false
--08-31
Q3
2026
0001995920
0001995920
2025-09-01
2026-05-31
0001995920
2026-06-29
0001995920
2026-05-31
0001995920
2025-08-31
0001995920
2026-03-01
2026-05-31
0001995920
2025-03-01
2025-05-31
0001995920
2024-09-01
2025-05-31
0001995920
us-gaap:CommonStockMember
2024-08-31
0001995920
us-gaap:AdditionalPaidInCapitalMember
2024-08-31
0001995920
us-gaap:RetainedEarningsMember
2024-08-31
0001995920
2024-08-31
0001995920
us-gaap:CommonStockMember
2024-11-30
0001995920
us-gaap:AdditionalPaidInCapitalMember
2024-11-30
0001995920
us-gaap:RetainedEarningsMember
2024-11-30
0001995920
2024-11-30
0001995920
us-gaap:CommonStockMember
2025-02-28
0001995920
us-gaap:AdditionalPaidInCapitalMember
2025-02-28
0001995920
us-gaap:RetainedEarningsMember
2025-02-28
0001995920
2025-02-28
0001995920
us-gaap:CommonStockMember
2025-08-31
0001995920
us-gaap:AdditionalPaidInCapitalMember
2025-08-31
0001995920
us-gaap:RetainedEarningsMember
2025-08-31
0001995920
us-gaap:CommonStockMember
2025-11-30
0001995920
us-gaap:AdditionalPaidInCapitalMember
2025-11-30
0001995920
us-gaap:RetainedEarningsMember
2025-11-30
0001995920
2025-11-30
0001995920
us-gaap:CommonStockMember
2026-02-28
0001995920
us-gaap:AdditionalPaidInCapitalMember
2026-02-28
0001995920
us-gaap:RetainedEarningsMember
2026-02-28
0001995920
2026-02-28
0001995920
us-gaap:CommonStockMember
2024-09-01
2024-11-30
0001995920
us-gaap:AdditionalPaidInCapitalMember
2024-09-01
2024-11-30
0001995920
us-gaap:RetainedEarningsMember
2024-09-01
2024-11-30
0001995920
2024-09-01
2024-11-30
0001995920
us-gaap:CommonStockMember
2024-12-01
2025-02-28
0001995920
us-gaap:AdditionalPaidInCapitalMember
2024-12-01
2025-02-28
0001995920
us-gaap:RetainedEarningsMember
2024-12-01
2025-02-28
0001995920
2024-12-01
2025-02-28
0001995920
us-gaap:CommonStockMember
2025-03-01
2025-05-31
0001995920
us-gaap:AdditionalPaidInCapitalMember
2025-03-01
2025-05-31
0001995920
us-gaap:RetainedEarningsMember
2025-03-01
2025-05-31
0001995920
2025-05-31
0001995920
us-gaap:CommonStockMember
2025-09-01
2025-11-30
0001995920
us-gaap:AdditionalPaidInCapitalMember
2025-09-01
2025-11-30
0001995920
us-gaap:RetainedEarningsMember
2025-09-01
2025-11-30
0001995920
2025-09-01
2025-11-30
0001995920
us-gaap:CommonStockMember
2025-12-01
2026-02-28
0001995920
us-gaap:AdditionalPaidInCapitalMember
2025-12-01
2026-02-28
0001995920
us-gaap:RetainedEarningsMember
2025-12-01
2026-02-28
0001995920
2025-12-01
2026-02-28
0001995920
us-gaap:CommonStockMember
2026-03-01
2026-05-31
0001995920
us-gaap:AdditionalPaidInCapitalMember
2026-03-01
2026-05-31
0001995920
us-gaap:RetainedEarningsMember
2026-03-01
2026-05-31
0001995920
us-gaap:CommonStockMember
2025-05-31
0001995920
us-gaap:AdditionalPaidInCapitalMember
2025-05-31
0001995920
us-gaap:RetainedEarningsMember
2025-05-31
0001995920
us-gaap:CommonStockMember
2026-05-31
0001995920
us-gaap:AdditionalPaidInCapitalMember
2026-05-31
0001995920
us-gaap:RetainedEarningsMember
2026-05-31
iso4217:USD
xbrli:shares
iso4217:USD
xbrli:shares
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
[X] Quarterly Report pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934
For the quarterly period ended May 31, 2026
[ ] Transition Report pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934
For the transition period from __________ to __________
Commission file number 000-56733
E-SMART CORP.
(Exact name of registrant as specified
in its charter)
| Nevada |
7371 |
35-2810816 |
| (State or Other Jurisdiction of Incorporation or Organization) |
|
(Primary Standard Industrial Classification Number) |
|
(IRS Employer Identification Number) |
| |
|
|
|
|
Diana Vasylenko
7311 Oxford Ave
Philadelphia, PA, 19111
Tel. +1620-3079197
Email: office@e-smart.io
(Address, including zip code,
and telephone number, including area code,
of registrant's principal executive
offices)
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 every Interactive Data File required to be submitted 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 such files). Yes (X)
No ( )
Indicate by check mark whether the registrant is a
large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large
accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange
Act. (Check one):
|
Large accelerated filer ( )
|
Accelerated
filer ( )
|
Non-accelerated filer (X) |
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)
State the number of shares outstanding of each of
the issuer's classes of common equity, as of the latest practicable date: 3,799,469 common shares issued and outstanding as of June
29, 2026.
