JUBILANT FLAME INTERNATIONAL, LTD

Statements of Operations

(Unaudited)

The accompanying notes are an integral part of the auditedthese financial statements.statements

F-3

Table of Contents

JUBILANT FLAME INTERNATIONAL, LTD

Statements of Changes in Stockholders’Stockholders' Deficit

(Unaudited)

The accompanying notes are an integral part of these financial statements

F-4

Table of Contents

JUBILANT FLAME INTERNATIONAL, LTD

Statements of Cash Flows

(Unaudited)

The accompanying notes are an integral part of these financial statements

F-5

Table of Contents

JUBILANT FLAME INTERNATIONAL, LTD

NOTES TO FINANCIAL STATEMENTSNotes to Financial Statements

FOR THE THREE AND SIX MONTH PERIODS ENDED AUGUSTMay 31, 2018 AND 20172019

(UNAUDITED)(Unaudited)

NOTE 1 – ORGANIZATION AND OPERATIONS

Jubilant Flame International, Ltd. (the “Company”"Company"), was formed on September 29, 2009 under the name Liberty Vision, Inc. The Company provided web development and marketing services for clients. On December 5, 2012 the Company disposed of its subsidiary corporation to a shareholder for a nominal sum, as well as other management operations. On August 18, 2015, the Company changed its name to Jubilant Flame International, Ltd.

From the fourth quarter of the fiscal year ended February 28, 2018, the Company started to market and sell cosmetics products imported from Asia -Acropass Series products – in the United States market. The Company purchased the inventory from a related party company in China. The Company contracted with a third party to operate the online shopping platform and marketing campaign in the United States.

The Company has the right to develop and market medical products under a license from BioMark. The primary intended products include Bone-Induction Artificial Bone (“BIAB”) and Vacuum Sealing Drainage (“VSD”) but the Company currently does not have any plan to deploy such licenses and is focusing its operation on the Acropass products.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

Interim Financial Information

Interim financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”("SEC") as promulgated in Item 210 of Regulation S-X. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“("US GAAP”GAAP") have been condensed or omitted pursuant to such SEC rules and regulations. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of financial position as of AugustMay 31, 2018,2019, results of operations, changes in stockholders’stockholders' equity (deficit) and cash flows for the sixthree month periods ended AugustMay 31, 20182019 and 2017,2018, as applicable, have been made. The results for these interim periods are not necessarily indicative of the results for the entire year. The accompanying financial statements should be read in conjunction with the financial statements and the notes thereto included in the Company’sCompany's Form 10-K.

Use of Estimates and Assumptions

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 revenues and expenses during the reporting period. Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

F-6

Table of Contents

The Company’s significant estimates include income tax provisions and valuation allowances of deferred tax assets; the fair value of financial instruments and the assumption that the company will continue as a going concern. Those significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to those estimates or assumptions, and certain estimates or assumptions are difficult to measure or value.

Recent Accounting Pronouncements

Pronouncements Adopted in Fiscal 2018

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). This ASU represents a single comprehensive model to recognize revenue to depict the transfer of promised goods or services to a customer at an amount that reflects the consideration it expects to be entitled to in exchange for those goods or services. The Company has adoptedadopts this ASU sincefrom the interim period ending May 31, 2018, under the modified retrospective approach. The implementation of this ASU will resultresulted in no adjustment to retained earnings and current financial statements.

Net Loss Per Common Share

Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by dividing net loss by the weighted average number of shares of common stock and potentially outstanding shares of common stock during each period.

NOTE 3 – GOING CONCERN

The financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. As of AugustMay 31, 2018,2019 the Company had current assets of $13,534,$22,488, and current liabilities total $949,814$1,038,338 resulting in a working capital deficit of $936,280.$1,015,850. The Company currently has small scale trading activities and has an accumulated deficit of $3,318,811$3,457,631 as of AugustMay 31, 2018.2019. This raises substantial doubt about the Company’sCompany's ability to continue as a going concern.

