UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

[X]	Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the quarterly period ended October 31, 2019
	For the quarterly period ended January 31, 2020
[ ]	Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934
	For the transition period from __________ to __________
	Commission File Number: 333-199013

Nogales Resources Corp.

(Exact name of registrant as specified in its charter)

Nevada	35-2510378
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

Unit 1908, Shanghai Mart Tower, 2299 West Yan'an Road, Changning District, Shanghai, China 200336
(Address of principal executive offices)

+86 (021) 2357-0055
(Registrant’s telephone number)

__________________________________________________________________
(Former name, former address and former fiscal year, if changed since last report)

Indicated by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days [X] Yes [ ] No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [ X ] No [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act..

[ ] Large accelerated filer

[ ] Non-accelerated filer

[ ] Emerging growth company

[ ] Accelerated filer

[X] Smaller reporting company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). [X ] Yes [ ] No

State the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 2,790,000 common shares as of ~~December~~March 13, ~~2019~~2020

Table of Contents

TABLE OF CONTENTS

Page PART I - FINANCIAL INFORMATION Item 1. Financial Statements 3 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 4 Item 3. Quantitative and Qualitative Disclosures About Market Risk 5 Item 4. Controls and Procedures 5 PART II - OTHER INFORMATION Item 1. Legal Proceedings 67 Item 1A: Risk Factors 67 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 67 Item 3. Defaults upon Senior Securities 67 Item 4. Mine Safety Disclosures 67 Item 5. Other Information 67 Item 6. Exhibits 67 SIGNATURES 78

Table of Contents

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Our consolidated financial statements included in this Form 10-Q are as follows:

F-1	Consolidated Balance Sheets as of ~~October~~January 31, ~~2019~~2020 ~~(unaudited)~~ and April 30, 2019 (unaudited);
F-2	Consolidated Statements of Operations for the three and ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 and ~~2018~~2019 (unaudited);
F-3	Consolidated Statement of Cash Flows for the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 and ~~2018~~2019 (unaudited); and
F-4	Notes to Consolidated Financial Statements (unaudited).

These unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the SEC instructions to Form 10-Q. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the interim period ended ~~October~~January 31, ~~2019~~2020 are not necessarily indicative of the results that can be expected for the full year.

3F-1

Table of Contents

NOGALES RESOURCES CORP.

CONSOLIDATED BALANCE SHEETS

(EXPRESSED IN US DOLLARS)

	October 31,			April 30,
	2019			2019
		(Unaudited)
ASSETS
Current
Cash	$	517		$	139
Total assets	$	517		$	139
LIABILITIES
Current
Accounts payable and accrued liabilities	$	12,000		$	22,324
Due to related party		175,974			143,606
Total current liabilities		187,974			165,930
STOCKHOLDERS’ DEFICIT
Preferred stock, $0.001 par value 10,000,000 shares authorized, none issued and outstanding		—			—
Common stock, $0.001 par value 90,000,000 shares authorized 2,790,000 shares issued and outstanding as of October 31, 2019 and April 30, 2019.		2,790			2,790
Additional paid in capital		18,135			18,135
Accumulated deficit		(208,382	)		(186,716	)
Total stockholders’ deficit		(187,457	)		(165,791	)
Total liabilities and stockholders’ deficit	$	517		$	139

(unaudited)

	January 31,			April 30,
	2020			2019

ASSETS
Current
Cash	$	498		$	139
Total assets	$	498		$	139
LIABILITIES
Current
Accounts payable and accrued liabilities	$	23,373		$	22,324
Due to related party		175,974			143,606
Total liabilities		199,347			165,930
STOCKHOLDERS’ DEFICIT
Preferred stock, $0.001 par value 10,000,000 shares authorized, none issued and outstanding		—			—
Common stock, $0.001 par value 90,000,000 shares authorized 2,790,000 shares issued and outstanding as of January 31, 2020 and April 30, 2019.		2,790			2,790
Additional paid in capital		18,135			18,135
Accumulated deficit		(219,774	)		(186,716	)
Total stockholders’ deficit		(198,849	)		(165,791	)
Total liabilities and stockholders’ deficit	$	498		$	139

See accompanying notes that are an integral part of these unaudited consolidated financial statements.

