Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Feb. 28, 2018 | Apr. 30, 2018 | Nov. 30, 2017 | |
Document And Entity Information | |||
Entity Registrant Name | TGS International Ltd. | ||
Entity Central Index Key | 1,701,859 | ||
Document Type | 10-K | ||
Document Period End Date | Feb. 28, 2018 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --02-28 | ||
Entity Filer Category | Smaller Reporting Company | ||
Is Entity a Well-known Seasoned Issuer? | No | ||
Is Entity a Voluntary Filer? | No | ||
Is Entity's Reporting Status Current? | Yes | ||
Entity Common Stock, Shares Outstanding | 13,530,000 | ||
Entity Public Float | $ 0 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY |
Consolidated Statements of Fina
Consolidated Statements of Financial Position - USD ($) | Feb. 28, 2018 | Feb. 28, 2017 |
Current | ||
Cash | $ 8,186 | $ 20,867 |
Prepaid expenses | 2,473 | 7,548 |
Trade receivables | 1,490 | |
Total current asset | 10,659 | 29,905 |
Long-term | ||
Equipment & fixtures | 7,880 | 9,918 |
Total Assets | 18,539 | 39,823 |
Current | ||
Trades and other payables | 24,976 | 19,955 |
Due to related parties (Note 4) | 54,690 | |
Total Liabilities | 79,666 | 19,955 |
STOCKHOLDERS' (DEFICIENCY) EQUITY | ||
Capital Stock Authorized 200,000,000 common stock, voting, par value $0.0001 each 100,000,000 preferred stock, non-voting, par value $0.0001 each Issued 13,530,000 common stock (Note 5) | 1,353 | 1,353 |
Additional paid in capital (Note 5) | 33,094 | 33,094 |
Deficit | (95,319) | (14,327) |
Accumulated other comprehensive income (loss) | (255) | (252) |
Total Stockholders' (Deficiency) Equity | (61,127) | 19,868 |
Total Liabilities and Stockholders' Equity (Deficiency) | $ 18,539 | $ 39,823 |
Consolidated Statements of Fin3
Consolidated Statements of Financial Position (Parenthetical) - $ / shares | Feb. 28, 2018 | Feb. 28, 2017 |
Consolidated Statements Of Financial Position Parenthetical | ||
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, voting par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, authorized | 100,000,000 | 100,000,000 |
Preferred stock, non-voting par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, issued | 13,530,000 | 13,530,000 |
Consolidated Statements of Loss
Consolidated Statements of Loss and Comprehensive Loss - USD ($) | 3 Months Ended | 12 Months Ended |
Feb. 28, 2017 | Feb. 28, 2018 | |
Consolidated Statements Of Loss And Comprehensive Loss | ||
Revenue | $ 6,214 | $ 33,663 |
Cost of goods sold | (5,214) | (22,148) |
Gross profit | 1,000 | 11,515 |
Expenses | ||
Depreciation | 2,038 | |
Filing fees | 20,293 | |
General & administration | 3,594 | 8,989 |
Management fee | 8,588 | |
Professional fees | 11,733 | 52,599 |
Total expenses | 15,327 | 92,507 |
Net loss | (14,327) | (80,992) |
Other comprehensive income (loss) | ||
Foreign currency adjustment | (252) | (3) |
Comprehensive loss | $ (14,579) | $ (80,995) |
Basic and diluted loss per common stock | $ (0.001) | $ (0.006) |
Weighted average number of shares outstanding | 13,065,000 | 13,530,000 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Equity - USD ($) | Common stock | Additional paid-in capital | Accumulated other comprehensive income (Loss) | Deficit | Total |
Beginning balance, shares at Nov. 30, 2016 | |||||
Beginning balance, amount at Nov. 30, 2016 | |||||
Common stock issued, shares | 13,530,000 | ||||
Common stock issued, amount | $ 1,353 | 30,103 | 31,456 | ||
Other comprehensive income for the year | (252) | (252) | |||
Shareholder contribution on acquisition | 2,991 | 2,991 | |||
Net loss for the period | (14,327) | (14,327) | |||
Ending balance, shares at Feb. 28, 2017 | 13,530,000 | ||||
Ending balance, amount at Feb. 28, 2017 | $ 1,353 | 33,094 | (252) | (14,327) | 19,868 |
Net loss for the period | (80,992) | ||||
Ending balance, amount at Feb. 28, 2018 | (61,127) | ||||
Beginning balance, shares at Feb. 28, 2017 | 13,530,000 | ||||
Beginning balance, amount at Feb. 28, 2017 | $ 1,353 | 33,094 | (252) | (14,327) | 19,868 |
Other comprehensive income for the year | (3) | (3) | |||
Net loss for the period | (80,992) | (80,992) | |||
Ending balance, shares at Mar. 28, 2018 | 13,530,000 | ||||
Ending balance, amount at Mar. 28, 2018 | $ 1,353 | $ 33,094 | $ (255) | $ (95,319) | $ (61,127) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 3 Months Ended | 12 Months Ended |
Feb. 28, 2017 | Feb. 28, 2018 | |
Operating activities | ||
Net loss for the period | $ (14,327) | $ (80,992) |
Depreciation | 2,038 | |
Changes in non-cash working capital: | ||
Trade receivables | (1,496) | 1,534 |
Prepaid expenses | (7,579) | 5,311 |
Trade and other payables | 10,119 | 4,315 |
Due to related parties | 2,991 | 54,452 |
Net cash used in operating activities | (10,292) | (13,342) |
Financing activities | ||
Common stock issued | 31,456 | |
Net cash provided by financing activities | 31,456 | |
Investing activities | ||
Acquisition | (154) | |
Net cash used in investing activities | (154) | |
Effect of exchange rate changes on cash | (143) | 661 |
Net cash increase (decrease) for period | 20,867 | (12,681) |
Cash, beginning of the period | 20,867 | |
Cash, end of the period | $ 20,867 | $ 8,186 |
NATURE AND CONTINUANCE OF OPERA
NATURE AND CONTINUANCE OF OPERATIONS | 12 Months Ended |
Feb. 28, 2018 | |
Notes to Financial Statements | |