E-SMART CORP.
QUARTERLY REPORT ON FORM 10-Q
TABLE OF CONTENTS
| |
|
Page |
| PART I |
FINANCIAL INFORMATION: |
|
| |
|
|
| Item 1. |
Financial Statements (Unaudited) |
3 |
| |
|
|
| |
Condensed Balance Sheets as of May 31, 2026 (Unaudited) and August 31, 2025 |
4 |
| |
|
|
| |
Condensed Statements of Operations for the three and nine months ended May 31, 2026 and 2025 (Unaudited) |
5 |
| |
|
|
| |
Condensed Statements of Changes in Stockholders’ Deficit for the three and nine months ended May 31, 2026 and 2025 (Unaudited) |
6 |
| |
|
|
| |
Condensed Statements of Cash Flows for the nine months ended May 31, 2026 and 2025 (Unaudited) |
7 |
| |
|
|
| |
Notes to the Condensed Financial Statements for the nine months ended May 31, 2026 and 2025 (Unaudited) |
8 |
| |
|
|
| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
13 |
| |
|
|
| Item 3. |
Quantitative and Qualitative Disclosures About Market Risk |
17 |
| |
|
|
| Item 4. |
Controls and Procedures |
18 |
| |
|
|
| PART II |
OTHER INFORMATION: |
|
| |
|
|
| Item 1. |
Legal Proceedings |
19 |
| |
|
|
| Item 1A |
Risk Factors |
19 |
| |
|
|
| Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds |
19 |
| |
|
|
| Item 3. |
Defaults Upon Senior Securities |
19 |
| |
|
|
| Item 4. |
Submission of Matters to a Vote of Securities Holders |
19 |
| |
|
|
| Item 5. |
Other Information |
19 |
| |
|
|
| Item 6. |
Exhibits |
19 |
| |
|
|
| |
Signatures |
19 |
| |
|
2
PART 1 – FINANCIAL INFORMATION
Item 1. Financial Statements
The accompanying interim financial statements of E-Smart
Corp. (“the Company”, “we”, “us” or “our”), have been prepared without audit pursuant
to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included
in financial statements prepared in accordance with United States generally accepted principles have been condensed or omitted pursuant
to such rules and regulations.
The interim financial statements are condensed and
should be read in conjunction with the company’s latest annual financial statements.
In the opinion of management, the financial statements
contain all material adjustments, consisting only of normal adjustments considered necessary to present fairly the financial condition,
results of operations, and cash flows of the Company for the interim periods presented.
3
E-SMART
CORP.
Condensed Balance Sheets
| |
|
May 31, 2026 (Unaudited) |
|
August 31, 2025 |
| ASSETS |
|
|
|
|
| Current Assets |
|
|
|
|
| Cash and cash equivalents |
$ |
506 |
$ |
6,825 |
| Prepaid Expenses |
|
18,966 |
|
20,274 |
| Total Current Assets |
|
19,472 |
|
27,099 |
| |
|
|
|
|
| Intangible assets |
|
|
|
|
| Intangible assets |
|
173,800 |
|
173,800 |
| Accumulated amortization |
|
(85,688) |
|
(59,618) |
| Total Intangible assets |
|
88,112 |
|
114,182 |
| Total Assets |
$ |
107,584 |
$ |
141,281 |
| |
|
|
|
|
| STOCKHOLDERS’ DEFICIT AND LIABILITIES |
|
|
|
|
| Liabilities |
|
|
|
|
| Current Liabilities |
|
|
|
|
| Related Party Loan |
$ |
248,227 |
$ |
200,790 |
| Accounts Payable |
|
99 |
|
198 |
| Total Liabilities |
$ |
248,326 |
$ |
200,988 |
| |
|
|
|
|
| Stockholders’ Deficit |
|
|
|
|
| |
|
|
|
|
| Common stock, par value $0.001; 75,000,000 shares authorized, 3,799,469 and 5,799,469 shares issued and outstanding as of May 31, 2026 and August 31, 2025, respectively |
|
3,799 |
|
5,799 |
| Additional Paid-in Capital |
|
54,529 |
|
44,742 |
| Accumulated deficit |
|
(199,070) |
|
(110,249) |
| Total Stockholders’ Deficit |
|
(140,742) |
|
(59,708) |
| Total Liabilities and Stockholders’ Deficit |
$ |
107,584 |
$ |
141,281 |
| |
|
|
|
|
See accompanying
notes, which are an integral part of these financial statements
4
E-SMART
CORP.
