Disclaimer Regarding Forward Looking Statements
Our Management's Discussion and Analysis of Financial Condition and Results of
Operations contains not only statements that are historical facts, but also
statements that are forward-looking. Forward-looking statements are, by their
very nature, uncertain and risky. These risks and uncertainties include
international, national and local general economic and market conditions;
demographic changes; our ability to sustain, manage, or forecast growth; our
ability to successfully make and integrate acquisitions; raw material costs and
availability; new product development and introduction; existing government
regulations and changes in, or the failure to comply with, government
regulations; adverse publicity; competition; the loss of significant customers
or suppliers; fluctuations and difficulty in forecasting operating results;
changes in business strategy or development plans; business disruptions; the
ability to attract and retain qualified personnel; the ability to protect
technology; and other risks that might be detailed from time to time in our
filings with the Securities and Exchange Commission.
Although the forward-looking statements in this Quarterly Report on Form 10-Q
reflect the good faith judgment of our management, such statements can only be
based on facts and factors currently known by them. Consequently, and because
forward-looking statements are inherently subject to risks and uncertainties,
the actual results and outcomes may differ materially from the results and
outcomes discussed in the forward-looking statements. You are urged to carefully
review and consider the various disclosures made by us in this Quarterly Report
on Form 10-Q and in our other reports as we attempt to advise interested parties
of the risks and factors that may affect our business, financial condition, and
results of operations and prospects.
Overview
We were incorporated on September 14, 2011 in Delaware as "Eco Planet Corp." On
October 21, 2013, we effected a 1-for-200 reverse stock split of our common
stock, $0.0001 par value per share (the "Common Stock"), and changed our name to
"Zosano, Inc." On October 31, 2013, we entered into a Stock Purchase Agreement
with Zosano Pharma Corporation (formerly known as ZP Holdings, Inc.) pursuant to
which we issued and sold 10,016,973 shares of Common Stock (the "Shares") to
Zosano Pharma Corporation. As a result of our issuance and sale of the Shares to
Zosano Pharma Corporation, a change in control of the Company occurred and
Zosano Pharma Corporation became the owner of 99.9% of our outstanding Common
Stock.
On November 14, 2016, Zosano Phama Corporation entered into Stock Purchase
Agreements with eighteen (18) foreign investors (the "New Shareholders"),
pursuant to which Zosano Pharma Corporation sold an aggregate of 10,016,973
shares of common stock of Zosano, Inc. (the "Company"), or approximately 99.9%
of the issued and outstanding common stock of the Company, to the New
Shareholders. As a result of the transaction, the New Shareholders acquired
approximately 99.9% of the total votes entitled to be cast at any meeting of
shareholders, giving them voting control of the Company. The New Shareholders
obtained the funds for the purchase of the Company's common stock in the
transaction from each of their available cash on hand.
On December 15, 2016, we filed Articles of Amendment to its Amended Articles of
Incorporation (the "Articles of Amendment") with the Secretary of State of
Delaware effecting a name change of the Company to J.E.M. Capital, Inc. (the
"Corporate Action"). The Corporate Action and the Amended Articles became
effective on March 15, 2017, following compliance with notification requirements
of the Financial Industry Regulatory Authority. The new CUSIP number for the
Company's common stock is 46619V107. On March 14, 2017, the Financial Industry
Regulatory Authority (FINRA) approved the Corporate Action. The Company's stock
is quoted on the OTCQB under the ticker symbol ZOSN, but beginning March 15,
2017, the Company's common stock will begin trading under the symbol JEMC.
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On January 5, 2017, we entered into a Share Exchange Agreement with Essential
Element Limited, a British Virgin Islands company ("ESEL"), and Leung Chi Wah
Earnest, the principal shareholder of ESEL, pursuant to which the Company issued
an aggregate of 2,005,400 shares of common stock, or approximately 17% of the
issued and outstanding common stock of the Company, to Mr. Leung in exchange for
100% of the issued and outstanding shares of ESEL. ESEL owns all of the issued
and outstanding shares of J.E.M. Capital Limited, a company organized under the
laws of Hong Kong ("JEM Capital"). ESEL and JEM Capital currently have no
operations, but include the corporate structure that the Company believes
necessary for the acquisition of assets in Hong Kong and China. ESEL has
incurred material expenses setting up such structure.
