This discussion should be read in conjunction with the Company's consolidated
financial statements, including the Notes thereto, for the years ended September
30, 2021 and September 30, 2022, beginning on Page F-1.
Management's Discussion and Analysis of Financial Condition and Results of
Operations.
Overview
During our historic period, we were a start-up company whose main focus was to
promote, market, distribute and export a range of enzyme products manufactured
in the United States for sale for human and animal consumption in certain Asian
markets, including ASEAN. Our objective was to commence marketing and
distribution of a range of enzyme products for human and animal consumption to
sole country distributors, wholesalers, dealers and retailers, as well as to the
general public following a Multi-Level Marketing - Franchise Investor Dealer
Related (MLM-FIDR) concept, beginning in Taiwan, and then China, Hong Kong,
Macau, Thailand, Malaysia, Singapore and Sri Lanka.
At some point, which we believe may have occurred approximately mid- to
late-2016, Oliver Lin's management ceased operating our original business. We
have not generated any revenue from operations since that time.
In 2019 and through the end of fiscal 2021, we explored plans to restart our
enzyme products business or develop a new business. In 2019 and through early
2020, we had planned to restart our original enzyme products business, by
importing enzyme supplements from the United States for sale in Taiwan. However,
due to the COVID-19 pandemic, all non-COVID-19 related matters, including
obtaining an import license from Taiwan's Ministry of Economic Affairs and the
Taiwan FDA, were delayed or were taking longer than usual in Taiwan beginning in
late-January 2020. For various reasons, including the fact that, without a
reasonably foreseeable end of the pandemic and Taiwan government resources being
shifted to dealing with the pandemic, we decided to abandon the plan to restart
our enzyme products business.
During fiscal year 2020, we announced that we were in the preliminary stage of
developing a new business plan to sell and distribute physiological sea water
and nasal spray in Taiwan and the United States. However, after exploring this
possible business as a result of several factors, including but not limited to
difficulties in commencing a new business during the ongoing COVID-19 pandemic,
we decided not to pursue the nasal spray business.
In September 2020, we announced that we were exploring business opportunities
for medical mask, medical-grade gloves and possibly other PPE. During fiscal
2021, due to lack of sufficient funding, we decided not to pursue the PPE
business. We continued to explore other products with high demand since the
advent of the COVID-19 pandemic, specifically rapid test kits. However, due to
lack of funding and other factors, including the size of enterprise needed to
successfully carry out such a business, we no longer intend to pursue this
business.
On August 1, 2022, the board of directors (the "Board") of the Company
unanimously approved to expand our business in the area of electric vehicle
supply equipment ("EVSE") and will direct the management team to implement our
new business plan in such industry. On August 16, 2022, we formally announced
our intention to reposition as EVSE solutions provider, seeking to grow business
in EVSE industry, including building, owning, and operating the next generation
of electric vehicle charging stations in the U.S. We intend to bring convenient,
reliable, and accessible charging experience to electric vehicle drivers,
utilizing frictionless technology and carbon-neutral vehicle-charging
infrastructure.
On October 26, 2022, we entered into three Charging Station Site Host Agreements
(the "Agreements") with two institutions (the "Site Hosts"), respectively,
pursuant to which the Site Hosts agree to allow us to install our electric
vehicle charging stations at the locations set forth in the Agreements (the
"Charging Stations"). Under the Agreements, we agree to share our revenue
generated by the sales of electricity at the Charging Stations with the Site
Hosts in accordance with the schedules set forth therein.
At this time, we reserve the right to further change our business plan at any
time.
6
Hukui InvestmentIn late September 2020, we announced that Hukui and we had entered into the
Hukui Agreement, pursuant to which we agreed to purchase an aggregate 200,000
shares of Hukui's Series C Preferred Shares at $10.00 per share, for an
aggregate investment of $2,000,000.
