2017
Nevada | 46-4485465 | |
(State of incorporation) | (I.R.S. Employer Identification No.) |
6920 Salashan Parkway, Suite D-101 Ferndale, WA 98248 |
(360) 244-4339
☑ Yes
3DX INDUSTRIES, INC.
Page | ||
PART I. FINANCIAL INFORMATION | ||
ITEM 1. | FINANCIAL STATEMENTS | 3 |
ITEM 2. | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | |
ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | |
ITEM 4. | CONTROLS AND PROCEDURES | |
PART II. OTHER INFORMATION | ||
ITEM 1. | LEGAL PROCEEDINGS | |
ITEM 1A. | RISK FACTORS | |
ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS | |
ITEM 3. | DEFAULTS UPON SENIOR SECURITIES | |
ITEM 4. | [MINE SAFETY DISCLOSURES] | |
ITEM 5. | OTHER INFORMATION | |
ITEM 6. | EXHIBITS |
Page | ||
Financial Statements: | ||
4 | ||
Balance Sheets as of | ||
Statements of Operations for the three months ended January 31, 2017 and 2016 (Unaudited) | 5 | |
Statements of Cash Flows for the | 6 | |
Notes to Financial Statements |
3DX INDUSTRIES, INC.
Balance Sheets
(Unaudited)
July 31, | October 31, | |||||||
2015 | 2014 | |||||||
Assets | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 7,314 | $ | 2,074 | ||||
Accounts receivable | 63,305 | — | ||||||
Prepaid expenses | — | 1,614 | ||||||
Total current assets | 70,619 | 3,688 | ||||||
Property and equipment | ||||||||
Manufacturing equipment | 1,392,981 | 1,254,571 | ||||||
Furniture and fixtures | 638 | 638 | ||||||
Computer equipment | 1,005 | 1,005 | ||||||
Less accumulated depreciation | (210,323 | ) | (75,585 | ) | ||||
Total property and equipment | 1,184,301 | 1,180,629 | ||||||
Other assets | ||||||||
Website development (net of accumulated amortization of $2,681 and $1,691) | 1,439 | 2,429 | ||||||
Security deposit | 4,975 | 4,275 | ||||||
Total other assets | 6,414 | 6,704 | ||||||
Total assets | $ | 1,261,334 | $ | 1,191,021 | ||||
Liabilities and stockholders' deficit | ||||||||
Current liabilities | ||||||||
Accounts payable and accrued expenses | $ | 663,980 | $ | 331,595 | ||||
Payables to related parties | 258,195 | 149,135 | ||||||
Equipment purchase payable - current portion | 634,990 | 196,378 | ||||||
Accrued compensation - convertible | 174,000 | 174,000 | ||||||
Current portion of notes payable - unrelated party | 417,674 | 236,495 | ||||||
Current portion of convertible notes payable - unrelated party | 188,980 | — | ||||||
Total current liabilities | 2,337,819 | 1,087,603 | ||||||
Long-term liabilities | ||||||||
Equipment purchase payable | — | 479,362 | ||||||
Convertible notes payable - related party | 500,000 | 500,000 | ||||||
Convertible notes payable - unrelated party | 128,314 | 157,541 | ||||||
Note payable - unrelated parties | 145,171 | 52,897 | ||||||
Total long-term liabilities | 773,485 | 1,189,800 | ||||||
Total liabilities | 3,111,304 | 2,277,403 | ||||||
Stockholders' equity | ||||||||
Preferred stock, $.001 par value, 10,000,000 shares authorized, none outstanding | — | — | ||||||
Common stock, 175,000,000 shares authorized, $0.001 par value, 37,461,409 shares issued at July 31, 2015 and at October 31, 2014 | 37,461 | 37,461 | ||||||
Additional paid-in capital | 14,931,530 | 14,931,530 | ||||||
Accumulated deficit | (16,818,961 | ) | (16,055,373 | ) | ||||
Total stockholders' deficit | (1,849,970 | ) | (1,086,382 | ) | ||||
Total liabilities and stockholders' deficit | $ | 1,261,334 | $ | 1,191,021 |
2017. 2016. Nine Months Ended July 31, 2015 Nine Months Ended July 31, 2014 in the amount of $150,000. $25,928. Critical Accounting Estimates concern. These financial statements do not include any adjustments that might result from the outcome of this uncertainty. 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 be necessary should the Company be unable to continue as a going concern. 2017. January 31, October 31, 2017 2016 Assets Current assets $ 25,928 $ 16,471 Accounts receivable 32,677 41,363 Total current assets 58,605 57,834 Property and equipment 661,776 1,392,981 Furniture and fixtures 638 638 Computer equipment 1,005 1,005 Less accumulated depreciation (230,904 ) (459,603 ) Total property and equipment 432,515 935,021 Other assets 174 358 Security deposit 4,275 4,275 Total other assets 4,449 4,633 Total assets $ 495,569 $ 997,488 Liabilities and stockholders' deficit Current liabilities $ 1,093,745 $ 1,053,123 Payables to related parties 479,555 448,130 - 678,266 Accrued compensation - convertible 174,000 174,000 Notes payable - unrelated