Condensed Statements of Operations (Unaudited)
| |
|
Three months
ended May 31, 2026 |
|
Three months
ended May 31, 2025 |
|
Nine months
ended May 31, 2026 |
|
Nine months
Ended May 31, 2025 |
| |
|
|
|
|
|
|
|
|
| REVENUES |
$ |
7,950 |
$ |
9,756 |
$ |
37,710 |
$ |
20,101 |
| Discounts given |
|
- |
|
- |
|
- |
|
(42) |
| GROSS PROFIT |
|
7,950 |
|
9,756 |
|
37,710 |
|
20,059 |
| |
|
|
|
|
|
|
|
|
| OPERATING EXPENSES |
|
|
|
|
|
|
|
|
| General and Administrative Expenses |
|
29,401 |
|
41,582 |
|
118,744 |
|
84,770 |
| TOTAL OPERATING EXPENSES |
$ |
29,401 |
$ |
41,582 |
$ |
118,744 |
$ |
84,770 |
| |
|
|
|
|
|
|
|
|
| LOSS FROM OPERATIONS |
$ |
(21,451) |
$ |
(31,826) |
$ |
(81,034) |
$ |
(64,711) |
| |
|
|
|
|
|
|
|
|
| OTHER LOSS |
|
|
|
|
|
|
|
|
| Interest Income |
$ |
- |
$ |
|
$ |
- |
$ |
5 |
| Interest Expense |
|
(2,871) |
|
(2,597) |
|
(7,787) |
|
(7,246) |
| TOTAL OTHER LOSS |
$ |
(2,871) |
$ |
(2,597) |
$ |
(7,787) |
$ |
(7,241) |
| PROVISION FOR INCOME TAXES |
|
- |
|
- |
|
- |
|
- |
| |
|
|
|
|
|
|
|
|
| NET LOSS |
$ |
(24,322) |
$ |
(34,423) |
$ |
(88,821) |
$ |
(71,952) |
| |
|
|
|
|
|
|
|
|
| NET LOSS PER SHARE: BASIC AND DILUTED |
$ |
(0.01) |
$ |
(0.01) |
$ |
(0.02) |
$ |
(0.01) |
| |
|
|
|
|
|
|
|
|
| WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: BASIC AND DILUTED |
|
3,799,469 |
|
5,799,469 |
|
4,898,370 |
|
5,411,413 |
See accompanying
notes, which are an integral part of these financial statements
5
E-SMART CORP.
Condensed Statements of Changes in Stockholders’
Deficit
For the three and nine months ended May 31, 2026
and 2025 (Unaudited)
| |
|
|
|
|
|
|
|
|
|
| |
Common Stock |
|
Additional Paid-in
Capital |
|
Accumulated Deficit |
|
Total Stockholders’
Equity (Deficit) |
| |
Shares |
Amount |
|
|
|
| |
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| Balance, August 31, 2024 |
4,500,000 |
$ |
4,500 |
$ |
6,905 |
$ |
(42,215) |
$ |
(30,810) |
|
Common Shares
Issued for Cash |
1,020,003 |
|
1,020 |
|
21,930 |
|
- |
|
22,950 |
| Imputed Interest |
- |
|
- |
|
2,359 |
|
- |
|
2,359 |
| Net Loss for the Period |
- |
|
- |
|
- |
|
(14,514) |
|
(14,514) |
| Balance, November 30, 2024 |
5,520,003 |
$ |
5,520 |
$ |
31,194 |
$ |
(56,729) |
$ |
(20,015) |
|
Common Shares
Issued for Cash |
279,466 |
|
279 |
|
6,009 |
|
- |
|
6,288 |
| Imputed Interest |
- |
|
- |
|
2,290 |
|
- |
|
2,290 |
| Net Loss for the Period |
- |
|
- |
|
- |
|
(23,014) |
|
(23,014) |
| Balance, February 28, 2025 |
5,799,469 |
$ |
5,799 |
$ |
39,493 |
$ |
(79,743) |
$ |
(34,451) |
| Imputed Interest |
- |
|
|
|
2,597 |
|
|
|
2,597 |
| Net Loss for the Period |
- |
|
- |
|
- |
|
(34,423) |
|
(34,423) |
| Balance, May 31, 2025 |
5,799,469 |
$ |
5,799 |
$ |
42,090 |
$ |
(114,165) |
$ |
(66,276) |
| |
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| Balance, August 31, 2025 |
5,799,469 |
$ |
5,799 |
$ |
44,742 |
$ |
(110,249) |
$ |
(59,708) |
| Imputed Interest |
- |
|
- |
|
2,434 |
|
- |
|
2,434 |
| Net Loss for the Period |
- |
|
- |
|
- |
|
(22,013) |
|
(22,013) |
| Balance, November 30, 2025 |
5,799,469 |
$ |
5,799 |
$ |
47,176 |
$ |
(132,262) |
$ |
(79,287) |
| Common Shares Cancelled |
(2,000,000) |
|
(2,000) |
|
2,000 |
|
- |
|
- |
| Imputed Interest |
- |
|
- |
|
2,482 |
|
- |
|
2,482 |
| Net Loss for the Period |
- |
|
- |
|
- |
|
(42,486) |
|
(42,486) |
| Balance, February 28, 2026 |
3,799,469 |
$ |
3,799 |
$ |
51,658 |
$ |
(174,748) |
$ |
(119,291) |
| Imputed Interest |
- |
|
- |
|
2,871 |
|
|
|
2,871 |
| Net Loss for the Period |
- |
|
- |
|
- |
|
(24,322) |
|
(24,322) |
| Balance, May 31, 2026 |
3,799,469 |
$ |
3,799 |
$ |
54,529 |
$ |
(199,070) |
$ |
(140,742) |
See accompanying notes, which are
an integral part of these financial statements
6
E-SMART CORP.