NOTE 1 - NATURE AND CONTINUANCE OF OPERATIONS | TGS International Ltd. (“TGS” or the “Corporation”) was incorporated in the state of Nevada, United States on December 1, 2016. On December 21, 2016, the Corporation entered into a business combination by acquiring TGS Building Products Ltd., (“TGS Alberta”) (Note 3). TGS Alberta, which was incorporated on March 8, 2016 specializes in the sale and distribution and installation of building materials and is focused in the North American market. These consolidated financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which assumes that the Corporation and its subsidiary will be able to meet its obligations and continue its operations for next fiscal year. Realization values may be substantially different from carrying values as shown and these consolidated financial statements and do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Corporation be unable to continue as a going concern. At February 28, 2018, the Corporation had not yet achieved profitable operations and has accumulated losses of $95,319 since its inception. The Corporation expects to incur further losses in the development of its business, all of which casts substantial doubt about the Corporation’s ability to continue as a going concern. The Corporation’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management anticipates that additional funding will be in the form of equity financing from the sale of common stock. Management may also seek to obtain short-term loans from the directors of the Corporation. There are no current arrangements in place for equity funding or short-term loans. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Feb. 28, 2018 | |
Notes to Financial Statements | |
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Basis of Presentation The Corporation’s consolidated financial statements included herein are prepared under the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America. These consolidated financial statements include the financial statements of its wholly owned subsidiary, TGS Alberta. All inter-company balances and transactions have been eliminated. Cash For purposes of the consolidated statement of cash flows, management considers liquid investments with an original maturity of three months or less to be cash equivalents. As at February 28, 2018, all cash amounts deposited in accounts were federally insured. Equipment & Fixtures Items of equipment and fixtures are measured at cost less accumulated depreciation and accumulated impairment loss. Depreciation is calculated using the straight-line method and at the following annual rates which is intended to amortize the cost over its useful life: Equipment and fixtures – 5 years Improvements and betterments are capitalized if they extend the useful life of the asset. Repair and maintenance costs are charged to expense as incurred. Gain (loss) related to retirement or disposition of fixed assets is recognized in the period which the gain (loss) occurs. Use of Estimates The preparation of consolidated 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 disclosures of contingent assets and liabilities at the date of consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Such estimates includes the useful life, residual value and depreciation rate of equipment and fixtures. Management makes its best estimate of the ultimate outcome for these items based on historical trends and other information available when the consolidated financial statements are prepared. Changes in estimates are recognized in accordance with the accounting rules for the estimate, which is typically in the period when new information becomes available to management. Actual results could differ from those estimates. Comprehensive Income (loss) The Corporation adopted FASB ASC 220, “Reporting Comprehensive Income”, which establishes standards for the reporting and display of comprehensive income and its components in the consolidated financial statements. Comprehensive income consists of net income and other gains and losses affecting stockholders’ equity that are excluded from net income, such as unrealized gains and losses on investments available for sale, foreign currency translation gains and losses and minimum pension liability. Since inception, the Corporation’s other comprehensive income (loss) represents foreign currency translation adjustments. Basic and Diluted Loss per Common Stock FASB ASC 260 requires dual presentation of basic and diluted earnings per share (EPS) with a reconciliation of the numerator and denominator of the EPS computations. Basic earnings per share amounts are based on the weighted average shares of common stock outstanding. If applicable, diluted earnings per stock would assume the conversion, exercise or issuance of all potential common stock instruments such as options, warrants and convertible securities, unless the effect is to reduce a loss or increase earnings per share. Diluted net income (loss) per common stock on the potential exercise of the equity-based financial instruments is not presented where anti-dilutive. Financial Instruments Fair Value The guidance for fair value measurements establishes the authoritative definition of fair value, sets out a framework for measuring fair value and outlines the required disclosures regarding fair value measurements. Fair value is the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. The Corporation uses a three-tier fair value hierarchy based upon observable and non-observable inputs as follows: n Level 1 – observable inputs such as quoted prices in active markets; n Level 2 – inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and n Level 3 – unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. Cash is measured using level 1 inputs. Assets and Liabilities that are