UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-K

x Annual report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934

for the fiscal year ended July 31, ~~2017~~2018, or

¨ Transition report pursuant to section 13 or 15(d) of the Securities Exchange act of 1934

for the transition period from to

Commission File No. 0-55423

GRAND PERFECTA, INC.

(Exact Name of Registrant as Specified in Its Charter)

Nevada

46-5732930

(State or Other Jurisdiction of

Incorporation or Organization)

(IRS Employer

Identification No.)

~~Koyo~~123 ~~Building,~~West ~~2F, 2-36-10 Minamisuna~~Nye ~~Koto-ku~~Lane, ~~Tokyo~~Suite ~~136-0076 Japan~~129

Carson City, NV 89706

(Address of Principal Executive Offices and Zip Code)

Registrant’s Telephone Number: ~~+81~~(801)560-~~3-5632-7251~~6969

Securities registered under Section 12(b) of the Act: None

Securities registered under Section 12(g) of the Act: Common Stock, Par Value $0.001

Indicate by check mark if registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes ¨ No x

Indicate 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. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Website, if any,~~ every interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 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 ¨x

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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 ¨ Accelerated filer ¨ Non-accelerated filer ¨ ~~(Do not check if a smaller reporting company)~~ Smaller reporting company x Emerging growth company x

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). Yes ¨ No x

The aggregate market value of voting stock held by non-affiliates on January 2931, ~~2017~~2018, based on the average bid and asked prices on that day was $~~676~~1,~~363~~087,560. As of ~~October~~January 1516, ~~2017~~2019, the Registrant had outstanding 314,~~800~~977,~~000~~332 shares of common stock, par value $0.001.

Documents incorporated by reference: None

TABLE OF CONTENTS

ITEM NUMBER AND CAPTION		Page
Part I
1.	Business	1
1A.	Risk Factors	4
1B.	Unresolved Staff Comments	4
2.	Properties	4
3.	Legal Proceedings	4
4.	Mine Safety Disclosures	4
Part II
5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	5
6.	Selected Financial Data	6
7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	6
7A.	Quantitative and Qualitative Disclosures About Market Risk	13
8.	Financial Statements and Supplementary Data	13
9.	Changes in and Disagreements ~~With~~with Accountants on Accounting and Financial Disclosure	13
9A.	Controls and Procedures	13
9B.	Other Information	14
Part III
10.	Directors, Executive Officers and Corporate Governance	15
11.	Executive Compensation	16
12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	17
13.	Certain Relationships and Related Transactions, and Director Independence	18
14.	Principal Accountant Fees and Services	19
15.	Exhibits and Financial Statement Schedules	20

CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS

This annual report on Form 10-K may contain certain “forward-looking” statements as such term is defined by the Securities and Exchange Commission in its rules, regulations and releases, which represent the Company’s expectations or beliefs, including but not limited to, statements concerning the Company’s operations, economic performance, financial condition, growth and acquisition strategies, investments, and future operational plans. For this purpose, any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the generality of the foregoing, words such as “may,” “will,” “expect,” “believe,” “anticipate,” “intent,” “could,” “estimate,” “might,” “plan,” “predict” or “continue” or the negative or other variations thereof or comparable terminology are intended to identify forward-looking statements. This information may involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from the future results, performance, or achievements expressed or implied by any forward-looking statements.

This annual report contains forward-looking statements, many of which relate to, or are based upon, (a) our plans for developing or participating in the development of new markets for our horse racing and sports content, (b) our opportunities for implementing horse racing related fantasy sports offerings, (c) our growth strategies, (d) anticipated trends in our industry, (e) our future financing plans, and (f) our anticipated need for working capital. These statements may be found under Item 1. “Business,” “Item 2. Properties” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations,” as well as in this annual report generally. Actual events or results may differ materially from those discussed in forward-looking statements as a result of various factors and matters described in this annual report. In light of these risks and uncertainties, there can be no assurance that the forward-looking statements contained in this annual report will in fact occur.

Given these risks and uncertainties, readers are cautioned not to place undue reliance on our forward-looking statements.

_______________________

Unless the context otherwise requires or otherwise notes, references in this Annual Report to “Grand Perfecta,” the “Company,” “we,” “our” or “us” means Grand Perfecta, Inc., and our ~~three~~subsidiaries ~~wholly-~~that we owned ~~subsidiaries~~for a portion of our fiscal year: LinkBit Consulting Co, Ltd. (“LinkBit”), Umajin Hong Kong Ltd. (“Umajin HK”), ~~and~~ Sports Perfecta, Inc. (“Sports Perfecta”) and WRN Co., Ltd. (“WRN”). As described elsewhere in this document, the Company still operates through two subsidiaries, Umajin HK, which had little to no operations in this fiscal year, and WRN, which is still operating.

iii

PART I

ITEM 1.

BUSINESS

Company Overview and History

Grand Perfecta, Inc., a Nevada corporation, (the “Company”) is engaged in the business of gathering, publishing and disseminating horse racing information and other content related to horse racing in Japan and the Japanese horse racing industry through its wholly owned subsidiary WRN, a Japanese corporation. Historically, through June 27, 2018, our operations ~~have~~were ~~been~~ conducted in Japan through our wholly-owned subsidiary, LinkBit Consulting Co, Ltd. (“LinkBit”). ~~currently~~LinkBit ~~has~~historically had six different websites that it ~~owns~~owned and ~~operates~~operated through its various subsidiaries, which ~~comprise~~comprised substantially all of the Company’s revenue. In May 2013, we acquired Umajin Hong Kong (“Umajin HK”) in Hong Kong as a wholly-owned subsidiary. Umajin HK delivered information on horse racing and soccer to its users until the end of June 2017, when it terminated its service.

In ~~August~~June ~~2015~~2018, Grand ~~Perfecta formed Sports~~ Perfecta tocompleted ~~pursue~~a ~~development~~disposition of a ~~fantasy~~substantial ~~sports~~portion ~~offering to horse racing fans and to offer more established fantasy sports opportunities in other sports. On January 7, 2016, Sports Perfecta acquired 100%~~ of ~~the outstanding stock of Just Mobile Sdn Bhd, a Malaysian company. On January 20, 2016, Just Mobile changed~~ its ~~name~~assets ~~to Sports Perfecta Technologies Sdn Bhd, so references herein to Sports Perfecta~~ and ~~its~~ operations ~~include~~through ~~this~~two ~~subsidiary~~transactions. ~~The total aggregate purchase price for the outstanding shares of Just Mobile amounted to $200,000, of which $120,000 was paid on the closing date and the remaining $80,000 was paid in April 2016.~~

~~Asserting~~On ~~Claims~~June ~~against~~26, ~~Management~~2018, the Company transferred 100% of the common stock of Sports Perfecta, Inc., a California corporation and subsidiary of the Company, and a receivable representing a sum owing to the Company by Sports Perfecta in the amount of JPY 185,540,908 to Neo Sports Ltd., a Japanese company (“Neo Sports”), in exchange for (a) 23,600,000 shares of Company common stock, (b) 100,00 shares of Company Series A Convertible Preferred Stock, and (c) an outstanding contract option right to purchase 3,000,000 shares of the common stock of Company at a price of $1.00 per share (the “Sports Perfecta Transaction”). All common and preferred shares delivered to the Company as part of the Sports Perfecta Transaction were immediately cancelled.

~~Because~~All ~~all~~ of ~~our~~the ~~directors and executive~~Company ~~officers~~securities ~~are~~acquired ~~either~~by ~~not~~Neo ~~U.S.~~Sports ~~citizens~~were orimmediately ~~reside~~transferred ~~outside~~to the ~~United~~Company ~~States,~~in itexchange ~~may~~for be100% ~~difficult,~~of ifthe ~~not~~capital ~~impossible,~~stock toof ~~acquire jurisdiction~~SPI, ~~over~~which ~~these~~was ~~persons~~owned inby the ~~event~~Company, ~~a lawsuit is initiated against Grand Perfecta or its officers~~ and ~~directors by~~ a ~~stockholder~~receivable ~~or group~~representing ofa ~~stockholders~~sum inowing ~~the~~to ~~United States. Furthermore, because~~ the ~~assets~~Company ofby ~~Grand~~Sports Perfecta, asin ~~well as~~ the ~~assets~~amount of ~~Grand Perfecta’s~~JPY ~~officers and directors~~185, ~~are located outside of the U.S.~~540, ~~it would also be very difficult to access those assets to satisfy an award entered against Grand Perfecta in a U~~908.~~S. court.~~

~~Voting~~On ~~Control~~June 27, 2018, the Company sold 100% of the capital stock of Link Bit Consulting Co, Ltd., a Japanese company and subsidiary of the Company (“LinkBit”), to IS Digital Ltd., a Cayman Islands company (“ISD”) for $420,000 in cash, and a sale to ISD of a receivable representing a sum owing to the Company by ~~Management~~LBC in the amount of JPY 8,089,625 for $80,000 in cash (the “LinkBit Transaction”).

~~Shuya~~After ~~Watanabe,~~the ~~who is a director and Chief~~foregoing ~~Executive Officer~~transactions, ~~owns Common Stock and Series A Convertible Preferred Stock of Grand Perfecta that represent approximately 46% of~~ the ~~total~~Company ~~voting~~continues ~~power of shares entitled~~ to ~~vote~~own onas ~~all~~subsidiaries ~~matters~~Umajin ~~submitted~~HK ~~to the shareholders for a vote. Furthermore, our officers~~ and ~~directors hold Common Stock and Series A Convertible Preferred Stock representing a total combined voting power of approximately 71% of the total voting power of our outstanding capital stock~~WRN. AsWRN ais ~~result,~~engaged ~~our officers and directors as a group, are effectively able to control certain corporate governance matters requiring shareholders’ approval. Such matters include transactions~~ in ~~which our officers and directors have an interest other than as a shareholder,~~ the ~~approval~~business of ~~significant~~publishing ~~corporate~~horse ~~transactions~~racing ~~such~~information, asincluding ~~increasing~~upcoming ~~the authorized number of our shares to complete acquisitions or raise capital~~races, ifrace ~~necessary~~results, and ~~any~~ ~~other~~detailed ~~transactions~~profiles requiring a majority vote without seeking other shareholders’ approval. Furthermore, our officers and directors as a group also have the ability to control other matters requiring shareholder approval including the election of ~~directors,~~ ~~which~~foreign ~~could~~jockeys ~~result~~who race in ~~the entrenchment of management~~Japan.

Asserting Claims against the Company

Because nearly all of the assets of Grand Perfecta are located in Japan, it would be very difficult to access those assets to satisfy an award entered against Grand Perfecta in a U.S. court.

Horse Racing in Japan

Horse racing in Japan is a popular equestrian sport with approximately 16,000 horse races held each year, which are predominately flat and jump races. Horse racing is organized and managed by the Japan Racing Association (JRA) and National Association of Racing (NAR), both of which are subject to the supervision of the Ministry of Agriculture, Forestry and Fisheries. This system of government supervision and administration of horse racing is unique to Japan and, we believe, one of the main reasons horse racing in Japan is considered by many the best in the world.

~~The~~In ~~JRA~~2017, ~~manages~~there ~~horse~~were approximately 288 JRA racing ~~events~~days atand ~~ten major~~1,276 ~~race~~NAR ~~courses~~racing indays. ~~metropolitan~~‘Racing ~~areas~~days’ ~~that~~means ~~are~~the ~~called~~total ~~Chuo~~number ~~Keiba~~of ~~(meaning~~race ~~"central~~days ~~horse~~of ~~racing")~~all courses. ~~Chuo~~Total ~~Keiba~~prize ~~represents some~~money of ~~the~~JRA ~~richest~~and ~~racing~~NAR races in ~~the world, with~~ 2017 ~~purses~~was ~~for~~approximately ~~graded~~JPY103 ~~stakes~~billion ~~races beginning at JPY55.6 million~~ (about US$~~506,000~~915 million). ~~The~~ ~~annual~~JRA ~~Japan Cup in November is 2,400 meter invitational turn race~~ and ~~Arima~~NAR ~~Kinen in December is a 2,500 meter season-end~~2018 ~~Grand~~figures ~~Prix. These two races~~ are ~~the~~not ~~richest~~yet ~~turf races in Japan and one of the richest in the world with a 2017 purse of JPY570 million (about US $5 million each)~~available.

The NAR manages approximately 14 smaller municipal race courses operated by local racing authorities, which is called Chihou Keiba (meaning "local horse racing"). Chihou Keiba consists primarily of dirt graded events, including the international Grade 1 race, Tokyo Daishōten.

In 2016, there were approximately 288 JRA racing days and 1,290 NAR racing days. ‘Racing days’ means the total number of race days of all courses. Total prize money of JRA and NAR races in 2016 was approximately JPY80 billion (about US$728 million). JRA and NAR 2017 figures are not yet available.

On track pari-mutuel betting in 2016 was JPY134 billion (about US$1.2 billion), and off-track betting was JPY 3.04 trillion (about US$27.7 billion). The number of spectators attending JRA races in 2016 was approximately 6.3 million and attending NAR races was approximately 3.2 million.

The popularity and large fan following for horse racing in Japan, which translates into a large volume of betting, creates a demand by racing enthusiasts for information on breeding, race history of horses, jockeys, and other matters that may be factors in evaluating races and how to bet the horses. Our business focuses on meeting that demand for information.

Our Business

~~Our~~Through June 27, 2018, our primary business iswas the delivery through the Internet and by phone to users and other consumers in Japan of information on horse racing and then convert those users to paying customers for enhanced services. ~~Revenue~~Prior ~~from~~to ~~service payments for~~ the ~~fiscal~~Sports ~~year~~Perfecta ~~ended~~Transaction ~~July~~and ~~31,~~the LinkBit ~~2017~~Transaction, ~~was~~the ~~approximately 97% of total revenue. The~~ remainder of our revenue ~~comes~~came from providing sales promotion services and advertisement insertion on ~~the~~ the horse racing information website ~~Umajin.net,~~and ~~which is operated by LinkBit. Also, we receive a small portion of revenue~~ selling mailing labels derived from our user base to third parties involved in the horse racing industry, which is a service we provide as a sideline to our core business. Since June 27, 2018, the Company’s primary business operations occur through our remaining operating subsidiary, WRN, which is engaged in the business of publishing horse racing information, including upcoming races, race results, and detailed profiles of foreign jockeys who race in Japan.

Internet and Phone Services

WePrior to the Sports Perfecta Transaction and the LinkBit Transaction, we typically ~~maintain~~maintained 6-10 branded websites which each have different concepts , and which ~~are~~were operated to meet the respective preferences of horse racing fans who are our users and customers. ~~Every 3-5 years we redesign the websites or launch new services in response to trends and changes in preference of horse racing fans and add a fresh dimension to the websites.~~ The following is a list of our prior subsidiaries and the ~~website~~websites owned by each that iswas used to publish racing information for our users.

· Turf Agent Co., Ltd., ~~publishes~~published information collected from racehorse owners on its website at http://turfagent.jp. In addition, Turf Agent provides current news about horse fairs, horse-breeding centers, etc. Turf Agent also ~~publishes~~published articles with tips and advice on how to evaluate and predict the racing performance of horses and how to identify (remarkable/promising) horses in specific races with the goal of fostering better appreciation and enjoyment of horse racing.

· Real Selector Co., Ltd., ~~publishes~~published information directed at beginners in the appreciation and betting of horse racing on its website at www.real-selector.jp.

· Tau Project Co., Ltd., ~~publishes~~published analytics on horses and races known as “Next-generation betting ticket purchase theory” on its website at https://to-dai.jp/.

· G1 Project Co., Ltd., ~~publishes~~published integrated statistical information on a wide range of elements and factors pertaining to horses, jockeys, tracks, races, and other horse racing matters on its website at http://www.g1-pro.jp.

· ~~WRN~~LinkBit ~~Co.,~~operated ~~Ltd.,~~a ~~which~~website ~~started~~called ~~its~~“Yoso ~~service~~Ou” inat ~~August~~http://keibagod.jp/ ~~2016,~~that publishes ~~global~~betting ~~horse~~lines ~~racing~~and ~~information~~provides ~~including~~other ~~upcoming~~track ~~races~~tips, ~~race~~advice ~~results,~~ and ~~detailed~~comments ~~profiles~~to ofusers. ~~foreign~~From ~~jockeys~~time ~~who~~to ~~race~~time inthe ~~Japan~~website atalso ~~http://www~~publishes feature articles on upcoming races.~~worldracenews.com.~~

·All of the foregoing were subsidiaries of LinkBit, ~~operates~~and awere ~~website~~disposed ~~called~~of ~~“Yoso~~in ~~Ou”~~the atLinkBit ~~http://keibagod~~Transaction.~~jp/~~ ~~that~~After ~~publishes~~the ~~betting~~LinkBit ~~lines~~Transaction, Umajin HK and ~~provides~~WRN are ~~other~~the ~~track~~only ~~tips,~~remaining ~~advice~~wholly-owned ~~and~~subsidiaries ~~comments~~of tothe ~~users~~Company. ~~From~~WRN ~~time~~started toits ~~time~~service ~~the~~in ~~website~~August ~~also~~2016, publishes ~~feature~~horse ~~articles~~racing information onincluding upcoming races, race results, and detailed profiles of foreign jockeys who race in Japan.

Customers to our Internet and phone information services paid access fees that range between $5 and $1,000, depending on the level of information access desired by the customer. Customers access the information service purchased with a personal user name and password for Internet access and a personal PIN for telephone access. Below is a chart setting forth specifics as to the service offering types and price ranges for each of our major service offerings that we provided through June 27, 2018 and for WRN, that is still operating as our subsidiary. We provide our customers with premium content consisting of single item services, such as information on specific races or events or multiple races on the same day that the customer can access on a one-time or short term basis, package items made up of a combination of single items with common features or trends in items that we identify in single item service purchases, and term items that are published over a period of time and provide broader coverage of events or various aspects of the horse racing industry. In the table below, we identify for each service the price range and type of service offered.

· LinkBit also owns and operates Umajin.net at http://uma-jin.net/, which is a comprehensive source of general information related to horse racing, including current news, races and events, interviews, and race videos and pictures.

All of the foregoing are subsidiaries of LinkBit.

Customers to our Internet and phone information services pay access fees that ranges between $5 and $1,000, depending on the level of information access desired by the customer. Customers access the information service purchased with a personal user name and password for Internet access and a personal PIN for telephone access. Below is a chart setting forth specifics as to the service offering types and price ranges for each of our major service offerings. We provide our customers with premium content consisting of single item services, such as information on specific races or events or multiple races on the same day that the customer can access on a one-time or short term basis, package items made up of a combination of single items with common features or trends in items that we identify in single item service purchases, and term items that are published over a period of time and provide broader coverage of events or various aspects of the horse racing industry. In the table below we identify for each service the price range and type of service offered.

Service Name	Price Range (USD)	Service Type (S = Single Item; P = Package or Term Item)
Turf Agent	$100 - $1,000	S,P
Tau Project	$10 - $100	S
G1 Project	$100 - $1,000	S,P
Real Selector	$100 - $1,000	S,P
Yoso ou	$5 - $300	S,P
WRN	$30 - $1,000	S,P

As of July 31, 2017, we had accumulated approximately 1.43 million user identifications. Among these, approximately 93,700 have used our paid services. Our revenue represents a large number of purchases across a large menu of potential options rather than a large number of purchases in a small number of service offerings. In 2017, approximately 80% of our offered services are package items and approximately 20% are single service items.

Selling our Services

The process of selling our horse racing information services focuses on attracting users to our websites and offering to them free content as an inducement to purchase access for more in-depth content. We solicit users to register themselves as a website or a phone user, free of charge, by advertising in a variety of public media channels, including newspapers, magazines, internet, TV, and direct mail, including advertising in our own media and holding events.

When users take advantage of our free content we are effectively giving them a sample of what we offer for purchase through our websites. This free content also gives us the opportunity to optimize content offerings to our users. When a user signs on to access our free content, we gather ~~information~~ information from the user’s usage that enables us to ascertain preferences and interests, which we use to make more focused service offerings directly to the user. This process enables us to perform a continual sales process with our users to convert them to customers. Historically, we have realized a conversion rate of approximately 6% of free content users making a decision to purchase one or more services. Our sales effort ~~focusses~~focuses on increasing the number of users, improving and enhancing the users’ experience, and improving our conversion rate to paying customers.

We also promote our services to potential users by pursuing a variety of activities that we believe increases public interest in horse racing, develops new horse racing fans, and exposes our websites and information offerings to potential new users. ~~The following are examples of the activities we have pursued in the past and may pursue in the future to advance public interest in horse racing and increase our potential user base.~~

· Annually we publish, in print media and on our website, magazines about upcoming racing seasons, and we also write articles for third party publications;

· We collaborate with Umajin Japan in the production of an internet television program titled “Ba Kyun!” that airs on FRESH! By Abema TV, and in providing content for the magazine Umajin published by Umajin Japan;

· We actively promote racing fan events, such as “Umaonaire,” which is a race prediction competition, and fan meetings with jockeys;

· From April 2008 through March 2010 we produced a weekly program aired on BS Fuji TV titled “Umajin;” and

· We provide planning, website and consulting services to others involved in the horse racing industry with respect to their events and promotional activities, including, for example, assisting emerging jockeys with establishing an internet identity through blogging.

Whenever we provide the foregoing services, our website, Umajin.net, and participation is publicized as part of the publication, program, event, or support service. Furthermore, in consideration of the services and content we provide in producing the internet television program Ba Kyun!, we are allowed to provide the full version of the program simultaneously on our umajin.net website.

LinkBit previously published Umajin, a horse racing magazine in Japan, but transferred that business to Umajin Co. Ltd. (referred to as Umajin Japan). We have continued to collaborate with Umajin Japan in the production of articles and other content for the magazine, and we also co-sponsor with Umagin Japan fan and spectator events of the type described above. We also collaborated with Umajin Japan in the production of the television program by providing sources and content.

Content

Our ability to attract users and sell them our fee-based services depends on the content we have to offer. We pursue a number of activities to generate content for our users.

WeThrough ~~have~~June 27, 2018, we had a team that ~~focuses~~focused on establishing and maintaining relationships with horse owners, trainers, jockeys, and others, all of which ~~are~~were a primary source of current information on what iswas going on at the track and in the horse racing industry. There are approximately 420 jockeys, 700 horse trainers, and 7,000 horse owners actively working today in Japan. We have connections with almost all of the jockeys and trainers, and with many of the owners as well. In addition, we gather information from more than 60 people who were formerly employed or otherwise affiliated with the horse racing industry, such as former jockeys and horse trainers. We also purchase horse racing information collected by Umajin Japan.

Much of the information we collect is used to produce articles, features, and on-going monthly reports that are the staples of our websites. We also use this information to perform analytics on horses and races and to calculate what we determine to be the value and capability of race horses using techniques we have developed by analyzing the previous10 years of horse racing data from Japan and nine years of horse racing data from Hong Kong.

Umajin.net has obtained approximately 674,000 addresses, all of which are non-paying. The total number of downloaded Umajin smartphone apps was 275,000.

LinkBit also publishes information on Umajin.net consisting of feature stories on noteworthy events, interviews with people in the horse racing industry, such as jockeys, trainers, and others, horse racing predictions and analysis, and distributes magazines by email. In addition, LinkBit has overseen the production and management of TV shows and events in the horse racing and sports industry. LinkBit collaborates with Umajin Japan on the production of “Ba Kyun!” a program that airs on FRESH! By Abema TV, an internet television station run by a Japanese internet, media, game and advertisement company, Cyber Agent, which has the benefit of publicizing our website, Umajin.net, to horse racing fans.