Condensed Statements of Cash Flows (Unaudited)
| |
|
For
the nine months ended May 31, 2026 |
|
For
the nine months ended May 31, 2025 |
| CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
| Net loss for the period |
$ |
(88,821) |
$ |
(71,952) |
| Adjustments to reconcile net loss to net cash used
in operating activities: |
|
|
|
|
| Amortization |
|
26,070 |
|
26,070 |
| Accounts Payable |
|
(99) |
|
10,198 |
| Accounts
Receivable |
|
- |
|
(2,500) |
| Prepaid Expense |
|
1,308 |
|
(19,371) |
| Deferred revenue |
|
- |
|
3,133 |
| Imputed
interest |
|
7,787 |
|
7,246 |
| Cash flows used in Operating Activities |
|
(53,755) |
|
(47,175) |
| CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
| Intangible Assets |
|
- |
|
- |
| Cash flows used in Investing Activities |
|
- |
|
- |
| CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
| Related Party Loan (proceeds /repayment) |
|
47,437 |
|
21,749 |
| Issuance of capital stock |
|
- |
|
29,238 |
| Cash Flows provided by Financing Activities |
|
47,437 |
|
50,987 |
| NET CHANGE IN CASH |
|
(6,318) |
|
3,812 |
| Cash, beginning of period |
|
6,825 |
|
546 |
| Cash, end of period |
$ |
506 |
$ |
4,358 |
| |
|
|
|
|
| SUPPLEMENTAL CASH FLOW INFORMATION: |
|
|
|
|
| Interest paid |
$ |
- |
$ |
- |
| Income taxes paid |
$ |
- |
$ |
- |
| |
|
|
|
|
| SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND
FINANCING ACTIVITIES: |
|
|
|
|
| Common Shares Cancelled |
|
(2,000) |
|
- |
See accompanying
notes, which are an integral part of these financial statements
7
E-SMART CORP.
Notes to the Condensed Financial Statements
For the three and nine months ended May 31, 2026
and 2025 (Unaudited)
Note 1 – ORGANIZATION AND NATURE OF BUSINESS
E-Smart
Corp. (“the Company”, “we”, “us” or “our”) was incorporated on June 6, 2023
under the laws of the State of Nevada, United States of America. E-Smart Corp.
is an innovative digital platform that aims to revolutionize the tattoo industry by efficiently connecting tattoo artists and clients.
Our platform is designed to enhance efficiency, simplifying the client-artist interaction process to meet the requirements of both clients
and tattoo studios.
Our platform ensures a seamless
experience for all users, providing a comprehensive database of skilled tattoo artists. Artists can easily showcase their exceptional
work, and expand their client base. By including essential information and direct links to their social media profiles, we facilitate
convenient access for users to view portfolios and initiate contact with their preferred artists. Masters interested in joining our platform
shall contact us through our designated contacts and apply for inclusion in the database.
Note 2 – GOING CONCERN
The accompanying financial statements have been prepared
in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern. The Company
currently has losses and has not completed its efforts to establish a stabilized source of revenues sufficient to cover operating costs
over an extended period of time. Therefore, there is substantial doubt about the Company’s ability to continue as a going concern.
Management anticipates that the Company will be dependent, for the near future, on additional investment capital to fund operating expenses.
The Company intends to position itself so that it will be able to raise additional funds through the capital markets. In light of management’s
efforts, there are no assurances that the Company will be successful in this or any of its endeavors or become financially viable and
continue as a going concern.
E-Smart
Corp. has generated $37,710 of revenue and incurred a net loss of $88,821 for the nine months ended May 31, 2026, additionally,
it is reporting an accumulated deficit since inception of $199,070 as of May 31, 2026.
The Company's capacity to operate as a going
concern is reliant on its ability to generate profitable operations in the future and/or secure the required funding to meet its obligations
and settle liabilities resulting from standard business operations when they become due. Management plans to finance operational expenses
for the next twelve months by using available cash on hand, as well as loans from directors and/or a private offering of Common Stock.
Note 3 – SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Basis of presentation
The accompanying financial statements have been prepared
in accordance with generally accepted accounting principles in the United States of America. The Company’s year-end is August 31.
Use of Estimates
The preparation of financial statements in
conformity with generally accepted accounting principles 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 the financial statements and the reported
amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.
8
Fair
Value of Financial Instruments
FASB
ASC Topic 820, "Fair Value Measurement," defines fair value as the exchange price that would be received for
an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction
between market participants on the measurement date. The standards apply to recurring and nonrecurring fair value measurements of financial
and non-financial assets and liabilities. The Company determines the fair values of its assets and liabilities based on a fair value hierarchy
that includes three levels of inputs that may be used to measure fair value.
The
three levels are defined as follows:
| Level 1: |
defined as observable inputs such as quoted prices in active markets; |
| Level 2: |
defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and |
| Level 3: |
defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. |
Cash
and Cash Equivalents
The
Company considers
all highly liquid
investments
with the original
maturities of
three months
or less to be cash
equivalents.
The Company had $506 and $6,825 of cash as of May 31, 2026 and August 31, 2025, respectively.
Prepaid Expenses
Prepaid expenses are amounts paid to secure the use
of assets or the receipt of services at a future date or continuously over one or more future periods. When the prepaid expenses are eventually
consumed, they are charged to expense.
As of May 31, 2026 the amount of prepaid expenses
was $18,966. The balance of prepaid expenses as of May 31, 2026 relates to a 12-month lease of servers, marketing services, fee for OTCQB.