party 746,113 647,073 Convertible notes payable - unrelated party 340,097 345,527 Total current liabilities 2,833,510 3,346,119 Long-term liabilities 500,000 500,000 Total long-term liabilities 500,000 500,000 Total liabilities 3,333,510 3,846,119 Stockholders' equity Preferred stock, $.001 par value, 10,000,000 shares authorized, none outstanding - - 43,461 37,461 Additional paid-in capital 15,081,532 14,931,530 (17,962,934 ) (17,817,622 ) Total stockholders' deficit (2,837,941 ) (2,848,631 ) Total liabilities and stockholders' deficit $ 495,569 $ 997,488 �� F-1 For the Three Months Ended For the Nine Months Ended July 31, July 31, 2015 2014 2015 2014 Revenue $ 105,806 $ — $ 274,439 — Cost of goods sold 25,433 — 57,523 — Gross profit 80,373 — 216,916 — Operating expenses Depreciation and amortization 45,236 29,768 135,728 30,539 Professional services 28,825 6,988 165,977 75,325 General and administrative expenses 253,188 116,211 629,904 9,733,298 Total operating expenses 327,249 152,967 931,609 9,839,162 Other income (expense) Gain on settlement of indebtedness — — — (4,829,408 ) Interest expense (26,773 ) (11,856 ) (48,895 ) (33,283 ) Total other (expense) (26,773 ) (11,856 ) (48,895 ) (4,862,691 ) Net loss $ (273,649 ) (164,823 ) $ (763,588 ) $ (14,701,853 ) Net loss per common share - basic and diluted $ (0.01 ) $ (0.00 ) $ (0.02 ) $ (0.45 ) Weighted average number of common shares outstanding 37,461,409 36,841,844 37,461,409 32,627,416 For the Three Months Ended January 31, 2017 2016 $ 100,751 $ 88,062 Cost of goods sold 1,698 9,397 Gross profit 99,053 78,665 Operating expenses Depreciation and amortization 30,599 50,074 Professional services 10,133 27,866 General and administrative expenses 232,131 217,295 Total operating expenses 272,863 295,235 Other income (expense) Interest expense (170,450 ) (27,163 ) - Total other income (expense) 28,498 (27,163 ) Net loss $ (145,312 ) $ (243,733 ) Net loss per common share - basic and diluted $ (0.003 ) $ (0.006 ) Weighted average number of common shares outstanding 39,504,887 37,461,409 F-2 For the Nine Months Ended July 31, 2015 2014 Cash flows from operating activities: Net loss $ (763,588 ) $ (14,701,853 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization expense 135,728 30,539 Loss on settlement of debt — 4,829,407 Stock-based compensation — 9,450,000 Changes in operating assets and liabilities (Increase) decrease in accounts receivable (63,305 ) — (Increase) decrease in prepaid expenses 1,614 (3,228 ) (Increase) decrease in security deposit (700 ) (4,275 ) Increase (decrease) in accounts payable 316,440 37,487 Increase (decrease) in accounts payable - related party 109,060 — Increase in deferred rent — 10,523 Increase (decrease) in accrued interest 43,952 33,283 Increase (decrease) in accrued compensation - related parties — 108,191 Net cash used in operating activities (220,799 ) (209,926 ) Cash flows from investing activities: Equipment purchases (93,386 ) Website development — (2,620 ) Net cash used in investing activities — (96,006 ) Cash flows from financing activities: Proceeds from third party borrowing 286,500 331,000 Repayments on third party borrowing (60,461 ) (12,510 ) Proceeds from related party borrowing — 24,038 Repayments on related party borrowing — (24,038 ) Net cash provided by financing activities 226,039 318,490 Increase (decrease) in cash 5,240 12,558 Cash - beginning of period 2,074 2,460 Cash - end of period $ 7,314 $ 15,018 Supplemental disclosures of cash flow information: Interest paid $ 7,988 $ 4,729 Income taxes paid $ — $ — Non-Cash Investing and Financing Transactions Equipment purchased with debt $ 138,410 $ 1,175,000 Common stock issued for debt — 48,800 Accrued compensation converted to common stock — 1,000 For the Three Months Ended January 31, 2017 2016 Cash flows from operating activities: Net loss $ (145,312 ) $ (243,733 ) Adjustments to reconcile net loss to net cash used in operating activities: 30,599 50,074 Amortization of debt discount 150,000 - (Gain) on disposal and settlement of equipment (198,948 ) - Changes in operating assets and liabilities 8,686 10,563 28,557 114,157 31,425 40,080 20,450 24,964 Net cash used in operating activities (74,543 ) (3,895 ) Cash flows from investing activities: Net cash used in investing activities - - Cash flows from financing activities: Proceeds from third party borrowing 100,000 - Repayments on third party borrowing (16,000 ) - Net cash provided by financing activities 84,000 - Increase (decrease) in cash 9,457 (3,895 ) Cash - beginning of period 16,471 19,951 Cash - end of period $ 25,928 $ 16,056 Supplemental disclosures of cash flow information: Interest paid $ - $ 2,500 Income taxes paid $ - $ - Non-Cash Investing and Financing Activities: Disposal of equipment: cost $ 731,205 $ - Disposal of equipment: accumulated depreciation (259,114 ) - (671,039 ) - $ (198,948 ) $ - F-3“Company”"Company") was incorporated in the state of Nevada on October 23, 2008. The Company’sCompany's principal activity presently is manufacturing and our head office is located near Bellingham WA, USA. The Company manufactures consumer and corporate products using an additive manufacturing method through 3D Metal printing technology and conventional precision manufacturing processes.Financial Statements PresentedThe accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions for Form 10-Q and Article 210 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. All such adjustments are of a normal recurring nature. Operating results for the nine month period ended July 31, 2015, are not necessarily indicative of the results that may be expected for the fiscal year ending October 31, 2015. For further information refer to the financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K/A for the fiscal year ended October 31, 2014 as filed with the Securities and Exchange Commission on February 18, 2015.JulyJanuary 31, 20152017 had a combined accumulated deficit of $16,818,961 $17,962,934 and had negative working capital of $2,267,200.$2,774,905. These conditions raise substantial doubt as to the Company's ability to continue as a going concern. These financial statements do not include any adjustments that might result from the outcome of this uncertainty. 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 be necessary should the Company be unable to continue as a going concern.Companycompany follows Accounting Standard Codificationthe provisions of ASC Topic No. 260, “Earnings Per Share” (“ASC No. 260”) that requires the reporting of both basic and diluted earnings (loss)Earnings per share.Share. Basic earnings (loss)net loss per share is computed by dividing net income (loss)loss available to common stockholders by the weighted average number of common shares outstanding forduring the period. The calculationBasic and diluted losses per share are the same as all potentially dilutive securities are anti-dilutive.dilutedcommon shares outstanding during the period. Diluted earnings (loss) per share reflects the potential dilution that could occur if securities orstock options and other contractscommitments to issue common stock were exercised or convertedequity awards vest resulting in the issuance of common stock or conversion of notes into shares of the company's common stock that could increase the number of shares outstanding and lower the earnings per share of the company's common stock. This calculation is not done for periods in a loss position as this would be antidilutive. For the three month periods ended January 31, 2017 and 2016, respectively, the Company has recorded a net loss and therefore we have not presented diluted earnings per share.accordance with ASC No. 260, any anti-dilutive effectsthose circumstances, the convertible debt is recorded net of the discount related to the BCF, and the Company amortizes the discount to operations over the life of the debt using the effective interest method. The Company was required to record BCF of $150,000 on net earnings (loss) per share are excluded. Potential common shares at Julythe convertible debt it issued during the three months ended January 31, 2015 and July 31, 2014 that2017.excluded fromassigned a dollar amount equaling the computationmarket value of diluted net loss per share include an optionthe shares issued on the date the shares were issued for such services. The non-cash consideration received pertains to convert approximately $4,117 in fees due to Santeo Financial Corporation at July 31, 2015officer's compensation and 2014 into 4,117,060 common shares. In addition, potential common shares at July 31, 2015 that have been excluded from the computation of diluted net loss per share include an option to convert approximately $3,470 (2014 - Nil) in fees due Santeo Financial Corporation at July 31, 2015 into 3,470,099 common shares.