Competition

~~We believe we are the leading provider of horse racing information in Japan.~~ With the popularity of horse racing in Japan and the high demand for information among enthusiasts, there are a substantial number of publications and other information sources that we compete with. We compete with these other publications and services on the basis of the quality of our content. We believe our focus on cultivating information sources allows us to provide better information than our competitors can provide.

Specifically, we believe our competitive advantage is based upon:

Our information-gathering ability (including the quantity and quality of information we gather);

Our relationships with affiliates and industry personnel on-site;

Our data analysis programs;

The techniques we use to present and distribute information and analysis in a manner that is highly usable by our customers;

The volume and quality of information we provide free of charge; and

Our integrated approach to providing horse racing information on a wide range of elements and factors pertaining to horses, jockeys, tracks, races, and other horse racing matters.

Sports Perfecta

Sports Perfecta is the U.S. subsidiary of Grand Perfecta, and a digital sports media company offering sport games, websites, iPhone and Android apps, Facebook apps as well as Smart TV apps. Sports Perfecta has B2B (business to business) and B2C (business to consumer) platforms, which has two components - namely FanXT and Fantasy4All for sports leagues around the world.

· FANXT provides daily and weekly fantasy games for popular sports across the world such as NFL, NBA, MLB, soccer and motor racing via the web, mobile and Facebook apps. It launched a fantasy jockey product in the United States last year.

· Fantasy4All is a white-label fantasy sport game that includes seasonal to daily fantasy sports running on the web, Facebook, iPhone/iPad and Android platforms, and covers a vast variety of sports from the NFL to soccer and lacrosse. White-label fantasy games embrace the strength of each platform, allowing users to share their achievements via Facebook. We are currently providing the B2B platform to the Australian grassroots soccer league.

At the moment Sports Perfecta provides free services aiming to increase visibility of its service to fantasy sports fans, and horse racing fans as well, so as to broaden the base of customers and potential paying users.

Intellectual Property

WeThrough ~~hold~~June ~~two~~27, ~~Trademarks: UMAJIN~~2018, we ~~which~~held ~~was registered~~two trademarks in Japan. ~~under~~Since ~~registration~~the ~~number~~LinkBit ~~5319066 as of April 23~~Transaction, ~~2010,~~we ~~and~~do ~~WINDEX1,~~not ~~which~~possess ~~was~~any ~~registered~~trademarks inor ~~Japan~~other ~~under~~intellectual ~~registration number 5876024 as of August 26, 2016~~property.

Employees

Grand Perfecta currently has ~~approximately~~one ~~67 employees~~employee, ~~including~~ ~~seven~~Steve ~~management~~Ketter, ~~level~~its ~~employees~~Chief ~~and~~Executive ~~7 part-time employees~~Officer. ~~Eight~~WRN, ofa ~~the~~wholly ~~employees~~owned ~~and~~subsidiary, has two ~~part-time~~contract employees ~~work at SPI’s subsidiary~~ in ~~Malaysia. The rest of the employees are in~~ Japan.

Further Information and Reports

We are required to file with the SEC annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports of certain events on Form 8-K, and proxy and information statements disseminated to stockholders in connection with meetings of stockholders and other stockholder actions. Copies of these and any other materials we file with the Commission may be inspected without charge at the public reference facilities maintained by the Commission in Room 1580 – 100 F Street, N.E., Washington, D.C. 20549. Copies of all or any part of our filings may be obtained from the Public Reference Section of the SEC at 100 F Street, N.E., Washington, D.C. 20549, upon payment of the prescribed fees. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The Company’s filings with the Commission are also available through its web site at http://www.sec.gov.

ITEM 1A.

RISK FACTORS

Disclosure under this item is not required of a smaller reporting company.

ITEM 1B.

UNRESOLVED STAFF COMMENTS

None.

ITEM 2.

PROPERTIES

Our principal business office is located at ~~Koyo~~123 ~~Building,~~West ~~2F,~~Nye ~~2-36-10 Minamisuna~~Lane, ~~Koto-ku,~~Suite ~~Tokyo 136-0076 Japan~~129, ~~which~~Carson ~~we lease for a monthly payment of JPY1~~City,~~725,360~~ ~~(approximately US~~NV ~~$15,700)~~89706. ~~Our~~We ~~office~~are inusing ~~Kuala~~the ~~Lumpur,~~office ~~Malaysia~~space isof ~~located~~our Chief atExecutive ~~12-05~~Officer, ~~Tower~~Steve AKetter, ~~The~~who ~~Vertical~~is ~~Office~~not ~~Suite,~~charging ~~8 Jalan Kerinchi, Bangsar South, 59200 Kuala Lumpur, Malaysia, which has~~ a ~~monthly~~fee ~~lease~~for ~~cost~~our use of ~~MYR~~the ~~5,668 (approximately US$1,300)~~space.

ITEM 3.

LEGAL PROCEEDINGS

We ~~are~~may be the subject of certain legal matters that we consider incidental to our business activities. ItWe isare ~~the~~not ~~opinion~~currently aware of ~~management~~any ~~that~~ongoing ~~the~~litigation ~~ultimate~~that ~~disposition of these matters~~ will ~~not~~ have a material impact on our financial position, liquidity or results of operations.

ITEM 4.

MINE SAFETY DISCLOSURES

The disclosure required by this Item 4 is not applicable to the Company’s business.

PART II

ITEM 5.

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

The common stock of Grand Perfecta trades in the over-the-counter market under the symbol “GPIW.” The following table sets forth for the respective periods indicated the prices of the common stock in the over-the-counter market, as reported and summarized on the OTC Marketplace. Such prices are based on inter-dealer bid and ask prices, without markup, markdown, commissions, or adjustments and may not represent actual transactions.

Calendar Quarter Ended	High Bid ($)	Low Bid ($)
October 31, 2015	$0.22	$0.14
January 31, 2016	$0.20	$0.12
April 30, 2016	$0.12	$0.07
July 31, 2016	$0.31	$0.07
October 31, 2016	$0.56	$0.10
January 31, 2017	$0.11	$0.04
April 30, 2017	$0.08	$0.06
July 31, 2017	$0.07	$0.04
October 31, 2017	$0.07	$0.04
January 31, 2018	$0.07	$0.03
April 30, 2018	$0.06	$0.03
July 31, 2018	$0.06	$0.03

Unregistered Sales of Equity Securities

There are no unregistered sales of securities that have not been reported, previously.

Dividends

We did not make any distributions to shareholders in fiscal years ~~2016~~2018 or 2017. Our present intention is to retain any earnings for use in our business activities, so it is not expected that any dividends on the common stock will be declared and paid in the foreseeable future.

Security Holders

At ~~October~~December 1519, ~~2017~~2018, there were approximately ~~599~~ 592 holders of record of our common stock.

Equity Compensation Plans

As of July 31, ~~2017~~2018, there were no equity securities authorized for issuance under any Company compensation plans.

Repurchases of common stock

There were no repurchases of equity securities by Grand Perfecta in the ~~three-month~~year ~~period~~ ended July 31, ~~2017~~2018.

ITEM 6.

SELECTED FINANCIAL DATA

Disclosure under this item is not required of a smaller reporting company.

ITEM 7.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and related notes appearing in this Form 10-K. Some of the information contained in this discussion and analysis or set forth elsewhere in this Form 10-K, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. You should know that there are many factors, both within and outside our control, that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

General

Grand Perfecta is engaged in the business of gathering, transmitting and providing horse racing information via various types of media, including ~~multiple~~a ~~websites~~website owned and operated by the wholly owned ~~subsidiaries~~subsidiary ofWRN. Prior to the Sports Perfecta Transaction and the LinkBit. ItTransaction, isthe ~~also~~Company ~~pursuing~~was pursuing development of a fantasy sports offering for a number of different sports, including horse racing, through its wholly-owned subsidiary, Sports Perfecta. A wholly owned subsidiary, Umajin HK, had been delivering information on horse racing to its users through its website similar to LinkBit, however it terminated its services at the end of June 2017.

Critical Accounting Policies

Our financial statements have been prepared in accordance with accounting principles generally accepted in the United States, which require that we make certain assumptions and estimates that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of net revenue and expenses during each reporting period. On an ongoing basis, management evaluates its estimates, including those related to collection of receivables, impairment of goodwill, contingencies, litigation and income taxes. Management bases its estimates and judgments on historical experiences and on various other factors believed to be reasonable under the circumstances. Actual results under circumstances and conditions different than those assumed could result in material differences from the estimated amounts in the financial statements. Our significant accounting policies are more fully described in the notes to our consolidated financial statements.

Basis of Presentation

The accompanying consolidated financial statements of the Company have been prepared in accordance with principles generally accepted in the United States of America (“GAAP”) and include the accounts of Grand Perfecta and its wholly-owned subsidiaries LinkBit, Umajin HK, ~~and~~WRN and Sports Perfecta. The Company discontinued the operations of its wholly-owned subsidiaries LinkBit and SPI in June 2018. The accounts for these subsidiaries have been presented in the discontinued operations in the accompanying consolidated financial statements. All intercompany balances and transactions have been eliminated in consolidation. The Company has determined that ~~two~~three affiliated entities, Space Cultivation Mobile, ~~and~~ Japan Horse Circle and Basougu Shokuninkai, which LinkBit conducts business with ~~are~~were variable interest entities and that the Company is was the primary beneficiary of each entity. As a result, the Company has consolidated the accounts of these variable interest entities into the accompanying consolidated financial statements. As the Company does not have any ownership interest in these variable interest entities, the Company has allocated the contributed capital in these variable interest entities as a component of ~~noncontrolling~~ non-controlling interest. ~~All~~These ~~intercompany~~three ~~balances~~variable ~~and~~interest ~~transactions~~entities did business with LinkBit. Therefore, these three entities have also been ~~eliminated~~presented in ~~consolidation~~the discontinued operations in the accompanying consolidated financial statements. After the discontinued operations, the Company consists of Grand Perfecta and its two remaining wholly-owned subsidiaries, Umajin HK and WRN There are no variable interest entities since the Company discontinued operations in June 2018.

Financial Statement Reclassification

Certain account balances from prior periods have been reclassified in these consolidated financial statements to conform to current period classifications. The prior year amounts have also been modified in these financial statements to properly report amounts under current operations and discontinued operations (see note 7).

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 and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reported periods. Amounts could materially change in the future.

Going Concern

Based on operating losses and negative cash from operations and the discontinued operations of most of the Company’s operations, substantial doubt exists about the Company’s ability to continue as a going concern. Management’s plan in this regard is to ~~improve~~find ~~sales~~new ~~and~~operations ~~further~~to ~~reduce~~enter ~~costs,~~into ~~including~~and ~~the~~focus ~~shift~~on ~~of its broadcast program from satellite television~~building toprofitable ~~web TV~~operations. To finance operations while it ~~improves~~finds ~~operating~~new ~~results~~operations, ~~it has sold $1,630,000 of common stock during~~ the ~~year~~Company ~~ended July 31, 2017 and if necessary~~ will continue financing activity such as taking loans, and issuing new ~~stock and asking existing creditors to convert their loans to~~ shares of the Company’s common stock.

As of July 31, ~~2017~~2018, we had cash of $~~102~~52,~~954~~ 716 and a working capital deficit of $9574,~~117,835~~780 as compared to cash of $83102,~~295~~954 ~~and~~at aJuly ~~working~~31, ~~capital~~2017, ~~deficit~~ of which $8665 related to continuing operations and $102,~~926,656~~289 related atto discontinued operations. As of July 31, ~~2016~~2017 the working capital deficit was $9,117,835.

We continue to have a significant working capital deficit that adversely affects our business by limiting the resources we have available to pursue the promotion of our information services and develop new service opportunities for potential customers. Historically, we have relied on extensions of note payment due dates and new debt financing to repay note obligations as they came due in order to continue operations. Going forward we will continue to use extensions and new debt financing to address note obligations that come due, endeavor to gradually reduce obligations with cash flow provided by operations, and pursue over the next 12 months equity financing that we can apply to debt reduction and business development. Nevertheless, the shortage of working capital adversely affects our ability to develop, sponsor, or participate in activities that promote our information services to prospective customers and to develop new content, because a substantial portion of cash flow goes to reduce debt rather than to advance operating activities. There is no assurance that our plans for addressing our working capital shortages will be successful, and our failure to be reasonably successful should be expected to result in a significant contraction of our operations and potentially a failure of the business.

Foreign Exchange

The Company’s primary operations are conducted in Japan and performed by its wholly owned subsidiaries LinkBit and WRN. The Company also conducts operations through Sports Perfecta, and its Malaysian subsidiary SPT. A wholly owned subsidiary, Umajin HK, had been delivering information on horse racing to its users through its website similar to LinkBit, however it terminated its service at the end of June 2017. WRN and LinkBit’s ~~functional~~ functional currency is the Japanese Yen and Umajin HK’s functional currency is the Hong Kong Dollar. SPT’s functional ~~currency~~ currency is the Malaysian Ringgit.

The financial statements of each entity are prepared using the applicable functional currencies, and have been translated into U.S. dollars (“USD”). Assets and liabilities are translated into USD at the applicable exchange rates at period-end. Stockholders’ equity is translated using historical exchange rates. Revenue and expenses are translated at the average exchange rates for the period. Any translation adjustments are included as foreign currency translation adjustments in accumulated other comprehensive income in the Company’s stockholders’ equity.

8The following rates were used to translate the accounts of LinkBit, Umajin HK, SPT and WRN into USD at the following balance sheet dates.

The following rates were used to translate the accounts of LinkBit, Umajin HK and SPT into USD at the following balance sheet dates.

	Balance Sheet Dates
	July 31, 2018		July 31, 2017
Japanese Yen to USD		0.0090		0.0091
Hong Kong Dollars to USD		0.1274		0.1280
Malaysian Ringgit to USD		0.2466		0.2335

	Balance Sheet Dates
	July 31,		July 31,
	2017		2016
Japanese Yen to USD		0.0091		0.0098
Hong Kong Dollars to USD		0.1280		0.1289
Malaysian Ringgit to USD		0.2335		0.2485

The following rates were used to translate the accounts of LinkBit, Umajin HK, SPT and WRN into USD for the following operating periods.

The following rates were used to translate the accounts of LinkBit, Umajin HK and SPT into USD for the following operating periods.

	For the Year Ended
	July 31, 2018		July 31, 2017
Japanese Yen to USD		0.0091		0.0091
Hong Kong Dollars to USD		0.1278		0.1287
Malaysian Ringgit to USD		0.2470		0.2321

	For the Year Ended
	July 31,		July 31,
	2017		2016
Japanese Yen to USD		0.0091		0.0087
Hong Kong Dollars to USD		0.1287		0.1289
Malaysian Ringgit to USD		0.2321		0.2413

Cash and Cash Equivalents

The Company considers all highly liquid holdings with maturities of three months or less at the time of purchase to be cash equivalents. The Company had no cash equivalents as of July 31, ~~2017~~ 2018 and ~~2016~~2017.

Accounts Receivable

Accounts receivable are carried at net realizable value, representing the outstanding balance less an allowance for doubtful accounts based on a review of all outstanding amounts. Management determines the allowance for doubtful accounts by regularly evaluating individual customer receivables and considering each customer's financial condition and credit history, as well as current economic conditions. Accounts receivable are written off when deemed uncollectible. Recoveries of accounts receivable previously written off are recorded when received. The Company had no allowance for doubtful accounts as of July 31, ~~2017~~2018 or ~~2016~~2017.

Property and Equipment

Property and equipment are recorded at historical cost and depreciated on a straight-line basis over their estimated useful lives once the individual assets are placed in service. Estimated useful lives for the assets are as follows.

Buildings and fixtures		8 - 43 years
Autos and trucks		2 - 6 years
Tools and equipment		4 - 10 years
Computer software		5 years

Goodwill

The Company’s goodwill represents the excess of purchase price over tangible and intangible assets acquired, less liabilities assumed arising from business acquisitions. Goodwill is not amortized, but is reviewed for potential impairment on an annual basis at the reporting unit level. As required by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 350-20, the Company conducted an analysis of the goodwill onat ~~its~~the ~~single~~ reporting unit. ~~As of July 31, 2016, the assessment for impairment found that the goodwill recorded for the acquisition of Umajin HK was impaired due to the ongoing and projected future losses of Umajin HK~~level. ~~As a result, an impairment charge of $99,502 was recorded during the year ended July 31, 2016.~~ There was no impairment of goodwill during the ~~year~~years ended July 31, 2018 and 2017.

Long-Lived Assets

In accordance with ASC 360-10, the Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that their net book value may not be recoverable. When such factors and circumstances exist, the Company compares the projected undiscounted future cash flows associated with the related asset or group of assets over their estimated useful lives against their respective carrying amount. Impairment, if any, is based on the excess of the carrying amount over the fair value, based on market value when available, or discounted expected cash flows, of those assets and is recorded in the period in which the determination is made. The Company performed this analysis at July 31, 2018 and 2017 and during the prior year determined that the sum of projected future cash flows over the remaining useful life of the intangible assets were negative. Accordingly, the Company recorded an impairment charge of $83,712 during the year ended July 31, 2017. There was no impairment of long-lived assets identified during the year ended July 31, ~~2016~~2018.

Fair Value of Financial Instruments

~~Fair~~In ~~value~~accordance iswith ~~defined as~~ASC 820, the ~~price~~carrying value ~~that~~of ~~would~~cash beand ~~received~~cash toequivalents ~~sell~~and anaccounts ~~asset~~payable orapproximates ~~paid~~fair tovalue ~~transfer~~due ato ~~liability~~the inshort-term anmaturity ~~orderly~~of ~~transaction~~these ~~between~~instruments. ASC ~~market~~820 ~~participants at~~clarifies the ~~measurement~~definition ~~date~~of fair value, ~~based~~prescribes onmethods ~~the~~for ~~Company’s~~measuring ~~principal~~fair orvalue, inand ~~the~~establishes ~~absence of~~ a ~~principal,~~fair ~~most~~value ~~advantageous~~hierarchy to ~~market~~classify ~~for~~ the ~~specific~~inputs ~~asset~~used orin ~~liability.~~measuring fair value as follows:

~~GAAP~~Level ~~provides~~1- ~~for~~Inputs ~~a three-level~~are ~~hierarchy~~unadjusted ofquoted ~~inputs~~prices in toactive ~~valuation~~markets ~~techniques~~for ~~used~~identical toassets ~~measure~~or ~~fair~~liabilities ~~value,~~available ~~defined~~at asthe ~~follows:~~measurement date.

~~• Level 1 — Inputs that are quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity can access.~~8

• Level 2- — Inputs ~~other~~are ~~than~~unadjusted quoted prices for ~~included~~similar ~~within~~assets ~~Level~~and 1liabilities ~~that~~in ~~are~~active ~~observable~~markets, ~~for~~quoted ~~the~~prices ~~asset~~for identical or ~~liability,~~similar ~~either~~assets ~~directly~~and orliabilities ~~indirectly~~in markets that are not active, ~~for~~inputs ~~substantially~~other ~~the~~than ~~full~~quoted ~~term~~prices ofthat ~~the~~are ~~asset~~observable, and inputs derived from or ~~liability,~~corroborated ~~including:~~by observable market data.

–Level ~~Quoted~~3- ~~prices~~Inputs ~~for~~are ~~similar~~unobservable ~~assets~~inputs which orreflect ~~liabilities~~the reporting entity’s own assumptions on what assumptions the market participants would use in ~~active~~pricing ~~markets~~the asset or liability based on the best available information.

–The ~~Quoted~~Company ~~prices~~has ~~for~~determined ~~identical~~that orthe ~~similar~~book ~~assets~~value orof ~~liabilities~~its inoutstanding financial ~~markets~~instruments ~~that~~as ~~are~~of ~~not~~July ~~active~~31, 2018 and 2017 approximates the fair value.

– Inputs other than quoted prices that are observable for the asset or liability

– Inputs that are derived principally from or corroborated by observable market data by correlation or other means

• Level 3 — Inputs that are unobservable and reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability based on the best information available in the circumstances (e.g., internally derived assumptions surrounding the timing and amount of expected cash flows).

The Company has determined that the book value of its outstanding financial instruments as of July 31, 2017 and 2016 approximates the fair value.

Concentration of Credit Risk

Financial instruments that potentially expose the Company to concentration of credit risk include cash, accounts receivable, notes receivable, and amounts due from related parties. The Company maintains its cash in banks located in Japan, Hong Kong, Malaysia and the United States in financial institutions with high credit ratings. Substantially all of the Company’s revenues are generated from customers in Japan. The Company conducts periodic reviews of the financial condition and payment practices of its customers and note receivable holders. The Company had ~~losses~~no losses related to the write off of notes receivable during the year ended July 31, ~~2017~~2018. ~~and~~During ~~2016~~the ofyear ~~$309,400 and~~ended ~~$7,395,~~July ~~respectively~~31, in2017 ~~addition~~the loss related to the write off of notes receivable was $1309,~~312~~400,~~276~~ ~~loss~~which onis ~~settlement~~included ofin ~~note~~discontinued ~~receivable~~operations ~~that~~in ~~was~~the ~~recorded~~consolidated ~~during~~statements of ~~the~~operations ~~year ended~~and ~~July~~comprehensive ~~31,~~income ~~2016~~(loss).

Revenue Recognition

The Company’s revenue consists primarily of sales of comprehensive horse racing information through multiple websites focusing on all aspects of the horse racing industry in Japan. Publication of horse racing digital magazines, and participating in other public events and media programs related to the horse racing industry do not generate significant revenue directly. These activities are undertaken for the purpose of increasing the number of horse racing fans and driving potential customers to our websites so as to hopefully eventually convert them to paying customers.

The Company recognizes revenue on arrangements in accordance with ASC 605, Revenue Recognition. Revenue is recognized only when the price is fixed and determinable, persuasive evidence of an arrangement exists, the service is performed and collectability of the resulting receivable is reasonably assured. The majority of the Company’s revenue is generated by per-item sales. For certain users, payment is received at the time of purchase and for others it is received after purchase. In either case, the Company recognizes revenue for per-item sales when the requested information is supplied to the user and collection is reasonably assured. For information packages that span a period of time, the Company recognizes revenue over the term of the package. Revenues are presented net of refunds, credits and known and estimated credit card chargebacks. The Company reports revenue net of any required taxes collected from customers and remitted to government authorities, with the collected taxes recorded as current liabilities until remitted to the relevant government authority. Rights to content purchased by customers in advance of the content being provided are recorded as deferred revenue.

Income Taxes

The Company accounts for income taxes in accordance with ASC 740, Income Taxes, using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

Advertising Costs

The Company expenses advertising costs as as incurred. Advertising costs incurred amounted to $94,997 from discontinued operations and $241,623 ($2,413 from continuing operations and $~~172~~239,~~983~~210 from discontinued operations) for the years ended July 31, ~~2017~~2018 and ~~2016~~2017, respectively.

