CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This document contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical fact are "forward-looking statements" for purposes of federal and state securities laws, including, but not limited to, any projections of earnings, revenue or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing.
Forward-looking statements may include the words "may," "could," "will," "estimate," "intend," "continue," "believe," "expect", "anticipate", "hope" or other similar words. These forward-looking statements present our estimates and assumptions only as of the date of this report. Except for our ongoing obligation to disclose material information as required by the federal securities laws, we do not intend, and undertake no obligation, to update any forward-looking statement.
Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and inherent risks and uncertainties. Some of the key factors impacting these risks and uncertainties include, but are not limited to:
? risks related to our ability to identify, pursue and commence a reverse merger
and/or a possible operating business;
? our ability to obtain adequate funding to complete a reverse merger or commence
a possible operating business and meet our operating expenses on a current
basis;
? general economic uncertainty, whether as a result of the COVID-19 pandemic or
otherwise;
? delays in our ability to obtain any necessary business licenses and permits,
and commence business operations, whether as a result of the COVID-19 pandemic
or otherwise; and
? current and longer-term economic and other impacts of the COVID-19 pandemic on
our operations, results of operations and financial condition, including
without limitation changes in consumer spending patterns for non-essential
products, resulting from the economic crisis caused by lockdown,
shelter-in-place, stay-at-home or similar orders instituted as a result of the
pandemic, or otherwise. Overview
We have no operations or any specific plan to commence any particular business at this time. Our focus will be to consider either or both of a possible business combination, which may include but not be limited to a reverse merger, with another operating business, or commencing a business of our own, the industry and nature of which we have not identified. We reserve the right to further change our business plan at any time.
Regardless of which overall business strategy we pursue - starting an operating business or engaging in a reverse merger or other business combination - we will continue to need capital to meet our expenses, primarily overhead and the professional fees related to the cost of compliance as a reporting company. To do so, we may raise equity, debt, convertible debt or a combination of any of the foregoing. However, there are no commitments in place to fund our capital requirements and no guarantee can be given that we will be able to secure such funding on terms that are favorable to us, or at all.
11Hukui Investment
The Hukui Agreement provided that we would purchase the Series C Preferred
Shares in three tranches, through a date on or before
? The first tranche is 80,000 Series C Preferred Shares in the amount of
(the "
? The second tranche is 60,000 Series C Preferred Shares in the amount of
by us on
? The third tranche is 60,000 Series C Preferred Shares in the amount of
(the "
before
An individual and resident of the
On
Results of Operations
Three-Month Period Ended
Revenues
We did not generate any revenues during the three-month period ended
Operating Expenses
We incurred total operating expenses of
Other expense
During the three-month period ended
Net Loss
As a result of the above, our net loss decreased from
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Six-Month Period Ended
Revenues
We did not generate any revenues during the six-month period ended
Operating Expenses
We incurred total operating expenses of
Other expense
During the six-month period ended
Net Loss
As a result of the above, our net loss increased from
Effect of the COVID-19 Pandemic on our Business
While our liquidity and capital resources are severely limited and present serious obstacles to starting a business, these limitations are unrelated to the COVID-19 pandemic and resulting global economic crisis.
Some of our personnel are in
Depending upon the extent and duration of the pandemic in
Liquidity and Capital Resources
Working Capital March 31, September 30, 2022 2021 Current Assets$ 263,851 $ 35,044 Current Liabilities 149,966 105,346 Working Capital (Deficit)$ 113,885 $ (70,302 )
As of
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As of
We had
We had total stockholders' equity of
On
Effective
During the year ended
On
On
Cash Flows Six months Six months ended ended March 31, March 31, 2022 2021 Cash flows used in operating activities$ (116,306 ) $ (132,341 )
Cash flows provided by (used in) investing activities 350,000 (800,000 ) Cash flows provided by financing activities
- 973,738 Net increase in cash during period$ 233,694 $ 41,397
During the six-month period ended
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With respect to our investing activities, we received
During the six-month period ended
There is substantial doubt that we can continue as an ongoing business for the next twelve months unless we obtain additional capital to pay our expenses as they become due. We do not anticipate any significant additional revenue until and unless we begin to execute on our plan of operations. There is no assurance that we will ever reach that stage. The condensed consolidated financial statements presented herein 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 we cannot continue as a going concern.