consulting services.F-4(Unaudited)ReclassificationCertain reclassifications have been made to conform the 2014 amounts to 2015 classifications for comparative purposes.Company’sCompany's management has evaluated all recent accounting pronouncements since the last audit through the issuance date of these financial statements. In the Company’sCompany's opinion, none of the recent accounting pronouncements will have a material effect on the financial statements.34 - RELATED PARTY TRANSACTIONSCompany’sCompany's common stock at a conversion price of $0.50 per share. The balance due Mr. Janssen at JulyJanuary 31, 20152017 totaled $513,292$526,261 (October 31, 20142016 - $507,022)$524,095) of which the accrued interest of $13,292$26,261 was classified as a short-term liability and the $500,000 was classified as a long-term liability. TheDuring the three months ended January 31, 2017, the accrued interest of $13,292$2,166 ($2,131 – January 31, 2016) was charged to operations. The Company has not paid any accrued interest.45 - EQUIPMENTJanssen’sJanssen's appointment to the Board of Directors and entry into an Employment Agreement (see Note 6 – Commitments and Contingencies below) and executed on December 18, 2013, the Company purchased various equipment relating to the post production processes for its 3D metal printing operation from Mr. Janssen, our sole officer and a director, for $500,000 which amount has been capitalized on our balance sheet.“Imputation"Imputation of Interest”"discounting the purchase price of the equipment by $18,795 for imputed interest using an interest rate of 5% per annum. The total gross capitalized value of this equipment was $731,025.$731,205.3DX INDUSTRIES, INC.Notes to Financial Statements(Unaudited)NOTE 4 – EQUIPMENT (continued)nine monthsfiscal year ended JulyOctober 31, 2015, the Company paid $60,461, of which $52,473$52,472 was applied to the principal and $7,988$7,989 applied to interest. The Company has met its payment obligations up to February 2015 and is in default of its current payment obligations. The Company has entered into negotiations with the third party to revise the payment schedule with respect to the purchase, however the loan is presently in default and is currently payable in full as at July 31, 2015November 23, 2016 in the total remaining amount of $634,990$681,039 (October 31, 20142016 - $675,740)$678,265).Disposal equipment at cost $ 731,205 Accumulated depreciation (259,114 ) Loss on carry value on disposal equipment (472,091 ) Settlement of equipment purchase payable and accrued interest 681,039 Lumpsum payment (10,000 ) Gain of debt settlement 671,039 Net on disposal $ 198,948 (3) Additional Equipment Purchased Company’sCompany's balance sheets. Of this amount a total of $122,465 is subject to an equipment finance agreement as more fully descried in Note 5(6)6(6) below.JulyJanuary 31, 20152017 totaled $661,776 and October 31, 20142016 totaled $1,392,981. (1) Santeo Financial Corp (“Santeo”)Third party convertible promissory notesSanteo Financial CorpCompany’sCompany's common stock at a conversion rate of $0.10 per share. Upon conversion, the holder has certain registration rights. The Company is obligated to bear all costs associated with the registration of the shares. During the three months ended January 31, 2017, the Company paid $5,000 in cash. The outstanding balance at JulyJanuary 31, 20152017 amounted to $25,000$23,666 (October 31, 20142016 - $nil)$28,137). As per the terms of the agreement, nothe Company accrued interest of $529 during the three months ended January 31, 2017 which was charged to operation.nine month periodthree months ended JulyJanuary 31, 2015.2017 which was charged to operation. (2) 55(2) – Equipment, on October 23, 2014 the Company entered into a Secured Promissory Note, Loan and Security Agreement (the “Note”"Note") in the principal amount of $675,000 with interest accruing at a rate of 5% per annum. Under the terms of the Note, principal and accrued interest are paid in monthly installments of $20,230 commencing on December 1, 2014. The note is secured by a lien on the purchased equipment. During the nine monthsfiscal year ended JulyOctober 31, 2015, the Company paid $60,461, of which $52,473$52,472 was applied to the principal and $7,988$7,989 applied to interest. The Company has met its payment obligations up to February 2015 and isthereafter was in default of its current payment obligations. TheOn November 23, 2016, the Company hasand ExOne entered into negotiations witha title transfer, conditional release and equipment lease agreement where under the Company, notified of its default under the original terms of the agreement and amendments thereto effective January 11, 2017, agreed to transfer title of the