Basic and Diluted Earnings Per Share

In accordance with ASC 260, Earnings Per Share, the basic income per common share is computed by dividing the net income available to common stockholders by the weighted average common shares outstanding during the period. Diluted earnings per share reflect per share amounts that would have resulted if diluted potential common stock had been converted to common stock. No dilutive potential common shares were included in the computation of diluted net income per share because their impact was anti-dilutive. As of July 31, 2017 ~~and 2016~~, the Company had total options of 3,000,000 which were excluded from the computation of net income per share because they are anti-dilutive. As of July 31, ~~2016~~2018, the Company ~~had~~did not ~~convertible~~have ~~notes~~any convertible ~~into~~notes ~~980,000~~or ~~shares of common stock which were excluded from~~ the ~~computation~~ ~~because~~options ~~they are anti-dilutive. As~~ of ~~July 31~~3, ~~2017~~000, ~~the Company did not have any convertible notes~~000. As a result, the basic and diluted earnings per share were the same for each of the periods presented.

Recent Accounting Pronouncements

InFrom May 2014, the FASB issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606). ASU 2014-09 creates a new topic in the ASC Topic 606 and establishes a new control-based revenue recognition model, changes the basis for deciding when revenue is recognized over time orto ~~at a point in~~ time, ~~provides~~ new ~~and~~accounting ~~more detailed guidance on specific topics, and expands and improves~~pronouncements ~~disclosures~~are ~~about~~issued ~~revenue.~~by InFASB ~~addition,~~that ~~ASU~~are ~~2014-09~~adopted ~~adds~~by athe ~~new~~Company ~~Subtopic~~as toof the ~~Codification,~~specified ~~ASC~~effective ~~340-40,~~date. ~~Other~~If ~~Assets~~not ~~and Deferred Costs: Contracts with Customers~~discussed, tomanagement ~~provide~~believes ~~guidance on costs related to obtaining a contract with a customer and costs incurred~~that inthe ~~fulfilling~~impact aof ~~contract~~recently ~~with~~issued astandards, ~~customer~~which ~~that~~ are not inyet ~~the scope of another ASC Topic. The guidance in ASU 2014-09 is~~ effective ~~for public entities for annual reporting periods beginning after December 15~~, ~~2017,~~will ~~including interim periods therein. Early application is~~ not ~~permitted.~~have ~~Management~~a ismaterial ~~in the process of assessing the~~ impact ~~of ASU 2014-09~~ on the Company’s ~~consolidated~~ financial statements upon adoption.

InResults ~~February~~of ~~2016,~~Operations ~~the FASB issued ASU No. 2016-02, Leases (Topic 842). The standard requires that lessees will be required to recognize assets and liabilities on the balance sheet~~ for the ~~rights~~Year ~~and~~Ended ~~obligations~~July ~~created by all leases with terms of more than 12 months. ASU No. 2016-02 also will require disclosures designed to give financial statement users information on the amount~~31, ~~timing,~~2018 and ~~uncertainty of cash~~ flows arising from leases. These disclosures include qualitative and quantitative information. The standard will take effect for fiscal years and interim periods within those fiscal years beginning after December 15, 2018 with earlier adoption permitted. The Company is assessing the impact of adopting ASU No. 2016-02 on the Company’s consolidated financial statements.2017

11The following are the results of our operations for the year ended July 31, 2018 as compared to the year ended July 31, 2017:

In March 2016, the FASB issued ASU No. 2016-09 ("ASU 2016-09"), Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. This ASU simplifies the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 is effective for fiscal years beginning after December 15, 2016 with early adoption permitted. The Company is assessing the impact of adopting ASU No. 2016-09 on the Company’s consolidated financial statements.

	For the Year Ended
	7/31/2018			7/31/2017			$ Change
Net sales	$	281,021		$	274,695		$	6,326
Total revenue		281,021			274,695			6,326

Operating Expenses
Cost of sales		286,501			250,017			36,484
Advertising		–			2,413			(2,413	)
Rent expense		–			9,575			(9,575	)
Other general and administrative expenses		825,197			1,169,412			(344,215	)
Total operating expenses		1,111,698			1,431,417			(319,719	)

Loss from operations		(830,677	)		(1,156,722	)		326,045

Other income (expense)
Other income (loss)		–			1,433			(1,433	)
Gain on sale/transfer of subsidiaries		2,245,490			–			2,245,490
Total other income (expense)		2,245,490			1,433			2,244,057

Net income (loss) before provision for income taxes		1,414,813			(1,155,289	)		2,570,102
Provision for (benefit from) income taxes		–			637			(637	)
Net income (loss) from continuing operations		1,414,813			(1,155,926	)		2,570,739
Net income (loss) from discontinued operations		1,913,368			(791,134	)		2,704,502
Provision for (benefit from) income taxes for discontinued operations		(774,666	)		97,253			(871,919	)
Net loss attributable to GPI stockholders	$	2,553,515		$	(1,849,807	)	$	4,403,322

~~Results of Operations for the Year Ended July 31, 2017 and 2016~~10

The following are the results of our operations for the year ended July 31, 2017 as compared to the year ended July 31, 2016:

	For the Year Ended
	July 31,			July 31,
	2017			2016			$ Change
Net sales	$	12,999,014		$	14,267,112		$	(1,268,098	)
Total revenue		12,999,014			14,267,112			(1,268,098	)
Operating Expenses:
Cost of sales		3,598,010			5,234,575		$	(1,636,565	)
Depreciation and amortization expense		88,443			91,757			(3,314	)
Impairment charge		83,712			99,502			(15,790	)
Advertising		241,623			172,983			68,640
Rent expense		720,140			898,360			(178,220	)
Salaries and wages		4,298,044			4,906,843			(608,799	)
Other general and administrative expenses		5,016,693			4,558,636			458,057
Total operating expenses		14,046,665			15,962,656			(1,915,991	)
Loss from operations		(1,047,651	)		(1,695,544	)		647,893
Other income (expense):
Loss on settlement of note receivable		–			(1,312,276	)		1,312,276
Other income (loss)		(8,389	)		375,708			(384,097	)
Gain on exchange		27,306			10,183			17,123
Interest income		9,662			11,501			(1,839	)
Interest expense		(927,351	)		(664,196	)		(263,155	)
Total other income (expense)		(898,772	)		(1,579,080	)		680,308
Net loss before provision for income taxes		(1,946,423	)		(3,274,624	)		1,328,201
Benefit from income taxes		(96,616	)		(64,555	)		(32,061	)
Net loss		(1,849,807	)		(3,210,069	)		1,360,262
Less: net loss attributable to noncontrolling interest		–			(62	)		62
Net loss attributable to GPI stockholders	$	(1,849,807	)	$	(3,210,007	)	$	1,360,200

Net Sales

Our net sales consist primarily of information and other content relating to the horse racing industry in Japan sold to customers through our websites. Overall, our net sales ~~decreased~~increased slightly during the year ended July 31, ~~2017~~2018 as compared to the same period in ~~2016~~2017. ~~due~~However, ~~primarily to~~ the ~~content~~majority ~~and platforms in certain~~ of ~~our service lines requiring new materials or methods to fulfill our customers’ needs. We have been focusing~~operations onwere ~~creating~~discontinued aand ~~new~~the ~~digital~~only ~~media~~operation togenerating ~~coincide~~sales ~~with~~at the ~~reduced~~end ~~popularity~~ of ~~traditional~~the ~~paper~~year ~~media~~is ~~and advertising~~WRN. ~~We believe this will take time to penetrate our customer base and bring revenue growth.~~ The ~~decrease~~majority inof ~~net~~the sales ~~was~~are ~~partially~~being ~~offset by~~presented ~~an increase~~ in the ~~average~~net ~~exchange~~income ~~rate~~(loss) infrom ~~effect~~discontinued ~~during these periods between the Japanese Yen and the U~~operations.~~S. Dollar of approximately 5%.~~

Operating Expenses

Total operating expenses for the year ended July 31, ~~2017~~2018 were $141,~~046~~111,~~665~~698, which represented a decrease of $1319,~~915,991~~719 as compared to the same period in ~~2016~~2017. ~~Our~~The lower operating expenses ~~decreased~~are due ~~primarily~~ to ~~lower~~the cost of sales from a reduction in sales volume, as well as from lower monthly service fees paid to Umajin Japan and lower television production costs. We also had lower salaries from a reduction in headcount as well as decreased ~~salaries from officers and directors~~operations. ~~Our~~WRN ~~general~~will ~~and~~continue ~~administrative expenses were also lower due~~ to ~~higher~~have ~~professional costs~~operating inexpense ~~the~~that ~~prior~~should ~~year~~be ~~associated~~consistent with ~~our public filings, as well as with~~ the ~~establishment and operation of Sports Perfecta.~~current year. The ~~decrease~~majority ~~in general and administrative expenses was offset partially by increased bad debt expense~~ of $302,005 due to write off uncollectible notes receivable, $600,000 of penalty expense related to failure to file tax returns, as well as additional expenses of $182,000 relating to restoration costs to restore our previous office space to its original condition. We do not expect these penalty and restoration costs to reoccur in the ~~future. The decrease in~~ operating expenses ~~was~~from ~~also~~prior ~~partially~~operations ~~offset~~are bypresented ~~an increase~~ in ~~the~~net ~~average~~income ~~exchange~~(loss) ~~rate~~from indiscontinued ~~effect during these periods between the Japanese Yen and the U~~operations.~~S. Dollar of approximately 5%.~~

Other Income/ (Expenses)

Total other income/expense for the year ended July 31, ~~2017~~2018 amounted to a gain of $~~898~~2,~~772~~245,490, which ~~decreased~~increased by $~~680~~2,~~308~~244,057 as compared to the same period in ~~2016~~2017. The increase ~~decrease~~ in other expenses is primarily due to athe ~~loss~~gain on ~~the~~discontinued ~~settlement~~operations offor ~~a note receivable of $1,312,276 from Umajin Japan during 2016, a related party entity owned by one of our directors. This decrease was offset partially by an increase in interest expense due to~~ the interest rates of the outstanding notes being higher than the prior period, including an additional $73,000 of default rate interest expense charged on two notes in default. Our other expenses were also higher in 2017 due to a loss on disposal of ~~property~~LinkBit and ~~equipment of~~SPI ~~$132,746 associated with moving offices~~ during the current ~~fourth quarter of fiscal~~ year ~~2017~~.

Liquidity and Capital Resources

Based on operating losses and negative cash from operations and the discontinued operations of the majority of the Company’s operations, substantial doubt exists about the Company’s ability to continue as a going concern. Management’s plan in this regard is to ~~improve~~find ~~sales~~new ~~and~~operations ~~further~~to bring ~~reduce~~in ~~costs,~~to ~~including~~ the ~~shift of its broadcast program from satellite television to web TV~~Company. To finance operations ~~while it improves operating results, it has sold $1,630,000 of common stock during~~ the ~~year~~Company ~~ended July 31, 2017 and if necessary~~ will continue financing activity such as taking loans, ~~issuing new stock~~ and ~~asking~~issuing ~~existing creditors~~new ~~to convert their loans to~~ shares of the Company’s common stock.

As of July 31, ~~2017~~2018, we had cash of $~~102~~52,~~954~~716 and a working capital deficit of $9574,~~117,835~~780 as compared to cash of $83102,~~295~~954 ~~and~~at aJuly ~~working~~31, ~~capital~~2017, ~~deficit~~ of which $8665 related to continuing operations and $102,~~926,656~~289 atrelated to discontinued operations. As of July 31, ~~2016~~2017 the working capital deficit was $9,117,835.

The following is a summary of our cash flows from operating, investing and financing activities for the years ended July 31, ~~2017~~2018 and ~~2016~~2017.

	Year Ended
	July 31,			July 31,
	July 31, 2018			July 31, 2017
	2017			2016
Cash flows provided by (used in) operating activities	$	545,668		$	(753,380	)
Cash flows used in operating activities	$	(753,380	)	$	(809,503	)
Cash flows provided by (used in) investing activities	$	604,938		$	(227,010	)
Cash flows used in investing activities	$	(227,010	)	$	(207,157	)
Cash flows provided by (used in) financing activities	$	(1,201,994	)	$	1,005,285
Cash flows provided by financing activities	$	1,005,285		$	1,011,606

Net cash flows ~~used~~provided inby operating activities for the year ended July 31, ~~2017~~2018 amounted to $~~753~~545,~~380~~668, compared to net cash used of $~~809~~753,~~503~~380 for the year ended July 31, ~~2016~~2017. Net cash flows ~~used~~provided inby operating activities were ~~lower~~higher during the year ended July 31, ~~2017~~2018 due ~~primarily~~ to ~~our~~profitable ~~net~~operations ~~loss of $1,849,807~~during ~~for~~ the year ~~ended July 31, 2017 as~~ compared with a net ~~loss~~cash offlows ~~$3,210,069~~used by operations during the year ended July 31, ~~2016~~2017, offset bywith ~~non-cash charges~~an increase in ~~2016~~accounts payable ofand ~~$1,312,276~~accrued ~~for~~liabilities ~~the settlement of a note receivable, $120,000~~ in ~~share-based~~the ~~compensation~~prior ~~and an impairment charge of $99,502~~year.

1311

Net cash ~~used~~provided inby investing activities ~~amounted~~ amounted to $~~227~~604,~~010~~938 for the year ended July 31, ~~2017~~2018, compared with net cash used of $~~207~~227,~~157~~010 for the year ended July 31, ~~2016~~2017. The cash flows ~~used~~provided inby investing activities during the year ended July 31, ~~2017~~2018 was due primarily to ~~purchases~~the proceeds from the disposal of ~~property~~the ~~and~~subsidiaries ~~equipment~~ of $~~135~~427,~~700,~~673 ~~payments~~and ~~for~~investing ~~note~~activities ~~receivable~~of ~~lending~~discontinued operations of $~~618~~177,~~927,~~265 ~~offset~~which bywas ~~$527,617~~a inresult of proceeds from the collection of notes ~~receivables.~~receivable lending of $511,570 offset with payments for notes receivable lending of $330,046 ~~Cash~~and the purchase of property and equipment of $4,259. The cash flows used in investing activities during the year ended July 31, 2017 ~~2016~~was ofdue ~~$207,157~~to ~~was~~investing ~~primarily~~activities ~~the~~of ~~result~~discontinued operations of $89227,~~091~~010 inwhich ~~spending relating~~was tomade ~~purchases~~up of the purchase of property and equipment, of $~~687~~135,~~935~~700, of payments for note receivable lending, ~~and~~of $~~175~~618,~~963 in payments for the acquisition of subsidiaries~~927, offset by $53527,~~391~~617 in proceeds from the ~~sale of property and equipment, and $690,070 in proceeds from the~~ collection of notes receivables.

Net cash ~~provided~~used byin financing activities ~~for~~ for the year ended July 31, ~~2017~~2018 amounted to $1,~~005~~201,~~285~~994, as compared to net cash provided by $1,~~011~~005,~~606~~285 for the year ended July 31, ~~2016~~ 2017. Our cash ~~provided~~used byin financing activities during the year ended July 31, ~~2017~~2018 of $1,~~005~~201,~~285~~994 was ~~primarily~~ the result of financing activities of discontinued operations which included $12,~~630~~093,000 in proceeds from ~~the~~notes ~~sale~~payable ofoffset ~~stock,~~by ~~proceeds~~payments made on outstanding notes payable of $~~955~~3,~~500~~130,400 ~~from~~and payments made on outstanding notes payable ~~borrowing,~~to ~~and~~related ~~proceeds~~parties of $~~667~~164,~~485~~594. Our ~~from~~cash provided by ~~related~~financing ~~party~~activities ~~notes~~during ~~payable~~the ~~borrowing~~year ended July 31, ~~offset~~2017 byof $1,~~246~~005,~~700~~285 inwas ~~payments~~primarily ~~made~~the onresult ~~outstanding~~of ~~notes payable and~~ $1,~~001~~630,000 in ~~payments~~proceeds from ~~made~~the onsale ~~our~~of ~~convertible~~stock, ~~note~~offset ~~payable.~~by ~~During~~financing ~~the~~activities ~~year~~of ~~ended~~discontinued ~~July~~operations ~~31,~~which ~~2016,~~included ~~we had~~ proceeds of $2955,~~610,457~~500 from ~~new~~notes ~~note~~ payable ~~borrowings~~borrowing, and ~~net~~ proceeds of $~~104~~1,~~400~~274,000 from related party notes payable borrowing, offset by $1,246,700 in payments made on ~~our~~ outstanding notes payable, of $~~920~~1,~~251~~001,000 ~~and~~in payments ofmade on our convertible note payable, and $~~783~~606,~~000~~515 in payments made on our ~~convertible~~related ~~note~~party notes payable.

Description of Indebtedness

The following is a summary of our outstanding notes payable as of July 31, ~~2017~~2018 and July 31, ~~2016~~2017. All of these notes were included in the discontinued operations of the Company’s subsidiaries.

	July 31,		July 31,
	July 31, 2018		July 31, 2017
	2017		2016
Unsecured note payable issued on June 15, 2016, due on December 15, 2016, bearing interest at 15% per annum (21.9% per annum after the maturity date) due monthly. This note was transferred as part of the discontinued operations.	$	–	$	910,000
Unsecured note payable issued on June 15, 2016, due on December 15, 2016, bearing interest at 15% per annum (21.9% per annum after the maturity date) due monthly. The Company is currently in default under the terms of the note.	$	910,000	$	980,000
Unsecured note payable issued on December 20, 2011, due on December 31, 2016, bearing interest at 15% per annum (18% per annum after the maturity date) due monthly. This note was transferred as part of the discontinued operations.		–		1,911,000
Unsecured note payable issued on December 20, 2011, due on December 31, 2016, bearing interest at 15% per annum (18% per annum after the maturity date) due monthly. The Company is currently in default under the terms of the note.		1,911,000		2,058,000
Unsecured note payable issued on December 18, 2015, due in 20 monthly installments from July 31, 2017 through February 28, 2019, bearing interest at 12% per annum due monthly. This note was transferred as part of the discontinued operations.		–		864,500
Unsecured note payable issued on January 20, 2011, due on June 30, 2017, bearing interest at 12% per annum due monthly.		–		539,000
Unsecured note payable issued on February 5, 2016, due in 23 installments of JPY 3,000,000 beginning in February 2017 and a final installment of JPY 31,000,000 in January 2019, bearing interest at 12% per annum due monthly. This note was transferred as part of the discontinued operations.		–		746,200
Unsecured note payable issued on December 18, 2015, due in 20 monthly installments from July 31, 2017 through February 28, 2019, bearing interest at 12% per annum due monthly.		864,500		980,000
Unsecured note payable issued on June 28, 2017, payable in full on June 30, 2018, bearing interest at 12% per annum due monthly. This note was transferred as part of the discontinued operations.		–		418,600
Unsecured note payable issued on February 5, 2016, due in 23 installments of JPY 3,000,000 beginning in February 2017 and a final installment of JPY 31,000,000 in January 2019, bearing interest at 12% per annum due monthly.		746,200		980,000
Unsecured note payable issued on July 20, 2011, due on July 20, 2018, bearing interest at 12% per annum due monthly. This note was transferred as part of the discontinued operations.		–		273,000
Unsecured note payable issued on June 28, 2017, payable in full on June 30, 2018, bearing interest at 12% per annum due monthly.		418,600		–
Unsecured notes payable, non-interest bearing, due on demand. This note was transferred as part of the discontinued operations.		–		41,336
Unsecured note payable issued on July 20, 2011, due on July 20, 2018, bearing interest at 12% per annum due monthly.		273,000		294,000
Total notes payable		–		5,164,636
Unsecured notes payable, non-interest bearing, due on demand		41,336		44,516
Less: current portion of notes payable		–		(4,427,536	)
Total notes payable		5,164,636		5,875,516
Long-term portion of notes payable	$	–	$	737,100
Less: current portion of notes payable		4,427,536		3,797,916
Long-term portion of notes payable	$	737,100	$	2,077,600

Of the total outstanding debt listed above as of July 31, 2017, $4,427,536 of the outstanding amounts are due during the year ended July 31, 2018 and $737,100 of the amounts are due during the year ended July 31, 2019.12

OnWe ~~March~~also 5,had ~~2015,~~notes wepayable ~~entered~~outstanding ~~into a convertible~~from ~~note~~former ~~agreement~~related ~~for~~parties, ~~total~~all ~~principal borrowings~~ of ~~JPY~~which ~~200,000,000 ($1,620,000 at July 31, 2015). The amounts~~ were ~~originally~~either due on ~~March~~demand 5, 2016 and bear interest at a rate of 1% per annum. At the option of the debt holder, beginning 40 days after the issuance of the note, the debt holder may convert the outstanding balance of the note into shares of our common stock at a conversion rate equal to one share per JPY130.90 or ~~$1.10~~due ofduring ~~outstanding principal and accrued interest. During~~ the year ended July 31, ~~2016,~~2018. ~~the Company~~The ~~made~~following ~~payments~~is a summary of ~~$783,000~~our ~~on the~~ outstanding ~~principal~~balances ofdue ~~the convertible note payable, and the debt holder agreed~~ to ~~extend the~~related ~~maturity~~parties ~~date~~as ~~for~~of ~~an additional 6 months until September 5, 2016. During the year ended~~ July 31, ~~2017,~~2018 ~~the~~and ~~debt holder agreed to further extend the due date until June 30,~~ 2017. ~~The~~All ~~remaining balance~~ of ~~the~~these ~~convertible~~notes ~~note~~were ~~payable~~included ~~was paid~~ in ~~full by~~ the discontinued ~~maturity~~operations ~~date. As~~ of ~~July 31, 2017,~~ the ~~outstanding~~Company’s ~~balance amounted to $0~~subsidiaries.

	July 31, 2018		July 31, 2017
Unsecured note payable issued on March 26, 2012, due on demand, bearing interest at 1% per annum due monthly. The balance was due to a related party entity which is owned by one of the former directors of the Company. This debt was transferred with the discontinued operations.	$	–	$	910,000
Unsecured note payable issued on January 30, 2013, due on demand, bearing interest at 1% per annum due monthly. The balance was due to a related party entity which is owned by one of the former directors of the Company. This debt was transferred with the discontinued operations.		–		455,000
Unsecured note payable issued on June 14, 2016, non-interest bearing and due on October 31, 2017 discounted using an effective interest rate of 12%. The balance was due to a related party entity which is owned by one of the former directors of the Company. This debt was transferred with the discontinued operations.		–		273,000
Unsecured short-term borrowing on April 25, 2017, non-interest bearing and due on demand. The balance was due to a related party entity which is owned by one of the former directors of the Company. This debt was transferred with the discontinued operations.		–		345,800
Unsecured note payable issued on September 21, 2016, due on October 31, 2017 discounted using an effective interest rate of 12%. The balance was due to a related party entity which is owned by one of the former directors of the Company. This debt was transferred with the discontinued operations.		–		273,000
Unsecured note payable due to the Company's former Chairman and CEO, non-interest bearing and due on demand. This debt was transferred with the discontinued operations.		–		1,001,509
Total notes payable to related parties		–		3,258,309
Discount on notes payable to related parties		–		16,515
Notes payable to related parties, net	$	–	$	3,241,794

We also have note payable outstanding from related parties, all of which are either due on demand or due during the year ended July 31, 2018. The following is a summary of our outstanding balances due to related parties as of July 31, 2017 and 2016.