The Hukui Agreement provided that we would purchase the Series C Preferred
Shares in three tranches, through a date on or before June 30, 2022, as follows:
? The First Tranche Investment is 80,000 Series C Preferred Shares in the
amount of $800,000, such shares having been purchased by us on December
15, 2020 in the First Tranche Closing;
? The Second Tranche Investment is 60,000 Series C Preferred Shares in
the amount of $600,000, such shares having been purchased by us on June
25, 2021 in the Second Tranche Closing; and
? The Third Tranche Investment is 60,000 Series C Preferred Shares in the
amount of $600,000, such shares to have been purchased on or before
June 30, 2022 in the Third Tranche Closing.
Following the end of our 2021 fiscal year, the Purchaser, Hukui and we entered
into the Stock Purchase Agreement, pursuant to which we agreed to sell the
140,000 Hukui Shares that we had purchased in the First Tranche Closing and the
Second Tranche Closing to the Purchaser for $350,000 in cash, or $2.50 per
share. The sale of the Hukui Shares closed on November 19, 2021.
We had purchased the Hukui Shares in two tranches, on December 15, 2020 and June
30, 2021, pursuant to the Hukui Agreement, at $10.00 per share, for an aggregate
purchase price of $1,400,000. We sold the Hukui Shares at $2.50 per share, for
a total price of $350,000, resulting in loss of $1,050,000. We recognized
impairment loss of the market value of the shares of $1,050,000 for the year
ended September 30, 2021. See Note 4 to Notes to Consolidated Financial
Statements.
On December 17, 2021, Hukui and we entered into the Termination Agreement,
pursuant to which our obligation to make the Third Tranche Investment was
terminated and the Hukui Agreement was terminated. As a result, we have no
continuing contractual obligation to make any investment in Hukui.
As we are currently pursuing business in the area of electric vehicle supply
equipment ("EVSE"), we will need to raise capital to pursue such a business.
There are no commitments in place to fund any such business 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.
For the fiscal year ended September 30, 2020, Jui Pin (John) Lin, our former
President and Chief Executive Officer, periodically provided the capital we
needed to operate in the form of loans in the aggregate principal amount of
$120,410, the principal and accrued and unpaid interest of which are
convertible, at his option, into shares of our Common Stock at $0.05 per share.
On December 28, 2020, we repaid Mr. Lin $65,410 of the principal amount of loans
due and payable plus accrued interest in the amount of $1,162, for a total of
$66,572. On January 5, 2021, we repaid Mr. Lin $20,000 of the principal amount
of another such loan due and payable plus accrued interest in the amount of
$403, for a total of $20,403.
On August 26, 2020, Jui Pin (John) Lin loaned us $35,000 at 4% interest rate and
six months' maturity. The loan was repaid on February 26, 2021 in the principal
amount of $35,000, together with interest in the amount of of $706, for a total
of $35,706.
On October 9, 2020, another stockholder loaned us $30,000 (the "October 2020
Loan"), on substantially the same terms as the terms of the loans from Mr. Lin.
On April 9, 2021, the lender converted the outstanding principal, together with
accrued and unpaid interest in the amount of $598, into 3,059,836 shares of the
Company's Common Stock, at a rate of $0.01 per share.
During the fiscal year ended September 30, 2021, we raised an aggregate $1.8
million in two private offerings, the Fall 2020 Offering and the Spring 2021
Offering, to raise the capital needed to fund our operations and make the First
Tranche Investment and Second Tranche Investment in Hukui.
We may also raise equity, debt, convertible debt or a combination of any of the
foregoing, from other parties for the capital we may need for any of the
purposes specified in this report. There is no agreement in place between the
Company and anyone for such capital to continue to be made available to us as
needed, and we cannot guarantee that any such capital will continue to be
available to us on favorable terms, or at all, in the future.
7
Results of Operations
Year Ended September 30, 2022 compared to the Year Ended September 30, 2021
Revenues
We did not generate any revenues during the years ended September 30, 2022 and
2021.