measured at Fair Value on a Recurring Basis The fair value hierarchy requires the use of observable market data when available. In instances in which the inputs used to measure fair value fall into different levels of the fair value hierarchy, the fair value measurement has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Corporation’s assessment of the significance of a particular item to the fair value measurement in its entirety requires judgment, including the consideration of inputs specific to the asset or liability. The fair value of financial instruments consisting of cash, trade receivables, trade and other payables, and due to related parties were estimated to approximate their carrying values based on the short-term maturity of these instruments. Risks Financial instruments that potentially subject the Corporation to credit risk consist principally of cash and trade receivables. Management does not believe the Corporation is exposed to significant credit risk. Management, as well, does not believe the Corporation is exposed to significant interest rate risks during the periods presented in these consolidated financial statements as the Corporation does not hold any interest-bearing financial instruments. Fair Value Measurements The Corporation follows FASB ASC 820, Fair Value Measurements and Disclosures, for all financial instruments and non-financial instruments accounted for at fair value on a recurring basis. This accounting standard establishes a single definition of fair value and a framework for measuring fair value, sets out a fair value hierarchy to be used to classify the source of information used in fair value measurement and expands disclosures about fair value measurements required under other accounting pronouncements. It does not change existing guidance as to whether or not an instrument is carried at fair value. The Corporation defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities, which are required to be recorded at fair value, the Corporation considers the principal or most advantageous market in which the Corporation would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions and credit risk. The Corporation has adopted FASB ASC 825, Financial Instruments, which allows companies to choose to measure eligible financial instruments and certain other items at fair value that are not required to be measured at fair value. The Corporation has not elected the fair value option for any eligible financial instruments. Currency Risks The Corporation’s presentation currency is in US dollars and its functional currency is in Canadian dollars. Consequently, assets and liabilities carried in any currency other than Canadian dollars are subject to foreign currency fluctuations. As at February 28, 2018, cash of $785 (2017 - $nil) and due to related parties of $15,614 (2017 - $nil) were denominated in US dollars. Impairment of Long-Lived Assets Impairment losses on long-lived assets are recognized when events or changes in circumstances indicate that the undiscounted cash flows estimated to be generated by such assets are less than their carrying value and, accordingly, all or a portion of such carrying value may not be recoverable. Impairment losses are then measured by comparing the fair value of assets to their carrying amounts. No impairments of these types of assets were recognized during the year ended February 28, 2018. Revenue Recognition The Corporation recognizes revenue when persuasive evidence of an arrangement exists, shipment has occurred or services rendered, the price is fixed or determinable and payment is reasonably assured. Customers take ownership at point of sale and bear the costs and risks of delivery. Income Taxes The Corporation follows FASB ASC Topic 740, “Income Taxes” which requires the use of the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for future tax consequences attributable to temporary differences between the consolidated financial statements carrying amounts of existing assets and liabilities and loss carry forwards and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which those temporary differences are expected to be recovered or settled. The tax consequences of most events recognized in the current year’s consolidated financial statements are included in determining income taxes currently payable. However, because tax laws and financial accounting standards differ in their recognition and measurement of assets, liabilities, equity, revenues, expenses, gains and losses, differences arise between the amount of taxable income and pre-tax financial income for a year and between the tax bases of assets or liabilities and their reported amounts in the consolidated financial statements. Because the Corporation assumes that the reported amounts of assets and liabilities will be recovered and settled, respectively, a difference between the tax basis of an asset or a liability and its reported amount in the balance sheet will result in a taxable or a deductible amount in some future years when the related liabilities are settled or the reported amounts of the assets are recovered, which gives rise to a deferred tax asset. The Corporation must then assess the likelihood that the deferred tax assets will be recovered from future taxable income and to the extent the Corporation believes that recovery is not likely, the Corporation must establish a valuation allowance. The Corporation has adopted FASB guidance on accounting for uncertainty in income taxes which provides a consolidated financial statement recognition threshold and measurement