	July 31,		July 31,
	2017		2016
Unsecured note payable issued on March 26, 2012, due on demand, bearing interest at 1% per annum due monthly. The balance is due to a related party entity which is owned by one of the directors of the Company.	$	910,000	$	980,000
Unsecured note payable issued on January 30, 2013, due on demand, bearing interest at 1% per annum due monthly. The balance is due to a related party entity which is owned by one of the directors of the Company.		455,000		490,000
Unsecured note payable issued on June 14, 2016, non-interest bearing and due on October 31, 2017 discounted using an effective interest rate of 12%. The balance is due to a related party entity which is owned by one of the directors of the Company.		273,000		294,000
Unsecured short-term borrowing on April 25, 2017, non-interest bearing and due on demand. The balance is due to a related party entity which is owned by one of the directors of the Company		345,800		–
Unsecured note payable issued on September 21, 2016, due on October 31, 2017 discounted using an effective interest rate of 12%. The balance is due to a related party entity which is owned by one of the directors of the Company.		273,000		–
Unsecured note payable due to the Company's Chairman and CEO, non-interest bearing and due on demand.		1,001,509		830,118
Unsecured note payable due to the Company's President, non-interest bearing and due on demand.		–		196,000
Total notes payable to related parties		3,258,309		2,790,118
Discount on notes payable to related parties		16,515		13,049
Notes payable to related parties, net	$	3,241,794	$	2,777,069

ITEM 7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Disclosure under this item is not required of a smaller reporting company.

ITEM 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Grand Perfecta’s financial statements appear at the end of this report beginning with the Index to Financial Statements on page F-1~~, following page 27~~.

ITEM 9.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Not applicable.

ITEM 9A.

CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Pursuant to Rule 13a-15(b) of the Exchange Act, the Company's management, under the supervision of its Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company's disclosure controls and procedures (as such term is defined in Rule 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the period covered by this Annual Report on Form 10-K. The Company's disclosure ~~controls~~ controls and procedures are designed to ensure that information required to be disclosed in reports that the Company files or submits ~~under~~ under the Exchange Act is recorded, processed, summarized and reported within the time period specified in the SEC’s rules ~~and~~ and forms. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. Based upon such evaluation, the Company's Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were not effective at July 31, ~~2017~~2018.

1513

Changes in Internal Control over Financial Reporting

~~There~~In June 2018, the Company discontinued most of its operations and disposed of these operating subsidiaries. Along with this change, the then current management and directors of the Company resigned. New management and a new single board of director member has been put in place. Because of the lack of additional personnel, there is a weakness in segregation of duties and a weakness in qualified in-house personnel within the Company. Based on these changes, there were nosignificant changes in our internal ~~control~~ control over financial reporting during the ~~three-month~~year ~~period~~ ended July 31, ~~2017~~2018.

Management’s Annual Report on Internal Control over Financial Reporting

Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting (as such term is defined in Rule 13a-15(f) and 15d-15(f) of the Exchange Act). The Company's internal control over financial reporting includes policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company's assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company's assets that could have a material effect on the financial statements.

Owing to its inherent limitations, any system of internal control over financial reporting, no matter how well designed and operated, can provide only reasonable assurance with respect to financial statement preparation and presentation. Accordingly, the Company's internal controls over financial reporting was designed to provide reasonable assurance to its management and board of directors regarding the preparation and fair presentation of the Company's published financial statements.

Management ~~assessed~~ assessed the effectiveness of the Company's internal control over financial reporting as of July 31, ~~2017~~2018, using the criteria set forth in the Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on such assessment, management concluded that the Company's internal control over financial reporting was not effective as of July 31, ~~2017~~2018.

A material weakness is a control deficiency, or combination of control deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected. As a result of management’s evaluation described above, it concluded that the Company had a significant control deficiency as of July 31, ~~2017~~2018 that constituted a material weakness in our internal control over financial reporting. Management has determined that the Company lacks the processes and procedures to ensure all financial events and transactions are recorded in accordance with US GAAP. More specifically, the Company engages third party service providers to assist with the preparation of its financial statements in accordance with US GAAP and to assist with the preparation of its US income taxes, however, the Company lacks in-house personnel capable of reviewing and overseeing this effort.

This Annual Report on form 10-K does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to the rules of the SEC that permit the company to provide only management's report in this Annual Report.

ITEM 9B.

OTHER INFORMATION

None.

PART III

ITEM 10.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Directors and officers

Set forth in the table below are the names, ages and positions of our current directors and executive officers. None of our directors or executive officers has any family relationship to any other director or executive officer.

Name	Age	Position
Shuya Watanabe	46	Chairman of the Board of Directors, Chief Executive Officer
Steve Ketter	51	Chairman of the Board of Directors, Chief Executive Officer, Chief Financial Officer
Takashi Ozawa	45	President, Chief Operations Officer, Director
Masashi Takegaki	54	Chief Financial Officer, Secretary, Director
Motonori Okai	46	Director
Hideaki Takahashi	45	Director
Akira Tanabe	53	Director
Enrique Marchese	51	Director

All executive officers are elected by the board and hold office until their successors are duly elected and qualified. Each director is elected by the stockholders and serves until resignation or election of a successor by the stockholders.

Biographies

The following is information on the business experience of each of the officers and directors.

~~Shuya~~Steve ~~Watanabe~~Ketter, Chairman of the Board of Directors of the Company, Chief Executive Officer., ~~Mr.~~Chief ~~Watanabe~~Financial ~~has~~Officer. ~~served~~Steve asKetter, aage ~~representative~~51, ~~director~~has ofbeen self-employed ~~LinkBit~~ for ~~over~~ the past 10five years, ~~and~~as ~~became~~an ~~Chairman~~advisor ofon ~~the~~business ~~Board~~development, operations management, and ~~Chief~~strategic ~~Executive~~forecasting. The ~~Officer~~majority of ~~Grand~~his ~~Perfecta~~career athas ~~the~~been ~~time~~spent ~~of the business reorganization~~ in ~~May~~corporate ~~2012.~~risk Mrmanagement. ~~Watanabe~~He has ~~spent~~handled ~~most~~fraud ofmatters, ~~his~~investigations, ~~business~~executive protection ~~career in the horse racing industry~~ and, asthreat aassessments. ~~result,~~He ~~has~~received ~~substantial experience~~his ~~and~~Bachelor ~~industry~~of ~~contacts~~Science ~~that~~degree ~~are~~in ~~advantageous~~Business toManagement ~~the~~from ~~business~~Towson ofState ~~Grand~~University in ~~Perfecta~~1991.

Takashi Ozawa, President, Chief Operations Officer, Director. Mr. Ozawa has served as a representative director of LinkBit for over the past 10 years, and became President, Chief Operations Officer and a Director of Grand Perfecta at the time of the business reorganization in May 2012. Mr. Ozawa has spent the last 20 years of his business career in the horse racing business working in the areas of racing media sales, product planning and development, and customer relations management, all of which management believes are valuable to the business of Grand Perfecta.

Masashi Takegaki, Chief Financial Officer, Secretary, Director. Mr. Takegaki has served as accounting section head and then accounting manager of LinkBit for over the past five years, and became a director of LinkBit in September 2013. He became Chief Financial Officer, Secretary and a Director of Grand Perfecta in February 2013. Mr. Takegaki has 20 years of experience in the areas of accounting and business tax in Japan, which management believes qualifies him to provide the financial accounting Grand Perfecta requires.

Motonori Okai, Director. Mr. Okai was a director of LinkBit from March 2010 to March 2012, and he became a director of Grand Perfecta at the time of the business reorganization in May 2012. Mr. Okai has served as a representative director of Umajin Japan since April 2012, of which he is also the sole owner. Umajin Japan is engaged in the business of collecting and disseminating information about horse racing in Japan. Mr. Okai attended and graduated from jockey school, which gave him the opportunity to develop many contacts and relationships in the horse racing industry that he has continued to develop over the years. His network of personal connections with officials and other figures in the horse racing industry is a significant resource that allows him to provide great insight on the service offerings and future development of our business.

Hideaki Takahashi, Director. Mr. Takahashi became a director of LinkBit in March 2010, to provide Internet and web related marketing and promotional services. He has served as the sole director of Umajin HK from June 2012 to the present. He became a director of Grand Perfecta at the time of the business reorganization in May 2012. Mr. Takahashi has 20 years of experience in developing and operating Internet content business enterprises, so his experience benefits Grand Perfecta with respect to promoting and delivering service to website customers.

Akira Tanabe, Director. Mr. Tanabe has served for over five years as the representative director of Clara Ltd., a company engaged in the restaurant business in Japan. He became a director of Grand Perfecta at the time of the business reorganization in May 2012. In December 2013 he founded Cheval Attache Co., Ltd., a company engaged in the business of offering computer content and application services. Mr. Tanabe has more than 25 years of experience in business and management in multiple consumer industries, including the beauty industry and restaurant industry, so he brings a broader business experience and operational acumen to management’s deliberations on developing Grand Perfecta’s business.

Enrique Marchese, Director. Mr. Marchese is the founder and CEO of Lares Loreno Private Capital, a boutique merger and acquisition advisory firm that began operation in 2014. From 2009 to the formation of Lares Loreno, Mr. Marchese was an independent consultant on mergers, acquisitions, and financing. Mr. Marchese began his investment banking career at Donaldson, Lufkin & Jenrette in 1996 and subsequently held positions at Merrill Lynch and Deutsche Bank. Mr. Marchese graduated with an M.B.A. from the Booth School at the University of Chicago and holds a B.S. from the United States Naval Academy. Mr. Marchese has substantial experience in the investment banking and finance industry that is beneficial to management’s budgetary process and planning for financing opportunities.

Audit Committee; Financial Expert

The Board of directors has not established an audit committee, so the entire Board of Directors performs the functions associated with an audit committee, including, evaluating financial reporting matters, monitoring internal controls, compliance with internal financial policies, and engaging the registered independent accounting firm to audit the financial statements of Grand Perfecta. At present Grand Perfecta does not have a financial expert serving on the Board within the meaning of Item 407(d)(5)(ii) of Regulation S-K. The Board of Directors believes a financial expert would be advantageous and expects it will pursue a process for recruiting a financial expert to serve on the Board.

Director Nominations

The Board of Directors has not made any changes to the procedures by which security holders may recommend nominee’s to our Board of Directors.

Board Leadership Structure

Our Chairman of the Board also performs the functions and duties normally associated with a principal executive officer. The Board of Directors does not have a lead independent director. In light of the Company’s level of operations at present and its status as a smaller reporting company, the Board believes the Company’s current leadership structure is appropriate. All of our Board members are engaged directly and regularly in the operations of the Company, so we believe the Board is exposed to, or has the opportunity to discover and evaluate, all areas of meaningful risk pertaining to the Company’s operations and to manage those risks at acceptable levels for the Company.

Code of Ethics

We adopted a Code of Ethics and Business Conduct (the “Code of Conduct”) that applies to all of our officers and employees, including our principal executive officer, principal financial officer and principal accounting officer. Our Code of Conduct establishes standards and guidelines to assist our directors, officers, and employees in complying with both the Company’s corporate policies and with the law~~, and is posted at our website: www~~.grandperfecta.com. Additionally, we will provide to any person, without charge, a copy of the Code of Conduct upon written or oral request directed to: Corporate Secretary (Mr. Takegaki), Grand Perfecta, Inc., Koyo Building, 2F, 2-36-10 Minamisuna, Koto-ku, Tokyo 136-0076 Japan, telephone +81-3-5632-7251.

Compliance with Section 16(a) of the Exchange Act

Section 16(a) of the Securities Exchange Act of 1934 requires executive officers and directors, and persons who beneficially own more than 10% of Grand Perfecta’s common stock, to file initial reports of ownership and reports of changes in ownership with the Securities and Exchange Commission. Executive officers, directors and greater than 10% beneficial owners are required by Securities and Exchange Commission regulations to furnish Grand Perfecta with copies of all Section 16(a) forms they file. Based solely on Grand Perfecta’s review of copies of such reports and representations from Grand Perfecta’s executive officers and directors, and greater than ten-percent beneficial owners, Grand Perfecta’s believes that its executive officers and directors complied with all Section 16(a) filing requirements during the fiscal year ended July 31, ~~2017~~2018.

ITEM 11.

EXECUTIVE COMPENSATION

Executive Compensation

The following table sets forth the cash and other compensation paid by the Company to our named executive officers for the years ended July 31, ~~2017~~ 2018 and ~~2016~~2017.

Name and Principal Position	Year	Salary ($)	Total ($)
Shuya Watanabe Chief Executive Officer	2017 2016	491,400 674,250	491,400 674,250
Steve Ketter Chief Executive Officer	2018 2017	6,000 –	6,000 –
Takashi Ozawa Chief Operations Officer	2017 2016	491,400 613,350	491,400 613,350
Shuya Watanabe Former Chief Executive Officer	2018 2017	129,675 491,400	129,675 491,400
Masashi Takegaki Chief Financial Officer	2017 2016	120,120 125,280	120,120 125,280
Takashi Ozawa Former Chief Operations Officer	2018 2017	129,675 491,400	129,675 491,400
Masashi Takegaki Former Chief Financial Officer	2018 2017	100,100 120,120	100,100 120,120

Narrative Discussion of Compensation Table

The Board of Directors determines directors’ and officers’ salaries annually or as circumstances may otherwise warrant, usually in the month of October each year. Compensation decisions are based on a number of considerations. Some of the relevant factors considered in any given year may include:

Risk associated with serving as an officer or director;

The budget for the next year and the portion of the budget allocated to compensation;

Performance of the Company in the prior year, and the contribution of an officer to Company success;

Company goals for the coming year and incentivizing officers with compensation; and

The level of compensation customary in Japan for executives performing similar functions in companies of similar size or in the same industry.

Employee Benefit and Incentive Plans

We do not have any benefit or incentive plans for our executive officers.

Director Compensation

The following table sets forth the cash and other compensation paid by the Company to our former non-employee Directors for the years ended July 31, ~~2017~~2018 and ~~2016~~2017.

Name	Year	Cash Fees ($)	Total ($)
Motonori Okai	~~2017~~2018 ~~2016~~2017	-0- -0-	-0- -0-
Hideaki Takahashi (1)	~~2017~~2018 ~~2016~~2017	~~109~~100,~~200~~100 ~~104~~109,~~400~~200	~~109~~100,~~200~~100 ~~104~~109,~~400~~200
Akira Tanabe	~~2017~~2018 ~~2016~~2017	-0- -0-	-0- -0-
Enrique Marchese (2)	~~2017~~2018 ~~2016~~2017	3010,000 30,000	3010,000 30,000

(1) The amount paid to Mr. Takahashi is compensation for his services as a director of LinkBit and the sole director of Umajin HK.

(2) Mr. Marchese is paid an annual fee of $30,000 for his service as a director.

ITEM 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Security Ownership of Management

The following table sets forth as of ~~October~~January 1516, ~~2017~~2019, the number and percentage of the outstanding shares of common stock which, according to the information supplied to Grand Perfecta, were beneficially owned by (i) each person who is currently a director, (ii) each executive officer, (iii) all current directors and executive officers as a group, and (iv) each person who, to our knowledge, is the beneficial owner of more than 5% of the outstanding common stock. As of that date the Company had 314,~~800~~977,~~000~~332 shares of its common stock and ~~100,000~~0 shares of its ~~Series~~ Series A Preferred Stock issued and outstanding. ~~The Series A Preferred Stock is convertible into a total of 100,000 common shares.~~

5% Beneficial Owners (excluding officers and directors)	Number of Shares Beneficially Owned ⁽¹⁾	Percent of Class ⁽¹⁾

Capital Advisors, LLC P.O. Box 901658 Sandy, Utah 84090-1658	1,080,000	21.7%

Directors and Officers

Steve Ketter	0	0%

All directors and named executive officers as a group (1 person)	0	0%

5% Beneficial Owners (excluding officers and directors)	Number of Shares Beneficially Owned (1)	Percent of Class (1)
Kazuaki Goto (2) 34H One Legazpi Park 121 Rada st. Legazpi Village Manila Philippines	6,000,000	17.24
Sakura Corporation Ltd. (3) 7-12 Chifunemachi 2-chrome Matsuyama-shi, Ehime Prefecture, Japan	1,700,000	5.3
Heart Corporation Ltd. (3) 7-12 Chifunemachi 2-chrome, Matsuyama-shi, Ehime Prefecture, Japan	1,700,000	5.3
Directors and Officers
Shuya Watanabe (4)	14,100,000	45.73
Takashi Ozawa	6,600,000	20.75
Masashi Takegaki	-0-	-0-
Motonori Okai	-0-	-0-
Hideaki Takahashi	272,668	0.86
Akira Tanabe	1,250,000	3.93
Enrique Marchese	15,000	nil
All directors and named executive officers as a group (7 persons)	22,237,668	70.54

(1) The Company believes that each stockholder has sole voting and investment power with respect to the shares of common stock listed, except as otherwise noted. The number of shares beneficially owned by each stockholder is determined under rules of the SEC, and the information is not necessarily indicative of ownership for any other purpose. Under these rules, beneficial ownership includes (i) any shares as to which the person has sole or shared voting power or investment power, and (ii) any shares that the individual has the right to acquire within 60 days through the exercise of any stock option, warrant, conversion of preferred stock or other right, but such shares are deemed to be outstanding only for the purposes of computing the percentage ownership of the person that beneficially owns such shares and not for any other person shown in the table. The inclusion herein of any shares of common stock deemed beneficially owned does not constitute an admission by such stockholder of beneficial ownership of those shares of common stock. All percentage calculations are based on 4,977,332 shares of common stock issued and outstanding on January 16, 2019.

2017

~~(1) The~~ITEM ~~Company believes that each stockholder has sole voting and investment power with respect to the shares of common stock listed, except as otherwise noted~~13. ~~The~~CERTAIN ~~number~~RELATIONSHIPS ofAND ~~shares~~RELATED ~~beneficially~~TRANSACTIONS ~~owned~~AND byDIRECTOR each stockholder is determined under rules of the SEC, and the information is not necessarily indicative of ownership for any other purpose. Under these rules, beneficial ownership includes (i) any shares as to which the person has sole or shared voting power or investment power, and (ii) any shares that the individual has the right to acquire within 60 days through the exercise of any stock option, warrant, conversion of preferred stock or other right, but such shares are deemed to be outstanding only for the purposes of computing the percentage ownership of the person that beneficially owns such shares and not for any other person shown in the table. The inclusion herein of any shares of common stock deemed beneficially owned does not constitute an admission by such stockholder of beneficial ownership of those shares of common stock. All percentage calculations are based on 31,800,000 shares of common stock issued and outstanding on October 15, 2017.INDEPENDENCE

(2) Mr. Goto holds 3,000,000 shares of common stock, and an option to purchase an additional 3,000,000 common shares at a price of $1,.00 per share that expires June 11, 2019.

(3) Sakura Corporation Ltd. (“Sakura”) owns 1,000,000 shares of common stock, and Heart Corporation (”Heart”) owns 700,000 shares of common stock. Ms. Kaori Hanaoka is the Representative Director and controlling equity owner of Sakura and Heart. Consequently, the shares owned directly by Sakura and by Heart may be deemed to be beneficially held by the other, and Ms. Kaori Hanaoka may be deemed to be the indirect beneficial owner of the shares held by both Sakura and Heart.

(4) The 100,000 shares of Series A Preferred Stock held by Mr. Watanabe are convertible to common stock at a rate of one share of common stock for one share of Series A Preferred Stock, and vote with the common stock on all matters submitted to the stockholders. Each share of Series A Preferred Stock has the voting power of 10 common shares. The percentage calculation is for the total voting power of Mr. Watanabe without conversion of the Series A Preferred Stock.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Certain Relationships and Related Transactions

~~Shuya~~In ~~Watanabe~~June ~~has~~2018, ~~made~~the ~~advances~~Company toentered ~~LinkBit~~into a inconsulting ~~prior~~agreement ~~periods~~with ~~that~~its ~~totaled~~new ~~JPY84,705,904~~CEO ~~(approximately~~and ~~US$771,000)~~sole atdirector. ~~July~~The ~~31,~~agreement ~~2017.~~was ~~During~~for ~~the~~five ~~year~~months ~~ended~~from ~~July~~June ~~31,~~through ~~2017, Mr~~October. ~~Watanabe~~ ~~made~~The ~~additional~~Company agreed ~~advances~~to ofpay ~~JPY70,000,000~~him ~~(approximately US~~$~~637~~3,000) ~~and~~per ~~received~~month ~~repayments~~for ofhis ~~advances~~services ofin ~~JPY44,650,000 (approximately~~running ~~$406,315).~~the AsCompany ofand ~~July~~making ~~31,~~sure ~~2017,~~that ~~total~~the ~~outstanding~~required ~~advances~~audit ~~due~~and tofilings get Mrcompleted. ~~Watanabe~~As ~~amounted to JPY110,055,904 (US$1,001,509 as~~ of July 31, ~~2017).~~2018 ~~There~~the isCompany nohad ~~stated~~$6,000 ~~interest~~in onaccrued ~~the~~liabilities ~~advances~~for ~~and~~this ~~no stated maturity date~~agreement.

~~Motonori~~The ~~Okai~~following isrelated ~~the~~party ~~responsible director~~transactions ~~and~~were ~~sole~~all owner of Umajin Japan. Grand Perfecta and Umajin Japan have an agreement pursuant to which Umajin Japan provides to Grand Perfecta horserace information for a fee of 16 million yen per month (inclusive of consumption tax) and horseracing related ~~email magazine and web page content for a fee of 7 million yen per month (inclusive of consumption tax) for a total of 23 million Yen per month. The Company and Umajn Japan agreed~~ to ~~reduce~~ the ~~monthly~~Company’s ~~fees~~previous ~~from~~management ~~23 million Yen to 11 million Yen subsequent to October 2016. Subsequent to February 2017, the Company~~ and ~~Umajin Japan agreed to reduce~~ the ~~fee~~discontinued ~~to 8 million Yen per month through October 2017~~operations. ~~Payments~~These torelated ~~Umajin~~party ~~Japan~~transactions all were ~~JPY127,777,786~~eliminated ~~(approximately~~with ~~US$1,163,000),~~the ~~including~~discontinuation ~~consumption tax payments~~ of ~~JPY10,222,214 (approximately~~LBC ~~US$93,000)~~and ~~in fiscal year 2017. We expect this same commercial relationship will continue for the fiscal year ending July 31, 2018.~~SPI:

~~Mr.~~Shuya ~~Ozawa~~Watanabe, ~~had~~the Company’s ~~made~~former anCEO ~~advance~~and Chairman, made advances to LinkBit in prior periods ~~the~~that ~~amount~~totaled ~~of JPY20~~JPY110,~~000~~055,~~000~~904 (approximately US$~~196~~1,002,000) at ~~as of~~ July 31, ~~2016~~2017. During the year ended July 31, ~~2017~~2018, ~~this~~ ~~amount~~Mr. ~~was~~Watanabe ~~repaid~~did innot ~~full.~~make ~~There~~additional ~~are~~advances noand ~~further~~received repayments of advances ~~outstanding~~of toJPY5,687,286 ~~Mr.~~(approximately ~~Ozawa~~$52,000). There ~~was~~is no stated interest on the advances and no stated maturity date. This advance was part of the discontinued operations and was transferred with the disposal transactions in June 2018. As of July 31, 2018, the total outstanding advances due by the Company was $0.

21Motonori Okai, a former director of the Company, is the responsible director and sole owner of Umajin Japan. Grand Perfecta and Umajin Japan have an agreement pursuant to which Umajin Japan provides to Grand Perfecta horserace information for a fee of 16 million yen per month (inclusive of consumption tax) and horseracing related email magazine and web page content for a fee of 7 million yen per month (inclusive of consumption tax) for a total of 23 million Yen per month. The Company and Umajn Japan agreed to reduce the monthly fees from 23 million Yen to 11 million Yen subsequent to October 2016. Subsequent to February 2017, the Company and Umajin Japan agreed to reduce the fee to 8 million Yen per month through July 2018. Payments to Umajin Japan were JPY80,740,747 (approximately US$735,000), including consumption tax payments of JPY6,459,253 (approximately US$59,000) in fiscal year 2018. This agreement was also included in the discontinued operations and was transferred with the disposal transactions in June 2018.