equipment back to ExOne, agreed to revisea lump sum payment of $10,000 and agreed to enter into a 24 month lease for the payment schedule with respect to the purchase.equipmentF-6(3) Lender 1 a. 5% various notes payable Balance, October 31, 2015 $ 278,353 20,500 Accrued interest: 14,089 312,942 3,725 Balance, January 31, 2017 $ 316,667 (Unaudited)56 - NOTES PAYABLE – UNRELATED PARTY (continued) (3) Lender 1 (continued) a. 5% various notes payable (continued) Balance, October 31, 2014 $ 223,478 Additional: Principal 46,500 Repayment: Principal (5,000 ) Accrued interest: 10,116 Balance, July 31, 2015 $ 275,094 nine monthsfiscal year ended JulyOctober 31, 2015,2016, the Company received an additional $46,500$20,500 in loans from the aforementioned party which is assessed interest 5% per annum and mature at various dates through December 15, 2015.July 1, 2018. During the three months ended January 31, 2017 the Company accrued a further $3,725 in interest. b. 5% promissoryconvertible noteCompany’sCompany's common stock at a conversion rate of $0.10 per share. Upon conversion, the holder has certain registration rights. The Company is obligated to bear all costs associated with the registration of the shares. The outstanding balance at JulyOctober 31, 2016 amounted to $172,562 (October 31, 2015 amounted to $163,151 (October 31, 2014 - $157,541)$165,041). Accrued interest charged to operation for the ninetwelve months period ended JulyOctober 31, 2016 and 2015 totaled $7,521 and 2014 totaled $5,610$7,500, respectively.$5,651, respectively.the promissory note holder entered into an amendment to the terms of that certain note and accrued interest whereby, among other considerations, the conversion price was reduced from $0.10 per share to $0.001 per share. (4) Lender 2 Balance, October 31, 2014 $ 67,855 Additional: Principal — Accrued interest 2,431 Balance, July 31, 2015 $ 70,286 Balance, October 31, 2015 $ 71,105 3,259 74,364 Accrued interest 819 Balance, January 31, 2017 $ 75,183 nine month periodsthree months ended JulyJanuary 31, 2015 and 2014 amounted2017 totaled $819.$2,431 and $1,949, respectively.Unaudited Financial Statements (5) Lender 3 Company’sCompany's common stock at a conversion rate of $0.30 per share.F-73DX INDUSTRIES, INC.Notes to Financial Statements(Unaudited)NOTE 5 - NOTES PAYABLE – UNRELATED PARTY (continued)(5)Lender 3 (continued)Company’sCompany's common stock at a conversion rate of $0.15 per share.“Debt"Debt with Conversion and Other Options,”" there is no beneficial conversion feature associated with these promissory notes because the conversion rate is equal or greater than the fair market value on the issuance date. Note 1 Note 2 Balance, October 31, 2014 $ — $ — Additional: Principal 25,000 100,000 Accrued interest 829 3,315 Balance, July 31, 2015 $ 25,829 $ 103,315 Note 1 Note 2 Balance, October 31, 2015 $ 26,459 $ 105,836 2,507 10,027 28,966 115,863 630 2,520 Balance, January 31, 2017 $ 29,596 $ 118,383 (6) Equipment Finance Agreement (“EFA”("EFA") with Global Finance Group, Inc. to borrow up to $275,000. Under the EFA the Company received cash proceeds of $90,000, $5,000 was paid directly to a third party to reduce certain outstanding loans and a further $122,465 was expended by Global to purchase equipment on behalf of the Company. The EFA is secured by the purchased equipment, and is assessed interest at a rate of 12% per annum. Principal and accrued interest are paid in monthly installments of $7,243 commencing on May 1, 2015. It was agreed between the parties that the first 4 months of payments will be reduced by $5,000 per payment, and thereafter, commencing September 1, 2015 payments of the full installment value will commence.at JulyJanuary 31, 20152017 is $217,465$236,648 (October 31, 20142016 - $nil)$242,267). nine monthsfiscal year ended JulyOctober 31, 2015 in connection with the aforementioned equipment purchase, the Company capitalized the equipment (gross) at JulyOctober 31, 2015 in an amount totaling $122,465. The EFA is personally guaranteed by the Company’sCompany's President, Mr. Roger Janssen.F-8(Unaudited)68 - COMMITMENTS AND CONTINGENCIESCompany’sCompany's restricted common stock as a signing bonus. The shares were valued at $4,800,000 based upon the trading price of the shares on the date of grant. Officer’sOfficer's compensation for the year ended October 31, 2014 amounted to $4,887,449 including the indicated stock based compensation of $4,800,000. Accrued compensation due Mr. Janssen as of JulyJanuary 31, 20152017, amounted to $258,195$479,555 (October 31, 20142016 - $149,135)$448,130), which is included in the balance of other payables – related parties as reflected in the accompanying balance sheet. The $258,195$479,555 is net of $26,539$13,575 that was actually paid to Mr. Janssen during the nine monthsthree month period ended JulyJanuary 31, 2015.In January 2014, the Company entered into lease for warehouse and corporate office space located in Ferndale, Washington for 26 months. The Company was granted an option to extend the lease for another two years.paidshall pay a security deposit of $700 and agreed to a monthly rental fee of $350 with the first month payable upon signing. The Company did not make any payments under this agreement in the period ended January 31, 2017 and October 31, 2016 and has accrued a total of $8,330 and $7,175, respectively, as due and payable.