attribute for a tax position taken or expected to be taken in a tax return. Under this guidance, the Corporation may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position should be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The guidance also extends to de-recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, and income tax disclosures. As of February 28, 2018, the Corporation had no uncertain tax positions. Foreign Currency Translation The functional currency of the Corporation and its subsidiary is Canadian dollars (“C$”). The Corporation’s reporting currency is the United States currency (“US dollars”). (i) Foreign currency transactions Transactions in foreign currencies are initially recorded by the Corporation and its subsidiary at their respective functional currency rates prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rate of exchange at the reporting date. All differences are taken to the consolidated statement of operations. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. (ii) Foreign operations The assets and liabilities of foreign operations are translated to US dollars at exchange rates at the reporting date. The income and expenses of foreign operations are translated into US dollars at exchange rates at the dates of the transactions. Foreign currency adjustments are recognized in other comprehensive income (loss) in the accumulated other comprehensive income (loss). Foreign exchange gains or losses arising from a monetary item receivable from or payable to a foreign operation, the settlement of which is neither planned nor likely to occur in the foreseeable future and which in substance is considered to form part of the net investment in the foreign operation, are recognized in other comprehensive income in the cumulative amount of foreign currency translation differences. Recent Accounting Pronouncements The Corporation adopts new pronouncements relating to accounting principles generally accepted in the United States of America applicable to the Corporation as they are issued, which may be in advance of their effective date. Management does not believe that any recently issued, but not yet effective accounting standards, if currently adopted, would have a material effect on the accompanying consolidated financial statements. In May 2014, the FASB issued Accounting Standards Update 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09”) and issued subsequent amendments to the initial guidance during 2015 and 2016, collectively referred to as “Topic 606”. These updates supersede the revenue recognition requirements in ASC Topic 605, "Revenue Recognition" and nearly all other existing revenue recognition guidance under US GAAP. The core principle of Topic 606 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. Topic 606 can be applied either (i) retrospectively to each prior reporting period presented with the option to elect certain practical expedients; or (ii) retrospectively with the cumulative effect recognized at the date of initial application and providing certain additional disclosures (the “cumulative effect approach”). Topic 606 is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017, which will be the Corporation’s fiscal year beginning March 1, 2018 (fiscal 2019). The Corporation does not expect the adoption of this guidance will have a material impact on its consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This ASU amends guidance on reporting credit losses for assets held at amortized cost basis and available for sale debt securities. This ASU is effective for fiscal years beginning after December 15, 2019 (fiscal 2021), including interim periods within those fiscal years, with early adoption permitted. The Corporation does not expect the adoption of this guidance will have a material impact on its consolidated financial statements. In August 2016, the Financial Accounting Standards Board (“FASB) issued Accounting Standards Update (“ASU”) 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. This ASU addresses the classification of certain specific cash flow issues including debt prepayment or extinguishment costs, settlement of certain debt instruments, contingent consideration payments made after a business combination, proceeds from the settlement of certain insurance claims and distributions received from equity method investees. This ASU is effective for fiscal years beginning after December 15, 2017 (fiscal 2019), and interim periods within those fiscal years, with early adoption permitted. An entity that elects early adoption must adopt all of the amendments in the same period. The Corporation does not expect the adoption of this guidance will have a material impact on its consolidated financial statements. Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force) and the SEC did not or are not believed to have a material impact on the Corporation’s present or future consolidated financial statements. |
BUSINESS ACQUISITION
BUSINESS ACQUISITION | 12 Months Ended |
Feb. 28, 2018 | |
Notes to Financial Statements | |
NOTE 3 - BUSINESS ACQUISITION | On December 21, 2016, the Corporation acquired all of the issued and outstanding shares of TGS Alberta from related parties for cash of $154. This acquisition enables the Corporation to operate in the Canadian market. Consideration: $ Cash paid 154 Shareholder contribution 2,991 3,145 Net assets received: Cash (23 ) Trade receivables 3,916 Equipment and fixtures 9,783 Trade and other payables (10,570 ) Foreign exchange 39 3,145 The acquisition constitutes a business combination and is accounted for in accordance with Accounting Standards Codification 805 – Business Combinations. The acquisition date fair value of consideration transferred in the transaction was $3,145 which approximates the fair value of the net assets received. All costs associated with the transaction were expensed as incurred. |