F-12

Table of Contents

NOGALES RESOURCES CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS

(EXPRESSED IN US DOLLARS)

(Unaudited)

	Three months ended October 31,						Six months ended October 31,
	Three months ended January 31,						Nine months ended January 31,
	2019			2018			2019			2018
	2020			2019			2020			2019
Operating expenses
Audit and accounting fees	$	34,~~000~~500		$	3,000		$	610,~~000~~500		$	69,400
Legal fees		—147			—			~~899~~1,046			665
Office expenses		6,~~055~~021			6,~~121~~041			1218,~~123~~144			1218,~~168~~209
Transfer and filing fees		724			~~732~~724			23,~~644~~368			12,~~560~~284
Net and comprehensive loss for the period	$	(911,~~779~~392	)	$	(9,~~853~~765	)	$	(2133,~~666~~058	)	$	(2030,~~793~~558	)
Net loss per common share – basic and diluted	$	(0.00	)	$	(0.00	)	$	(0.01	)	$	(0.01	)
Weighted average number of common shares outstanding – basic and diluted		2,790,000			2,790,000			2,790,000			2,790,000

See accompanying notes that are an integral part of these unaudited consolidated financial statements.

F-23

Table of Contents

NOGALES RESOURCES CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(EXPRESSED IN US DOLLARS)

(Unaudited)

	Six months ended October 31,
	Nine months ended January 31,
	2019			2018
	2020			2019
Operating activities
Net loss for the period	$	(2133,~~666~~058	)	$	(2030,~~793~~558	)
Changes in operating assets and liabilities:
Accounts payable and accrued liabilities		~~(10~~1,~~324~~049	)		(1,~~875~~085	)
Net cash used in operating activities		(3132,~~990~~009	)		(2231,~~668~~643	)
Financing activities
Due to related party		32,368			2731,~~650~~657
Net cash provided by financing activities		32,368			2731,~~650~~657
Change in cash during the period		~~378~~359			~~4,982~~14
Cash, beginning of the period		139			143
Cash, end of the period	$	~~517~~498		$	~~5,125~~157

See accompanying notes that are an integral part of these unaudited consolidated financial statements.

F-34

Table of Contents

NOGALES RESOURCES CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

~~October~~January 31, ~~2019~~2020

(Unaudited)

Note 1 Nature of Operations and Ability to Continue as a Going Concern

The Company was incorporated in the state of Nevada, USA on April 9, 2014. The Company was formed for the purpose of acquiring and developing mineral properties.

Basis of Presentation

The unaudited interim consolidated financial statements included herein have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. They do not include all information and notes required by generally accepted accounting principles for complete financial statements. However, except as disclosed herein, there has been no material change in the information disclosed in the notes to the financial statements included in the Annual Report on Form 10-K of the Company for the year ended April 30, 2019. In the opinion of management, all adjustments (including normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020, are not necessarily indicative of the results that may be expected for the year ending April 30, 2020. For further information, these unaudited interim consolidated financial statements and the related notes should be read in conjunction with the Company’s audited consolidated financial statements for the year ended April 30, 2019, included in the Company’s report on Form 10-K.

Going Concern

These consolidated financial statements have been prepared assuming the Company will continue as a going concern and will be able to meet its obligations and continue its operations for its next fiscal year. Realization values may be substantially different from carrying values as shown and these financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern. The Company has yet to achieve profitable operations, has accumulated losses of $~~208~~219,~~382~~774 and expects to incur further losses in the development of its business, all of which casts substantial doubt about the Company’s ability to continue as a going concern.

Note 2 Related Party Transactions

During the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020, the Company’s President advanced the Company $32,368, for a total amount advanced of $175,974. The advances are unsecured, bear no interest, and have no terms of repayment.

F-45

Table of Contents

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements.” These forward-looking statements generally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on our operations and future prospects on a consolidated basis include, but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

We are a mineral exploration company incorporated in Nevada on April 9, 2014. On May 8, 2014, we incorporated a wholly-owned subsidiary, NRC Exploration LLC in the state of Nevada, for the purposes of mineral exploration. On May 15, 2018, NRC Exploration LLC was dissolved.

On May 20, 2014, our consulting geologist introduced us to a mineral property and we acquired an option on that property whereupon we could acquire 100% legal and beneficial ownership interest in a mineral claim known as the Donald mineral claim. In view of the world wide depressed market for metals in 2015, we chose at that time not to exercise our option on the Donald Property and that option expired. Management is currently searching for other opportunities in the mineral exploration field.

Results of Operations for the three and ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020.

For the three and ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 we did not earn any revenues. For the three and ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 we incurred total operating expenses of $911,~~779~~392 and $2133,~~666~~058 (~~2018~~2019 – $9,~~853~~765 and $2030,~~793~~558).

In the three and ~~six~~nine months ended ~~October~~ January 31, ~~2019~~ 2020 our net loss was $911,~~779~~392 and $2133,~~666~~058 (~~2018~~2019 – $9,~~853~~765 and $2030,~~793~~558).