(b) On March 15, 2017, the Company and Santeo entered into a letter agreement to revise the terms of the original March 30, 2015 equipment lease (ref: Note 9 above). Under the terms of the letter agreement, the Company will purchase the manufacturing equipment for a total of $18,000 no later than December 31, 2017, which amount shall also include all accrued and unpaid rental payments, and any interest thereon up to December 31, 2017. Should the Company be unable to make the required payment as at December 31, 2017, interest of 12% per annum shall apply to any balance outstanding. (c) On April 28, 2017, a third-party lender with various amounts outstanding agreed to release and waive a total of $367,170, inclusive of accrued interest thereon, with no further consideration payable. (d) On June 15, 2017, a total of 3,000,000 shares originally issued to settle part of convertible note in the amount of $3,000 as discussed in Note 9(c) above were returned to treasury and canceled. (e) During the month of June 2017, the Company and the original stakeholder of the McNeil Claims referenced in Note 3 above entered into an assignment agreement whereby the stakeholder acquired the defaulted claims. 10-Qcontains10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”"Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”"Exchange Act"). These forward-looking statements are not historical facts but rather are based on current expectations, estimates and projections. We may use words such as “anticipate,” “expect,” “intend,” “plan,” “believe,” “foresee,” “estimate”"anticipate," "expect," "intend," "plan," "believe," "foresee," "estimate" and variations of these words and similar expressions to identify forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, some of which are beyond our control, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted. You should read this report completely and with the understanding that actual future results may be materially different from what we expect. The forward looking statements included in this report are made as of the date of this report and should be evaluated with consideration of any changes occurring after the date of this Report. We will not update forward-looking statements even though our situation may change in the future and we assume no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.JulyJanuary 31, 2017, we had $7,314$25,928 of cash on hand. We incurred operating expenses in the amount of $931,609$272,863 during the ninethree months ended JulyJanuary 31, 2015.2017. These operating expenses were comprised of general and administrative expenses, professional fees, management salaries, consulting fees, and other miscellaneous expenses. has recently commenced revenue generating operations from its primary business in the manufacturing sector.sector during fiscal 2015. During the ninethree month period we generated gross revenues of $274,439$100,751 as compared to Nil$88,062 in the prior comparative period. While we expect to see an increase in revenues as we secure additional customers, we are not presently generating enough revenue to meet our operational overhead. Management cannot guarantee that the Company will be successful in its existing business operations and the Company’sCompany's business is subject to risks inherent in the operation of a business enterprise with limited revenue generating operations, including limited capital resources and ongoing operational shortfallsCompany’sCompany's existing shareholders.and nine month periods ended JulyJanuary 31, 2015,2017, as compared to the same periods ended JulyJanuary 31, 2014.2016.$105,806$100,751 and $274,439$88,062 in revenues from operations and $25,433$1,698 and $57,523$9,397 in cost of goods sold for the three and nine months ended JulyJanuary 31, 2015, respectively, with $nil in revenue from operations2017 and cost of goods sold for the same periods ended July 31, 2014.2016, respectively. Revenues were slightly increased over the second quarter as the Company was able to bring on additional staff in order to undertake additional customer orders.