Akira Tanabe, a former director of the Company, is the representative director of Clara Ltd., which has made advances to LinkBit that totaled ~~JPY150~~ JPY180,000,000 (approximately US$1,~~365~~638,000) at July 31, 2017). The interest rate on the advances is 1% per annum, and is due upon demand. OnInterest ~~September~~payments ~~21,~~to ~~2016,~~ Clara Ltd. ~~made~~for anfiscal ~~additional~~year ~~advance totaling~~2018 ~~JPY30~~totaled JPY479,~~000,000~~178 (approximately US$~~273~~4,~~000~~400). ~~The~~This ~~interest~~advance ~~rate~~was onpart of the ~~advance~~discontinued isoperations 1%and ~~per~~was ~~annum~~transferred ~~and~~with isthe ~~due~~disposal ontransactions ~~October~~in ~~31,~~June ~~2017~~2018. At As of July 31, ~~2017~~2018, the ~~aggregate~~total outstanding ~~principal~~advances ~~balances~~due ofby the ~~advances~~Company ~~outstanding~~was ~~were JPY180,000,000 (approximately US~~$~~1,638,000)~~0. ~~Interest payments to Clara Ltd. for fiscal year 2017 totaled JPY1,732,603 (approximately US$16,000).~~

Additionally, LinkBit entered into an agreement with Clara Ltd. allowing them access to the LinkBit’s database containing certain horse racing information for an indefinite period. As compensation, LinkBit will receive a total of JPY30,000,000, resulting in USD$273,000 of revenue for LinkBit in fiscal year 2017. The fee under this agreement is payable in 10 monthly installments starting in November 2016. As of July 31, 2017, the amount due under this agreement was JPY3,000,000 (USD$27,300) which was paid in full in August of 2017. This agreement was also included in the discontinued operations and was transferred with the disposal transactions in June 2018.

Additionally, LinkBit is a party to a services agreement with Cheval Attache Co., Ltd. (of which Mr. Tanabe (a former director of the Company) is a representative director) dated August 2014. Cheval Attache delivers services relating to content and application development. LinkBit pays a monthly fee of JPY1,000,000 (approximately US$9,000) to Cheval Attache. During fiscal year ~~2017~~2018 a total of ~~JPY12~~JPY11,~~960~~880,000 (approximately US$~~118~~108,000) in service fees was paid to Cheval Attache. ~~During~~This ~~fiscal~~agreement ~~year~~was ~~2017, LinkBit~~ also ~~charged~~included ~~Cheval~~in ~~Attache~~the ~~JPY11,021,988~~discontinued ~~(approximately~~operations and ~~US$100,000)~~was ~~service~~transferred ~~fees~~with ~~related to~~the ~~access~~disposal ittransactions ~~provided~~in ~~relating~~June ~~to horseracing contacts~~2018.

Cheval Attache also made advances totaling JPY68,000,000 (approximately USD$618,800) at July 31, 2017. There is no stated interest on the advances and JPY30,000,000 (USD$273,000) of the amounts are due on October 31, 2017, and remainder is due on demand.18

Cheval Attache also made advances totaling JPY68,000,000 (approximately USD$618,800) at July 31, 2017. There is no stated interest on the advances and they are due on demand. This advance was part of the discontinued operations and was transferred with the disposal transactions in June 2018. As of July 31, 2018, the total outstanding advances due by the Company was $0.

Director Independence

Our common stock is not quoted or listed on any national exchange or interdealer quotation system with a requirement that a majority of our board of directors be independent and therefore, the Company is not subject to any director independence requirements. Under NASDAQ Rule 5605(a)(2)(A), a director is not considered to be independent if he or she also is an executive officer or employee of the corporation or if there have been certain transactions between the Company and the director or another company with which the director is affiliated. Under these standards, ~~Enrique~~there ~~Marchese~~ is ~~the~~no ~~only~~ director that the Board of Directors has determined is an independent director.

ITEM 14.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

The aggregate fees billed to the Company by ~~Mac~~its ~~Accounting~~principal ~~Group,~~accountants ~~LLP, Haynie & Company, and by HJ & Associates~~ for the years ended July 31, ~~2017~~2018 and ~~2016~~2017, for professional fees are as follows:

	2017		2016
	2018		2017
Audit fees	$	~~170~~140,000	$	~~216~~170,000
Audit related fees		~~-0-~~–		~~-0-~~–
Total audit and related fees		~~170~~140,000		~~216~~170,000
Other consulting fees		~~-0-~~–		~~-0-~~–
Tax fees		~~-0-~~–		~~30,000~~–
Total fees	$	~~170~~140,000	$	~~246~~170,000

Audit Fees and audit related fees are amounts billed for professional services that our independent public accounting firm provided for the audit of our annual financial statements, review of the financial statements included in our reports on 10-Q, and other services typically provided by an accountant in connection with statutory and regulatory filings or engagements for those fiscal years.

ITEM 15.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

The following documents are included as exhibits to this report pursuant to Item 601 of Regulation S-K:

Exhibit No.		Title of Document

3.1		Articles of Incorporation of Grand Perfecta, Inc. (formerly known as STI Holdings, Inc.) (1)

3.2		Bylaws of Grand Perfecta, Inc. (1)

3.3		Certificate of Amendment to Articles of Incorporation dated January 9, 2008, designating preferred stock as Series A Convertible Preferred Stock (1)

3.4		Certificate of Amendment to Articles of Incorporation dated June 21, 2011, for Designation of Rights, Privileges, and Preferences of Series A Convertible Preferred Stock of Grand Perfecta, Inc. (formerly known as STI Holdings, Inc.) (1)

3.5		Certificate of Amendment to Articles of Incorporation dated March 29, 2013, for name change of STI Holdings, Inc. to Grand Perfecta, Inc. (1)

4.1		Convertible Debenture dated March 5, 2015 with respect to JPY200,000,000 principal amount of convertible notes bearing interest at 1.0% per annum (1)

4.2		First Amendment dated March 2, 2016, to the Convertible Debenture dated March 5, 2015 (2)

10.1		Service Agreement dated August 1, 2014 between Link Bit Consulting Co., Ltd. and Cheval Attache Co., Ltd. (1)

10.2		Loan Agreement dated March 26, 2012 between Clara Ltd., as lender, and Link Bit Consulting Co., Ltd., as borrower (1)

10.3		Revised Loan Agreement dated January 29, 2013 between Clara Ltd., as lender, and Link Bit Co., Ltd., as borrower (1)

10.4		Offshore Securities Purchase Agreement dated as of March 5, 2015 between Grand Perfecta, Inc. and Europlus International Ltd. (1)

10.5		Link Bit Co., Ltd. office lease with Tokyo Teleport Center Co., Ltd. dated August 31, 2014 (1)

10.6		Stock Purchase Agreement dated June 11, 2014 between Grand Perfecta, Inc. and Kuzuaki Goto (1)

10.7		Lease (license) between Umajin Hong Kong Ltd and Apex Business Centre Limited dated as of June 25, 2014 (1)

10.8		Offer Letter between Grand Perfecta, Inc. and Enrique Marchese dated May 8, 2014 (1)

10.9		Note Payment and Satisfaction Agreement between Link Bit Consulting Co., Ltd., and Umajin Co. Ltd., dated October 28, 2015 (3)

10.10		Services Agreement between Link Bit Consulting Co., Ltd., and Umajin Co. Ltd., dated November 1, 2015 (3)

10.11		Money Loan Agreement between Link Bit Consulting Co., Ltd., and Fuji Kigyo Co., Ltd., dated December 18, 2015 (4)

10.12		Loan Agreement dated June 15, 2016, between Link Bit Consulting Co., Ltd., and Toshiro Ohshimo (6)

10.13		Offshore Securities Purchase Agreement dated August 23, 2016, between Grand Perfecta, Inc., and Sakura Corporation (6)

2320

10.14		Offshore Securities Purchase Agreement dated March 31, 2017, between Grand Perfecta, Inc., and Heart Corporation (7)
14.1		Code of Ethics (5)
21.1		List of Subsidiaries
31.1		Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2		Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1		Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2		Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Extension Schema
101.CAL		XBRL Taxonomy Extension Calculation Linkbase
101.DEF		XBRL Taxonomy Extension Definition Linkbase
101.LAB		XBRL Taxonomy Extension Label Linkbase
101.PRE		XBRL Taxonomy Extension Presentation Linkbase

(1) These exhibits are incorporated herein by this reference to our registration statement on Form 10, filed with the Securities and Exchange Commission on April 15, 2015.

(2) This exhibit is incorporated herein by this reference to our report on Form 10-Q for the period ended April 30, 2016, filed with the Securities and Exchange Commission on June 14, 2016.

(3) These exhibits are incorporated herein by this reference to our report on Form 10-Q for the period ended October 31, 2015, filed with the Securities and Exchange Commission on December 15, 2015.

(4) This exhibit is incorporated herein by this reference to our report on Form 10-Q for the period ended January 31, 2016, filed with the Securities and Exchange Commission on March 16, 2016.

(5) These exhibits are incorporated herein by this reference to our report on Form 10-K for the period ended July 31, 2015, filed with the Securities and Exchange Commission on November 13, 2015.

(6) These exhibits are incorporated herein by this reference to our report on Form 10-K for the period ended July 31, 2016, filed with the Securities and Exchange Commission on November 8, 2016.

24(7) These exhibits are incorporated herein by this reference to our report on Form 10-K for the period ended July 31, 2017, filed with the Securities and Exchange Commission on November 2, 2017.

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	GRAND PERFECTA, INC.
Date: November 2, 2017	By	/s/ Shuya Watanabe
Date: January 25, 2019	By	/s/ Steve Ketter
		Shuya Watanabe, Chief Executive Officer
		Steve Ketter, Chief Executive Officer
		(Principal Executive Officer)
Date: November 2, 2017	By	/s/ Masashi Takegaki
Date: January 25, 2019	By	/s/ Steve Ketter
		Masashi Takegaki, Chief Financial Officer
		Steve Ketter, Chief Financial Officer
		(Principal Financial and Accounting Officer)

In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Date:November 2, 2017	/s/ Shuya Watanabe
	Shuya Watanabe, Director
Date: November 2, 2017	/s/ Takashi Ozawa
	Takashi Ozawa, Director
Date: November 2, 2017	/s/ Masashi Takegaki
	Masashi Takegaki, Director
Date: November 2, 2017	/s/ Motonori Okai
	Motonori Okai, Director
Date: November 2, 2017	/s/ Takashi Ozawa
	Takashi Ozawa, Director
Date: November 2, 2017	/s/ Hideaki Takahashi
	Hideaki Takahashi, Director
Date: November 2, 2017	/s/ Akira Tanabe
	Akira Tanabe, Director
Date: November 2, 2017	/s/ Enrique Marchese
	Enrique Marchese, Director

Date: January 25, 2019	/s/ Steve Ketter
	Steve Ketter, Director

2522

INDEX TO FINANCIAL STATEMENTS

Consolidated Financial Statements

Grand Perfecta, Inc.

	Page
Reports of Independent Registered Public Accounting Firm	F-2
Consolidated Balance Sheets	F-3
Consolidated Statements of Operations	F-4
Consolidated Statements of Operations and Comprehensive Income	F-4
Consolidated Statements of Comprehensive Income	F-5
Consolidated Statements of Stockholders’ Equity (Deficit)	F-5
Consolidated Statements of Stockholders’ Equity (Deficit)	F-6
Consolidated Statements of Cash Flows	F-6
Consolidated Statements of Cash Flows	F-7
Notes to the Consolidated Financial Statements	F-7
Notes to the Consolidated Financial Statements	F-8

F-1

MAC ACCOUNTING GROUP, LLP

CERTIFIED PUBLIC ACCOUNTANTS

Report of Independent Registered Public Accounting Firm

ToTO ~~the~~THE ~~Board~~SHAREHOLDERS ofAND ~~Directors~~THE BOARD OF DIRECTORS OF GRAND PERFECTA, INC.

~~Grand~~OPINION ~~Perfecta,~~ON ~~Inc.~~THE FINANCIAL STATEMENTS

~~Koto-ku~~WE HAVE AUDITED THE ACCOMPANYING CONSOLIDATED BALANCE SHEETS OF GRAND PERFECTA, ~~Tokyo~~INC. AND ITS SUBSIDIARIES (THE COMPANY) AS OF JULY 31, ~~Japan~~2018 AND 2017, THE RELATED CONSOLIDATED STATEMENTS OF OPERATIONS, COMPREHENSIVE INCOME (LOSS), STOCKHOLDERS' EQUITY (DEFICIT) AND CASH FLOWS FOR THE YEARS THEN ENDED, AND THE RELATED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (COLLECTIVELY, THE FINANCIAL STATEMENTS). IN OUR OPINION, THE FINANCIAL STATEMENTS PRESENT FAIRLY, IN ALL MATERIAL RESPECTS, THE FINANCIAL POSITION OF THE COMPANY AS OF JULY 31, 2018 AND 2017, AND THE RESULTS OF ITS OPERATIONS AND ITS CASH FLOWS FOR THE YEARS THEN ENDED, IN CONFORMITY WITH ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN THE UNITED STATES OF AMERICA.

WeGOING have audited the accompanying consolidated balance sheets of Grand Perfecta, Inc. and subsidiaries as of July 31, 2017 and 2016, and the related consolidated statements of operations, comprehensive income, stockholders' equity (deficit) and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.CONCERN

WeTHE ~~conducted~~ACCOMPANYING ~~our~~FINANCIAL ~~audits~~STATEMENTS inHAVE ~~accordance~~BEEN ~~with~~PREPARED ASSUMING ~~the~~THAT ~~standards~~THE ~~of the~~COMPANY ~~Public~~WILL ~~Company~~CONTINUE ~~Accounting~~AS ~~Oversight~~A ~~Board~~GOING ~~(United States)~~CONCERN. ~~Those~~AS ~~standards~~DISCUSSED ~~require~~IN ~~that~~NOTE we2 ~~plan~~TO ~~and~~THE ~~perform~~FINANCIAL ~~the~~STATEMENTS, ~~audits~~THE toCOMPANY ~~obtain~~HAS ~~reasonable~~SUFFERED ~~assurance~~RECURRING ~~about~~LOSSES ~~whether~~FROM ~~the financial statements are free of material misstatement. The Company is not required to have~~OPERATIONS, ~~nor~~ ~~were~~NEGATIVE weCASH ~~engaged~~FLOWS toFROM ~~perform~~OPERATIONS, anAND ~~audit~~HAS ofDISCONTINUED ~~its~~SUBSTANTIALLY ~~internal~~ALL ~~control~~OF ~~over~~ITS ~~financial reporting~~OPERATIONS. THIS ~~Our~~RAISES ~~audits~~SUBSTANTIAL ~~included~~DOUBT ~~consideration~~ABOUT ~~of internal~~THE ~~control~~COMPANY'S ~~over~~ABILITY ~~financial~~TO ~~reporting~~CONTINUE asAS aA ~~basis~~GOING ~~for~~CONCERN. ~~designing~~MANAGEMENT'S ~~audit~~PLANS ~~procedures~~IN ~~that~~REGARD ~~are~~TO ~~appropriate in the circumstances,~~THESE ~~but~~MATTERS ~~not~~ALSO ~~for~~ARE ~~the~~DESCRIBED ~~purpose~~IN ofNOTE ~~expressing an opinion on the effectiveness of the Company’s internal control over financial reporting~~2. ~~Accordingly,~~ weTHE ~~express~~FINANCIAL noSTATEMENTS ~~such~~DO ~~opinion.~~NOT AnINCLUDE ~~audit~~ANY ~~also~~ADJUSTMENTS ~~includes~~THAT ~~examining,~~MIGHT onRESULT aFROM ~~test~~THE ~~basis, evidence supporting the amounts and~~OUTCOME ~~disclosures~~OF inTHIS ~~the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation~~UNCERTAINTY. ~~We believe that our audits provide a reasonable basis for our opinion.~~

InBASIS ~~our~~FOR opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Grand Perfecta, Inc. and subsidiaries as of July 31, 2017 and 2016, and the results of their operations and their cash flows for the years then ended, in conformity with U.S. generally accepted accounting principles. OPINION

~~The~~THESE ~~accompanying~~FINANCIAL ~~consolidated~~STATEMENTS ~~financial~~ARE ~~statements~~THE ~~have been~~RESPONSIBILITY ~~prepared~~OF ~~assuming~~THE ~~that~~COMPANY’S ~~the~~MANAGEMENT. ~~Company~~OUR ~~will~~RESPONSIBILITY ~~continue~~IS asTO aEXPRESS ~~going~~AN ~~concern.~~OPINION AsON ~~discussed~~THE inCOMPANY’S ~~Note~~FINANCIAL 2STATEMENTS ~~to the consolidated financial statements,~~BASED ~~the~~ON ~~Company~~OUR ~~has~~AUDITS. ~~experienced~~WE ~~losses~~ARE ~~from~~A ~~operations~~PUBLIC ~~during~~ACCOUNTING ~~the~~FIRM ~~last~~REGISTERED ~~two~~WITH ~~years~~THE ~~and~~PUBLIC ~~has~~COMPANY ~~total~~ACCOUNTING ~~liabilities~~OVERSIGHT inBOARD ~~excess~~(UNITED ofSTATES) ~~total assets.~~(PCAOB) ~~This~~AND ~~raises~~ARE ~~substantial~~REQUIRED ~~doubt~~TO ~~about~~BE ~~the~~INDEPENDENT ~~Company's~~WITH ~~ability~~RESPECT toTO ~~continue~~THE asCOMPANY aIN ~~going~~ACCORDANCE ~~concern~~WITH U.S. ~~Management's~~FEDERAL ~~plans~~SECURITIES inLAWS ~~regard~~AND toTHE ~~these~~APPLICABLE ~~matters~~RULES ~~also~~AND ~~are~~REGULATIONS ~~described~~OF inTHE ~~Note~~SECURITIES 2.AND ~~The~~EXCHANGE ~~consolidated~~COMMISSION ~~financial~~AND ~~statements~~THE ~~do not include any adjustments that might result from the outcome of this uncertainty~~PCAOB.

~~/s/~~WE ~~Mac~~CONDUCTED ~~Accounting~~OUR ~~Group~~AUDITS IN ACCORDANCE WITH THE STANDARDS OF THE PCAOB. THOSE STANDARDS REQUIRE THAT WE PLAN AND PERFORM THE AUDIT TO OBTAIN REASONABLE ASSURANCE ABOUT WHETHER THE FINANCIAL STATEMENTS ARE FREE OF MATERIAL MISSTATEMENT, ~~LLP~~WHETHER DUE TO ERROR OR FRAUD. THE COMPANY IS NOT REQUIRED TO HAVE, NOR WERE WE ENGAGED TO PERFORM, AN AUDIT OF ITS INTERNAL CONTROL OVER FINANCIAL REPORTING. AS PART OF OUR AUDITS WE ARE REQUIRED TO OBTAIN AN UNDERSTANDING OF INTERNAL CONTROL OVER FINANCIAL REPORTING BUT NOT FOR THE PURPOSE OF EXPRESSING AN OPINION ON THE EFFECTIVENESS OF THE COMPANY'S INTERNAL CONTROL OVER FINANCIAL REPORTING. ACCORDINGLY, WE EXPRESS NO SUCH OPINION.

~~Mac~~OUR ~~Accounting~~AUDITS ~~Group~~INCLUDED PERFORMING PROCEDURES TO ASSESS THE RISKS OF MATERIAL MISSTATEMENT OF THE FINANCIAL STATEMENTS, ~~LLP~~WHETHER DUE TO ERROR OR FRAUD, AND PERFORMING PROCEDURES THAT RESPOND TO THOSE RISKS. SUCH PROCEDURES INCLUDED EXAMINING, ON A TEST BASIS, EVIDENCE REGARDING THE AMOUNTS AND DISCLOSURES IN THE FINANCIAL STATEMENTS. OUR AUDITS ALSO INCLUDED EVALUATING THE ACCOUNTING PRINCIPLES USED AND SIGNIFICANT ESTIMATES MADE BY MANAGEMENT, AS WELL AS EVALUATING THE OVERALL PRESENTATION OF THE FINANCIAL STATEMENTS. WE BELIEVE THAT OUR AUDITS PROVIDE A REASONABLE BASIS FOR OUR OPINION.

~~Midvale,~~/s/ ~~Utah~~MAC ACCOUNTING GROUP, LLP

~~November~~WE 2,HAVE ~~2017~~ SERVED AS THE COMPANY'S AUDITOR SINCE 2016.

MIDVALE, UTAH
JANUARY 25, 2019

WWW.MACACCOUNTINGGROUP.COM

1070 MECHAM LANE, MIDVALE, UTAH 84047

801.414.3664

F-2

GRAND PERFECTA, INC.

