The following discussion and analysis of our results of operations and financial condition should be read together with our audited financial statements and the notes thereto, which are included elsewhere in this report. Our financial statements have been prepared in accordance with U.S. GAAP. In addition, our financial statements and the financial information included in this report reflect our organizational transactions and have been prepared as if our current corporate structure had been in place throughout the relevant periods.

We are a newly organized blank check company formed as a Nevada corporation for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. Our initial business combination and value creation strategy is to identify, acquire and, after our initial business combination, assist in the growth of a business which provide financial services in Asia, primarily China.

We intend to utilize cash derived from the proceeds of our initial public offering and a private placement of private warrants that occurred simultaneously with the completion of our initial public offering, our securities, debt or a combination of cash, securities and debt, in effecting a business combination. The issuance of additional shares of common stock or preferred stock:





  • may significantly reduce the equity interest of our stockholders;




   •  may subordinate the rights of holders of shares of common stock if we issue
      shares of preferred stock with rights senior to those afforded to our
      shares of common stock;




   •  will likely cause a change in control if a substantial number of our shares
      of common stock are issued, which may affect, among other things, our
      ability to use our net operating loss carry forwards, if any, and most
      likely will also result in the resignation or removal of our present
      officers and directors; and




  • may adversely affect prevailing market prices for our securities.

Similarly, if we issue debt securities or incur other indebtedness to finance our initial business combination, it could result in:





   •  default and foreclosure on our assets if our operating revenues after a
      business combination are insufficient to pay our debt obligations;




   •  acceleration of our obligations to repay the indebtedness even if we have
      made all principal and interest payments when due if the debt security
      contains covenants that required the maintenance of certain financial
      ratios or reserves and we breach any such covenant without a waiver or
      renegotiation of that covenant;




   •  our immediate payment of all principal and accrued interest, if any, if the
      debt security is payable on demand; and




   •  our inability to obtain additional financing, if necessary, if the debt
      security contains covenants restricting our ability to obtain additional
      financing while such security is outstanding.

We have neither engaged in any operations nor generated any revenues to date. Our entire activity since inception has been to prepare for our proposed fundraising through an offering of our equity securities and to seek business combination targets for our initial business combination.

We are an emerging growth company as defined in the JOBS Act. As an emerging growth company, we have elected to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. As such, our financial statements may not be comparable to companies that comply with public company effective dates.





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Operating Expenses

We had operating expenses of $716,008 and $113,016 for the year ended September 30, 2019 and the period from July 27, 2018 (inception) through September 30, 2018, respectively. During the year ended September 30, 2019, operating expenses were primarily due to audit fees of $38,545, legal fees of $95,000, general and administrative expenses of $316,278, and officers' compensation of $266,185, of which $13,333 were in connection with stock issuances to our Chief Executive Officer and Chief Financial Officer. During the period from July 27, 2018 (inception) through September 30, 2018, we had legal fees of $25,000, general and administrative expenses of $40,238, and officers' compensation of $47,778, of which $2,222 were in connection with stock issuances to our Chief Executive Officer and Chief Financial Officer. Pursuant to the executed Offer Letters, the Company agreed to pay the Company's Chief Executive Officer $2,000 in cash per month and 50,000 founder shares, and pay the Company's Chief Financial Officer $5,000 in cash per month and 50,000 founder shares. The total 100,000 founder shares were issued in September of 2018. Accordingly, we recognized stock-based compensation of $13,333 during the year ended September 30, 2019, and recognized stock-based compensation of $2,222 during the period from July 27, 2018 (inception) through September 30, 2018, to the statement of operations. The unrecognized stock-based compensation was $4,444 as of September 30, 2019.

Our operating expenses increased significantly in 2019 due to fees associated with our initial public offering, including fees paid to Nasdaq, and professional and consulting fees and travel expenses associated with evaluating various initial business combination candidates. Our operating expenses are difficult to predict due to the uncertainty of the business combination, and it may be necessary to continuously raise additional capital to sustain operations. On July 24, 2019, we issued an unsecured promissory note to the sponsor for a principal amount of up to $800,000 for working capital purposes. Pursuant to the note, the sponsor agreed to loan to us up to a total of $800,000 in the event our cash held outside of the trust account is less than $150,000.