The 12-month lease of these services was not accounted for under ASC 842 due to the Company’s decision not to apply the requirements
of ASC 842 to short-term leases (leases with a term of twelve months or less). The balance will be amortized using the straight-line method
over the 12-month term. During the nine months ended May 31, 2026, we recognized server expenses of $15,300, marketing expenses of $14,850,
and SEO service expenses of $7,258, fee for OTCQB of $5,500.
Accounts Payable
Accounts Payable discloses a liability to a creditor,
carried on open account, usually for purchases of goods and services. As of May 31, 2026, the Company had accounts payable of $99.
Depreciation, Amortization, and Capitalization
The Company records depreciation and amortization
when appropriate using straight-line balance method over the estimated useful life of the assets. We estimate that the useful life of
equipment is 5 years. Expenditures for maintenance and repairs are charged to expense as incurred. Additions, major renewals and replacements
that increase the property's useful life are capitalized. Property sold or retired, together with the related accumulated depreciation
is removed from the appropriated accounts and the resultant gain or loss is included in net income.
As of May 31, 2026, the Company had accumulated
amortization of $85,688.
9
Income
Taxes
Income
taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities
are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using
the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available
evidence, are not expected to be realized.
All
income tax amounts reflect the use of the liability method under accounting for income taxes. Income taxes are provided for the tax effects
of transactions reported in the financial statements and consist of taxes currently due plus deferred taxes arising primarily from differences
between financial and tax reporting purposes. Current year expense represents the amount of income taxes paid, payable or refundable for
the period.
Deferred
income taxes, net of appropriate valuation allowances, are determined using the tax rates expected to be in effect when the taxes are
actually paid. Valuation allowances are recorded against deferred tax assets when it is more likely than not that such assets will not
be realized. When an uncertain tax position meets the more likely than not recognition threshold, the position is measured to determine
the amount of benefit or expense to recognize in the financial statements.
The
Company’s income tax returns are subject to review and examination by federal, state and local governmental authorities. As of May
31, 2026, there is no year currently under examination with federal, state and local governmental authorities. To the extent penalties
and interest are incurred through an examination, they would be included in the income tax section of the statement of operations.
Basic
Income (Loss) Per Share
The Company
computes income (loss) per share in accordance with FASB ASC 260 “Earnings per Share”. Basic loss per share is computed by
dividing net income (loss) available to common shareholders by the weighted average number of outstanding common shares during the period.
Diluted income (loss) per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive loss
per share excludes all potential common shares if their effect is anti-dilutive.
Revenue
Recognition
Under
Accounting Standards Codification No. 606, "Revenue from Contracts with Customers" ("ASC 606"), the Company recognizes
revenue when control of promised goods or services is transferred to customers in an amount that reflects the consideration the Company
expects to be entitled to in exchange for those goods or services. ASC 606 establishes a five-step model for revenue recognition:
1.
Identify the contract with the customer: The Company enters into subscription agreements for its API services with customers. The Company
offers the "AI Powered Tattoo Artist," a subscription-based API service that utilizes artificial intelligence to generate custom
tattoo designs. The "AI Powered Tattoo Artist" API is available through both a free trial plan with limited features and paid
subscription plans for different amount of API requests.
2.
Identify the performance obligations in the contract: The Company's performance obligation is providing access to its API services for
the subscription period.
3.
Determine the transaction price: The transaction price is the fixed amount agreed upon in the subscription agreement, adjusted for any
variable consideration such as discounts or rebates.
4.
Allocate the transaction price to the performance obligations: The transaction price is allocated entirely to the performance obligation
of API access.
5.
Recognize revenue when (or as) the performance obligation is satisfied: Revenue is recognized over time as API access is provided, typically
ratably over the subscription period.
10
For the
three-month period ended May 31, 2026, the Company’s revenue was derived from a single customer.
During
the nine months ended May 31, 2026 and 2025 the Company recorded revenue of $37,710 and $20,101,
respectively. As of May 31, 2026, and August 31, 2025, the Company did not record any deferred revenue and Accounts receivable was $0.
Recent Accounting Pronouncements
We
have reviewed all the recently issued, but not yet effective, accounting pronouncements and we do not believe any of these pronouncements
will have a material impact on the Company.
Note 4 – INTANGIBLE
ASSETS
Intangible
assets relate to the website and API software, which the Company purchased on June 30, 2023. The website was placed in service on August
30, 2023 and amortization is expected to cover a period of 5 years. As of May 31, 2026, the
amount of intangible assets is $173,800 consisting of website and API. Amortization
expense for the nine months ended May 31, 2026 was $26,070. Accumulated amortization as of May 31, 2026 was
$85,688.
Intangible assets amounts are as follows:
| |
|
Website Development |
|
AI-Powered Tattoo Cost Calculator API |
|
Total |
| Estimated Useful Life (Years) |
|
5 |
|
5 |
|
|
| Total Cost of the Asset |
|
81,000 |
$ |
92,800 |
$ |
173,800 |
| Accumulated Amortization at May 31, 2026 |
|
(42,008) |
|
(43,680) |
|
(85,688) |
| Net Book Value at May 31, 2026 |
$ |
38,992 |
$ |
49,120 |
$ |
88,112 |
| Amortization Expense for three months ended May 31, 2026 |
$ |
4,050 |
$ |
4,640 |
$ |
8,690 |
| Amortization Expense for the nine months ended May 31, 2026 |
$ |
12,150 |
$ |
13,920 |
$ |
26,070 |
Note
5 – COMMON STOCK
The
Company has 75,000,000, $0.001 par value shares of common stock authorized.