CONSOLIDATED BALANCE SHEETS

	July 31,			July 31,
	July 31, 2018			July 31, 2017
	2017			2016
Assets
Assets
Current assets
Cash	$	~~102~~52,~~954~~716		$	~~83,295~~665
Accounts receivable, net		18,~~085,276~~632			~~738~~19,~~924~~735
Accounts receivable - related party		27,300			–
Current assets of discontinued operations		–			3,489,454
Current portion of notes receivable		2,057,251			2,457,846
Total current assets		61,348			3,509,854
Deferred tax assets, current portion		206,270			112,008
Prepaid expenses and other current assets		30,803			12,660
Total current assets		3,509,854			3,404,733
Property and equipment, net		174,311			242,749
Other assets
Long-term notes receivables, net of current portion		605,449			644,543
Other assets		–			2,176
Deferred tax assets, long-term portion		583,052			620,347
Other assets of discontinued operations		–			8,461,948
Goodwill		6,917,722			7,449,853
Total other assets		–			8,464,124
Other intangibles, net		–			126,447
Total assets	$	61,348		$	11,973,978
Other assets		183,590			675,382
Total other assets		8,289,813			9,516,572
Total assets	$	11,973,978		$	13,164,054
Liabilities and Stockholders' Equity (Deficit)
Current liabilities
Accounts payable and accrued expenses	$	3,467,660		$	2,665,190
Accounts payable, related party payable, and accrued expenses	$	627,666		$	641,440
Accounts payable to related parties		109,813			278,977
Deferred revenues		8,462			–
Deferred revenues		866,865			1,424,008
Taxes payable		–			637
Current portion of notes payable		4,427,536			3,797,916
Current liabilities of discontinued operations		–			11,985,612
Debt to related parties, net of discount		3,241,794			2,777,069
Total current liabilities		636,128			12,627,689
Convertible note payable		–			1,078,000
Long-term portion of notes payable of discontinued operations		–			737,100
Taxes payable		514,021			310,229
Total liabilities		636,128			13,364,789
Total current liabilities		12,627,689			12,331,389
Commitments and contingencies		–			–
Long-term portion of notes payable, net of current portion		737,100			2,077,600
Total liabilities		13,364,789			14,408,989
Commitments and contingencies
Stockholders' equity (deficit)
Preferred stock, $0.001 par value, 100,000,000 shares authorized, 100,000 shares issued and outstanding as of July 31, 2017 and 2016		100			100
Preferred stock, $0.001 par value, 100,000,000 shares authorized, 0 and 100,000 shares issued and outstanding as of July 31, 2018 and 2017, respectively		–			100
Common stock, $0.001 par value, 500,000,000 shares authorized, 31,800,000 and 30,100,000 shares issued and outstanding as of July 31, 2017 and 2016, respectively		31,800			30,100
Common stock, $0.001 par value, 500,000,000 shares authorized, 4,977,332 and 31,800,000 shares issued and outstanding as of July 31, 2018 and 2017, respectively		4,977			31,800
Additional paid-in capital		54,~~752~~594,~~362~~285			45,~~062~~752,~~308~~362
Accumulated other comprehensive income		325,864			297,999
Accumulated deficit		(5,152,172	)		(7,705,687	)
Accumulated deficit		(7,705,687	)		(5,855,880	)
Accumulated other comprehensive income		(21,870	)		325,864
Total GPI stockholders' equity (deficit)		(1574,~~595,561~~780	)		(1,~~465~~595,~~373~~561	)
Noncontrolling interest		~~204,750~~–			~~220~~204,~~438~~750
Total stockholders' equity (deficit)		(1574,~~390,811~~780	)		(1,~~244~~390,~~935~~811	)
Total liabilities and stockholders' equity	$	11,973,978		$	13,164,054
Total liabilities and stockholders' equity (deficit)	$	61,348		$	11,973,978

See accompanying notes to consolidated financial statements

F-3

GRAND PERFECTA, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

	For the Year Ended
	July 31,			July 31,
	July 31, 2018			July 31, 2017
	2017			2016
Net sales	$	281,021		$	274,695
Net sales	$	12,999,014		$	14,267,112
Total revenues		281,021			274,695
Total revenues		12,999,014			14,267,112
Operating expenses
Operating expenses:
Cost of sales		286,501			250,017
Cost of sales		3,598,010			5,234,575
Advertising		–			2,413
Depreciation and amortization expense		88,443			91,757
Rent expense		–			9,575
Impairment charge		83,712			99,502
General and administrative expenses		825,197			1,169,412
Advertising		241,623			172,983
Total operating expenses		1,111,698			1,431,417
Rent expense		720,140			898,360
Loss from operations		(830,677	)		(1,156,722	)
Salaries and wages		4,298,044			4,906,843
Other income (expense)
Other general and administrative expenses		5,016,693			4,558,636
Other income (expense)		–			1,433
Total operating expenses		14,046,665			15,962,656
Gain on sale/transfer of subsidiaries		2,245,490			–
Loss from operations		(1,047,651	)		(1,695,544	)
Total other income (expense)		2,245,490			1,433
Other income (expense):
Net income (loss) before provision for income taxes		1,414,813			(1,155,289	)
Loss on settlement of note receivable		–			(1,312,276	)
Provision for (benefit from) income taxes		–			637
Other income (expense)		(8,389	)		375,708
Net income (loss) from continuing operations		1,414,813			(1,155,926	)
Gain on exchange		27,306			10,183
Income (loss) from operations of discontinued operations		1,913,368			(791,134	)
Interest income		9,662			11,501
Provision for (benefit from) income taxes for discontinued operations		(774,666	)		97,253
Interest expense		(927,351	)		(664,196	)
Net income (loss) from discontinued operations		1,138,702			(693,881	)
Total other income (expense)		(898,772	)		(1,579,080	)
Net income (loss)	$	2,553,515		$	(1,849,807	)
Net loss before provision for income taxes		(1,946,423	)		(3,274,624	)
Net income (loss) per share from continuing operations, basic and diluted	$	0.05		$	(0.04	)
Provision for (benefit from) income taxes		(96,616	)		(64,555	)
Net income (loss) per share from discontinued operations, basic and diluted	$	0.04		$	(0.02	)
Net loss		(1,849,807	)		(3,210,069	)
Net income (loss) per share, basic and diluted	$	0.09		$	(0.06	)
Less: net loss attributable to noncontrolling interest		–			(62	)
Weighted average number of common shares outstanding, basic and diluted		29,369,231			31,251,781
Net loss attributable to GPI	$	(1,849,807	)	$	(3,210,007	)
Other comprehensive income (loss)
Net loss per share, basic and diluted	$	(0.06	)	$	(0.11	)
Foreign currency translation adjustments		(347,734	)		27,865
Weighted average number of common shares outstanding, basic and diluted		31,251,781			29,934,973
Comprehensive income (loss)		2,205,781			(1,821,942	)
Comprehensive income (loss) attributable to non-controlling interest		(204,750	)		(15,688	)
Comprehensive income (loss) attributable to GPI stockholders	$	2,001,031		$	(1,837,630	)

See accompanying notes to consolidated financial statements

F-4

GRAND PERFECTA, INC.

CONSOLIDATED STATEMENTS OF ~~COMPREHENSIVE~~STOCKHOLDERS’ ~~INCOME~~ EQUITY (DEFICIT)

		For the Year Ended
	Preferred Stock						Common Stock						Additional Paid-in			Accumulated			Accumulated Other Comprehensive			Non-controlling
		July 31,				July 31,
	Shares			Amount			Shares			Amount			Capital			Deficit			Income			Interest			Total
		2017				2016
Balance, July 31, 2016		100,000		$	100			30,100,000		$	30,100		$	4,062,308		$	(5,855,880	)	$	297,999		$	220,438		$	(1,244,935	)
Net loss		$	(1,849,807	)		$	(3,210,069	)
Sale of stock		–			–			1,700,000			1,700			1,628,300			–			–			–			1,630,000
Other comprehensive income (loss), net of tax:
Discount from note payable to related parties		–			–			–			–			61,754			–			–			–			61,754
Foreign currency translation adjustments			27,865				(141,266	)
Foreign currency translation adjustment		–			–			–			–			–			–			27,865			(15,688	)		12,177
Total other comprehensive income (loss), net of tax			27,865				(141,266	)
Net loss		–			–			–			–			–			(1,849,807	)		–			–			(1,849,807	)
Comprehensive loss			(1,821,942	)			(3,351,335	)
Balance, July 31, 2017		100,000			100			31,800,000			31,800			5,752,362			(7,705,687	)		325,864			204,750			(1,390,811	)
Comprehensive income (loss) attributable to noncontrolling interest			(15,688	)			44,139
Shares received in exchange for interest in subsidiary		(100,000	)		(100	)		(26,822,668	)		(26,823	)		(1,158,077	)		–			–			(204,750	)		(1,389,750	)
Comprehensive loss attributable to GPI stockholders		$	(1,837,630	)		$	(3,307,196	)
Foreign currency translation adjustment		–			–			–			–			–			–			(347,734	)		–			(347,734	)
Net income		–			–			–			–			–			2,553,515			–			–			2,553,515
Balance, July 31, 2018		–		$	–			4,977,332		$	4,977		$	4,594,285		$	(5,152,172	)	$	(21,870	)	$	–		$	(574,780	)

See accompanying notes to consolidated financial statements

F-5

GRAND PERFECTA, INC.

CONSOLIDATED STATEMENTS OF ~~STOCKHOLDERS’ EQUITY~~CASH FLOWS

																	Accumulated
	For the Year Ended
														Additional			Other
	July 31, 2018			July 31, 2017
		Preferred Stock						Common Stock						Paid-in			Comprehensive			Accumulated			Noncontrolling
Cash flows from operating activities
		Shares				Amount		Shares			Amount			Capital			Income			Deficit			Interest			Total
Net income (loss)	$	2,553,515		$	(1,849,807	)
Balance, July 31, 2015			100,000			$	100		30,500,000		$	30,500		$	4,121,034		$	439,265		$	(2,645,873	)	$	219,146		$	2,164,172
Net income (loss) from discontinued operations		(1,138,702	)		693,881
Stock issued for services			–				–		1,000,000			1,000			119,000			–			–			–			120,000
Adjustments to reconcile net loss to net cash used in operating activities:
Settlement of related party note receivable through exchange of stock			–				–		(1,400,000	)		(1,400	)		(194,600	)		–			–			–			(196,000	)
Gain on sale/transfer of subsidiaries		(2,245,490	)		–
Sale of interest in subsidiary			–				–		–			–			–			–			–			(42,785	)		(42,785	)
Changes in operating assets and liabilities:
Discount from note payable to related parties			–				–		–			–			16,874			–			–			–			16,874
Accounts receivable		11,007			(18,963	)
Foreign currency translation adjustment			–				–		–			–			–			(141,266	)		–			44,139			(97,127	)
Prepaid expenses and other current assets		2,173			–
Net loss			–				–		–			–			–			–			(3,210,007	)		(62	)		(3,210,069	)
Accounts payable, related party payable, and accrued expenses		24,654			556,855
Balance, July 31, 2016			100,000				100		30,100,000			30,100			4,062,308			297,999			(5,855,880	)		220,438			(1,244,935	)
Deferred revenue		8,556			–
Sale of stock			–				–		1,700,000			1,700			1,628,300			–			–			–			1,630,000
Operating cash flows from discontinued operations		1,329,955			(135,346	)
Discount from note payable to related parties			–				–		–			–			61,754			–			–			–			61,754
Net cash provided by (used in) operating activities		545,668			(753,380	)
Foreign currency translation adjustment			–				–		–			–			–			27,865			–			(15,688	)		12,177
Cash flows from investing activities
Net loss			–				–		–			–			–			–			(1,849,807	)		–			(1,849,807	)
Proceeds from sale of interest in subsidiary, net		427,673			–
Balance, July 31, 2017			100,000			$	100		31,800,000		$	31,800		$	5,752,362		$	325,864		$	(7,705,687	)	$	204,750		$	(1,390,811	)
Investing activities of discontinued operations		177,265			(227,010	)
Net cash provided by (used in) investing activities		604,938			(227,010	)
Cash flows from financing activities
Sale of common stock		–			1,630,000
Financing activities of discontinued operations		(1,201,994	)		(624,715	)
Net cash provided by (used in) financing activities		(1,201,994	)		1,005,285
Effect of exchange rate fluctuations on cash		1,150			(5,236	)
Net change in cash		(50,238	)		19,659
Cash, beginning of the period		102,954			83,295
Cash, end of the period		52,716			102,954
Less cash of discontinued operations, end of the period		–			(102,289	)
Cash of continuing operations, end of the period	$	52,716		$	665
Supplemental disclosure of cash flow information:
Interest paid	$	674,975		$	797,702
Income taxes paid	$	23,078		$	22,383
Supplemental disclosure of non-cash investing and financing information:
Increase in additional paid in capital and debt discount for imputed interest	$	–		$	61,754
Assumption of payable balance to subsidiary	$	(90,956	)	$	–
Assumption of receivable balance from subsidiary	$	344,531		$	–
Shares returned and cancelled for sale of SPI	$	1,185,000		$	–
Shares returned and cancelled for no consideration	$	3,223		$	–

See accompanying notes to consolidated financial statements

F-6

GRAND PERFECTA, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

	For the Year Ended
	July 31,			July 31,
	2017			2016
Cash flows from operating activities
Net loss	$	(1,849,807	)	$	(3,210,069	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		88,443			91,757
Loss on settlement of note receivable		–			1,312,276
Share-based compensation		–			120,000
Impairment charge		83,712			99,502
Amortization of debt discount		57,128			4,033
Loss on disposal of property and equipment		132,746			42,174
Loss on write-off of notes receivables		309,400			7,395
Gain on forgiveness of note payable		–			(165,300	)
Gain on sale of interest in subsidiary		–			(35,462	)
Gain on bargain purchase of subsidiary		–			(84,432	)
Provision for (benefit from) deferred taxes		(109,279	)		(85,782	)
Changes in operating assets and liabilities:
Accounts receivable		(398,897	)		22,700
Accounts receivable - related party		(27,300	)		–
Prepaid expenses and other current assets		(18,962	)		376,477
Other assets		443,691			(6,629	)
Accounts payable and accrued expenses		914,457			910,296
Accounts payable to related party		(149,236	)		247,663
Deferred revenue		(455,428	)		(74,066	)
Taxes payable		225,952			(382,036	)
Net cash used in operating activities		(753,380	)		(809,503	)
Cash flows from investing activities
Purchase of property and equipment		(135,700	)		(89,091	)
Proceeds from sale of property and equipment		–			53,391
Proceeds from collection of notes receivables		527,617			690,070
Payments for notes receivable lending		(618,927	)		(687,935	)
Proceeds from sale of interest in subsidiary, net		–			2,371
Payments for acquisition of subsidiaries, net of cash received		–			(175,963	)
Net cash used in investing activities		(227,010	)		(207,157	)
Cash flows from financing activities
Proceeds from notes payable		955,500			2,610,457
Sale of common stock		1,630,000			–
Payments on note payable		(1,246,700	)		(920,251	)
Proceeds from related parties borrowings, net		667,485			104,400
Payments on convertible note payable		(1,001,000	)		(783,000	)
Net cash provided by financing activities		1,005,285			1,011,606
Effect of exchange rate fluctuations on cash		(5,236	)		12,571
Net change in cash		19,659			7,517
Cash, beginning of the period		83,295			75,778
Cash, end of the period	$	102,954		$	83,295
Supplemental disclosure of cash flow information:
Interest paid	$	797,702		$	660,163
Income taxes paid	$	22,383		$	403,263
Supplemental disclosure of non-cash investing and financing information:
Decrease in common stock, par value, from settlement of related party note receivable	$	–		$	(1,400	)
Decrease in additional paid-in capital from settlement of related party note receivable	$	–		$	(194,600	)
Forgiveness of Basougu note payable in conjunction with acquisition	$	–		$	(12,641	)
Increase in additional paid in capital and debt discount for imputed interest	$	61,754		$	16,874
Reclassification of balance from related party notes receivable to notes receivable	$	–		$	499,898

See accompanying notes to consolidated financial statements

F-7

GRAND PERFECTA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. DESCRIPTION OF BUSINESS

Organization

Grand Perfecta, Inc. (“Grand Perfecta”) was incorporated in the State of Nevada on March 25, 2002, as STI Holdings, Inc. (“STI”). On May 12, 2012, Grand Perfecta completed an Agreement and Plan of Reorganization whereby it acquired 100% of the issued and outstanding shares of Link Bit Consulting Co, Ltd. (“LinkBit”), a Japanese corporation, for 25,000,000 common shares in a transaction accounted for as a recapitalization of LinkBit. Effective March 29, 2013, STI amended its Articles of Incorporation to change its name to Grand Perfecta, Inc. On May 27, 2013, Grand Perfecta issued 272,668 shares in exchange for 100% of the issued and outstanding shares of Umajin Hong Kong Ltd. (“Umajin HK”), a Hong Kong corporation. In August 2015, Grand Perfecta formed Sports Perfecta, Inc. (“Sports Perfecta”), as a California subsidiary to pursue development of a fantasy sports offering to horse racing fans. The operations of Grand Perfecta, LinkBit, Umajin HK, and Sports Perfecta are collectively referred to as the “Company.”

On December 16, 2015, LinkBit acquired 100% of the outstanding shares of Basougu Shokuninkai Co., Ltd. (“Basougu”), a Japanese corporation (See Note 6). On January 7, 2016, Sports Perfecta acquired 100% of the outstanding stock of Just Mobile Sdn. Bhd. (“Just Mobile”), a Malaysian company (see Note 6). On January 20, 2016, Just Mobile changed its name to Sports Perfecta Technologies Sdn Bhd (“SPT”). The operations of Just Mobile are referred to as SPT after the acquisition date of January 7, 2016.

On June 26, 2018, the Company discontinued operations of its subsidiary Sports Perfecta, Inc. (“SPI”) along with its wholly owned subsidiary, Sports Perfecta Technologies Sdn Bhd (“SPT”). Ownership of these two entities were transferred to Neo Sports Ltd., a Japanese company, in exchange for 23,600,000 shares of the Company’s common stock, 100,000 shares of the Company’s Series A convertible preferred stock and the contract option right to purchase 3,000,000 shares of the Company’s common stock. See note 7.

On June 27, 2018, the Company discontinued operations of its subsidiary Link Bit Consulting Co., Ltd. (“LBC”) and all of its subsidiaries, except for WRN Co., Ltd. (“WRN”). The Company continued operations of WRN. On this date, the Company sold LBC and its subsidiaries and assets to IS Digital Ltd., a Cayman Island company, in exchange for $500,000. See note 7.

Nature of Business

The Company iswas engaged in the business of transmitting and ~~providing~~ providing horse racing information via various types of media, including multiple websites owned and operated by the wholly owned ~~subsidiaries~~ subsidiaries of LinkBit, WRN and Umajin HK. LinkBit ~~currently~~operated ~~operates~~ 6 websites through its various subsidiaries, which ~~generate~~generated substantially all of the Company’s revenue. Umajin HK had been delivering information on horse racing to its users through its website, however it terminated its service at the end of June 2017. The Company iswas also pursuing development of a fantasy sports offering ~~through~~ through Sports Perfecta, which has not yet generated any significant revenue. In June 2018, the Company discontinued the operations of its subsidiaries, LinkBit and SPI. WRN continues to operate one of these websites and business.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying consolidated financial statements of the Company have been prepared in accordance with principles generally accepted in the United States of America (“GAAP”) and include the accounts of Grand Perfecta and its wholly-owned subsidiaries LinkBit, Umajin HK, ~~and~~WRN and Sports Perfecta. The Company discontinued the operations of its wholly-owned subsidiaries LinkBit and SPI in June 2018. The accounts for these subsidiaries have been presented in the discontinued operations in the accompanying consolidated financial statements. All intercompany balances and transactions have been eliminated in consolidation. The Company has determined that ~~two~~three affiliated entities, Space Cultivation Mobile, ~~and~~ Japan Horse Circle and Basougu Shokuninkai, which LinkBit conducts business with ~~are~~were variable interest entities and that the Company iswas the primary beneficiary of each entity. As a result, the Company has consolidated the accounts of these variable interest entities into the accompanying consolidated financial statements. As the Company does not have any ownership interest in these variable interest entities, the Company has allocated the contributed capital in these variable interest entities as a component of ~~noncontrolling~~ non-controlling interest. ~~All~~These ~~intercompany~~three ~~balances~~variable ~~and~~interest ~~transactions~~entities did business with LinkBit. Therefore, these three entities have also been ~~eliminated~~presented in ~~consolidation~~the discontinued operations in the accompanying consolidated financial statements. After the discontinued operations, the Company consists of Grand Perfecta and its two remaining wholly-owned subsidiaries, Umajin HK and WRN. There are no variable interest entities since the Company discontinued operations in June 2018.

F-7

Financial Statement Reclassification

Use of Estimates

Going Concern

Based on operating losses and negative cash from operations, and the discontinued operations of most of the Company’s operations, substantial doubt exists about the Company’s ability to continue as a going concern. Management’s plan in this regard is to ~~improve~~find ~~sales~~new ~~and~~operations ~~further~~to ~~reduce~~enter ~~costs,~~into ~~including~~and ~~the~~focus ~~shift~~on ofbuilding profitable ~~its broadcast program from satellite television to web TV~~operations. To finance operations while it ~~improves~~finds ~~operating~~new ~~results~~operations, ~~it has sold $1,630,000 of common stock during~~ the ~~year~~Company ~~ended July 31, 2017 and if necessary~~ will continue financing activity such as taking loans, and issuing new ~~stock and asking existing creditors to convert their loans to~~ shares of the Company’s common stock.

~~F-8~~As of July 31, 2018, we had cash of $52,716 and a working capital deficit of $574,780 as compared to cash of $102,954 at July 31, 2017, of which $665 related to continuing operations and $102,289 related to discontinued operations. As of July 31, 2017 the working capital deficit was $9,117,835.

As of July 31, 2017, we had cash of $102,954 and a working capital deficit of $9,117,835 as compared to cash of $83,295 and a working capital deficit of $8,926,656 at July 31, 2016.

Foreign Exchange

The Company’s primary operations are conducted in Japan and performed by its wholly owned subsidiaries LinkBit and WRN. The Company also conducts operations through Sports Perfecta, and its Malaysian subsidiary SPT. A wholly owned subsidiary, Umajin HK, had been delivering information on horse racing to its users through its website similar to LinkBit, however it terminated its service at the end of June 2017. WRN and LinkBit’s functional currency is the Japanese Yen and Umajin HK’s functional currency is the Hong Kong Dollar. SPT’s functional currency is the Malaysian Ringgit.

~~The following rates were used to translate the accounts of LinkBit, Umajin HK and SPT into USD at the following balance sheet dates.~~F-8

	Balance Sheet Dates
	July 31,		July 31,
	2017		2016
Japanese Yen to USD		0.0091		0.0098
Hong Kong Dollars to USD		0.1280		0.1289
Malaysian Ringgit to USD		0.2335		0.2485

The following rates were used to translate the accounts of LinkBit, Umajin HK, SPT and WRN into USD at the following balance sheet dates.

The following rates were used to translate the accounts of LinkBit, Umajin HK and SPT into USD for the following operating periods.

	Balance Sheet Dates
	July 31, 2018		July 31, 2017
Japanese Yen to USD		0.0090		0.0091
Hong Kong Dollars to USD		0.1274		0.1280
Malaysian Ringgit to USD		0.2466		0.2335

	For the Year Ended
	July 31,		July 31,
	2017		2016
Japanese Yen to USD		0.0091		0.0087
Hong Kong Dollars to USD		0.1287		0.1289
Malaysian Ringgit to USD		0.2321		0.2413

The following rates were used to translate the accounts of LinkBit, Umajin HK, SPT and WRN into USD for the following operating periods.

	For the Year Ended
	July 31, 2018		July 31, 2017
Japanese Yen to USD		0.0091		0.0091
Hong Kong Dollars to USD		0.1278		0.1287
Malaysian Ringgit to USD		0.2470		0.2321

Cash and Cash Equivalents

F-9

Accounts Receivable

Property and Equipment

Buildings and fixtures		8 - 43 years
Autos and trucks		2 - 6 years
Tools and equipment		4 - 10 years
Computer software		5 years

Goodwill

F-9

Long-Lived Assets

Fair Value of Financial Instruments

~~Fair~~In ~~value~~accordance iswith ~~defined~~ASC as820, the ~~price that~~carrying ~~would~~value beof ~~received~~cash toand ~~sell~~cash anequivalents ~~asset~~and oraccounts ~~paid~~payable toapproximates ~~transfer~~fair avalue ~~liability~~due into anthe ~~orderly~~short-term ~~transaction~~maturity ~~between~~of ~~market~~these ~~participants~~instruments. ASC at820 clarifies the ~~measurement~~ ~~date~~definition of fair value, ~~based~~prescribes onmethods ~~the~~for ~~Company’s~~measuring ~~principal~~fair orvalue, inand ~~the~~establishes ~~absence~~a offair avalue ~~principal,~~hierarchy to ~~most~~classify ~~advantageous~~the ~~market~~inputs ~~for~~used ~~the~~in ~~specific asset~~measuring orfair ~~liability.~~value as follows:

~~GAAP~~Level ~~provides~~1- ~~for~~Inputs aare ~~three-level~~unadjusted ~~hierarchy~~quoted prices ofin ~~inputs~~active tomarkets ~~valuation~~for ~~techniques~~identical ~~used~~assets toor ~~measure~~liabilities ~~fair~~available ~~value,~~at ~~defined~~the asmeasurement ~~follows:~~date.