On June 21, 2019, the Company passed a unanimous written consent of the Board of
Directors to issue 1,000,000 and 1,000,000 common shares to Mr. MingJing Xia
("Mr. Xia") and Mr. Yulong Yang ("Mr. Yang"), respectively. These shares were
issued on the same date to Mr. Xia for his service in the capacity of Chief
Financial Officer and Chairperson of the Board, and issued to Mr. Yang for his
service in the capacity of Chief Executive Officer and member of the Board, for
their first year's services commencing from 1 July 2019. Both of Mr. Xia and Mr.
Yang are entitled to a monthly salary of $1,000 during this period.
We are a shell company as defined in Rule 12b-2 promulgated under the Securities
Exchange Act of 1934 (the "Exchange Act"). As a shell company, we have no
operations and assets. Our current business plan is to identify a privately held
operating company, which is profitable or, in management's view, has growth
potential, irrespective of the industry in which it is engaged, desiring to
become a publicly held company with access to U.S. capital markets by merging
with us through a reverse merger or acquisition. We can give no assurances that
we will be successful in finding or acquiring a desirable business opportunity,
given the limited resources that are expected to be available to us for
implementation of our business plan. Furthermore, we can give no assurances that
any business combination, if one occurs, will be on terms that are favorable to
us or our current stockholders.
Results of Operations
Three Months Ended March 31, 2020 Compared To Three Months Ended March 31, 2019
Revenue
We have not generated any revenues since our inception.
Operating expenses
Our operating expenses primarily consisted of general and administrative
expenses, such as salary and related expenses, audit and review fees, tax
returns preparation fees, transfer agent services, franchise and business taxes,
other professional services and general office expenses. Operating expenses for
the three months ended March 31, 2020 and 2019 were $18,946 and $4,846,
respectively. The increase in operating expenses was due to the increase in
professional fees and directors' fees of the Company for the three months ended
March 31, 2020.
Net loss
Net loss for the three months ended March 31, 2020 was $18,946, as compared to
$4,846 for the three months ended March 31, 2019. The increase in operating
expenses was due to the increase in professional fees and directors' fees of the
Company for the three months ended March 31, 2020.
Liquidity and Capital Resources
As of March 31, 2020 and 31 December 2019, we had cash of $nil. Our current cash
needs are being satisfied by the shareholders. We do not believe we will be able
to satisfy our cash needs internally until we consummate a merger transaction
with a private company, and even then there is no assurance we will be able to
do so. During the three months ended March 31, 2020 and 2019, because of our
operating losses, we did not generate positive operating cash flows.
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Our current assets, total assets, current liabilities, and total liabilities as
of March 31, 2020 compared to December 31, 2019 are as follows:
March 31, 2020 December 31,
(Unaudited) 2019 Change
Prepaid expenses $ 6,000 12,000 (6,000)
Total current assets 6,000 12,000 (6,000)
Total assets 6,000 12,000 (6,000)
Total current liabilities 145,402 132,456 12,946
Total liabilities 145,402 132,456 12,946
Assets and Liabilities
As of March 31, 2020, we had prepaid expenses of $6,000 in respect of the
unvested awards of stock based compensation. We had liabilities totalling
$145,402 and $132,456 as of March 31, 2020 and December 31, 2019, respectively,
which consisted of accrued expenses related to salary, office expenses, audit
and review fees, transfer agent services, legal and professional fees and
advance from the shareholders.
Stockholders' Deficit
Stockholders' deficit consisted primarily of shares issued to founders in the
amount of $1,203, capital raised to fund our operations of $55,589, and
additional capital provided to settle obligations for $245,679, offset by the
accumulated deficit of $465,873 as of March 31, 2020.
Cash Flows from Operating Activities . For the three months ended March 31,
2020, our net cash used in operations was $59,166 compared to $12,600 net cash
used in operations for the same period in 2019. This was mainly attributable
to increase in expenses payment during the three months ended March 31, 2020.
Cash Flows from Financing Activities . Net cash flows provided by financing
activities in the three months ended March 31, 2020 was $59,166, compared to
$12,436 net cash provided by financing activities in the same period in 2019.
This was mainly attributable to increase in proceeds from shareholders' advances
for financing our operations during the three months ended March 31, 2020.
Off Balance Sheet Arrangements
We have no off balance sheet arrangements.
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