The following discussion should be read in conjunction with our financial statements and related notes thereto included elsewhere in this Quarterly Report on Form 10-Q and the financial statements and related notes thereto in our Annual Report on Form 10-K for the year ended December 31, 2020.

This discussion contains certain forward-looking statements that involve risks and uncertainties. Our actual results and the timing of certain events could differ materially from those discussed in these forward-looking statements as a result of certain factors, including, but not limited to, those set forth herein and elsewhere in this Quarterly Report and in our other filings with the Securities and Exchange Commission. See "Cautionary Note Regarding Forward Looking Statements."





Plan of Operations

As of the filing of this Report, it is the current intention of the board of directors for our company to develop and manufacture a next generation high-performance computer system that is scalable, upgradeable, and cost effective for processing cryptocurrencies, tokens and blockchain-based transactions. We are in the process of refining and finalizing the course of action needed to implement our proposed new business operations. As a result, management has not determined our actual short-term or long-term cash requirements, which management expects to be substantial.

We will require substantial financing to commence meaningful business operations and to achieve our goals, and a failure to obtain this necessary capital when needed on acceptable terms, or at all, could force us to delay, limit, reduce or terminate our product development plans, any commercialization efforts or other operations. We may not be able to secure financing on favorable terms, or at all, to meet our future capital needs. In addition, even if we are able to obtain sufficient funding to commence our business operations, we may need to pursue additional financing in the future to make expenditures and/or investments to support the growth of our business and may require additional capital to pursue our business objectives and respond to new competitive pressures, pay extraordinary expenses or fund our growth, including through acquisitions. Additional funds, however, may not be available when we need them on terms that are acceptable to us, or at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to commence our proposed business operations, to continue to grow and support our business and to respond to business challenges could be significantly limited.





Critical Accounting Policies

Our financial statements are prepared using the accrual basis of accounting in accordance with accounting principles generally accepted in the United States (US GAAP). Our fiscal year ends December 31.

This Management's Discussion and Analysis of Financial Condition and Results of Operations discuss our financial statements, which have been prepared in accordance with US GAAP. The preparation of these financial statements requires making estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported revenues and expenses for the reporting periods. On an ongoing basis, we evaluate such estimates and judgments. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ (perhaps significantly) from these estimates under different assumptions or conditions.

While all the accounting policies impact the financial statements, certain policies may be viewed to be critical. Our management believes that we do not have any significant accounting policies, given we had only limited operations as of September 30, 2021.





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Results of Operations



Revenues

We had no revenues for the three and nine months ended September 30, 2021 and 2020.





Expenses

Operating expenses for the three and nine months ended September 30, 2021 were $1,876,000 and $2,587,000, respectively, compared to $78,000 and $315,000 for the three and nine months ended September 30, 2020, respectively. The increase of $2,272,000 for the nine months ended September 30, 2021 as compared to the nine months ended September 30, 2020 primarily pertained to (1) the accretion of stock-based compensation related to the Restricted Stock Awards issued two consultants totaling to $1,550,000 in relation to their services; (2) vested warrants amounting to $561,000; and (3) other expenses such as filing, legal and transfer agent fees and consulting fees paid to outside third parties in 2021.





Net loss

Net loss for the nine months ended September 30, 2021 and 2020 was $2,813,000 and $665,000, respectively, consisting primarily of the expenses for the accretions of the stock based compensation, filing fees, transfer agent costs, legal, consulting and accounting fees, and financing costs.

Liquidity and Capital Resources





Our financial position as of September 30, 2021 and December 31, 2020 were as
follows:



Working Capital



                             September 30, 2021       December 31, 2020

Current Assets              $          3,377,000     $             2,000
Current Liabilities                    3,297,000               1,325,000
Working Capital (Deficit)   $             80,000     $        (1,323,000 )

At September 30, 2021, we had cash of approximately $3,377,000. Working capital deficit improved by approximately $1,403,000 from December 31, 2020 to September 30, 2021 to reflect a positive working capital balance. The change in our working capital was primarily due to increase in cash and cash equivalents used in operations of approximately $3,377,000, decrease in prepaid expenses of approximately $2,000, decrease in our accounts payable and accrued liabilities of approximately $18,000, increase in convertible promissory notes from new issuances with total proceeds of $3,550,000, and issuance of additional convertible promissory notes in the aggregate principal amount of $128,000.





Cash Flows



                                                  For the Nine Months Ended
                                                        September 30,
                                                     2021              2020


Net cash from Operating Activities              $     (301,000 )    $ (172,000 )
Net cash from Investing Activities                           -               -
Net cash from Financing Activities                   3,678,000          49,000
Increase (decrease) in Cash during the Period        3,377,000        (123,000 )
Cash, Beginning of Period                                    -         123,000
Cash, End of Period                             $    3,377,000      $        -

Our net cash used in operating activities was $301,000 and $172,000 for the nine-month period ended September 30, 2021 and 2020, respectively, resulting from operating expenses.

The increase in net cash from financing activity of $3,678,000 was primarily due to the sale and issuance of our convertible promissory notes in the principal amount of $3,550,000.

Plan of Operations and Cash Requirements

It is the current intention of the board of directors for our company to develop and manufacture next generation high-performance computer systems that are scalable, upgradable, and cost effective for processing cryptocurrencies, crypto-tokens, and other blockchain-based transactions. As of the filing of this Report, our management is still in the process of refining and finalizing the course of action needed to implement our proposed new business operations. As a result, management has not determined our actual short-term or long-term cash requirements, which management expects to be substantial.

We will require substantial financing to commence meaningful business operations and to achieve our goals, and a failure to obtain this necessary capital when needed on acceptable terms, or at all, could force us to delay, limit, reduce or terminate our product development plans, any commercialization efforts or other operations. We may not be able to secure financing on favorable terms, or at all, to meet our future capital needs. In addition, even if we are able to obtain sufficient funding to commence our business operations, we may need to pursue additional financing in the future to make expenditures and/or investments to support the growth of our business and may require additional capital to pursue our business objectives and respond to new competitive pressures, pay extraordinary expenses or fund our growth, including through acquisitions. Additional funds, however, may not be available when we need them on terms that are acceptable to us, or at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to commence our proposed business operations, to continue to grow and support our business and to respond to business challenges could be significantly limited.





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Until we finalize our plans and raise capital to execute our business plan, our operations will be developmental, so our operating expenses will be similarly limited. Our operational expenses have been and will continue to be funded by private placements of our debt and equity securities or by loans from our majority shareholder.

Off-Balance Sheet Arrangements

As of September 30, 2021, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4) of Regulation S-K.

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