Liquidity and Capital Resources

For year ended September 30, 2019, cash provided by operating activities amounted to $134,610, mainly due to interest earned on government securities held in the trust account of $925,644, plus non-cash expenses of $13,333 as the stock based compensation to our Chief Executive Officer and Chief Financial Officer, offset by operating loss of $716,008. Comparatively, cash of $70,138 used in operating activities during the period from July 27, 2018 (inception) through September 30, 2018 was due to the net loss of $113,016, partially offset by the increase in accrued expenses and accrued expenses to related parties amounted to $19,333 and $21,323, respectively.

On June 3, 2019, we consummated our initial public offering of 10,000,000 units, plus 1,500,000 additional units pursuant to the full exercise of the over-allotment option by the underwriters, at a price of $10.00 per unit, generating an aggregate amount of gross proceeds of $115,000,000. Simultaneously with the closing of our initial public offering, we consummated a sale of 5,375,000 warrants in a private placement to our sponsor at a price of $1.00 per warrant, generating gross proceeds of $5,375,000.

Following our initial public offering and the exercise of the over-allotment option in full, a total of $115,000,000 was placed in the trust account. Offering costs consist of legal, accounting, underwriting fees and other costs incurred through the balance sheet date that are directly related to our initial public offering. Offering costs of $6,625,439 include underwriting fees of $2,875,000 in cash, initial public offering costs of $315,120, and the fair value of 92,000 shares issued and 920,000 warrants granted to the underwriters in total amount of $3,435,319, pursuant to the underwriting agreement, which were charged to stockholders' equity upon the completion of our initial public offering.

During the period from July 27, 2018 (inception) through September 30, 2018, we had cash of $372,500 provided by financing activities primarily due to the proceeds from sales of founder shares.

As of September 30, 2019, we had cash and government securities held in the trust account of $115,925,644 (including approximately unrealized gain of $925,644), substantially all of which has been invested in U.S. treasury bills with a maturity of 180 days or less. Interest income earned on the balance in the trust account may be available to us to pay taxes. Since inception, we have not withdrawn any interest income from the trust account.

We intend to use substantially all of the funds held in the trust account, including any amounts representing interest earned on the trust account to complete our initial Business Combination. We may withdraw interest from the trust account to pay income taxes. To the extent that our capital stock or debt is used, in whole or in part, as consideration to complete our Business Combination, the remaining proceeds held in the trust account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.

As of September 30, 2019, we had cash of $1,078,708 held outside the trust account and $800,000 was in an escrow account setup for a non-binding Letter of Intent with a potential target company for an initial business combination between the Company and such potential target company. The deal was not closed as of September 30, 2019 and $800,000 was released by the escrow agent and returned to the Company on October 2, 2019. We intend to use the funds held outside the trust account to identify and evaluate target candidates, perform business and legal due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, and structure, negotiate and complete a business combination.

In order to finance transaction costs in connection with an intended initial business combination, our sponsor, initial stockholders, officers, directors or their affiliates may, but are not obligated to, loan us funds as may be required. If we consummate an initial business combination, we would repay such loaned amounts. In the event that the initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts, but no proceeds from our trust account would be used for such repayment. Up to $1,500,000 of such loans may be convertible into warrants of the post business combination entity at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the private warrants. On July 24, 2019, we issued an unsecured promissory note to the sponsor for a principal amount of up to $800,000 for working capital purposes. Pursuant to the note, the sponsor agreed to loan to us up to a total of $800,000 in the event our cash held outside of the trust account is less than $150,000.

We do not believe we will need to raise additional funds in order to meet the expenditures required for operating our business.

However, if the actual costs to identify a target business, undertake in-depth due diligence and negotiate a business combination exceed our estimated amount, we may have insufficient funds available to operate our business prior to our initial business combination. Moreover, we may need to obtain additional financing by issuance of additional securities or incurrence of debt to consummate our initial business combination or to fulfill our obligations to redeem a significant number of our public shares upon consummation of our initial business combination. Subject to compliance with applicable securities laws, we would only complete such financing simultaneously with the consummation of our initial business combination, in which case we may issue additional securities or incur debt in connection with such initial business combination. We cannot provide any assurance that financing will be available to us on commercially acceptable terms, if at all. If we are unable to complete our initial business combination due to insufficient funds, we will be forced to cease operations and liquidate the trust account. In addition, following our initial business combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.





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