the fair value of its employee stock option awards.  This eliminates accounting for share-based compensation transactions using the intrinsic value and requires instead that such transactions be accounted for using a fair-value-based method. The Company recognizes the cost of all share-based awards on a graded vesting basis over the vesting period of the award. 

The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with ASC 718-10 and the conclusions reached by the ASC 505-50. Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earliest of a performance commitment or completion of performance by the provider of goods or services as defined by ASC 505-50.

INFINITY DISTRIBUTION, INC.

Notes to Financial Statements

(UNAUDITED)

Earnings per share

The Company follows ASC Topic 260 to account for the earnings per share. Basic earning per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earning per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. During periods when common stock equivalents, if any, are anti-dilutive they are not considered in the computation.

Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ significantly from those estimates.

Recent pronouncements

The Company has evaluated the recent accounting pronouncements through January 2018February 2019 and believes that none of them will have a material effect on the company’s financial statements.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business. The Company has not yet generated revenues from operations. Since its inception, the Company has been engaged substantially in financing activities and developing its business plan and incurring start up costs and expenses. As a result, the Company incurred net losses for the ninethree months ended February 28,August 31, 2018 of ($270,158)82,452). In addition, the Company’s development activities since inception have been financially sustained through debt and equity financing.

The ability of the Company to continue as a going concern is dependent upon its ability to raise additional capital from the sale of common stock and, ultimately, the achievement of significant operating revenues. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty.

On August 31, 2018, the Company had prepaid expenses totaling $10,000.issued 100,000 shares of Preferred Stock – Series A and 1,000,000 shares of Preferred Stock – Series B in exchange for a license agreement with Raul Mansueto. The prepaid professional fees will be expensedlicense agreement is effective from January 1, 2018 until December 21, 2020. The fair value of the shares was $100,100 and was based on estimated percentagethe value of completion for the services.  Duringsecurities, however the nine months ended February 28, 2018 the Company recorded amortizationshares represent prepaid royalty fees of $20,000.

The following is a summary of fixed assets:

Depreciation expense for the ninethree months ended February 28,August 31, 2018 was $296.

As of August 31, 2018, the Company repaid a total of $1,000 of the loanbalance owed to an officer, director and shareholder of the Company.Company was $44,950. The loan is due upon demand and bears 0% interest.

As of February 28,August 31, 2018, the balance owed was $44,950.

On April 24, 2015, the Company executed a convertible promissory note with an officer and director for $35,000. The unsecured note bears interest at 5% per annum with principal and interest due on the earlier of March 19, 2016 or the next equity financing. The debt is convertible at a discount of 30% of the price per share of the securities sold in the next equity financing. The debt discount was valued at $10,500 and was recorded to additional paid in capital and will be amortized over the life of the loan. As of the date of this filing, the loans are in default.

On May 8, 2015, the Company executed a convertible promissory note with an officer and director for $35,000. The unsecured note bears interest at 5% per annum with principal and interest due on the earlier of March 19, 2016 or the next equity financing. The debt is convertible at a discount of 30% of the price per share of the securities sold in the next equity financing. The debt discount was valued at $10,500 and was recorded to additional paid in capital and will be amortized over the life of the loan. As of the date of this filing, the loans are in default.

On May 11, 2015, the Company executed a convertible promissory note with an officer and director for $21,500. The unsecured note bears interest at 5% per annum with principal and interest due on the earlier of March 19, 2016 or the next equity financing. The debt is convertible at a discount of 30% of the price per share of the securities sold in the next equity financing. The debt discount was valued at $6,450 and was recorded to additional paid in capital and will be amortized over the life of the loan. As of the date of this filing, the loans are in default.

Interest expense for the ninethree months ended February 28,August 31, 2018 is $3,422.  Amortization of the beneficial conversion feature for the nine months ended February 28, 2018 is $0.

The Company is authorized to issue 100,000,000 shares of its $0.001 par value common stock and 5,000,000 shares of its $0.001 par value preferred stock.

INFINITY DISTRIBUTION, INC.

Notes to Financial Statements

(UNAUDITED)

During the ninethree months ended February 28,August 31, 2018, the Company sold 455,00043,333 shares of common stock for a total of $45,500.

During the three months ended August 31, 2018, the Company had 10,995,000issued 100,000 shares of commonpreferred stock issued– Series A and 10,985,0001,000,000 shares outstanding.

As of February 28,August 31, 2018, there were no warrants or options outstanding to acquire any additional shares of common stock.

As of February 28,August 31, 2018, the Company had loans totaling $3,115 due to an individual who is an officer, director and shareholder.

As of August 31, 2018, the Company had loans totaling $44,950, convertible debt of $91,500 and accrued interest totaling $13,010$15,316 due to an individual who is an officer, director and shareholder. As of the date of this filing, the convertible debt is in default.

During the ninethree months ended February 28,August 31, 2018, the Company had executive compensation for two officers totaling $197,500.$69,000. As of February 28,August 31, 2018, the accrued executive compensation balance was $474,455.

NOTE 9 – SUBSEQUENT EVENTS

During the seven month period ending March 31, 2019, the Company sold a total of 70,000 shares of common stock for a total of $10,500.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Information

This Quarterly Report on Form 10-Q contains forward-looking statements. When used in this Quarterly Report on Form 10-Q, the words "anticipate," "believe," "estimate," "will," "plan," "seeks," "intend," and "expect" and similar expressions identify forward-looking statements. Although we believe that our plans, intentions, and expectations reflected in any forward-looking statements are reasonable, these plans, intentions, or expectations may not be achieved. Our actual results, performance, or achievements could differ materially from those contemplated, expressed, or implied, by the forward-looking statements contained in this Quarterly Report on Form 10-Q. Important factors that could cause actual results to differ materially from our forward-looking statements are set forth in this Quarterly Report on Form 10-Q All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements set forth in this Quarterly Report on Form 10-Q. Except as required by federal securities laws, we are under no obligation to update any forward-looking statement, whether as a result of new information, future events, or otherwise.

Critical Accounting Policies

There have been no material changes to our critical accounting policies and estimates from the information provided in, "Management's Discussion and Analysis and Results of Operations", included in our Annual Report on Form 10-K for the period ended February 28, 2018.

Infinity Distribution, Inc. was incorporated in the State of Nevada on May 8, 2015, under the name Infinity Distribution, Inc. We consider ourselves to be an emerging growth company under applicable federal securities laws and will be subject to reduced public company reporting requirements.requirements. From our inception to date, we have generated no revenues, and our operations have been limited to organizational, start-up, and capital formation activities. Our plan of operation is to engage in the business of offering a variety of services designed to assist Philippine exporters, small or large, which have a competitive product or service in terms of price, quality, delivery and after-sales service, whatever the size of the transaction to find clients in the United States.

GENERAL

PART II. OTHER INFORMATION

From time to time, we may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.

We are not presently a party to any material litigation, nor to the knowledge of management is any litigation threatened against us, which may materially affect us.

See Risk Factors set forth in the Company's Annual Report on Form 10-K for the fiscal year ended May 31, 2017 and the discussion in Item 1, above, under "Liquidity and Capital Resources."

None.

None.

None.

None.

SIGNATURES

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 hereunto duly authorized.