DUE TO RELATED PARTIES
DUE TO RELATED PARTIES | 12 Months Ended |
Feb. 28, 2018 | |
Notes to Financial Statements | |
NOTE 4 - DUE TO RELATED PARTIES | As at February 28, 2018, the Corporation was obligated to shareholders for funds advanced to the Corporation for working capital, in the amount of $54,690 (February 28, 2017 - $Nil). The advances are unsecured and no interest rate or payback schedule has been established. |
COMMON STOCK
COMMON STOCK | 12 Months Ended |
Feb. 28, 2018 | |
Notes to Financial Statements | |
NOTE 5 - COMMON STOCK | (i) Stock issued On December 1, 2016, the date of inception, the Corporation received $723 to issue 9,500,000 common stocks. On January 28, 2017, the Corporation closed a private placement to issue 4,030,000 common stocks for a gross proceed of $30,733. (ii) Weighted average stock outstanding As at February 28, 2018, weighted average number of common stocks for the loss per common stock calculation is 13,530,000 (2017 – 13,065,000). |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Feb. 28, 2018 | |
Notes to Financial Statements | |
NOTE 6 - INCOME TAXES | Potential benefits of income tax losses have not been recognized in these consolidated financial statements because the Corporation cannot be assured it is more likely-than-not it will utilize the net operating losses carried forward in future years. Income tax recovery differs from that which would be expected by applying the effective rates to net loss as follows: For the year ended February 28, 2018 For the period ended February 28, 2017 $ $ Net loss for the year / period (80,992 ) (14,327 ) Statutory and effective rates 34 % 34 % Income tax recovery at effective rate (27,537 ) (1,871 ) Income tax expense on Canadian income - (14 ) Difference in foreign tax rate 12,244 (5 ) Change in valuation allowance (15,293 ) 4,980 Corporate income tax recovery recognized in the accounts - - During the year, the Corporation has $541 of loss carry forwards in Canada that begin to expire in 2038. The Corporation has $92,795 of loss carry forwards in the United States that begin to expire in 2037. The components of the net deferred tax asset are below: February 28, 2018 February 28, 2017 $ $ Non-capital losses carried forward 95,374 14,382 Deferred tax asset value 15,293 4,980 Valuation allowance (15,293 ) (4,980 ) Deferred tax assets recognized - - |
SUMMARY OF SIGNIFICANT ACCOUN13
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Feb. 28, 2018 | |
Summary Of Significant Accounting Policies Policies | |
Basis of Presentation | The Corporation’s consolidated financial statements included herein are prepared under the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America. These consolidated financial statements include the financial statements of its wholly owned subsidiary, TGS Alberta. All inter-company balances and transactions have been eliminated. |
Cash | For purposes of the consolidated statement of cash flows, management considers liquid investments with an original maturity of three months or less to be cash equivalents. As at February 28, 2018, all cash amounts deposited in accounts were federally insured. |
Equipment & Fixtures | Items of equipment and fixtures are measured at cost less accumulated depreciation and accumulated impairment loss. Depreciation is calculated using the straight-line method and at the following annual rates which is intended to amortize the cost over its useful life: Equipment and fixtures – 5 years Improvements and betterments are capitalized if they extend the useful life of the asset. Repair and maintenance costs are charged to expense as incurred. Gain (loss) related to retirement or disposition of fixed assets is recognized in the period which the gain (loss) occurs. |
Use of Estimates | The preparation of consolidated 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 disclosures of contingent assets and liabilities at the date of consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Such estimates includes the useful life, residual value and depreciation rate of equipment and fixtures. Management makes its best estimate of the ultimate outcome for these items based on historical trends and other information available when the consolidated financial statements are prepared. Changes in estimates are recognized in accordance with the accounting rules for the estimate, which is typically in the period when new information becomes available to management. Actual results could differ from those estimates. |
Comprehensive Income (loss) | The Corporation adopted FASB ASC 220, “Reporting Comprehensive Income”, which establishes standards for the reporting and display of comprehensive income and its components in the consolidated financial statements. Comprehensive income consists of net income and other gains and losses affecting stockholders’ equity that are excluded from net income, such as unrealized gains and losses on investments available for sale, foreign currency translation gains and losses and minimum pension liability. Since inception, the Corporation’s other comprehensive income (loss) represents foreign currency translation adjustments. |