On
June 30, 2023, the Company issued 4,500,000 shares of common stock to its President
and Incorporator, Diana Vasylenko, at $0.001 per share.
During
the fiscal year ended August 31, 2025, the Company issued 1,299,469 shares of common stock for cash proceeds of $29,238, or $0.0225 per
share.
During
the nine months ended May 31, 2026, the Company did not issue any shares of common stock. However, during the same period, Diana Vasylenko,
the Company’s President, Chief Executive Officer, Treasurer, Secretary, and Director, returned 2,000,000 shares of restricted common
stock to the Company for no consideration. These shares were subsequently cancelled by the Company.
As
of May 31, 2026, the Company had 3,799,469 shares issued and outstanding, consisting of 2,500,000 restricted shares and 1,299,469 unrestricted
shares.
Note 6 – RELATED PARTY
Effective June 6, 2023, the Company entered a Loan
Agreement with its CEO. The lender agreed to lend a total of $70,000 payable in applicable installments over the Term of the loan. The
CEO agreed to an interest rate of 0% and a Term of 5 years. Effective November 14, 2023, the CEO agreed to increase the maximum loan
amount to $220,000, and effective January 30, 2026, the loan amount was increased to $320,000.
11
As of May 31, 2026 and August 31, 2025, the amount due to a related party
was $248,227 and $200,790, respectively.
Imputed interest expense of $7,787 for the nine months ended May
31, 2026 was recorded as additional paid-in capital.
Note 7 – COMMITMENTS
AND CONTINGENCIES
In
the normal course of business, the Company may become a party to litigation matters involving claims against it. As of May 31,
2026, there are no current matters that would have a material effect on the Company’s
financial position or results of operations.
Note 8 – SUBSEQUENT
EVENTS
In
accordance with FASB ASC Topic 855, "Subsequent Events," the Company has evaluated subsequent events after the balance sheet
date through June 29, 2026, the date that the financial statements were available to be issued. The Company has determined that there
are no material subsequent events that require recognition or disclosure in these condensed financial statements.
12
ITEM 2. MANAGEMENT’ DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FORWARD LOOKING STATEMENT NOTICE
Statements made in this Form 10-Q that are not historical
or current facts are "forward-looking statements" made pursuant to the safe harbor provisions of Section 27A of the Securities
Act of 1933 (the "Act") and Section 21E of the Securities Exchange Act of 1934. These statements often can be identified by
the use of terms such as "may," "will," "expect," "believe," "anticipate," "estimate,"
"approximate" or "continue," or the negative thereof. We intend that such forward-looking statements be subject to
the safe harbors for such statements. We wish to caution readers not to place undue reliance on any such forward-looking statements, which
speak only as of the date made. Any forward-looking statements represent management's best judgment as to what may occur in the future.
However, forward-looking statements are subject to risks, uncertainties and important factors beyond our control that could cause actual
results and events to differ materially from historical results of operations and events and those presently anticipated or projected.
We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of
such statement or to reflect the occurrence of anticipated or unanticipated events.
Financial information contained in this quarterly
report and in our unaudited interim financial statements is stated in United States dollars and are prepared in accordance with United
States generally accepted accounting principles.
IN GENERAL
E-Smart
Corp. (“Company”) was incorporated on June 06, 2023 under the laws of Nevada. We are a Nevada-incorporated Company
focused on creating a platform that facilitates interaction between tattoo artists and enthusiasts. Our product serves as a combined professional
profile and artistic showcase for tattoo artists, enabling them to present their expertise and history in an aesthetically pleasing format.
This platform simplifies the process for employers to identify and locate skilled artists within their vicinity. Moreover, our service
offers users the capability to generate preliminary tattoo sketches through an AI-driven tattoo design tool.
E-Smart Corp.
is a dynamic and forward-thinking digital platform that connects tattoo artists and clients seamlessly. By leveraging advanced technologies,
offering comprehensive services, and prioritizing user convenience, we provide an unparalleled experience for all stakeholders
in the tattoo industry.
INITIAL FOCUS OF OUR BUSINESS
We
are an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012, as amended, and therefore we intend to
take advantage of certain exemptions from various public Company reporting requirements, including not being required to have our internal
control over financial reporting audited by our independent registered public accounting firm pursuant to Section 404(b) of the Sarbanes-Oxley
Act of 2002, reduced disclosure obligations regarding executive compensation in this prospectus, our periodic reports and our proxy statements
and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and any golden parachute payments
not previously approved. We will remain an emerging growth company until the earliest of (i) the last day of the fiscal year in which
the market value of our Common Stock that is held by non-affiliates equals or exceeds $700 million as of the end of that year’s
second fiscal quarter, (ii) the last day of the fiscal year in which we have total annual gross revenue of $1.235 billion or
more during such fiscal year (as indexed for inflation), (iii) the date on which we have issued more than $1.00 billion in non-convertible
debt in the prior three-year period.
We are not a “shell
Company” within the meaning of Rule 405, promulgated pursuant to the Securities Act, because we have developed a business plan and
real business operations.
13
MONETIZATION STRATEGY
Our monetization strategy
includes offering an API - AI textual tattoo idea generator, enabling businesses and developers to leverage our technology to enhance
their own products and services.