respective periods.13and nine months ended JulyJanuary 31, 2015,2017 and 2016 total operating expenses were $327,249$272,863 and $931,609, respectively, as compared to $152,967 and $9,839,162 for the same periods ended July 31, 2014.$295,235, respectively. The substantialslight decrease in expenditures for the ninethree months ended JulyJanuary 31, 20152017 as compared to the same nine monthsthree month period in 20142016 relates to a reduction in stock based compensation incurreddepreciation and amortization over the respective periods, as well as a substantive decrease in 2014 totaling $9,450,000.professional fees. During the respective comparative periods, save the one-time charge to stock based compensation as set out above, fees incurred for professional fees and general and administrative expenses increased period over period in both the three month and nine months comparative periods as the Company increased its level of operations. During the most recent three and nine month periods the Company expensed $45,236$30,599 and $135,728$50,074 as depreciation and amortization expense, with no similar comparative expenseexpense. Professional fees were reduced from $27,866 in the comparative periods ended July 31, 2014. In addition, during the prior three and nine month periods ended July 31, 2014, the Company recorded other expenses of $nil and $4,829,408 respectively as the result of a loss on the settlement of certain indebtedness, with no similar lossesfiscal 2016 to only $10,133 in the current three month period of fiscal 2017. General and six month periodsadministrative expenses were slightly increased from $217,295 in 2016 to $232,131 in the three months ended JulyJanuary 31, 2015.2017. Interest expenses increased period over period asdue to the fact that holders of certain convertible notes and the Company renegotiated the conversion terms during the period ended January 31, 2017. As a result the Company recorded $150,000 relative to the amortization of the debt discount as interest expenses in the period, with no similar expense in the prior comparative three month period. Further there was required to takea one time gain on additional loans from third parties to carry out operations.disposal of equipment in the current period of $198,948, again with no similar comparative entry in fiscal 2016. The Company recorded net losses of $273,649$145,312 and $763,588$243,733 for the three and nine months ended JulyJanuary 31, 2015 as compared to $164,8232017 and $14,701,853 in the three and nine month periods ended July 31, 2014. July 31, 2015 July 31, 2014 Difference Current Assets $ 70,619 $ 18,246 $ 52,373 Current Liabilities $ 2,337,819 1,374,652 $ 863,167 Working Capital $ (2,267,200 ) $ (1,356,406 ) $ (810,794 ) January 31, 2017 October 31, 2016 Difference $ 58,605 $ 57,834 $ 771 Current Liabilities $ 2,833,510 3,346,119 $ (512,609 ) Working Capital $ (2,774,905 ) $ (3,288,285 ) $ 513,380 Net Cash (Used) in Operating Activities $ (220,799 ) $ (209,926 ) Net Cash (Used) in Investing Activities — (96,006 ) Net Cash Provided by Financing Activities 226,039 318,490 Net Increase (Decrease) in Cash During the Period $ 5,240 $ 12,558 Net Cash (Used) in Operating Activities $ (74,543 ) $ (3,895 ) Net Cash (Used) in Investing Activities - - Net Cash Provided by Financing Activities 84,000 - Net Increase (Decrease) in Cash During the Period $ 9,457 $ (3,895 ) ninethree months ended JulyJanuary 31, 2015 totaled $48,8952017 $170,450 as compared to $33,283$27,163 for the ninethree months ended JulyJanuary 31, 2014.2016. Interest expense in both comparative periods consists primarilythe current three month period includes a one time amortization of accrued interest ondebt discount relative to the repricing of certain outstanding accounts andconvertible notes payable.JulyJanuary 31, 20152017 is $7,314.14management’smanagement's estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.As at July 31, 2015, ourThe Company has aincurred net losslosses since inception, and as of $763,588 andJanuary 31, 2017 had a combined accumulated deficit of $16,818,961. We have not attained profitable operations $17,962,934 and are dependent upon obtaining financing to pursue any extensive activities. For these reasons, our auditors stated in their report