Basic and Diluted Loss per Common Stock | FASB ASC 260 requires dual presentation of basic and diluted earnings per share (EPS) with a reconciliation of the numerator and denominator of the EPS computations. Basic earnings per share amounts are based on the weighted average shares of common stock outstanding. If applicable, diluted earnings per stock would assume the conversion, exercise or issuance of all potential common stock instruments such as options, warrants and convertible securities, unless the effect is to reduce a loss or increase earnings per share. Diluted net income (loss) per common stock on the potential exercise of the equity-based financial instruments is not presented where anti-dilutive. |
Fair Value | The guidance for fair value measurements establishes the authoritative definition of fair value, sets out a framework for measuring fair value and outlines the required disclosures regarding fair value measurements. Fair value is the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. The Corporation uses a three-tier fair value hierarchy based upon observable and non-observable inputs as follows: n Level 1 – observable inputs such as quoted prices in active markets; n Level 2 – inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and n Level 3 – unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. Cash is measured using level 1 inputs. Assets and Liabilities that are measured at Fair Value on a Recurring Basis The fair value hierarchy requires the use of observable market data when available. In instances in which the inputs used to measure fair value fall into different levels of the fair value hierarchy, the fair value measurement has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Corporation’s assessment of the significance of a particular item to the fair value measurement in its entirety requires judgment, including the consideration of inputs specific to the asset or liability. The fair value of financial instruments consisting of cash, trade receivables, trade and other payables, and due to related parties were estimated to approximate their carrying values based on the short-term maturity of these instruments. |
Risks | Financial instruments that potentially subject the Corporation to credit risk consist principally of cash and trade receivables. Management does not believe the Corporation is exposed to significant credit risk. Management, as well, does not believe the Corporation is exposed to significant interest rate risks during the periods presented in these consolidated financial statements as the Corporation does not hold any interest-bearing financial instruments. |
Fair Value Measurements | The Corporation follows FASB ASC 820, Fair Value Measurements and Disclosures, for all financial instruments and non-financial instruments accounted for at fair value on a recurring basis. This accounting standard establishes a single definition of fair value and a framework for measuring fair value, sets out a fair value hierarchy to be used to classify the source of information used in fair value measurement and expands disclosures about fair value measurements required under other accounting pronouncements. It does not change existing guidance as to whether or not an instrument is carried at fair value. The Corporation defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities, which are required to be recorded at fair value, the Corporation considers the principal or most advantageous market in which the Corporation would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions and credit risk. The Corporation has adopted FASB ASC 825, Financial Instruments, which allows companies to choose to measure eligible financial instruments and certain other items at fair value that are not required to be measured at fair value. The Corporation has not elected the fair value option for any eligible financial instruments. |
Currency Risks | The Corporation’s presentation currency is in US dollars and its functional currency is in Canadian dollars. Consequently, assets and liabilities carried in any currency other than Canadian dollars are subject to foreign currency fluctuations. As at February 28, 2018, cash of $785 (2017 - $nil) and due to related parties of $15,614 (2017 - $nil) were denominated in US dollars. |
Impairment of Long-Lived Assets | Impairment losses on long-lived assets are recognized when events or changes in circumstances indicate that the undiscounted cash flows estimated to be generated by such assets are less than their carrying value and, accordingly, all or a portion of such carrying value may not be recoverable. Impairment losses are then measured by comparing the fair value of assets to their carrying amounts. No impairments of these types of assets were recognized during the year ended February 28, 2018. |
Revenue Recognition | The Corporation recognizes revenue when persuasive evidence of an arrangement exists, shipment has occurred or services rendered, the price is fixed or determinable and payment is reasonably assured. Customers take ownership at point of sale and bear the costs and risks of delivery. |
