The following information should be read in conjunction with (i) the financial
statements of Evil Empire Designs, Inc., a Nevada corporation (the "Company"),
and the notes thereto appearing elsewhere in this Form 10-Q together with (ii)
the more detailed business information and the December 31, 2020 audited
financial statements and related notes included in the Company's Form 10-K (File
No. 000-56212; the "Form 10-K"), as filed with the Securities and Exchange
Commission on April 14, 2021. Statements in this section and elsewhere in this
Form 10-Q that are not statements of historical or current fact constitute
"forward-looking" statements.
OVERVIEW
The Company was incorporated in the State of Nevada on December 23, 2009, and
has established a fiscal year end of December 31.
The Company's authorized capital stock amounts to 125,000,000 shares, consisting
of 100,000,000 of common stock with a par value of $0.001 per share, and
25,000,000 shares of preferred stock with a par value of $0.001 per share.
Going Concern
To date the Company has had operations and revenues of a developing business,
and consequently has incurred recurring losses from operations. No substantial
revenues are anticipated until we complete the financing we endeavor to obtain,
as described in the Form 10-K, and implement our initial business plan. The
ability of the Company to continue as a going concern is dependent on raising
capital to fund our business plan and ultimately to attain profitable
operations. Accordingly, these factors raise substantial doubt as to the
Company's ability to continue as a going concern.
Our activities have been financed from related-party loans and the proceeds of
share subscriptions.
The Company plans to raise additional funds through debt or equity offerings.
There is no guarantee that the Company will be able to raise any capital through
this or any other offerings.
PLAN OF OPERATION
We are an operating motorcycle parts design, manufacturing, marketing and sales
business and have generated revenues of $61,229 from our business for the nine
months ended September 30, 2021. During the 12 months following the date of
filing of this Quarterly Report on Form 10-Q, we will be focused on attempting
to raise $750,000 of funds to expand our business. We have no assurance that
future financing will materialize. If that financing is not available, we may be
unable to continue. Management believes that if we are successful in raising
$750,000, we will be able to generate sales revenue within the following twelve
months thereof. However, if such public financing is not available, we could
fail to satisfy our future cash requirements. We have no assurance that future
financing will materialize. If that financing is not available we may be unable
to continue. Management believes that if subsequent private placements are
successful, we will be able to generate sales revenue within the following
twelve months thereof. However, additional equity financing may not be available
to us on acceptable terms or at all, and thus we could fail to satisfy our
future cash requirements.
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If we are unsuccessful in raising the additional proceeds through a private
placement offering we will then have to seek additional funds through debt
financing, which would be highly difficult for an early-stage company to secure.
Therefore, the Company is highly dependent upon the success of the anticipated
private placement offering and failure thereof would result in the Company
having to seek capital from other sources such as debt financing, which may not
even be available to the Company. However, if such financing were available,
because we are an early stage company, it would likely have to pay additional
costs associated with high risk loans and be subject to an above market interest
rate. At such time these funds are required, management would evaluate the terms
of such debt financing and determine whether the business could sustain
operations and growth and manage the debt load. If we cannot raise additional
proceeds via a private placement of its common stock or secure debt financing it
would be required to cease business operations. As a result, investors in our
common stock would lose all of their investment.
With new investors joining, the Company will increase its current efforts on
marketing and selling its already created variety of products.
RESULTS OF OPERATIONS
Comparison of the three and nine months ended September 30, 2021 and 2020
The Company recorded revenue of $50,895 and $3,829 during the three months ended
September 30, 2021 and 2020, respectively. The Company recorded revenue of
$61,229 and $7,594 during the nine months ended September 30, 2021 and 2020,
respectively.
Operating expenses for the three-month periods ended September 30, 2021 and
2020, were $9,907 and $24,194, respectively, consisting of a general and
administrative expense of $8,010 and depreciation and amortization of $1,897 for
the three months ended September 30, 2021, and a general and administrative
expense of $22,244 and depreciation and amortization of $1,950 for the three
months ended September 30, 2020.
Operating expenses for the nine-month periods ended September 30, 2021 and 2020,
were $30,875 and $82,639, respectively, consisting of a general and
administrative expense of $25,184 and depreciation and amortization of $5,691
for the nine months ended September 30, 2021, and a general and administrative
expense of $74,811 and depreciation and amortization of $7,828 for the nine
months ended September 30, 2020.
For the three-month period ended September 30, 2021, we had net income of
$24,750. By comparison, for the three-month period ended June 30, 2020, we
incurred a net loss of $25,846. For the nine-month periods ended September 30,
2021 and 2020, we incurred net losses of $8,897 and $100,921, respectively.
Liquidity and Capital Resources
There are no agreements or understandings about future loans by or with the
officers, directors, principals, affiliates, or shareholders of the Company. The
Company will continue to raise outside capital through loans, equity sales and
possible licensing agreements. These factors raise substantial doubt about the
company's ability to continue as a going concern
At September 30, 2021, the Company had negative working capital of $596,662.
Current assets were $50,476. Current liabilities as of the same date were
$647,138, consisting of convertible debt of $377,125, outstanding notes of
$145,030, and accounts payable and accrued liabilities $124,983.
Net cash used in operating activities in the nine-month period ended September
30, 2021 was $31,485, compared to net cash used of $63,110 in the same period in
2020. The variance between the same periods relates mainly to a lower loss in
2021 over 2020.
Net cash used in investing activities was $(127,500) for the nine-month period
ended September 30, 2021 and $(100,000) in the same period in 2020. The
investment was pursuant to an agreement with TOL.
Net cash provided by financing activities for the nine months period ended
September 30, 2021 was $153,826, compared to $149,013 in the same period in
2020. Cash provided was a result of proceeds from notes payable in the amount of
$100,030 and convertible notes in the principal amounts of $53,796 issued in
2021, and a result of convertible notes in the principal amounts of $92,710 and
common stock issued for $55,950, in 2020.
As of September 30, 2021, the Company had total assets of $346,300 and total
liabilities of $647,138. Our accumulated deficit as of September 30, 2021 was
$531,652. Liabilities increased in 2021 due mainly to an increase in accounts
payables and accrued expense during this period versus the same period in 2020.
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Inflation
We believe that inflation has not had a significant impact on our operations
since inception.
Off-Balance Sheet Arrangements
We had no off-balance sheet arrangements or guarantees of third party
obligations at March 31, 2020.
Subsequent Events
None through date of this filing.
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EVIL EMPIRE DESIGNS, INC. 