Operating Expenses
We incurred total operating expenses of $396,311 and $363,637 for the years
ended September 30, 2022 and 2021, respectively. Our operating expenses consist
of legal fees, other professional fees, payroll expenses, stock-based
compensation, rent, bank charges, and transfer agent fees. The increase in
operating expenses for the year ended September 30, 2022 compared to the same
period ended in 2021 was primarily due to the increase in payroll expenses and
stock-based compensation.
Other expense
During the year ended September 30, 2022, we incurred $3,823 other expenses
mainly due to interest incurred for unpaid penalty from IRS. During the year
ended September 30, 2021, we had a net other income of $52,250, which included
incurred $78,476 of other income due to liabilities written off, partially
offset by a $25,000 penalty plus interest of $1,226 from the IRS for failing to
file Form 5472 timely. During the year ended September 30, 2021 we incurred
$1,050,000 impairment loss of investment. We invested $1,400,000 in Hukui's
Series C Preferred stock, which was sold on November 17, 2021 for $350,000,
resulting in loss of $1,050,000. We wrote down the investment on September 30,
2021 to reflect fair market value of the investment.
Net Loss
As a result of the above, our net loss decreased from $1,364,432 in the year
ended September 30, 2021 to $400,134 in the same period ended in 2022.
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.
Our personnel are in Taiwan, which has been relatively less affected by the
pandemic compared to many other countries in Asia, Europe and the United States.
However, even before an increase in the number of cases of COVID-19 in Taiwan,
we experienced delays in obtaining business licenses and permits, and any other
governmental approvals that might have been required for businesses that we
previously considered commencing, since government offices have been working
with reduced staff during the pandemic. We expect this situation to continue and
possibly become more challenging depending upon the duration of the pandemic.
Depending upon the extent and duration of the pandemic and the resulting global
economic crisis, these conditions may have an adverse impact on our ability to
raise capital and commence any business we may pursue.
Liquidity and Capital Resources
Working Capital
September 30, September 30,
2022 2021
Current Assets $ 150,893 $ 35,044
Current Liabilities 205,016 105,346
Working Capital Deficit $ (54,123 ) $ (70,302 )
8
As of September 30, 2022, we had current assets of $150,893 and a working
deficit of $54,123. In comparison, as of September 30, 2021, we had current
assets of $35,044 and a working capital deficit of $70,302.
As of September 30, 2022, we had total assets of $150,893, compared with total
assets of $385,044 at September 30, 2021. The decrease in total assets was
primarily due to the sale of investment and cash spent in operating expenses
after selling the 140,000 Hukui Shares for cash.
We had $205,016 in total current liabilities as of September 30, 2022,
consisting of $102,185 in accounts payable and $102,831 due to related parties.
This is compared to total current liabilities of $105,346 in total current
liabilities as of September 30, 2021, consisting of $100,746 in accounts
payable, $1,590 in accrued expenses, and $3,010 due to related parties. The
increase in due to related parties was primarily due to unpaid compensation to
officers and directors.
We had total stockholders' deficit of $83,349 and an accumulated deficit of
$9,922,955 as of September 30, 2022. In comparison, we had a total stockholders'
equity of $253,472 and an accumulated deficit of $9,522,821 as of September 30,
2021.
On December 15, 2020, we completed a private offering of our Common Stock. We
sold 107,000,000 shares of our Common Stock to 34 individuals at a purchase
price of $0.01 per share, for gross proceeds of $1,070,000 before allocating
certain expenses associated with the offering in the amount of $5,852 as
adjusted paid-in capital.
Effective March 31, 2021, we issued an aggregate 6,399,965 shares of our Common
Stock to some of our directors, officers, employees and independent consultants,
who converted accrued and unpaid compensation in the aggregate amount of
$94,398. Of this amount, (i) $37,998 was with respect to amounts accrued during
fiscal year 2020 and was converted at a rate of $0.05 per share into an
aggregate 759,965 shares of our Common Stock; and (ii) $56,400 was with respect
to amount accrued during fiscal year 2021 through March 31, 2021 and was
converted at a rate of $0.01 per share into an aggregate 5,640,000 shares of our
Common Stock.