Income Taxes | The Corporation follows FASB ASC Topic 740, “Income Taxes” which requires the use of the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for future tax consequences attributable to temporary differences between the consolidated financial statements carrying amounts of existing assets and liabilities and loss carry forwards and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which those temporary differences are expected to be recovered or settled. The tax consequences of most events recognized in the current year’s consolidated financial statements are included in determining income taxes currently payable. However, because tax laws and financial accounting standards differ in their recognition and measurement of assets, liabilities, equity, revenues, expenses, gains and losses, differences arise between the amount of taxable income and pre-tax financial income for a year and between the tax bases of assets or liabilities and their reported amounts in the consolidated financial statements. Because the Corporation assumes that the reported amounts of assets and liabilities will be recovered and settled, respectively, a difference between the tax basis of an asset or a liability and its reported amount in the balance sheet will result in a taxable or a deductible amount in some future years when the related liabilities are settled or the reported amounts of the assets are recovered, which gives rise to a deferred tax asset. The Corporation must then assess the likelihood that the deferred tax assets will be recovered from future taxable income and to the extent the Corporation believes that recovery is not likely, the Corporation must establish a valuation allowance. The Corporation has adopted FASB guidance on accounting for uncertainty in income taxes which provides a consolidated financial statement recognition threshold and measurement attribute for a tax position taken or expected to be taken in a tax return. Under this guidance, the Corporation may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position should be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The guidance also extends to de-recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, and income tax disclosures. As of February 28, 2018, the Corporation had no uncertain tax positions. |
Foreign Currency Translation | The functional currency of the Corporation and its subsidiary is Canadian dollars (“C$”). The Corporation’s reporting currency is the United States currency (“US dollars”). (i) Foreign currency transactions Transactions in foreign currencies are initially recorded by the Corporation and its subsidiary at their respective functional currency rates prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rate of exchange at the reporting date. All differences are taken to the consolidated statement of operations. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. (ii) Foreign operations The assets and liabilities of foreign operations are translated to US dollars at exchange rates at the reporting date. The income and expenses of foreign operations are translated into US dollars at exchange rates at the dates of the transactions. Foreign currency adjustments are recognized in other comprehensive income (loss) in the accumulated other comprehensive income (loss). Foreign exchange gains or losses arising from a monetary item receivable from or payable to a foreign operation, the settlement of which is neither planned nor likely to occur in the foreseeable future and which in substance is considered to form part of the net investment in the foreign operation, are recognized in other comprehensive income in the cumulative amount of foreign currency translation differences. |
Recent Accounting Pronouncements | The Corporation adopts new pronouncements relating to accounting principles generally accepted in the United States of America applicable to the Corporation as they are issued, which may be in advance of their effective date. Management does not believe that any recently issued, but not yet effective accounting standards, if currently adopted, would have a material effect on the accompanying consolidated financial statements. In May 2014, the FASB issued Accounting Standards Update 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09”) and issued subsequent amendments to the initial guidance during 2015 and 2016, collectively referred to as “Topic 606”. These updates supersede the revenue recognition requirements in ASC Topic 605, "Revenue Recognition" and nearly all other existing revenue recognition guidance under US GAAP. The core principle of Topic 606 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. Topic 606 can be applied either (i) retrospectively to each prior reporting period presented with the option to elect certain practical expedients; or (ii) retrospectively with the cumulative effect recognized at the date of initial application and providing certain additional disclosures (the “cumulative effect approach”). Topic 606 is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017, which will be the Corporation’s fiscal year beginning March 1, 2018 (fiscal 2019). The Corporation does not expect the adoption of this guidance will have a material impact on its consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This ASU amends guidance on reporting credit losses for assets held at amortized cost basis and available for sale debt securities. This ASU is effective for fiscal years beginning after December 15, 2019 (fiscal 2021), including interim periods within those fiscal years, with early adoption permitted. The Corporation does not expect the adoption of this guidance will have a material impact on its consolidated financial statements. In August 2016, the Financial Accounting Standards Board (“FASB) issued Accounting Standards Update (“ASU”) 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. This ASU addresses the classification of certain specific cash flow issues including debt prepayment or extinguishment costs, settlement of certain debt instruments, contingent consideration payments made after a business combination, proceeds from the settlement of certain insurance claims and distributions received from equity method investees. This ASU is effective for fiscal years beginning after December 15, 2017 (fiscal 2019), and interim periods within those fiscal years, with early adoption permitted. An entity that elects early adoption must adopt all of the amendments in the same period. The Corporation does not expect the adoption of this guidance will have a material impact on its consolidated financial statements. Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force) and the SEC did not or are not believed to have a material impact on the Corporation’s present or future consolidated financial statements. |