The Company may raise additional capital through the sale of its equity securities, through an offering of debt securities, or through borrowings from financial institutions or related parties. By doing so, the Company hopes to generate sufficient capital to execute its business plan in the cosmetics and medical sector on an ongoing basis. Management believes that actions presently being taken to obtain additional funding provide the opportunity for the Company to continue as a going concern. There is no guarantee the Company will be successful in achieving these objectives.

NOTE 4 – PREPAID EXPENSE

The Company is paying an annual fee for its OTC Markets service. The service period is from December 1, 20172018 to November 30, 2018.2019. The service charge is recorded as a prepaid expense and amortized using straight line amortization over the service period. The prepaid expense balance is $2,500$6,000 as of AugustMay 31, 20182019 compared to $7,500$9,000 as of February 28, 2018.2019.

F-7

Table of Contents

NOTE 5 – RELATED PARTY TRANSACTIONS

In support of the Company’s efforts and cash requirements, it must rely on advances from related parties until such time that the Company can support its operations or attains adequate financing through sales of its common stock or traditional debt financing. There is no formal written commitment for continued support by shareholders. The advances are considered temporary in nature and have not been formalized by a promissory note.

As of AugustMay 31, 2018,2019, the Company had a $416,660$449,946 loan outstanding with its CEO, Ms. Yan Li. This compares with the outstanding balance of $390,828$443,606 for Ms. Yan Li at February 28, 2018. The loans are non-interest bearing, due upon demand and unsecured.

A related party is providing accounting service to the company at an estimated annual service fee of $20,000.$23,000. From November 2017, the Company started to purchase cosmetic products from a related party controlled by our CEO. As of the six-monththree-month period ended AugustMay 31, 2018,2019, the Company incurred a total of $22,736$49,935 due to related party for inventory purchase and accrued service fee. This compares with a total of $12,842$44,112 due to related party for inventory purchase and accrued service fee at February 28, 2018.2019.

NOTE 6 – ACCRUED OFFICER COMPENSATION AND STOCK COMPENSATION

On December 15, 2015, the Company entered into employment agreements with its president, Ms. Yan Li, and its former secretary and treasurer, Mr. Robert Ireland.

Both agreements were retroactively effective as of December 4, 2015, for a term of 36 months (measured from December 4, 2015). On August 30, 2017, Mr. Robert Ireland resigned as Secretary/Treasurer of the company.

On January 15, 2019, the board of the company approved new compensation to its five officers including two new appointed directors. The five directors waived their salary and receives total 500,000 shares each year for a term of three years.

As of AugustMay 31, 2018,2019, a total of $510,375$535,500 had been accrued as salary compensation payable compared to $460,125$535,500 at February 28, 20182019 to the president only.

During the three months and six months ended AugustMay 31, 2018,2019, a total of $52,500 and $105,000$4,500 stock compensation had been recorded to the president respectivelyfive senior officers compared to $105,000 and $210,000$52,500 for the same periodsperiod in the prior year to the president and former secretary and treasurer.president.

NOTE 7 – STOCKHOLDERSSTOCKHOLDERS’ EQUITY

AtFor the quarter ended AugustMay 31, 2018,2019, a total of 50,000125,000 Shares were issued to the president and other four senior officers as stock compensation. Total value of $105,000$4,500 has been recorded for the stock compensation.

NOTE 8 – SUBSEQUENT EVENTS

None.

F-8

Table of Contents

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the financial statements and the notes to those statements included elsewhere in this Quarterly Report on Form 10-Q. This Quarterly Report on Form 10-Q contains certain statements that are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. Certain statements contained in the MD&A are forward-looking statements that involve risks and uncertainties. The forward-looking statements are not historical facts, but rather are based on current expectations, estimates, assumptions and projections about our industry, business and future financial results. Our actual results could differ materially from the results contemplated by these forward-looking statements due to a number of factors, including those discussed in other sections of this Quarterly Report on Form 10-Q.