on our audited financial statements that they havehad negative working capital of $2,774,905. These conditions raise substantial doubt that we will be ableas to the Company's ability to continue as a going concern without further financing.JulyJanuary 31 2015,, 2017 we had no off-balance sheet transactions that have had, or are reasonably likely to have, a current or future effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.Company’sCompany's management has evaluated all recent accounting pronouncements since the last auditfinancial report and through the issuance date of these financial statements. In the Company’sCompany's opinion, none of the recent accounting pronouncements will have a material effect on the financial statements.15JulyJanuary 31,, 2015.16 1. Quarterly Issuances: None. 2. Subsequent Issuances: None.17Number Description Filing 3.01Articles of IncorporationFiled with the SEC on January 6, 2009 as part of our Registration Statement on Form S-1.3.02BylawsFiled with the SEC on January 6, 2009 as part of our Registration Statement on Form S-1.3.03Amended Articles of IncorporationFiled with the SEC on March 22, 2010 as part of our Quarterly Report on Form 10-Q.4.04Amended Articles of Incorporation, effective November 18, 2013File with the SEC on December 31, 2013 as part of our Current Report on Form 8-K.10.01Assignment of Exploration Agreement between the Company and Carlin Gold Resources, Inc., dated February 22, 2010Filed with the SEC on March 4, 2010 as part of our Current Report on Form 8-K.10.02Exploration Agreement by and between Carlin Gold Resources, Inc. and Trio Gold Corp dated January 28, 2010Filed with the SEC on March 4, 2010 as part of our Current Report on Form 8-K.10.03Agreement between the Company and St. Elias Mines Ltd. dated April 16, 2010Filed with the SEC on June 21, 2010 as part of our Quarterly Report on Form 10-Q.10.04Revision to Exploration Agreement by and between Carlin Gold Resources, Inc. and Trio Gold Corp dated February 24, 2010Filed with the SEC on February 15, 2011 as part of our Annual Report on Form 10-K.10.05Purchase and Sale Agreement between the Company and Warrior Ventures, Inc. dated March 24, 2011Filed with the SEC on June 8, 2011 as part of our Current Report on Form 8-K.10.06Executive Employment Agreement, dated December 18, 2013 by and between 3DX Industries, Inc. and Roger JanssenFile with the SEC on December 31, 2013 as part of our Current Report on Form 8-K.10.07Equipment Purchase Agreement, dated December 18, 2013 by and between 3DX Industries, Inc. and Roger JanssenFile with the SEC on December 31, 2013 as part of our Current Report on Form 8-K.10.08Acquisition and Option Agreement, dated October 8, 2013 by and between the Company and Trio Gold Corp.Filed with the SEC on October 23, 2013 as part of our Current Report on Form 8-K.10.09Agreement between the Company and Dragon Resource Holdings Inc. dated November 9, 2012Filed with the SEC on November 19, 2012 as part of our Current Report on Form 8-K.16.01Letter from Robison, Hill and Co. dated December 11, 2014Filed with SEC on February 18, 2015, as part of our Annual Report on Form 10-K.31.0131.1Certification of Principal Executive Officer Pursuant to Rule 13a-14 Filed herewith. 31.0231.2Certification of Principal Financial Officer Pursuant to Rule 13a-14 Filed herewith. 32.0132.1CEO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act Filed herewith. 32.0232.2CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act Filed herewith. 101.INS*XBRL Instance DocumentFiled herewith.101.SCH*XBRL Taxonomy Extension Schema DocumentFiled herewith.101.CAL*XBRL Taxonomy Extension Calculation Linkbase DocumentFiled herewith.101.LAB*XBRL Taxonomy Extension Labels Linkbase DocumentFiled herewith.101.PRE*XBRL Taxonomy Extension Presentation Linkbase DocumentFiled herewith.101.DEF*XBRL Taxonomy Extension Definition Linkbase DocumentFiled herewith.*Pursuant to Regulation S-T, this interactive data file is deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.18 3DX INDUSTRIES, INC. By: /s/ Roger Janssen Name: Roger Janssen Title: Date: September 21, 2015January 17, 2018By: /s/ Roger Janssen Name: Roger Janssen Title: Director Date: September 21, 2015January 17, 2018By: /s/ Earl W. Abbott Name: Earl W. Abbot Title: Director