BUSINESS ACQUISITION (Tables)
BUSINESS ACQUISITION (Tables) | 12 Months Ended |
Feb. 28, 2018 | |
Business Acquisition Tables | |
Schedule of net asset received in acquisition | This acquisition enables the Corporation to operate in the Canadian market. Consideration: $ Cash paid 154 Shareholder contribution 2,991 3,145 Net assets received: Cash (23 ) Trade receivables 3,916 Equipment and fixtures 9,783 Trade and other payables (10,570 ) Foreign exchange 39 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Feb. 28, 2018 | |
Income Taxes Tables | |
Schedule of Income tax recovery | Income tax recovery differs from that which would be expected by applying the effective rates to net loss as follows: For the year ended February 28, 2018 For the period ended February 28, 2017 $ $ Net loss for the year / period (80,992 ) (14,327 ) Statutory and effective rates 34 % 34 % Income tax recovery at effective rate (27,537 ) (1,871 ) Income tax expense on Canadian income - (14 ) Difference in foreign tax rate 12,244 (5 ) Change in valuation allowance (15,293 ) 4,980 Corporate income tax recovery recognized in the accounts - - |
Schedule of components of the net deferred tax asset | The components of the net deferred tax asset are below: February 28, 2018 February 28, 2017 $ $ Non-capital losses carried forward 95,374 14,382 Deferred tax asset value 15,293 4,980 Valuation allowance (15,293 ) (4,980 ) Deferred tax assets recognized - - |
NATURE AND CONTINUANCE OF OPE16
NATURE AND CONTINUANCE OF OPERATIONS (Detail Narrative) - USD ($) | 12 Months Ended | |
Feb. 28, 2018 | Feb. 28, 2017 | |
Nature And Continuance Of Operations Detail Narrative | ||
Entity incorporation, state country name | Nevada | |
Entity incorporation, date of incorporation | Dec. 1, 2016 | |
Accumulated losses | $ (95,319) | $ (14,327) |
SUMMARY OF SIGNIFICANT ACCOUN17
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 12 Months Ended | |
Feb. 28, 2018 | Feb. 28, 2017 | |
Due to related parites | $ 15,614 | |
Foreign Currency [Member] | ||
Cash | $ 785 | $ 0 |
Equipment and fixtures [Member] | ||
Estimated useful life | 5 years |
BUSINESS ACQUISITION (Details)
BUSINESS ACQUISITION (Details) - USD ($) | 1 Months Ended | 3 Months Ended |
Dec. 21, 2016 | Feb. 28, 2017 | |
Consideration: | ||
Stockholder contribution | $ 2,991 | |
TGS Alberta [Member] | ||
Consideration: | ||
Cash paid | $ 154 | |
Stockholder contribution | 2,991 | |
Total consideration | 3,145 | |
Net assets received: | ||
Cash | (23) | |
Trade receivables | 3,916 | |
Equipment and fixtures | 9,783 | |
Trade and other payables | (10,570) | |
Foreign exchange | 39 | |
Net assets received, total | $ 3,145 |
BUSINESS ACQUISITION (Detail Na
BUSINESS ACQUISITION (Detail Narrative) - TGS Alberta [Member] | 1 Months Ended |
Dec. 21, 2016USD ($) | |
Consideration: | |
Cash paid | $ 154 |
Net assets received: | |
Net assets received, total | $ 3,145 |
DUE TO RELATED PARTIES (Detail
DUE TO RELATED PARTIES (Detail Narrative) - USD ($) | Feb. 28, 2018 | Feb. 28, 2017 |
Related Party Transactions [Abstract] | ||
Due to related parties | $ 54,690 |
COMMON STOCK (Detail Narrative)
COMMON STOCK (Detail Narrative) - USD ($) | 1 Months Ended | ||
Jan. 28, 2017 | Feb. 28, 2018 | Feb. 28, 2017 | |
Common stock outstanding shares | 13,530,000 | 13,065,000 | |
December 1, 2016 [Member] | |||
Common stock shares reserved for future issuance, value | $ 723 | ||
Common stock shares reserved for future issuance, shares | 9,500,000 | ||
Private Placement [Member] | |||
Common stock shares reserved for future issuance, shares | 4,030,000 | ||
Gross proceeds from private placement issue | $ 30,733 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 3 Months Ended | 12 Months Ended | 13 Months Ended | |
Feb. 28, 2017 | Feb. 28, 2017 | Feb. 28, 2018 | Mar. 28, 2018 | |
Income Taxes Details | ||||
Net loss for the year / period | $ (14,327) | $ (14,327) | $ (80,992) | $ (80,992) |
Statutory and effective rates | 34.00% | 34.00% | ||
Income tax recovery at effective rate | $ (1,871) | $ (27,537) | ||
Income tax expense on Canadian income | (14) | |||
Difference in foreign tax rate | (5) | 12,244 | ||
Change in valuation allowance | 4,980 | (15,293) | ||
Corporate income tax recovery recognized in the accounts |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) - USD ($) | Feb. 28, 2018 | Feb. 28, 2017 |
Income Taxes Details 1 | ||
Non-capital losses carried forward | $ 95,374 | $ 14,382 |
Deferred tax asset value | 15,293 | 4,980 |
Valuation allowance | (15,293) | (4,980) |
Deferred tax assets recognized |
INCOME TAXES (Detail Narrative)
INCOME TAXES (Detail Narrative) | 12 Months Ended |
Feb. 28, 2018USD ($) | |
Canada [Member] | |
Operating loss carry forwards | $ (541) |
Expiry date | 2,038 |
United States [Member] | |
Operating loss carry forwards | $ (92,795) |
Expiry date | 2,037 |