This 10-K contains forward-looking statements. Our actual results could differ
materially from those set forth as a result of general economic conditions and
changes in the assumptions used in making such forward-looking statements. The
following discussion and analysis of our financial condition and results of
operations should be read together with the audited consolidated financial
statements and accompanying notes and the other financial information appearing
elsewhere in this report. The analysis set forth below is provided pursuant to
applicable Securities and Exchange Commission regulations and is not intended to
serve as a basis for projections of future events.
Overview
Forge Innovation Development Corp. is a development stage company and was
incorporated in the State of Nevada in January 2016. The Company's primary
objective is commercial and residential land development, including the purchase
and sale of real estate, targeting properties primarily in Southern California.
We also intend to manage properties we own, and properties owned by unaffiliated
third parties. Our activities will include securing acquisition rights to
properties, obtaining zoning and other entitlements for the properties, securing
financing for purchase of the properties, improving the properties'
infrastructure and amenities and selling the properties to homeowner and
commercial owners for restaurants, offices and small businesses. Our first
property acquisition was 29 acres in the city of Desert Hot Springs in Southern
California. Due to problems with permits and adjacent landowners, rather than
getting involved in protracted negotiations, the Company sold the property to an
independent third party for a profit.
On August 17, 2020, the Company established a wholly-owned subsidiary, Forge
Network Inc, in the State of California. As of December 31, 2022, we have not
generated any income from the subsidiary yet due to our business strategy
adjustment.
On March 24, 2023, pursuant to an Asset Purchase Agreement between Forge
Innovation Development Corp. (the "Company" or the "Buyer") and Legend
Investment Management, LLC ("Legend LLC" or the "Seller"), the Company acquired
77.3% of Legend LLC's 66% ownership of Legend International Investment, LP
("Legend LP"). Legend LP owns 100% of Mission Marketplace; a grocery anchored
shopping center (the "Property") located at 6240 Mission Boulevard in Jurupa
Valley, California. The Property contains two, one-story and one, two-story
buildings containing 48,722 total square foot of gross leasable area situated on
a 4.51acre site.
The Seller is an affiliate of the Company and therefore the acquisition is being
treated as a related party transaction. The Company acquired 51% interest of
Legend LP from Legend LLC in exchanged for 1,967,143 common stocks of the
Company, valued at $0.70 per share for a total purchase price of $1,377,000,
which equals 51% of Legend LP's approximate net value of $2,700,000 based on (1)
the Property's valuation appraisal report dated on February 20, 2023, (2) Legend
LP's net book value as of February 28, 2023, and (3) the loan agreement to
Legend LP by a third-party lender effective on March 23, 2023. After the closing
of the acquisition, the Company will own 51% of Legend LP and the Seller will
own 15% of Legend LP.
Results of Operation for the years ended December 31, 2022 and 2021
During the years ended December 31, 2022 and 2021, the Company generated
$122,604 and $36,000 of revenues, respectively; which was mainly due to the
newly signed property management agreement with Legend LP. During the years
ended December 31, 2022 and 2021, the Company incurred consulting, general and
administrative expenses of $166,837 and $321,234, respectively. The decrease in
consulting, general and administrative expenses was mainly due to the decreasing
in salary expenses and professional fees. During the years ended December 31,
2022 and 2021, the Company obtained government grants in the amount of $Nil and
$24,400, respectively. The government grants were the subsidy to companies
against COVID-19. For the years ended December 31, 2022 and 2021, our net loss
was $34,112 and $262,434, respectively. The decrease in net loss was mainly due
to the increase in revenue generate from property management service and
decrease in general and administrative expenses for the year ended December 31,
2022, compared to last year.
Equity and Capital Resources
We have incurred losses since inception of our business in 2016 and, as of
December 31, 2022, we had an accumulated deficit of $1,565,579. As of December
31, 2022, we had cash of $11,734 and a negative working capital of $140,204,
compared to cash of $60,364 and a working capital deficit of $95,686 as of
December 31, 2021. The increase in the working capital deficit was primarily due
to cash used to pay for operating expenses, acquisition of property and
equipment, and repayment of loans.
8
Going Concern Assessment
The Company demonstrates adverse conditions that raise substantial doubt about
the Company's ability to continue as a going concern. These adverse conditions
are negative financial trends, specifically cash outflow from operating
activities, operating losses, accumulated deficit and other adverse key
financial ratios.
Management's plan to alleviate the substantial doubt about the Company's ability
to continue as a going concern include attempting to improve its business
profitability, its ability to generate sufficient cash flow from its operations
and execute the business plan of the Company in order to meet its operating
needs on a timely basis. However, there can be no assurance that these plans and
arrangements will be sufficient to fund the Company's ongoing capital
expenditures and other requirements.
The consolidated financial statements do not include any adjustments relating to
the recoverability and classification of recorded assets, or the amounts and
classification of liabilities that might be necessary in the event that the
Company cannot continue as a going concern.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements that have or are reasonably likely to
have a current or future effect on our financial condition, changes in financial
condition, revenues or expenses, results of operations, liquidity, capital
expenditures or capital resources that is material to stockholders.
Critical Accounting Policies
The consolidated financial statements of the Company have been prepared in
accordance with accounting principles generally accepted in the United States.
The preparation of these consolidated financial statements requires making
estimates and judgments that affect the reported amounts of assets, liabilities,
revenues and expenses, and related disclosure of contingent assets and
liabilities. The estimates are based on historical experience and on various
other assumptions that are believed to be reasonable under the circumstances,
the results of which form the basis of making judgments about the carrying
values of assets and liabilities that are not readily apparent from other
sources. Actual results may differ from these estimates under different
assumptions or conditions.
The critical accounting policies are discussed in further detail in the notes to
the audited consolidated financial statements appearing elsewhere in this
report. Management believes that the application of these policies on a
consistent basis enables us to provide useful and reliable financial information
about our operating results and financial condition.
© Edgar Online, source Glimpses