Notes to Financial Statements
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1.
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NATURE OF BUSINESS, ORGANIZATION AND BASIS OF PRESENTATION
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TGI Solar Power Group, Inc. (“TGI”
or the “Company”) is a publicly held corporation formed under the laws of the State of Delaware as Liberty Leasing
Co. Inc. in 1967. The Company changed its name to LIBCO Corporation on June 29, 1973, RDIS Corporation on Jan 11, 1993 and TenthGate
International, Inc. on February 20, 2007 before adopting its current name in June 2008. Tenth Gate International, Inc. acquired
TenthGate Incorporated, a Delaware corporation, by merger of TGI’s subsidiary, TenthGate Merger Sub, Inc., a Utah corporation,
with and into TenthGate Incorporated in April 2007. Thereafter, TenthGate International, Inc. became a development stage company
which owned various subsidiaries with licenses and patents held by those subsidiaries. On July 25, 2008, Tenth Gate International,
Inc., acquired from Solar 18 Corporation, a Florida corporation, (“Solar 18”), Solar 18’s patented technology
which the Company believed to be viable in commercial and residential applications, especially in the field of green energy. Thereafter,
the Company changed its name toTGI Solar Power Group, Inc. TGI Solar Power Group, Inc. discontinued operations of its other subsidiaries
(of the former TenthGate International, Inc.) to pursue energy technology products and services. The Company’s fiscal year
end is July 31st.
TGI Solar Power Group, Inc. is
primarily engaged in the business of providing potential alternative energy solutions to residential and business customers. The
Company markets alternative solutions on its website and directly to potential customers and creates a Present Value (PV) solution
that details price, tax benefits or cost support and the potential energy savings that might be realized from customers.
Accordingly, TGI intends to launch
new business initiatives intended to provide clients with management, tools and resources to deliver interactive, real-time, on
demand staffing for full time and project based personnel. The Company is exploring the possibility of entering into a business
to provide staffing for contract projects in solar energy, as well as potentially in other businesses. We hope these business initiatives
will result in infrastructure which supports qualifying, investigating and on-boarding of viable project management candidates,
a process that includes automated reporting of hours, benefits and insurance and obtaining insurance and building expertise that
may drive continued support of this model which may include the three offerings to companies; permanent, temporary and contract
based and the five established vertical markets, information technology, engineering, light industrial and blue collar, financial
services and medical.
The accompanying unaudited financial
statements have been prepared on the basis the Company will continue as a going concern, which contemplates the realization of
assets and the satisfaction of liabilities in the normal course of business. The Company has a history of operating losses and
the Company continues to rely on financing and the issuance of Preferred and Common shares to raise capital. The Company’s
significant losses from operations and the Company’s dependence on equity and debt financing raise substantial doubt about
the Company's ability to continue as a going concern. The financial statements of the Company do not include any adjustments relating
to the recoverability and classification of recorded assets, or the amounts and classifications of liabilities that might be necessary
should the Company be unable to continue as a going concern
TGI Solar Power Inc.
Notes to Financial Statements
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3.
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BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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The accompanying unaudited condensed
consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted
in the United States of America for interim financial information and with the instructions to Article 8 of Regulation S-X. Accordingly,
they do not include all of the information and footnotes required by accounting principles generally accepted in the United States
of America for complete consolidated financial statements. In the opinion of management, all adjustments considered necessary for
a fair presentation have been included. Operating results for the nine-month period ended April 30, 2017 are not necessarily indicative
of the results that may be expected for the year ending July 31, 2017. The unaudited condensed consolidated financial statements
should be read in conjunction with the consolidated financial statements and footnotes thereto included in the Company's Annual
Report on Form 10-K for the year ended July 31, 2016 as filed on November 14, 2016.
These financial statements have
been prepared by the Company in accordance with generally accepted accounting principles in the United States of America. (“GAAP”).