Our Business

Jubilant Flame International, Ltd., (the “Company”"Company", “the “Registrant”"the "Registrant", “we”"we", “us”"us" or “our”"our") was formed on September 29, 2009 under the name Liberty Vision, Inc. The Company provided web development and marketing services for clients. On December 5, 2012, the Company disposed of its subsidiary corporation to a shareholder for a nominal sum, as well as other management operations. On December 16, 2012, the Company changed its name to Jiu Feng Investment Hong Kong, Inc. On January 27, 2013, the Company announced the change of its ticker symbol from “LBYV”"LBYV" to “JFIL.”"JFIL." On July 24, 2013, the Company changed its business sector to the medical sector. On August 18, 2015 the Company changed its name to Jubilant Flame International, Ltd.

From the fourth quarter of the fiscal year ended February 28, 2018, the Company started to market and sell cosmetics products imported from Asia -Acropass Series products – in the United States market. The Company purchased the inventory from a related party company in China. The Company contracted with a third party to operate the online shopping platform and marketing campaign in the United States.

The Company has the right to develop and market medical products under a license from BioMark. The primary intended products include Bone-Induction Artificial Bone (“BIAB”) and Vacuum Sealing Drainage (“VSD”) but the companyCompany currently does not have any plan to deploy such licenses and is focusing its operation on the Acropass products.

Results of Operations

Revenue

We recognized $5,849$6,330 sales revenue in the three months and $14,091 sales revenue in six months ended AugustMay 31, 2018 respectively. There is no2019 compared to $8,241 sales revenue in the three months and sixended May 31, 2018.

Operating Expenses

For the three months ended AugustMay 31, 2017.2019 compared to the three months ended May 31, 2018

3

Table of Contents

Operating Expenses

For the three months ended August 31,2018 compared to the three months ended August 31,2017

The major components of our operating expenses for the three months ended AugustMay 31, 20182019 and 20172018 are outlined in the table below:

The $79,008$84,962 decrease in our operating costs for the three months ended AugustMay 31, 20182019 compared to three months ended AugustMay 31, 2017,2018, was mainly due to the $80,250a decrease of $73,125 in officer salary compensation dueas a result of waiving of officer salary since January, 2019, and reduction in stock compensation to former Treasurer resignation.

For the six months ended August 31,2018 compared to the three months ended August 31,2017

The major componentsofficers, and a decrease of our operating expenses for the six months ended August 31, 2018 and 2017 are outlined in the table below:

The $145,296 decrease in our operating costs for the six months ended August 31, 2017 compared to six months ended August 31, 2017, was mainly due to the $157,875 decrease in officer compensation due to former Treasurer resignation offset with $13,498 increase$8,236 in selling expense fordue to new cosmetic product.

4

Table of Contents

product campaign and promotion activity reduction.

Other Expenses

Other expenses decreased to zero forNo other expense during the period of three months ended AugustMay 31, 2018, from $520 gain for the three months ended August 31, 2017. Other expenses consisted primarily of $1,233 decrease in gain in change in derivatives liability offset by $3932019 and $320 decrease in debt discount amortization expense and interest expense respectively.

Other expenses decreased to zero for the six months ended August 31, 2018, from $7,678 for the six months ended August 31, 2017. Other expenses consisted primarily of $4,238 decrease in debt discount amortization expense and $3,120 decrease in change in derivatives liability respectively.

The change in other expense is mainly due to convertible note pay off in August 2017.2018.

Net Loss

For the three months ended AugustMay 31, 2018,2019, we recognized a net loss of $93,386$25,742 compared to the net loss of $173,798$109,635 for the corresponding period in 2017.

For the six months ended August 31, 2018, we recognized a net loss of $203,021 compared to the net loss of $362,600 for the corresponding period in 2017.2018. 

Liquidity and Capital Resources

Working Capital

As of AugustMay 31, 2018,2019, the Company had $13,534 current assets of $22,488, primarily comprising of inventory of $7,464, cash of $3,450 and$11,261, prepaid expenses of $2,500,$6,000 and inventory of $4,628, and current liabilities of $949,814,$1,038,338, resulting in a working capital deficit of $936,280.$1,015,850. The Company had limited profitable trading activities and has an accumulated deficit of $3,318,811$3,457,631 as at AugustMay 31, 2018.2019. This raises substantial doubt about the Company’sCompany's ability to continue as a going concern.

The financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future.

4

Table of Contents

Based on the Company’s current operating plan, the Company does not have sufficient cash and cash equivalents to fund its operations for at least the next twelve months. The Company will need to obtain additional financing to operate our business. The Company may raise additional capital through the sale of its equity securities, through an offering of debt securities, or through borrowings from financial institutions or related parties. By doing so, the Company hopes to generate sufficient capital to execute its business plan in the cosmetic and medical sector on an ongoing basis. Management believes that actions presently being taken to obtain additional funding provide the opportunity for the Company to continue as a going concern. There is no guarantee the Company will be successful in achieving these objectives.

5

Table of Contents

Cash Flows from Operating Activities

Our net cash used in operating activities decreased by $4,108 in$12,591in the sixthree months ended AugustMay 31, 20182019 compared to the net cash used in operating activities in the sixthree months ended AugustMay 31, 2017,2018, representing a decrease of 12%63.6%. The decrease in net cash used in operating activities was primarily the result of a $9,894 increase$8,236 decrease in due to related party.selling expense and $2,950 decrease in professional fee expense. 

Cash Flows from Investing Activities

We did not generate or use any cash from investing activities during the three months ended AugustMay 31, 20182019 or 2017.2018. 

Cash Flows from Financing Activities

Our cash provided by financing activities decreased from $39,279$20,025 for the sixthree months ended AugustMay 31, 20172018 to $25,832$6,340 for the sixthree months ended AugustMay 31, 2018.2019. In both periods, cash was provided by way of loans from related parties.

Future Financings

We anticipate that additional funding will be required in the form of equity financing from the sale of our common stock, through an offering of debt securities, or through borrowings from financial institutions or related parties. However, we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock or through a loan from our directors to meet our obligations over the next twelve months.

Recent Accounting Pronouncements

Pronouncements Adopted in Fiscal 2018

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). This ASU represents a single comprehensive model to recognize revenue to depict the transfer of promised goods or services to a customer at an amount that reflects the consideration it expects to be entitled to in exchange for those goods or services. The Company adopts this ASU for the interim period ending May 31, 2018, under the modified retrospective approach. The implementation of this ASU will result in no adjustment to retained earnings and current financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). Under this guidance, lessees will be required to recognize on the balance sheet a lease liability and a right-of-use asset for all leases, with the exception of short-term leases. The lease liability represents the lessee’s obligation to make lease payments arising from a lease, and will be measured as the present value of the lease payments. The right-of-use asset represents the lessee’s right to use a specified asset for the lease term, and will be measured at the lease liability amount, adjusted for lease prepayment, lease incentives received and the lessee’s initial direct costs. The standard also requires a lessee to recognize a single lease cost allocated over the lease term, generally on a straight-line basis. The new guidance is effective for fiscal years beginning after December 15, 2018. ASU 2016-02 is required to be applied using the modified retrospective approach for all leases existing as of the effective date and provides for certain practical expedients. Early adoption is permitted. There is no effects that the adoption, January 1, 2019, of ASU 2016-02 will have on the Company’s financial statements.

5

Table of Contents

Off Balance Sheet Arrangements

As of AugustMay 31, 2018,2019, we did not have any off-balance-sheet arrangements, as defined in Item 303(a)(4)(ii) of Regulation S-K.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we have conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as of the end of the period covered by this report. Based on this evaluation, our principal executive officer and principal financial officer concluded as of the evaluation date that our disclosure controls and procedures were not effective. We are presently examining changes to our procedures and policies to ensure a more timing reporting.

6

Table of Contents

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

We were not subject to any legal proceedings during the sixthree months ended AugustMay 31, 2018,2019, and currently we are not involved in any pending litigation or legal proceedings.

ITEM 1A. RISK FACTORS.

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable.

ITEM 5. OTHER INFORMATION.

Not applicable.

7

Table of Contents

ITEM 6. EXHIBITS

The following documents are filed as a part of this report:

________

** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

8

Table of Contents

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, thereunto duly authorized.