Businesses and developers
can integrate this technology into their products and services by subscribing to the API. This API is provided on a subscription basis,
offering different tiers such as a 14-day pass and a 30-day pass. To obtain an AI key for API access, users can choose a pricing plan
on our website and initiate contact by using the designated button, submitting their request. Additionally, we are exploring other revenue
avenues, including premium features, and strategic partnerships with tattoo-related businesses.
Exploring collaborations
with tattoo supply companies, tattoo equipment manufacturers, and other industry partners is essential for long-term growth and revenue
diversification.
Continuous assessment of
market trends and customer feedback will guide us in refining and expanding the functionality of our platform to unlock additional monetization
opportunities.
PROMOTION AND
MARKETING
We are focused on promoting our platform to attract
a diverse user base, including tattoo artists and clients. Our comprehensive advertising campaign is aimed at increasing platform awareness
and attracting new users. To effectively reach our target audience, we will utilize social media marketing, online advertising channels,
and strategic partnerships with industry influencers. We plan to develop engaging promotional materials, including videos, to showcase
the platform's features and benefits, generating interest and user engagement. Depending on available resources, we may engage advertising
agencies to accelerate our marketing efforts.
RESEARCH AND DEVELOPMENT EXPENDITURES
We have not incurred any research expenditures since
our incorporation.
BANKRUPTCY OR SIMILAR PROCEEDINGS
There has been no bankruptcy, receivership or similar
proceeding.
COMPLIANCE WITH GOVERNMENT REGULATION
We will be required to comply with all regulations,
rules and directives of governmental authorities and agencies applicable to the construction and operation of any facility in any jurisdiction
which we would conduct activities.
We do not believe that any existing or probable government
regulation on our business, including any applicable export or import regulation or control imposed by China will have a material impact
on the way we conduct our business.
PATENTS, TRADEMARKS AND COPYRIGHTS
We do not own, either legally or beneficially, any
patents or trademarks. We intend to protect our website (https://e-smart.io/) with copyright laws. Beyond our trade name, we do not hold
any other intellectual property.
SIGNIFICANT EMPLOYEES
Ms. Diana Vasylenko, the Company’s Chief Executive
Officer, continues to devote approximately forty hours per week to company matters. In addition, the Company appointed two directors to
support its operational, and administrative functions. As of May 31, 2026, the Company's Board consists of three directors.
14
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Results of Operations for the three months ended
May 31, 2026 as compared to the three months ended May 31, 2025
Revenue
For the three months ended May 31, 2026, the Company
generated total revenue of $7,950 from selling services to its customers.
For the three months ended May 31, 2025, the Company
generated total revenue of $9,756 from selling services to its customers.
Operating expenses
Total operating expenses for the three months ended
May 31, 2026 were $29,401. The operating expenses included Amortization Expense ($8,690), Legal & Professional Fees ($747), Legal
& Professional Services ($7,364), Server leasing expense ($5,100), Marketing services ($4,950) and Website Maintenance ($2,550).
Total operating expenses for the three months ended
May 31, 2025 were $41,582. The operating expenses included bank service charges ($17), Amortization Expense ($8,690), Legal & Professional
Fees ($846), Legal & Professional Services ($22,957), Postage and Delivery ($44), Exchange Gain or Loss ($178), Server leasing expense
($5,100) and Marketing services ($3,750).
Net Loss
The net loss for the three months ended May 31, 2026
was $24,322.
The net loss for the three months ended May
31, 2025 was $34,423.
Results of Operations for the nine months ended
May 31, 2026 as compared to the nine months ended May 31, 2025
Revenue
For the nine months ended May 31, 2026, the
Company generated total revenue of $37,710 from selling services to its customers.
For the nine months ended May 31, 2025, the Company
generated total revenue of $20,101 from selling services to its customers.
Operating expenses
Total operating expenses for the nine months
ended May 31, 2026 were $118,744. The operating expenses included bank service charges ($137), Amortization Expense ($26,070), Legal &
Professional Fees ($2,366), Legal & Professional Services ($47,403), Postage and Delivery ($40), Business Licenses and Permits ($220),
Server leasing expense ($15,300), Marketing services ($14,850), SEO service expenses ($7,258) and Website Maintenance ($5,100).
Total operating expenses for the nine months
ended May 31, 2025 were $84,770. The operating expenses included bank service charges ($104), Amortization Expense ($26,070), Legal &
Professional Fees ($3,993), Legal & Professional Services ($38,287), Business Licenses and Permits ($220), Postage and Delivery ($137),
Exchange Gain or Loss ($309), Server leasing expense ($11,900) and Marketing services ($3,750).
15
Net Loss
The net loss for the nine months ended May 31, 2026
was $88,821.
The net loss for the nine months ended May 31,
2025 was $71,952.
LIQUIDITY AND CAPITAL RESOURCES
Period ended May 31, 2026 compared to period ended
August 31, 2025
As at May 31, 2026, our Assets were $107,584. Total
Assets included Current Assets $19,472 and Intangible Assets $88,112. As at May 31, 2026, our Liabilities were $248,326 and Equity was
($140,742).
As at August 31, 2025, our Assets were $141,281. Total
Assets included Current Assets $27,099 and Intangible Assets $114,182. As at August 31, 2025, our Liabilities were $200,988 and Equity
was ($59,708).