Use of Estimates
The preparation of financial
statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets
and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts
of revenues and expenses during the reporting periods. Actual results could differ from those estimates
Income Taxes
Estimates of taxable income of
the legal entity and jurisdiction are used in the tax rate calculation. Management uses judgment in estimating what the Company's
income tax will be for the year. Since judgment is involved, there is a risk that the tax rate may increase or decrease in any
period. In determining income/(loss) for financial statement purposes, management must make certain estimates and judgments. These
estimates and judgments occur in the calculation of certain tax liabilities and in the determination of the recoverability of certain
deferred tax assets, which arise from temporary differences between the tax and financial statement recognition of revenue and
expense. FASB issued authoritative guidance concerning accounting for income taxes also requires that the deferred tax assets be
reduced by a valuation allowance if, based on the available evidence, it is more likely than not that all or some portion of the
recorded deferred tax assets will not be realized in future periods. In evaluating the Company's ability to recover the Company's
deferred tax assets, management considers all available positive and negative evidence including the Company's past operating results,
the existence of management is using to manage the underlying businesses.
Through April 30, 2017, the Company
has recorded a valuation allowance against the Company's deferred tax assets arising from net operating losses due to uncertainty
of their realization as a result of the Company's earnings history, the number of years the Company's net operating losses and
tax credits can be carried forward, the existence of taxable temporary differences and near-term earnings expectations. The amount
of the valuation allowance could decrease if facts and circumstances change that materially increase taxable income prior to the
expiration of the loss carry forwards. Any reduction in the valuation allowance would result in an income tax benefit in the period
such determination is made by the Company.
Due to the Company experiencing
several events that qualify as a change in control since its inception, the Company may be limited by section 382 of the Internal
Revenue Code as to the amount of net operating losses that may be used in future years.
TGI Solar Power Inc.
Notes to Financial Statements
Net (Loss) Earnings Per Share
Basic earnings per share are
calculated on the basis of the weighted-average number of common shares outstanding during the year. Basic earnings per share
are computed by dividing income available to common stockholders by the weighted-average common shares outstanding during the
period. Diluted earnings per share takes into account the potential dilution that could occur if securities or other contracts
to issue common stock were exercised and converted to common stock
Dilutive common share equivalents
consist of shares issuable upon conversion of convertible debt, and Preferred Stock.
As of April 30, 2017, and July
31, 2016 there were 10,000,000 outstanding shares of Preferred Series A Stock which convert to 30,000,000 common shares, 2,000,000
outstanding shares of Preferred Series B Stock which convert to 200,000,000 common shares and 275,000 outstanding shares of Preferred
Series C Stock which convert to 17,055,321,260 common shares.
The Company received an advance
of $300 from a shareholder in April 2017 to cover the expenses of the Company. The advance is non-interest bearing and has no set
repayment schedule.
The Company received advances
of $65,000 by a third party in September 2014 to cover expenses associated with a possible investment which was not pursued by
the Company The advance and related interest of approximately 12% was satisfied in full through the issuance of 40,000,000 shares
of common stock on July 31, 2016.
Interest
expense on the Advance was $0 and $3,942 for the three months ended April 30, 2017 and 2016.
Interest was $0 and $5,899
for the nine months ended April 30, 2017 and 2016.
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5.
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RELATED PARTY TRANSACTION
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During the
three months and nine months ended April 30, 2017, the Company incurred and paid $4,000 and $71,933 to its officer. As of April
30, 2017, and July 31, 2016 the Company prepaid consulting fees to its officer in the amount of $0 and $15,000 which is included
in Prepaid expense on the accompanying condensed balance sheet.
Common
:
At April 30, 2017 and July 31,
2016, the Company had 2,400,000,000 shares authorized and 1,705,036,105 shares of $.001 par value common stock issued and outstanding.
Common shares are voting and
dividends are paid at the discretion of the Board of Directors.
TGI Solar Power Inc.
