The following discussion and analysis of the financial condition and results of operations of the Company should be read in conjunction with the financial statements and the related notes and the discussions under "Application of Critical Accounting Policies," which describes key estimates and assumptions we make in the preparation of our financial statements.
RESULTS OF OPERATIONS
We had a net loss of
The following table summarizes key items of comparison and their related
increase for the years ended
Increase 2020 2019 2020 from 2019 Revenue $ - $ - $ - Selling, general and administrative expenses 88,449 82,698 5,751 Loss from operations (88,449 ) (82,698 ) (5,751 ) Interest expense (321,190 ) (320,640 ) (550 ) Net loss$ (409,639 ) $ (403,338 ) $ (6,301 ) 10
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Revenue
We did not earn any revenues during the years ended
LIQUIDITY AND CAPITAL RESOURCES
As of
Working Capital At At December 31, December 31, 2020 2019 Current assets$ 1,139 $ 510 Current liabilities 6,110,290 5,700,022 Working capital$ (6,109,151 ) $ (5,699,512 )
We anticipate generating losses and, therefore, may be unable to continue operations further in the future.
FINANCIAL CONDITION Increase (Decrease) 2020 2019 2020 from 2019 Net cash (used in) operating activities $ - $ - $ - Net cash provided by financing activities - - - Net increase (decrease) in cash $ - $ - $ - Cash balance at end of period $ - $ - Operating Activities.
We had no cash used in operating activities during the years ended
Financing Activities.
We had no cash provided by financing activities during the years ended
To date we have relied on proceeds from the sale of our shares and on loans from officers and directors, related companies and an independent third party in order to sustain our basic, minimum operating expenses; however, we cannot guarantee that we will secure any further sales of our shares or that our officers and directors, related companies or the independent third party will provide us with any future loans. We intend to use debt to cover the anticipated negative cash flows until we can operate at a break-even cash flow mode. We may seek additional capital to fund potential costs associated with possible expansion and/or acquisitions. We believe that future funding may be obtained from public or private offerings of equity securities, debt or convertible debt securities, or other sources. Stockholders should assume that any additional funding will likely be dilutive.
We are not aware of any known trends, demands, commitments, events or uncertainties that will result in or that are reasonably likely to result in our liquidity increasing or decreasing in any material way.
Information regarding our outstanding accrued liabilities, note payable and related party transactions are included in the footnotes to the audited financial statements included under "Item 8. Financial Statements and Supplementary Data", under notes: "3. Accrued Liabilities"; "4. Note Payable"; and "5. Related Party Transactions".
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FORECAST
As described above under "Business", our management is seeking potential merger
or acquisition candidates. In
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Our discussion and analysis of our financial condition and results of operations
are based upon financial statements which have been prepared in accordance with
generally accepted accounting principles in
We believe that the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our financial statements.
RELATED PARTY TRANSACTIONS
A related party is generally defined as (i) any person that holds 10% or more of the Company's securities and their immediate families, (ii) the Company's management, (iii) someone that directly or indirectly controls, is controlled by or is under common control with the Company, or (iv) anyone who can significantly influence the financial and operating decisions of the Company. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties.
FAIR VALUE OF FINANCIAL INSTRUMENTS
For certain of the Company's financial instruments, including prepaid expenses and accrued liabilities, the carrying amounts approximate fair values due to their short maturities.
Transactions involving related parties cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations can be substantiated.
It is not, however, practical to determine the fair value of amounts due to related parties and lease and management arrangement with related parties, if any, due to their related party nature.
INCOME TAXES
The Company uses the liability method of accounting for income taxes. Under this method, deferred income taxes are recorded to reflect the tax consequences on future years of temporary differences between the tax basis of assets and liabilities and their financial amounts at year-end. The Company provides a valuation allowance to reduce deferred tax assets to their net realizable value.
The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon settlement.
GOING CONCERN
We remain dependent on outside sources of funding for continuation of our operations. Our independent registered public accounting firm issued a going concern qualification in their report contained herein regarding substantial doubt about our ability to continue as a going concern.
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During the years ended
2020 2019 Net loss$ (409,639 ) $ (403,338 ) Negative working capital (6,109,151 ) (5,699,512 ) Stockholders' deficit (6,109,151 ) (5,699,512 )
These factors raise substantial doubt about our ability to continue as a going concern. The financial statements contained herein do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should we be unable to continue in existence. Our ability to continue as a going concern is dependent upon our ability to generate sufficient cash flows to meet our obligations on a timely basis, to obtain additional financing as may be required, and ultimately to attain profitable operations. However, there is no assurance that profitable operations or sufficient cash flows will occur in the future.
Our current operations are primarily funded by
These steps have provided us with the cash flows to continue our business, but have not resulted in significant improvement in our financial position. We are considering alternatives to address our cash flow situation that include:
· Raising capital through additional sale of our common stock and/or debt securities. · Reducing cash operating expenses to levels that are in line with current revenues.
These alternatives could result in substantial dilution of existing stockholders. There can be no assurance that our current financial position can be improved, that we can raise additional working capital or that we can achieve positive cash flows from operations. Our long-term viability as a going concern is dependent upon the following:
· Our ability to locate sources of debt or equity funding to meet current commitments and near-term future requirements. · Our ability to achieve profitability and ultimately generate sufficient cash flow from operations to sustain our continuing operations.
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