CASH FLOWS FROM OPERATING ACTIVITIES
For the nine months ended May 31, 2026 net cash flows
used in operating activities was $53,755.
For the nine months ended May 31, 2025 net cash flows
used in operating activities was $47,175.
CASH FLOWS FROM INVESTING ACTIVITIES
We had no cash used in investing activities during
the nine months ended May 31, 2026 and 2025.
CASH FLOWS FROM FINANCING ACTIVITIES
For the nine months ended May 31, 2026 net cash flows
provided by financing activities was $47,437.
For the nine months ended May 31, 2025 net cash flows
provided by financing activities was $50,987.
MANAGEMENT’S DISCUSSION AND ANALYSIS
You should read the following discussion and analysis
of our financial condition and results of operations together with our consolidated financial statements and the related notes and other
financial information. Some of the information contained in this discussion and analysis, including information with respect to our plans
and strategy for our business and related financing.
We qualify as an “emerging growth company”
under the JOBS Act. As a result, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements. For so long
as we are an emerging growth company, we will not be required to:
-
Have an auditor report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act;
-
Provide an auditor attestation with respect to management’s report on the effectiveness of our internal controls over financial
reporting;
16
-
Comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation
or a supplement to the auditor’s report providing additional information about the audit and the financial statements (i.e., an
auditor discussion and analysis);
-
Submit certain executive compensation matters to shareholder advisory votes, such as “say-on-pay” and “say-on-frequency;”
and
-
Disclose certain executive compensation related items such as the correlation between executive compensation and performance comparisons
of the CEO’s compensation to median employee compensation.
In addition, Section 107 of the JOBS Act also provides
that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities
Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain
accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits
of this extended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such
new or revised accounting standards.
We will remain an “emerging growth company”
for up to five years, or until the earliest of (i) the last day of the first fiscal year in which our total annual gross revenues exceed
$1 billion, (ii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Securities Exchange
Act of 1934, which would occur if the market value of our ordinary shares that is held by non-affiliates exceeds $700 million as of the
last business day of our most recently completed second fiscal quarter or (iii) the date on which we have issued more than $1 billion
in non-convertible debt during the preceding three year period. However, even if we no longer qualify for the exemptions for an emerging
growth company, we may still be, in certain circumstances, subject to scaled disclosure requirements as a smaller reporting company. For
example, smaller reporting companies, like emerging growth companies, are not required to provide a compensation discussion and analysis
under Item 402(b) of Regulation S-K or the auditor attestation of internal controls over financial reporting.
We believe that we will be able to raise enough
money through the offering to continue our proposed operations, but we cannot guarantee that once we continue operations we will stay
in business after doing so. If we are unable to successfully find customers, we may quickly use up the proceeds from this offering and
will need to find alternative sources.
OFF-BALANCE SHEET ARRANGEMENTS
We have no off-balance sheet arrangements
that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues
or expenses, results of operations, liquidity, capital expenditures or capital resources.
LIMITED OPERATING HISTORY; NEED FOR ADDITIONAL
CAPITAL
There is no historical financial information about
us upon which to base an evaluation of our performance. We are in start-up stage operations and have generated limited revenues. Our business
is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources and possible cost
overruns due to price and cost increases in services and products.
We have no assurance that future financing will
be available to us on acceptable terms. If financing is not available on satisfactory terms, we may be unable to continue, develop or
expand our operations. Equity financing could result in additional dilution to existing shareholders.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK
None
17
ITEM 4. CONTROLS AND PROCEDURES
Our management is responsible for establishing and
maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that is
designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded,
processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and
procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer
in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including
its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate
to allow timely decisions regarding required disclosure.
An evaluation was conducted under the supervision
and with the participation of our management of the effectiveness of the design and operation of our disclosure controls and procedures
as of May 31, 2026. Based on that evaluation, our management concluded that our disclosure controls and procedures were not effective
as of such date to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act, is recorded,
processed, summarized and reported within the time periods specified in SEC rules and forms.
Changes in Internal Controls over Financial Reporting
There was no change in the Company’s internal
control over financial reporting during the quarterly period covered by this report that has materially affected, or is reasonably likely
to materially affect, the Company’s internal control over financial reporting.
18
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We are
not currently a party to any legal proceedings, and we are not aware of any pending or potential legal actions.
ITEM 1A. RISK FACTORS
None
ITEM 2. UNREGISTERED SALES OF
EQUITY SECURITIES AND USE OF PROCEEDS
None
ITEM 3. DEFAULTS UPON SENIOR
SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS
TO A VOTE OF SECURITIES HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS
The following exhibits are included as part of this
report by reference:
| |
|
|
| 31.1 |
|
Certification of Chief Executive Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(a) or 15d-14(a). |
| |
|
|
| 32.1 |
|
Certifications pursuant to Securities Exchange Act of 1934 Rule 13a-14(b) or 15d-14(b) and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002. |
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this quarterly report
on Form 10-Q to be signed on its behalf by the undersigned, thereunto duly authorized in the 7311 Oxford Ave, Philadelphia, PA 19111 United
States on June 29, 2026.
| |
E-SMART CORP. |
| |
|
| |
By: /s/ Diana Vasylenko |
| |
Name: Diana Vasylenko |
| |
Title: President, Chief Executive Officer, Treasurer, Secretary and Director |
| |
(Principal Executive, Financial and Accounting Officer) |
19