• Level 12- — Inputs ~~that~~ are unadjusted quoted prices for ~~(unadjusted)~~similar assets and liabilities in active markets, quoted prices for identical or similar assets orand liabilities in markets that are not active, ~~markets~~inputs other than quoted prices that ~~the~~are ~~entity~~observable, ~~can~~and ~~access~~inputs derived from or corroborated by observable market data.

• Level 23- — Inputs ~~other~~are ~~than~~unobservable ~~quoted~~inputs which ~~prices~~reflect ~~included~~the ~~within~~reporting ~~Level~~entity’s 1own ~~that~~assumptions ~~are~~on ~~observable~~what ~~for~~assumptions the ~~asset~~market orparticipants ~~liability,~~would ~~either~~use ~~directly~~in orpricing ~~indirectly, for substantially~~ the asset ~~full~~or ~~term~~liability ofbased on the ~~asset~~best oravailable ~~liability, including:~~information.

–The ~~Quoted~~Company ~~prices~~has ~~for~~determined ~~similar~~that ~~assets~~the orbook ~~liabilities~~value inof ~~active~~its ~~markets~~outstanding financial instruments as of July 31, 2018 and 2017 approximates the fair value.

– Quoted prices for identical or similar assets or liabilities in markets that are not active

– Inputs other than quoted prices that are observable for the asset or liability

– Inputs that are derived principally from or corroborated by observable market data by correlation or other means

The Company has determined that the book value of its outstanding financial instruments as of July 31, 2017 and 2016 approximates the fair value.

F-10

Concentration of Credit Risk

Financial instruments that potentially expose the Company to concentration of credit risk include cash, accounts receivable, notes receivable, and amounts due from related parties. The Company maintains its cash in banks located in Japan, Hong Kong, Malaysia and the United States in financial institutions with high credit ratings. Substantially all of the Company’s revenues are generated from customers in Japan. The Company conducts periodic reviews of the financial condition and payment practices of its customers and note receivable holders. The Company had ~~losses~~no losses related to the write off of notes receivable during the year ended July 31, ~~2017~~2018. ~~and~~During ~~2016~~the ofyear ~~$309,400~~ended ~~and~~July $731,~~395,~~ ~~respectively, in~~2017 ~~addition~~the loss related to the ~~$1,312,276~~write ~~loss~~off ~~on settlement~~ of ~~note~~notes receivable ~~that~~ was ~~recorded~~$309,400, ~~during~~which ~~the~~is ~~year~~included ~~ended~~in ~~July~~discontinued ~~31,~~operations ~~2016~~in ~~(see~~the consolidated statements ~~Note~~of 13operations and comprehensive income (loss).

Revenue Recognition

F-10

Income Taxes

Advertising Costs

The Company expenses advertising costs as incurred. Advertising costs incurred amounted to $94,997 from discontinued operations and $241,623 ($2,413 from continuing operations and $~~172~~239,~~983~~210 from discontinued operations) for the years ended July 31, ~~2017~~2018 and ~~2016~~2017, respectively.

Basic and Diluted Earnings Per Share

In accordance with ASC 260, Earnings Per Share, the basic income per common share is computed by dividing the net income available to common stockholders by the weighted average common shares outstanding during the period. Diluted earnings per share reflect per share amounts that would have resulted if diluted potential common stock had been converted to common stock. No dilutive potential common shares were included in the computation of diluted net income per share because their impact was anti-dilutive. As of July 31, 2017 ~~and 2016~~, the Company had total options of 3,000,000 ~~which~~ which were excluded from the computation of net income per share because they are anti-dilutive. As of July 31, ~~2016~~2018, the Company did ~~had~~not ~~convertible~~have ~~notes~~any convertible ~~into~~notes ~~980,000~~or ~~shares of common stock which were excluded from~~ the ~~computation~~options ~~because they are anti-dilutive. As~~ of ~~July 31~~3, ~~2017~~000, ~~the Company did not have any convertible notes~~000. As a result, the basic and diluted earnings per share were the same for each of the periods presented.

Recent Accounting Pronouncements

InFrom ~~May~~time ~~2014~~to time, ~~the~~new ~~FASB~~accounting ~~issued Accounting Standards Update (“ASU”)~~pronouncements ~~2014-09,~~are ~~Revenue~~issued ~~from~~by ~~Contracts~~FASB ~~with~~that ~~Customers~~are ~~(Topic~~adopted ~~606).~~by ~~ASU 2014-09 creates a new topic in~~ the ~~ASC~~Company ~~Topic~~as ~~606~~of ~~and establishes a new control-based revenue recognition model, changes~~ the ~~basis~~specified ~~for~~effective ~~deciding~~date. ~~when~~If ~~revenue~~not ~~is recognized over time or at a point in time~~discussed, ~~provides~~management ~~new~~believes ~~and more detailed guidance on specific topics, and expands and improves disclosures about revenue. In addition,~~that ~~ASU 2014-09 adds a new Subtopic to~~ the ~~Codification,~~impact ~~ASC~~of ~~340-40,~~recently ~~Other~~issued ~~Assets and Deferred Costs: Contracts with Customers~~standards, ~~to provide~~which ~~guidance on costs related to obtaining a contract with a customer and costs incurred in fulfilling a contract with a customer that~~ are not inyet ~~the scope of another ASC Topic. The guidance in ASU 2014-09 is~~ effective ~~for public entities for annual reporting periods beginning after December 15~~, ~~2017,~~will ~~including interim periods therein. Early application is~~ not ~~permitted.~~have ~~Management~~a ~~is in~~material ~~the process of assessing the~~ impact ~~of ASU 2014-09~~ on the Company’s ~~consolidated~~ financial statements upon adoption.

~~F-11~~ 3. STOCKHOLDERS’ EQUITY

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The standard requires that lessees will be required to recognize assets and liabilities on the balance sheet for the rights and obligations created by all leases with terms of more than 12 months. ASU No. 2016-02 also will require disclosures designed to give financial statement users information on the amount, timing, and uncertainty of cash flows arising from leases. These disclosures include qualitative and quantitative information. The standard will take effect for fiscal years and interim periods within those fiscal years beginning after December 15, 2018 with earlier adoption permitted. The Company is assessing the impact of adopting ASU No. 2016-02 on the Company’s consolidated financial statements.

3. PROPERTY AND EQUIPMENT, NET

The Company’s property and equipment consisted of the following.

	July 31,			July 31,
	2017			2016
Buildings and fixtures	$	102,528		$	317,140
Autos and trucks		275,799			297,014
Tools and equipment		423,632			538,231
Computer software		1,442,753			1,553,734
		2,244,712			2,706,119
Less: accumulated depreciation		(2,070,401	)		(2,463,370	)
	$	174,311		$	242,749

Depreciation expense amounted to $54,053 and $71,530 for the year ended July 31, 2017 and 2016, respectively.

4. NOTES RECEIVABLE

The Company’s outstanding notes receivable consist of unsecured advances, including interest ranging from 0% to 3% per annum, payable in full on dates extending through 2039. As of July 31, 2017 and 2016, the Company had total outstanding notes receivable of $2,662,700 and $3,102,389, respectively. The portion of these outstanding notes receivables that were either due on demand or had scheduled due dates within one year amounted to $2,057,251 and $2,457,846 as of July 31, 2017 and 2016, respectively.

The future scheduled maturities of outstanding notes receivables as of July 31, 2017 based on contractual due dates are as follows.

	Year Ended
	July 31,
2018	$	2,057,251
2019		7,486
2020		10,997
2021		–
2022		31,251
Thereafter		555,715
Total	$	2,662,700

F-12

5. GOODWILL

The Company had recorded goodwill relating to the purchase of Media 21, Inc. in 2011, as well as the acquisition of Umajin HK on May 27, 2013. The following is a summary of the activity relating to goodwill for the years ended July 31, 2016 and 2017. The impairment expense related to Umajin HK of $99,502 during the year end July 31, 2016 has been the only impairment expense recognized.

Balance as of July 31, 2015	$	6,257,112
Impairment of Umajin HK goodwill		(99,502	)
Foreign currency translation adjustment		1,292,243
Balance as of July 31, 2016	$	7,449,853
Foreign currency translation adjustment		(532,131	)
Balance as of July 31, 2017	$	6,917,722

6. ACQUISITIONS

On January 7, 2016, Sports Perfecta entered into a Share Purchase Agreement to acquire 100% of the outstanding shares of SPT. The total aggregate purchase price for the outstanding shares of SPT amounted to $200,000, of which $120,000 was paid on the closing date and the remaining $80,000 was paid in April 2016.

Assets acquired and liabilities assumed were recorded at their estimated fair values as of the acquisition date. The fair values of identifiable intangible assets were based on valuations using the income approach.

The purchase price was allocated as follows as of the acquisition date:

Cash	$	38,908
Accounts receivable		20,960
Other current assets		6,751
Intangible assets		134,476
Current liabilities		(1,095	)
Total Purchase Price	$	200,000

Intangible assets acquired represent developed technology which has an estimated useful life of 4 years. Amortization expense for intangible assets amounted to $34,390 and $20,227 for year ended July 31, 2017 and 2016, respectively. As of July 31, 2017, the Company determined that the future projected cash flows over the remaining useful life of the intangible assets were negative. As a result, the Company recorded an impairment charge during the year ended July 31, 2017 of $83,712, representing the book value of the intangible assets at the time.

On December 16, 2015, the Company entered into a purchase agreement to acquire 100% of the outstanding shares of Basougu. The total purchase price for the outstanding shares of Basougu amounted to 2 million Japanese Yen ($16,400 on the purchase date). The fair value of the net assets acquired from Basougu amounted to $95,980 as of the acquisition date. As the fair value of the net assets was greater than the purchase price, the Company recorded a gain on the acquisition of Basougu of $79,580, which is reflected as a component of other income on the accompanying statements of operations for the year ended July 31, 2016. There was no goodwill or other intangible assets acquired in connection with the purchase of Basougu.

F-13

7. NOTES PAYABLE

A summary of the Company’s outstanding notes payable is as follows:

	July 31,		July 31,
	2017		2016
Unsecured note payable issued on June 15, 2016, due on December 15, 2016, bearing interest at 15% per annum (21.9% per annum after the maturity date) due monthly. The Company is currently in default under the terms of the note.	$	910,000	$	980,000
Unsecured note payable issued on December 20, 2011, due on December 31, 2016, bearing interest at 15% per annum (18% per annum after the maturity date) due monthly. The Company is currently in default under the terms of the note.		1,911,000		2,058,000
Unsecured note payable issued on January 20, 2011, due on June 30, 2017, bearing interest at 12% per annum due monthly.		–		539,000
Unsecured note payable issued on December 18, 2015, due in 20 monthly installments from July 31, 2017 through February 28, 2019, bearing interest at 12% per annum due monthly.		864,500		980,000
Unsecured note payable issued on February 5, 2016, due in 23 installments of JPY 3,000,000 beginning in February 2017 and a final installment of JPY 31,000,000 in January 2019, bearing interest at 12% per annum due monthly.		746,200		980,000
Unsecured note payable issued on June 28, 2017, payable in full on June 30, 2018, bearing interest at 12% per annum due monthly.		418,600		–
Unsecured note payable issued on July 20, 2011, due on July 20, 2018, bearing interest at 12% per annum due monthly.		273,000		294,000
Unsecured notes payable, non-interest bearing, due on demand		41,336		44,516
Total notes payable		5,164,636		5,875,516
Less: current portion of notes payable		4,427,536		3,797,916
Long-term portion of notes payable	$	737,100	$	2,077,600

Substantially all of the above outstanding notes payable are personally guaranteed by the Company’s Chief Executive Officer.

Future scheduled maturities of long-term debt are as follows:

	Year Ended
	July 31,
2018	$	4,427,536
2019		737,100
Total	$	5,164,636

F-14

8. DEBT TO RELATED PARTIES

A summary of the Company’s outstanding debt to related parties is as follows:

	July 31,		July 31,
	2017		2016
Unsecured note payable issued on March 26, 2012, due on demand, bearing interest at 1% per annum due monthly. The balance is due to a related party entity which is owned by one of the directors of the Company.	$	910,000	$	980,000
Unsecured note payable issued on January 30, 2013, due on demand, bearing interest at 1% per annum due monthly. The balance is due to a related party entity which is owned by one of the directors of the Company.		455,000		490,000
Unsecured note payable issued on June 14, 2016, non-interest bearing and due on October 31, 2017 discounted using an effective interest rate of 12%. The balance is due to a related party entity which is owned by one of the directors of the Company.		273,000		294,000
Unsecured short-term borrowing on April 25, 2017, non-interest bearing and due on demand. The balance is due to a related party entity which is owned by one of the directors of the Company		345,800		–
Unsecured note payable issued on September 21, 2016, due on October 31, 2017 discounted using an effective interest rate of 12%. The balance is due to a related party entity which is owned by one of the directors of the Company.		273,000		–
Unsecured note payable due to the Company's Chairman and CEO, non-interest bearing and due on demand.		1,001,509		830,118
Unsecured note payable due to the Company's President, non-interest bearing and due on demand.		–		196,000
Total notes payable to related parties		3,258,309		2,790,118
Discount on notes payable to related parties		16,515		13,049
Notes payable to related parties, net	$	3,241,794	$	2,777,069

The Company imputed interest on the above notes payable received on June 14, 2016 and September 21, 2016 using the effective interest rate of 12%, which approximated the Company’s incremental borrowing rate. The total interest imputed amounted to $78,628, including $16,874 during the year ended July 31, 2016 and $61,754 during the year ended July 31, 2017. The imputed interest was recorded as a discount to the note payable and an increase to additional paid-in capital. The amounts are being amortized as interest expense through the maturity dates of the notes, which amounted to $57,128 and $4,033 during the year ended July 31, 2017 and 2016, respectively.

9. CONVERTIBLE NOTE PAYABLE

On March 5, 2015, the Company entered into a convertible note agreement for total principal borrowings of JPY 200,000,000 ($1,620,000 at July 31, 2015). The amounts were originally due on March 5, 2016 and bear interest at a rate of 1% per annum. At the option of the debt holder, beginning 40 days after the issuance of the note, the debt holder may convert the outstanding balance of the note into shares of the Company’s common stock at a conversion rate equal to one share per JPY130.90 or $1.10 of outstanding principal and accrued interest. During the year ended July 31, 2016, the Company made payments of $783,000 on the outstanding principal of the convertible note payable, and the debt holder agreed to extend the maturity date for an additional 6 months until September 5, 2016. During the year ended July 31, 2017, the debt holder agreed to further extend the due date until June 30, 2017. The remaining balance of the convertible note payable was paid in full by the maturity date. As of July 31, 2017, the outstanding balance amounted to $0.

The conversion feature associated with the convertible note payable created a derivative liability as of April 14, 2015, the date in which the note became convertible. The Company valued the derivative as of each subsequent reporting period using the Black-Scholes pricing model up until the principal amount was paid in full during the year ended July 31, 2017, at which point the derivative no longer existed. The value at each of these dates amounted to $0.

10. STOCKHOLDERS’ EQUITY

Preferred Stock

The Company is authorized to issue up to 100,000,000 shares of preferred stock with a par value of $0.001, with 100,000 shares designated as Series A Preferred Stock. The Series A Preferred Stock receive a 10 to 1 voting preference over common stock. Accordingly, for every share of Series A Preferred Stock held, the holder receives the voting rights equal to 10 shares of common stock. As such, the holders of the Series A Preferred Stock have the equivalent voting capability of 1,000,000 shares of common stock. The Series A Preferred Stock also has a $0.05 per share liquidation preference over common stock, and can be redeemed by the Company at any time, upon thirty days’ notice, for $0.05 per share.

~~The~~On June 26, 2018, as part of the transfer agreement of SPI, the Company ~~had~~received the outstanding 100,000 shares of Series A Preferred Stock ~~issued~~ and ~~outstanding~~immediately ascancelled ofthese ~~July~~shares ~~31,~~(see ~~2017 and 2016~~note 7).

~~F-15~~The Company had 0 and 100,000 shares of Series A Preferred Stock issued and outstanding as of July 31, 2018 and 2017, respectively.

Common Stock Transactions

Pursuant to the Satisfaction Agreement effective November 2, 2015 (see Note 13), Umajin Japan agreed to sell 1,400,000 shares of the Company’s common stock back to the Company, and the Company has agreed to release Umajin Japan from any further obligation due under the promissory note.

Effective January 25, 2016, the Company entered into a consulting agreement with an investor relations firm for a term of six months. Per the terms of the agreement, as compensation for the services to be provided, the Company issued 1,000,000 shares on February 8, 2016, which were fully vested on the date of the agreement. The total value of the shares as of the agreement date amounted to $120,000, which has been reflected as general and administrative expense during the year ended July 31, 2016.

On August 23, 2016, the Company entered into an Offshore Securities Purchase Agreement with an investor whereby the Company sold 1,000,000 shares of common stock for a purchase price of JPY100,000,000 (US $1,000,000 as of August 23, 2016).

On April 10, 2017, the Company entered into an Offshore Securities Purchase Agreement with an investor whereby the Company sold 700,000 shares of common stock for a purchase price of JPY70,000,000 (US $630,000 as of April 10, 2017).

~~Sale of Interest in Subsidiary~~F-11

On ~~July~~June 2926, ~~2016~~2018, ~~the~~as ~~Company~~part ~~sold~~of ~~its~~the ~~50%~~transfer ~~ownership~~agreement ~~interest in~~of ~~Ripuran Co.~~SPI, the ~~Ltd.~~Company ~~(“Ripuran”)~~received ~~for a total of JPY 350~~23,~~000 (approximately $3~~600,000). ~~The~~shares ~~gain on the sale~~ of ~~the~~Common ~~interest in~~Stock ~~Ripuran amounted to $35,462~~ and isimmediately ~~included~~cancelled asthese ashares ~~component~~(see ofnote ~~other income for the year ended July 31, 2016 in the accompanying consolidated statements of operations~~7).

On July 9, 2018, the Company cancelled 3,222,668 shares of common stock that had been returned to the Company by the stock holders for no compensation.

The Company had 4,977,332 and 31,800,000 shares of Common Stock issued and outstanding as of July 31, 2018 and 2017, respectively.

Stock Options

InOn ~~connection~~June ~~with~~26, ~~the~~2018, ~~sale~~as part of ~~stock~~the ontransfer ~~June~~agreement ~~11,~~of ~~2014~~SPI, the Company ~~granted~~ anreceived ~~option~~the tocontract ~~the~~option ~~buyer~~right to purchase ~~an additional~~ 3,000,000 shares of ~~common~~Common ~~stock~~Stock ~~for~~and aimmediately ~~purchase~~cancelled ~~price~~this ~~of $3 million at~~contract ~~any~~option ~~time~~(see ~~prior~~note to7). ~~June~~There ~~11,~~were ~~2019.~~no ~~The~~ options ~~are~~ outstanding as of July 31, ~~2017~~2018.

11 4. INCOME TAXES

The Company records its deferred taxes under the liability method, whereby deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are determined based on multi-national, multi-jurisdictional nature of the Company’s operations. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

Net deferred tax assets from continuing operations consisted of the following as of July 31, ~~2017~~2018 and ~~2016~~2017.

	July 31,			July 31,
	July 31, 2018			July 31, 2017
	2017			2016
Deferred tax assets:
Commission expenses	$	425,797		$	393,890
Loss carryforwards	$	569,710		$	–
Loss carryforwards		172,145			273,144
Valuation allowance		(569,710	)		–
Allowance for doubtful accounts		143,554			51,450
Net deferred tax assets	$	–		$	–
Other		84,564			70,245
Deferred tax liabilities:
Depreciation		–			(18,461	)
Others		(10,529	)		(9,689	)
Valuation allowance		(26,209	)		(28,224	)
Net deferred tax assets	$	789,322		$	732,355

The income tax provision differs from the amount of income tax determined by applying the applicable income tax rate to pretax income from continuing operations for the years ended July 31, ~~2017~~ 2018 and ~~2016~~2017 due to the following.

F-16

	July 31, 2018			July 31, 2017
Income tax expense (benefit) based on book income at the statutory rate	$	536,238		$	(209,363	)
IRS tax penalty		–			210,000
Permanent book to tax differences		(471,553	)		–
Valuation allowance		(64,685	)		–
Total income tax provision	$	–		$	637

	July 31,			July 31,
	2017			2016
Income tax expense (benefit) based on book income at Japanese statutory rate	$	(418,479	)	$	(649,395	)
IRS tax penalty		210,000			–
Loss on credit recorded		–			486,383
Entertainment expense		80,914			90,679
Additional taxes		3,966			5,988
Tax rate difference between current tax and deferred tax assets		3,539			(14,263	)
Others		23,444			16,053
Total income tax provision	$	(96,616	)	$	(64,555	)

F-12

The Company classifies income tax penalties and interest, if any, as part of other general and administrative expenses in the accompanying consolidated statements of operations. The Company had accrued penalties of $600,000 as of July 31, 2018 and 2017 resulting from the failure to timely file required returns in the US from 2013 through 2016. ~~There were no accrued penalties as of July 31, 2016.~~

At July 31, 2018, the Company had net operating loss carryforwards of approximately $2,713,000 that may be offset against future taxable income from the year 2019 through 2038. No tax benefit has been reported in the July 31, 2018 consolidated financial statements since the potential tax benefit is offset by a valuation allowance of the same amount. The Company's tax years for its Federal and State US jurisdictions which are currently open for examination are the years of ~~2013~~2014 - ~~2016~~2017. The Company’s tax years in Japanese jurisdictions that are open for examination are the years of ~~2012~~2013 – ~~2016~~2017.

12The Company adopted the provisions of ASU 2015-17 prospectively, with the first annual period of change effective July 31, 2018. ~~COMMITMENTS~~ ~~AND~~Prior ~~CONTINGENCIES~~periods were not retrospectively adjusted.

5. COMMITMENTS AND CONTINGENCIES

Operating Leases

~~The~~Prior to June 27, 2018, the Company ~~leases~~was leasing its corporate headquarters and administrative offices in ~~Toyko~~Tokyo, Japan, as well as the administrative offices of SPT in Kuala Lumpur, Malaysia under non-cancelable operating leases extending through April 15, 2019. These leases were transferred with the discontinued operations. The lease of the Umajin HK office ended on July 21, 2017. The Company also leases other office space as needed on a month-to-month basis. ~~The Company incurred rent expense of $720,140 and $898,360 for the years ended July 31, 2017 and 2016, respectively.~~

~~Future~~The ~~minimum~~Company ~~lease~~incurred ~~payments~~rent ~~under~~expense ~~non-cancelable~~for ~~operating~~continuing operations ~~leases~~of ~~are~~$0 asand ~~follows~~for discontinued operations of $363,976 for the year ended July 31, 2018 and for continuing operations of $9,575 and for discontinued operations of $710,565 for the year ended July 31, 2017.

Years ending July 31,
2018	$	197,618
2019		172,709
Total	$	370,327

Litigation

In the ordinary course of business, the Company may be or has been involved in legal proceedings from time to time. As of the date of this annual report, there have been no material legal proceedings relating to the Company.

13 6. RELATED PARTY TRANSACTIONS

AsIn ofJune ~~July 31~~2018, ~~2017~~the Company entered into a consulting agreement with its new CEO and ~~2016,~~sole ~~the~~director. The agreement was for five months from June through October. The Company ~~had~~agreed to pay him $3,~~258,309~~000 per month for his services in running the Company and making sure that the required audit and filings get completed. As $2of July 31,~~790,118,~~ ~~respectively~~2018 ofthe ~~notes~~Company ~~payable~~had ~~due~~$6,000 toin ~~related~~accrued ~~parties~~liabilities ~~(see~~for ~~Note~~this 8)agreement.