Our ability to continue as a going concern is dependent upon our ability to successfully execute our business plan and generate profitable operations in the future, and, until and unless we achieve that, to obtain the necessary financing to meet our obligations and repay our liabilities arising from normal business operation as and when they become due. To date, our capital requirements have primarily been funded by shareholders through the purchase of our Common Stock in private offerings and short-term borrowings from a former officer and another shareholder.
The Company sold the 140,000 Hukui Shares for
Contractual Obligations
We do not have material contractual obligations and commitments. We only have one lease that is renewed on a month-to-month basis.
Off-Balance Sheet Arrangements
We have not entered into any other financial guarantees or other commitments to guarantee the payment obligations of any third parties. We have not entered into any derivative contracts that are indexed to our shares and classified as shareholder's equity or that are not reflected in our condensed consolidated financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or research and development services with us.
Critical accounting policies and estimates
Our discussion and analysis of our financial condition and results of operations
are based upon our condensed consolidated financial statements, which have been
prepared in accordance with accounting principles generally accepted in
15 Foreign currency translation
The financial statements of our subsidiary denominated in currencies other than the USD are translated into USD using the closing rate method. The balance sheet items are translated into USD using the exchange rates at the respective balance sheet dates. The capital and various reserves are translated at historical exchange rates prevailing at the time of the transactions while income and expenses items are translated at the average exchange rate for the period. All exchange differences are recorded in stockholders' equity.
Stock-Based Compensation
We account for stock-based compensation in which we obtain employee services in share-based payment transactions under FASB ASC Topic 718, Compensation - Stock Compensation, which requires us to expense the cost of employee services received in exchange for an award of equity instruments based on the grant date fair value of such instruments over the vesting period.
We also adopted FASB ASC Topic 505-50, Equity-Based Payments to Non-Employees, to account for equity instruments issued to parties other than employees for acquiring goods or services. Such awards for services are recorded at either the fair value of the consideration received or the fair value of the instruments issued in exchange for such services, whichever is more reliably measurable.
Recent accounting pronouncements
We do not expect that the adoption of recently issued accounting pronouncements will have a material impact on its financial position, results of operations, or cash flows. For a full summary of recent accounting pronouncements, please refer to Note 2 of Notes to Condensed Consolidated Financial Statements.
Currency exchange rates
Our functional currency is the USD, and the functional currency of our operations is the TWD. It is anticipated that all of our sales will be denominated in TWD. As a result, changes in the relative values of USD and TWD affect our reported amounts of revenues and profit (or loss) as the results of our operations are translated into USD for reporting purposes. In particular, fluctuations in currency exchange rates could have a significant impact on our financial stability. Fluctuations in exchange rates between the USD and the TWD would also affect our gross and net profit margins and could result in foreign exchange and operating losses.
Our exposure to foreign exchange risk primarily relates to currency gains or losses resulting from timing differences between the signing of sales contracts and the settling of these contracts. Furthermore, we translate monetary assets and liabilities denominated in other currencies into TWD, the functional currency of our operations. Our results of operations and cash flow are translated at average exchange rates during the period, and assets and liabilities are translated at the unified exchange rate at the end of the period. Translation adjustments resulting from this process are included in accumulated other comprehensive income in our statement of shareholders' equity. We have not used any forward contracts, currency options or borrowings to hedge our exposure to foreign currency exchange risk. We cannot predict the impact of future exchange rate fluctuations on our results of operations and may incur net foreign currency losses in the future.
To the extent that we hold assets denominated in USD, any appreciation of the TWD against the USD could result in a charge in our statement of operations and a reduction in the value of our USD-denominated assets. On the other hand, a decline in the value of the TWD against the USD could reduce the USD equivalent amounts of our financial results.
For financial reporting purposes, the financial statements of the Company's
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