Our expenses during the three and ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020 consisted of audit and accounting fees of $34,~~000~~500 and $610,~~000~~500 (~~2018~~2019 – $3,000 and $69,400), Office and miscellaneous expenses of $6,~~055~~021 and $1218,~~123~~144 (~~2018~~2019 – $6,~~121~~041 and 1218,~~168~~209), legal fees of $~~nil~~147 and $~~899~~1,046 (~~2018~~2019 – $ nil and $665) and transfer and filing fees of $724 and $23,~~644~~368 (~~2018~~2019 – $~~732~~724 and $12,~~560~~284).

Liquidity and Capital Resources

As of October 31, 2019, we had total current assets of $517 (April 30, 2019 – $139), consisting entirely of cash. We had current liabilities of $187,974 (April 30, 2019 – $165,930). Accordingly, we had a working capital deficit of $187,457 as of October 31, 2019 (April 30, 2019 – $165,791).

To date, we have funded our operations primarily through loans from related parties and from unrelated third parties. As of October 31, 2019, we owed our current CEO $175,974 for advances.

We do not currently have sufficient funds to repay our existing debts. If we are unable to secure additional financing, we could fail and investors may lose some or all of their investment. In addition, we are no longer pursuing exploration or development of the Donald Property and our option for that property has expired. We are currently searching for other opportunities in the mineral exploration field. As such, we are unable to provide an accurate estimate of our financial requirements for the next twelve months. If we do identify a suitable business opportunity that we wish to pursue, we will likely need substantial financing. If we fail to obtain sufficient financing, our ability to pursue alternative business opportunities may be limited. We do not currently have any financing arrangements in place, and there is no assurance that sufficient financing will be available to us when needed.

Table of Contents

Liquidity and Capital Resources

As of January 31, 2020, we had total current assets of $498 (April 30, 2019 – $139), consisting entirely of cash. We had current liabilities of $199,347 (April 30, 2019 – $165,930). Accordingly, we had a working capital deficit of $198,849 as of January 31, 2020 (April 30, 2019 – $165,791).

To date, we have funded our operations primarily through loans from related parties and from unrelated third parties. As of January 31, 2020, we owed our current CEO $175,974 for advances.

Going Concern

As discussed in the notes to our consolidated financial statements, we have no established source of revenue. Without realization of additional capital, it would be unlikely for us to continue as a going concern.

Our activities to date have been supported by equity financing. Management continues to seek funding from its shareholders and other qualified investors to pursue its business plan.

Off Balance Sheet Arrangements

As of ~~October~~January 31, ~~2019~~2020, there were no off balance sheet arrangements.

Recently Issued Accounting Pronouncements

We do not expect the adoption of recently issued accounting pronouncements to have a significant impact on our results of operations, financial position or cash flow.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

A smaller reporting company is not required to provide the information required by this Item.

Table of Contents

Item 4. Controls and Procedures

We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of ~~October~~January 31, ~~2019~~2020. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, Ms. Yang Liu. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of ~~October~~January 31, ~~2019~~2020, our disclosure controls and procedures are not effective. There have been no changes in our internal controls over financial reporting during the ~~six~~nine months ended ~~October~~January 31, ~~2019~~2020.

Management determined that the material weaknesses that resulted in controls being ineffective are primarily due to lack of resources and number of employees. Material weaknesses exist in the segregation of duties required for effective controls and various reconciliation and control procedures not regularly performed due to the lack of staff and resources.

Limitations on the Effectiveness of Internal Controls

Our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will necessarily prevent all fraud and material error. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the internal control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.

Table of Contents

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

We are not a party to any pending legal proceeding. We are not aware of any pending legal proceeding to which any of our officers, directors, or any beneficial holders of 5% or more of our voting securities are adverse to us or have a material interest adverse to us.

Item 1A: Risk Factors

A smaller reporting company is not required to provide the information required by this Item.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults upon Senior Securities

None

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

Item 6. Exhibits

Exhibit Number	Description of Exhibit
3.1	Articles of Incorporation (1)
3.2	By-laws (1)
31.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101	Materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended October 31, 2017 formatted in Extensible Business Reporting Language (XBRL).

(1) Incorporated by reference to Registration Statement on Form S-1 filed on September 29, 2014.

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Nogales Resources Corp.
Date:	~~December~~March 13, ~~2019~~2020
By:	/s/ Yang Liu Yang Liu
Title:	Chief Executive Officer, Chief Financial Officer and Director (principal executive officer and principal accounting officer)

Filing Compare · Nogales Resources Corp