The ~~Company~~following ~~had made advances to Umajin Co., Ltd. (“Umajin Japan”), a~~ related party ~~entity~~transactions ~~owned~~were byall ~~one~~related of to the ~~directors of the~~ Company.’s ~~Effective~~previous ~~October~~management ~~30,~~and ~~2015,~~ the ~~Company~~discontinued ~~entered into~~operations. aThese ~~Receivables~~related ~~Transfer~~party ~~Agreement~~transactions ~~with~~all ~~Europlus~~were ~~International~~eliminated ~~(“EI”), in which~~ with the ~~Company~~discontinuation ~~transferred $499,898 (JPY 60,228,650)~~ of ~~outstanding~~LBC ~~receivables~~and ~~due~~SPI ~~from~~(see ~~Umajin Japan to EI in exchange for a~~ note ~~receivable of $494,899 (JPY 59,626,363~~7) ~~to be paid in three quarterly installments starting on January 31, 2016 and finishing on July 31, 2016. The amount was collected in full by the Company on August 1, 2016.~~:

~~Effective~~As ~~November~~of 2,July ~~2015~~31, ~~the~~2018 ~~Company entered into a Note Payable~~ and Satisfaction Agreement (the “Satisfaction Agreement”) with Umajin Japan in order to settle the remaining receivable balance outstanding. The Company was the holder of a promissory note made by Umajin Japan in the principal amount of JPY 1812017,~~720,000~~ ~~($1,508,276 as of November 2, 2015). The promissory note was secured by 1,400,000 shares of~~ the Company~~’s common~~ ~~stock,~~had which were owned by Umajin Japan. Pursuant to the Satisfaction Agreement, Umajin Japan agreed to sell its shares of common stock to the Company, and the Company has agreed to release Umajin Japan from any further obligation due under the promissory note. The fair value of the common stock sold to the Company amounted to $~~196,000.~~0 ~~The difference between the fair value of the common stock~~ and ~~the outstanding balance of the note receivable amounted to~~ $13,~~312~~258,~~276~~309, ~~which was recorded as loss from settlement~~ ofrespectively ~~note receivable in the accompanying consolidated statement~~ of ~~operations~~notes ~~for~~payable ~~the year ended July 31, 2016. There were no outstanding amounts~~ due ~~from~~to ~~Umajin~~related ~~Japan~~parties as(see ofnote ~~July 31, 2017 or 2016~~7).

Umajin Co., Ltd. (“Umajin Japan”), was a related party entity owned by one of the former directors of the Company. The Company and Umajin Japan entered into a service agreement which was modified on November 1, 2015 to set the monthly fee payable by the Company to Umajin Japan for providing horserace information at 16 million Yen per month (inclusive of consumption tax), and to set the monthly fee payable for providing a horseracing related email magazine and web page content at 7 million Yen per month (inclusive of consumption tax) for a total of 23 million Yen per month. The Company and Umajin Japan agreed to reduce the monthly fees from 23 million Yen to 11 million Yen subsequent to October 2016. Subsequent to February 2017, the Company and Umajin Japan agreed to reduce the fee to 8 million Yen per month through July 2018.

Total fees paid to Umajin Japan for the year ended July 31, 2018 and 2017 amounted to $793,520 and $1,255,800, respectively. The fees paid to Umajin Japan are included in income (loss) from operations of discontinued operations in the accompanying consolidated statements of operations. As of July 31, 2018 the Company had $0 due to Umajin Japan due to the sale of LBC (see note 7). As of July 31, 2017 the Company had $108,604 due to Umajin Japan which is reflected in current liabilities of discontinued operations in the accompanying consolidated balance sheets.

F-13

During the years ended July 31, 2018 and 2017, the Company received consulting services from Cheval Attache, a related party entity owned by one of the Company’s former directors, (including amounts for consumption tax) of $108,108 and $117,938, respectively, which are included in income (loss) from operations of discontinued operations in the accompanying consolidated statements of operations. During the year ended July 31, 2017, the Company also charged Cheval Attache (including amounts for consumption tax) $100,300 of revenue related to information provided relating to providing horseracing contacts, which is included in income (loss) from operations of discontinued operations in the accompanying consolidated statement of operations.

G-Liberta, a subsidiary of Cheval Attache, performed certain advertising and research services for the Company. Total expenses related to G-Liberta during the year ended July 31, 2018 and 2017 amounted to $2,800 and $1,209, respectively, and are reflected as part of income (loss) from operations of discontinued operations in the accompanying consolidated statements of operations. As of July 31, 2018 the Company had $0 due to G-Liberta due to the sale of LBC (see note 7) and as of July 31, 2017 the Company had $1,209 due to G-Liberta which is reflected in current liabilities of discontinued operations in the accompanying consolidated balance sheets.

On October 17, 2016, the Company entered into an agreement with Clara Ltd., a related party entity owned by one of the Company’s former directors, allowing Clara Ltd. access to the Company’s database containing certain horse racing information owned by the Company for an indefinite period. As compensation, the Company was to receive a total of 30,000,000 Yen, payable in 10 monthly installments starting in November 2016. As of July 31, 2017 the amount due under this agreement was $27,300 which is reflected in current liabilities of discontinued operations in the accompanying consolidated balance sheets, which was paid in full in August of 2017. The revenue related to this transaction of $273,000 is reflected as income (loss) from operations of discontinued operations on the accompanying consolidated statement of operations for the year ended July 31, 2017 with no revenue recorded from the related party during the year ended July 31, 2018.

7. DISCONTINUED OPERATIONS

During the year ended July 31, 2018 the Company decided to discontinue most of its operating activities. This was done by way of the following two transactions:

On June 26, 2018, the Company exchanged all the issued and outstanding shares of common stock of its wholly owned subsidiary, Sports Perfecta, Inc. (“SPI”) to Neo Sports, Ltd, a Japanese company, for 100,000 shares of the Company’s series A preferred stock, 23,600,000 shares of the Company’s common stock and an option contract right for 3,000,000 shares of the Company’s common stock. This transaction included SPI’s wholly owned subsidiary, Sports Perfecta Technologies Sdn Bhd.

On June 27, 2018, the Company exchanged all the issued and outstanding shares of common stock of its wholly owned subsidiary, Link Bit Consulting Co. Ltd. (“LBC”) to IS Digital Ltd., a Cayman Island company for $420,000 in cash and 100% of the account receivable balance owed to the Company by LBC for $80,000 in cash. This transaction included all of LBC’s subsidiaries, except for WRN Co. Ltd. (“WRN”). WRN’s issued and outstanding common stock was transferred to the Company from LBC on this date.

F-14

In accordance with the provisions of ASC 205-20, the Company has separately reported the assets and liabilities of the discontinued operations in the consolidated balance sheets. The assets and liabilities have been reflected as discontinued operations in the consolidated balance sheets as of July 31, 2018 and July 31, 2017, and consist of the following:

	July 31, 2018		July 31, 2017
CURRENT ASSETS OF DISCONTINUED OPERATIONS:
Cash	$	–	$	102,289
Accounts receivable, net		–		1,065,541
Accounts receivable - related party		–		27,300
Current portion of notes receivable [1]		–		2,057,251
Deferred tax assets, current [2]		–		206,270
Prepaid expenses and other current assets		–		30,803
TOTAL CURRENT ASSETS OF DISCONTINUED OPERATIONS	$	–	$	3,489,454

NONCURRENT ASSETS OF DISCONTINUED OPERATIONS:
Property and equipment, net [3]	$	–	$	174,311
Long-term note receivable, net of current portion [1]		–		605,449
Deferred tax assets, long-term [2]		–		583,052
Goodwill [4]		–		6,917,722
Other assets [5]		–		181,414
TOTAL NONCURRENT ASSETS OF DISCONTINUED OPERATIONS	$	–	$	8,461,948

CURRENT LIABILITIES OF DISCONTINUED OPERATIONS
Accounts payable and accrued expenses	$	–	$	2,826,219
Accounts payable - related party		–		109,813
Deferred revenues		–		866,866
Current portion of notes payable [6]		–		4,427,536
Notes payable to related parties [7]		–		3,241,794
Taxes payable		–		513,384
TOTAL CURRENT LIABILITIES OF DISCONTINUED OPERATIONS	$	–	$	11,985,612

LONG-TERM LIABILITIES OF DISCONTINUED OPERATIONS
Long-term portion of notes payable, net of current portion [6]	$	–	$	737,100
TOTAL LONG-TERM LIABILITIES OF DISCONTINUED OPERATIONS	$	–	$	737,100

[1]

The Company’s outstanding notes receivable consist of unsecured advances, including interest ranging from 0% to 3% per annum, payable in full on dates extending through 2039. As of July 31, 2018 and 2017, the Company had total outstanding notes receivable of $0 and $2,662,700, respectively. The portion of these outstanding notes receivables that were either due on demand or had scheduled due dates within one year amounted to $0 and $2,057,251 as of July 31, 2018 and 2017, respectively.

[2]	Net deferred tax assets from discontinued operations consisted of the following as of July 31, 2018 and 2017:

	July 31, 2018		July 31, 2017
Deferred tax assets:
Commission expenses	$	–	$	425,797
Loss carryforwards		–		172,145
Allowance for doubtful accounts		–		143,554
Other		–		84,564

Deferred tax liabilities:
Others		–		(10,529	)

Valuation allowance		–		(26,209	)
Net deferred tax assets	$	–	$	789,322

F-15

The income tax provision differs from the amount of income tax determined by applying the applicable income tax rate to pretax income from discontinued operations for the years ended July 31, 2018 and 2017 due to the following:

	July 31, 2018			July 31, 2017
Income tax expense (benefit) based on book income at Japanese statutory rate	$	748,934		$	(209,116	)
Entertainment expense		65,333			80,914
Additional taxes		3,966			3,966
Tax rate difference between current tax and deferred tax assets		3,539			3,539
Others		(47,106	)		23,444
Total income tax provision	$	774,666		$	(97,253	)

[3]	The Company’s property and equipment consisted of the following.

	July 31, 2018		July 31, 2017
Buildings and fixtures	$	–	$	102,528
Autos and trucks		–		275,799
Tools and equipment		–		423,632
Computer software		–		1,442,753
		–		2,244,712
Less: accumulated depreciation		–		(2,070,401	)
	$	–	$	174,311

Depreciation expense amounted to $25,867 and $54,053 for the year ended July 31, 2018 and 2017, respectively.

[4]	The Company had recorded goodwill relating to the purchase of Media 21, Inc. in 2011, as well as the acquisition of Umajin HK on May 27, 2013. The following is a summary of the activity relating to goodwill for the years ended July 31, 2018 and 2017.

Balance as of July 31, 2016	$	7,449,853
Foreign currency translation adjustment		(532,131	)
Balance as of July 31, 2017	$	6,917,722
Transfer of discontinued operation assets		(6,917,722	)
Balance as of July 31, 2018	$	–

[5]

Intangible assets acquired with SPT represent developed technology which had an estimated useful life of 4 years. Amortization expense for intangible assets amounted to $0 and $34,390 for year ended July 31, 2018 and 2017, respectively. As of July 31, 2017, the Company determined that the future projected cash flows over the remaining useful life of the intangible assets were negative. As a result, the Company recorded an impairment charge during the year ended July 31, 2017 of $83,712, representing the book value of the intangible assets at the time.

[6]	A summary of the Company’s outstanding notes payable is as follows:

	July 31, 2018		July 31, 2017
Unsecured note payable issued on June 15, 2016, due on December 15, 2016, bearing interest at 15% per annum (21.9% per annum after the maturity date) due monthly. This note was transferred as part of the discontinued operations.	$	–	$	910,000
Unsecured note payable issued on December 20, 2011, due on December 31, 2016, bearing interest at 15% per annum (18% per annum after the maturity date) due monthly. This note was transferred as part of the discontinued operations.		–		1,911,000
Unsecured note payable issued on December 18, 2015, due in 20 monthly installments from July 31, 2017 through February 28, 2019, bearing interest at 12% per annum due monthly. This note was transferred as part of the discontinued operations.		–		864,500
Unsecured note payable issued on February 5, 2016, due in 23 installments of JPY 3,000,000 beginning in February 2017 and a final installment of JPY 31,000,000 in January 2019, bearing interest at 12% per annum due monthly. This note was transferred as part of the discontinued operations.		–		746,200
Unsecured note payable issued on June 28, 2017, payable in full on June 30, 2018, bearing interest at 12% per annum due monthly. This note was transferred as part of the discontinued operations.		–		418,600
Unsecured note payable issued on July 20, 2011, due on July 20, 2018, bearing interest at 12% per annum due monthly. This note was transferred as part of the discontinued operations.		–		273,000
Unsecured notes payable, non-interest bearing, due on demand. This note was transferred as part of the discontinued operations.		–		41,336
Total notes payable		–		5,164,636
Less: current portion of notes payable		–		(4,427,536	)
Long-term portion of notes payable	$	–	$	737,100

Substantially all of the above outstanding notes payable were personally guaranteed by the Company’s former Chief Executive Officer.

F-16

[7]	A summary of the Company’s outstanding notes payable to related parties is as follows:

	July 31, 2018		July 31, 2017
Unsecured note payable issued on March 26, 2012, due on demand, bearing interest at 1% per annum due monthly. The balance was due to a related party entity which is owned by one of the former directors of the Company. This debt was transferred with the discontinued operations.	$	–	$	910,000
Unsecured note payable issued on January 30, 2013, due on demand, bearing interest at 1% per annum due monthly. The balance was due to a related party entity which is owned by one of the former directors of the Company. This debt was transferred with the discontinued operations.		–		455,000
Unsecured note payable issued on June 14, 2016, non-interest bearing and due on October 31, 2017 discounted using an effective interest rate of 12%. The balance was due to a related party entity which is owned by one of the former directors of the Company. This debt was transferred with the discontinued operations.		–		273,000
Unsecured short-term borrowing on April 25, 2017, non-interest bearing and due on demand. The balance was due to a related party entity which is owned by one of the former directors of the Company. This debt was transferred with the discontinued operations.		–		345,800
Unsecured note payable issued on September 21, 2016, due on October 31, 2017 discounted using an effective interest rate of 12%. The balance was due to a related party entity which is owned by one of the former directors of the Company. This debt was transferred with the discontinued operations.		–		273,000
Unsecured note payable due to the Company's former Chairman and CEO, non-interest bearing and due on demand. This debt was transferred with the discontinued operations.		–		1,001,509
Total notes payable to related parties		–		3,258,309
Discount on notes payable to related parties		–		16,515
Notes payable to related parties, net	$	–	$	3,241,794

The Company imputed interest on the above notes payable received on June 14, 2016 and September 21, 2016 using the effective interest rate of 12%, which approximated the Company’s incremental borrowing rate. The total interest imputed amounted to $78,628, including $61,754 during the year ended July 31, 2017 and $0 during the year ended July 31, 2018. The imputed interest was recorded as a discount to the note payable and an increase to additional paid-in capital. The amounts are being amortized as interest expense through the maturity dates of the notes, which amounted to $16,515 and $57,128 during the year ended July 31, 2018 and 2017, respectively.

In accordance with the provisions of ASC 205-20, the Company has not included in the results of continuing operations the results of operations of the discontinued operations in the consolidated statements of operations and comprehensive income (loss). The results of operations for these entities for the period ended June 27, 2018 and year ended July 31, 2017 have been reflected as discontinued operations in the consolidated statements of operations and comprehensive income (loss) for the years ended July 31, 2018 and 2017, and consist of the following:

	Year Ended
	July 31, 2018			July 31, 2017
REVENUES OF DISCONTINUED OPERATIONS	$	11,119,238		$	12,724,319

OPERATING EXPENSES OF DISCONTINUED OPERATIONS:
Cost of sales		2,428,226			3,347,993
Depreciation and amortization expense		25,867			88,443
Impairment expense		–			83,712
Advertising expense		94,997			239,210
Rent Expense		363,976			710,565
Salaries and wages expense		2,938,904			4,298,044
Other general and administrative expenses		2,663,376			3,847,281
		8,515,346			12,615,248
OPERATING INCOME (LOSS) OF DISCONTINUED OPERATIONS		2,603,892			109,071

OTHER (INCOME) EXPENSE OF DISCONTINUED OPERATIONS
Other (income) expense		(714	)		9,822
(Gain) loss on foreign exchange		(18,040	)		(27,306	)
Interest income		(5,854	)		(9,662	)
Interest expense		715,132			927,351
		690,524			900,205

INCOME (LOSS) BEFORE INCOME TAXES OF DISCONTINUED OPERATIONS		1,913,368			(791,134	)
Provision for (benefit from) income taxes of discontinued operations [2]		774,666			(97,253	)
NET INCOME (LOSS) OF DISCONTINUED OPERATIONS	$	1,138,702		$	(693,881	)

F-17

~~Concurrently~~In accordance with the ~~Satisfaction~~provisions ~~Agreement~~of ASC 205-20, the Company ~~and~~ ~~Umajin~~has ~~Japan~~separately ~~modified~~reported the ~~service~~cash ~~agreement~~flow ~~between~~activity ~~them~~of ~~effective November 1, 2015, to set~~ the ~~monthly~~discontinued ~~fee~~operations ~~payable~~in by the ~~Company to~~consolidated ~~Umajin~~statements ~~Japan for providing horserace information at 16 million Yen per month (inclusive~~ of ~~consumption~~cash ~~tax),~~flows. ~~and~~The cash toflow ~~set~~activity ~~the monthly~~from ~~fee~~discontinued ~~payable~~operations for ~~providing~~the aperiod ~~horseracing~~ended ~~related~~June ~~email~~27, ~~magazine~~2018 and ~~web~~year ~~page~~ended ~~content~~July at31, 72017 ~~million~~have ~~Yen~~been ~~per month (inclusive~~reflected ofas ~~consumption~~discontinued ~~tax)~~operations ~~for~~in athe ~~total~~consolidated statements of 23cash ~~million~~flows ~~Yen~~for ~~per month. The Company and Umajn Japan agreed to reduce~~ the ~~monthly~~years ~~fees~~ended ~~from 23~~July ~~million~~31, ~~Yen~~2018 toand ~~11 million Yen subsequent to October 2016. Subsequent to February~~ 2017, ~~the Company~~ and ~~Umajin Japan agreed to~~consist ~~reduce~~of the ~~fee to 8 million Yen per month through October 2017.~~following:

Total fees paid to Umajin Japan for the year ended July 31, 2017 and 2016 amounted to $1,255,800 and $2,149,709, respectively. The fees paid to Umajin Japan are included in cost of sales in the accompanying consolidated statements of operations. The Company also subleased office space to Umajin Japan during the year ended July 31, 2016. Total sublease income from Umajin Japan for the year ended July 31, 2016 amounted to $33,600, and is recorded as a reduction of rent expense in the accompanying consolidated statements of operations. The Company also received payments of $4,909 during the year ended July 31, 2016 from Umajin Japan as reimbursement of utility expenses under the sublease which have been recorded as a reduction of other general and administrative expenses in the accompanying consolidated statements of operations. There was no sublease activity during the year ended July 31, 2017. As of July 31, 2017 and 2016, the Company had $108,604 an $278,977, respectively, due to Umajin Japan, which is reflected in accounts payable to related parties in the accompanying consolidated balance sheets.

	Year Ended
	July 31, 2018			July 31, 2017
DISCONTINUED OPERATING ACTIVITIES
Net income (loss)	$	1,138,702		$	(693,881	)
Depreciation and amortization		25,867			88,443
Amortization of debt discount		16,515			57,128
Impairment charge		–			83,712
Loss on disposal of property, plant and equipment		–			132,746
Loss on write-off of notes receivables		–			309,400
Provision for (benefit from) deferred taxes		73,810			(109,279	)
Changes in operating assets and liabilities:
Accounts receivable		(517,058	)		(379,934	)
Accounts receivable - related party		18,200			(27,300	)
Prepaid expenses and other current assets		16,002			(18,961	)
Other assets		(11,475	)		443,691
Accounts payable and accrued liabilities		(169,821	)		357,601
Accounts payable and accrued liabilities to related party		39,511			(149,236	)
Deferred revenue		(118,585	)		(455,428	)
Taxes payable		818,287			225,952
Net cash provided by (used in) operating activities of discontinued operations	$	1,329,955		$	(135,346	)

INVESTING ACTIVITIES OF DISCONTINUED OPERATIONS
Purchase of property and equipment	$	(4,259	)	$	(135,700	)
Proceeds from collection of notes receivables		511,570			527,617
Payments for notes receivable lending		(330,046	)		(618,927	)
Net cash provided by (used in) investing activities of discontinued operations	$	177,265		$	(227,010	)

FINANCING ACTIVITIES OF DISCONTINUED OPERATIONS
Proceeds from notes payable	$	2,093,000		$	955,500
Payments on note payable		(3,130,400	)		(1,246,700	)
Payments on convertible note payable		–			(1,001,000	)
Payments on notes payable - related parties		–			(606,515	)
Proceeds from notes payable - related parties		(164,594	)		1,274,000
Net cash used in financing activities of discontinued operations	$	(1,201,994	)	$	(624,715	)

~~During the year ended July 31, 2016, the Company sold horses to Cheval Attache Co~~8., ~~Ltd~~SUBSEQUENT (“Cheval Attache”), a related party company owned by one its directors, for approximately $50,000 for a gain of approximately $14,000. In addition, during the years ended July 31, 2017 and 2016, the Company received consulting services from Cheval Attache (including amounts for consumption tax) of $117,938 and $112,752, respectively, which are included in cost of sales in the accompanying consolidated statements of operations. During the year ended July 31, 2017, the Company also charged Cheval Attache (including amounts for consumption tax) $100,300 of revenue related to information provided relating to providing horseracing contacts, which is included in net sales in the accompanying consolidated statement of operations.EVENTS

~~G-Liberta,~~Management ahas ~~subsidiary~~evaluated ofsubsequent ~~Cheval Attache~~events, ~~performs certain~~ ~~advertising~~in ~~and~~accordance ~~research~~with ~~services~~FASB ~~for~~ASC ~~the~~Topic ~~Company.~~855, ~~Total~~“Subsequent ~~expenses~~Events,” ~~related~~through toJanuary ~~G-Liberta~~16, ~~during~~2019, the ~~year~~date ~~ended~~which ~~July~~the ~~31,~~consolidated financial ~~2017~~statements ~~and 2016~~were ~~amounted~~available to ~~$1,209~~be ~~and~~issued ~~$0, respectively,~~ and there are ~~reflected~~no asmaterial ~~part~~subsequent ~~of cost of sales and accounts payable to related parties in the accompanying consolidated financial statements~~events.

On October 17, 2016, the Company entered into an agreement with Clara Ltd., a related party entity owned by one of its directors, allowing Clara Ltd. access to the Company’s database containing certain horse racing information owned by the Company for an indefinite period. As compensation, the Company will receive a total of 30,000,000 Yen, payable in 10 monthly installments starting in November 2016. The amount due under this agreement of $27,300 is included in accounts receivable – related party on the accompanying consolidated balance sheet as of July 31, 2017. The revenue related to this transaction of $273,000 is reflected as net sales on the accompanying consolidated statement of operations for the year ended July 31, 2017.

14. SUBSEQUENT EVENTS

In accordance with ASC 855, Subsequent Events, the Company has evaluated subsequent events through the date of this filing, and has determined that there are no subsequent events that require disclosure.

F-18

Filing Compare · Grand Perfecta, Inc.