Notes to Financial Statements
Series A Preferred Stock
At April 30, 2017 and July 31,
2016, the Company had 10,000,000 shares of Series A Preferred Stock, $.001 par value, authorized, issued and, outstanding. The
Series A Preferred Stock has a liquidation preference over the common stock and any other class or series of capital stock whose
terms expressly provide that the holders of the Series A Preferred Stock should receive preferential payment. Holders of the Preferred
Stock Series A are entitled to vote on all matters submitted to shareholders of the Company and are entitled to 10 votes for each
share of the Series A Preferred Stock owned.
Each share of Series A Preferred
Stock is convertible, at the option of the holder, into three shares of the Company's common stock. However, holders cannot convert
any share of Series A Preferred Stock into shares of common stock until (a) the Series A Preferred Stock has been held for a minimum
of 24- months; (b) the Common Stock is trade for at least $0.50 per share (c) the Company has a positive Net Worth; and (c) The
Company is traded on the Pink Sheets, or higher exchange.
Holders of the Series A Preferred
Stock are entitled to receive dividends as declared at the discretion of the Board of Directors. These dividends are based on the
number of shares of Common Stock into which each share of Series A Preferred Stock is convertible
Series B Preferred Stock
At April 30, 2017 and July 31,
2016, the Company had 2,000,000 shares of Series B Preferred Stock, $.001 par value, authorized, issued and outstanding. Holders
of the Series B Preferred Stock Series B are entitled to vote on all matters submitted to shareholders of the Company and are entitled
to 1,000 votes for each share of the Series B Preferred Stock owned.
Each share of the Series B Preferred
Stock is convertible, at the option of the holder, into one hundred shares of the Company’s common stock. However, holders
cannot convert any share of Series B Preferred Stock into shares of common stock until (a) the Series B Preferred Stock has been
held for a minimum of 12 months; (b) the Common Stock is traded at least $0.01 per share (c) The Company is traded on the Pink
Sheets, or higher exchange.
Holders of the Series B Preferred
Stock are entitled to receive dividends as declared at the discretion of the Board of Directors. These dividends are based on the
number of shares of Common Stock into which each share of Series B Preferred Stock is convertible
Series C Preferred Stock
On June 22, 2016, the Company
authorized 275,000 shares of $1 Par Value Series C Convertible Preferred Stock. On June 26, 2016, the Company sold 137,500 shares
of its Series C Convertible Preferred Stock each to Ensure HR, LLC, a New Jersey limited liability company, and Meros HR, LLC,
a New Jersey limited liability company for $275,000. The proceeds were reduced by $19,460 of legal expenses related to the sale.
These 275,000 shares of Series C Preferred Stock are authorized issued and outstanding as of July 31, 2016
TGI Solar Power Inc.
Notes to Financial Statements
The Series Preferred C Stock
has a liquidation of twice its stated value, and converts into shares of Common Stock at the initial conversion price of $.000016124
per share, subject to adjustment for stock splits,
reclassification
and distributions. The Series C Preferred Stock votes on an as-converted basis multiplied by 1.9. The conversion price is initially
$.000016124 per share, subject to adjustment for dilutive issuances, so that upon conversion the holders of the Series C Preferred
Stock would hold shares of Common constituting 90 % of the fully diluted Common Stock upon conversion. Accordingly, the sale of
the Series C Stock resulted in a change of control of the Company. The Series C Preferred Stock cannot be converted until the Company
files an amendment increasing the authorized number of shares of Common Stock and/or effecting a reverse stock split of the Common
Stock so that the Company has enough authorized and unissued shares of Common Stock so as to permit the conversion of all outstanding
shares of Series C Preferred Stock.
Holders of the Series C Preferred
Stock are entitled to receive dividends as declared at the discretion of the Board of Directors. These dividends are based on the
number of shares of Common Stock into which each share of Series C Preferred Stock is convertible.