On April 9, 2021, we issued 3,059,836 shares of our Common Stock to repay the
principal and interest accrued upon the maturity of the October 2020 Note.
On June 15, 2021, we sold and issued 63,000,000 shares of our Common Stock to 18
individuals at purchase price of $0.01 per share in the Spring 2021 Offering.
Gross proceeds were $630,000, before allocating certain expenses associated with
the offering in the amount of $7,230 as adjusted paid-in capital.
On July 15, 2021, the Company completed the Spring 2021 Offering of its Common
Stock, on which date it sold and issued additional 10,000,000 shares of its
Common Stock to five individuals at a purchase price of $0.01 per share, for
gross proceeds of $100,000, before allocating certain expenses associated with
the offering in the amount of $959 as adjusted paid-in-capital.
During the year ended September 30, 2021, one of our shareholders made a loan to
us in the principal amount of $30,000 (the "October 2020 Loan"), primarily to
pay our expenses. The October 2020 Loan bore simple interest at a rate of 4% per
annum and was payable as to both principal and interest on the maturity date of
April 9, 2021. On the maturity date, the holder of the note evidencing the
October 2020 Loan converted the outstanding principal, together with accrued and
unpaid interest of $598, into 3,059,836 shares of our Common Stock, at the rate
of $0.01 per share.
9
Cash Flows
Year Ended Year Ended
September 30, September 30,
2022 2021
Cash flows used in operating activities $ (222,828 ) $ (304,588 )
Cash flows provided by (used in) investing activities 350,000 (1,400,000 )
Cash flows provided by financing activities - 1,695,549
Effect of exchange rate changes on cash (43 ) 218
Net increase (decrease) in cash during period $ 127,129 $ (8,821 )During the year ended September 30, 2022, we used $222,828 of cash in operating
activities which was attributable primarily to our net loss of $400,134 offset
by change in issuance of stock option and operating assets and liabilities of
$177,306. In comparison, during the year ended September 30, 2021, we used
$304,588 of cash in operating activities which was attributable primarily to our
net loss of $1,364,432 offset by impairment of $1,050,000 to investment and
change in operating assets and liabilities of $9,844.
With respect to our investing activities, we received $350,000 in payment for
the sale of the 140,000 Hukui Shares during the year ended September 30, 2022.
During the year ended September 30, 2021, we used $1,400,000 for investment in
Hukui.
During the year ended September 30, 2022, we did not have any financing
activity. During the year ended September 30, 2021, we had total cash inflow of
$1,695,549 from financing activities. We received $30,000 from the October 2020
Loan. We repaid $120,410 to the notes from related party, who was our then
President and Chief Executive Officer, Jui Pin Lin. We received $1,785,959, net
of directly associated expenses, including legal, transfer agent, and printing
and delivery expenses, from two private offerings of our Common Stock, which
were completed in December 2020 and July 2021, respectively. For accounting
purpose, we recorded the net proceeds from private offering instead of the gross
amount of $1,800,000.
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 involving the start of
our new electric vehicle charging station business. There is no assurance that
we will ever reach that stage. The 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 $350,000 cash on November 19,
2021. The proceeds have been used for operation expenses.
10
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
As of September 30, 2022, we had not entered into any other financial guarantees
or other commitments to guarantee the payment obligations of any third parties.
As of September 30, 2022, we had 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 consolidated financial statements. Furthermore, as of September
30, 2022, we had not had any retained or contingent interest in assets
transferred to an unconsolidated entity that serves as credit, liquidity or
market risk support to such entity. As of September 30, 2022, we had not had 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 consolidated financial statements, which have been prepared
in accordance with accounting principles generally accepted in the United
States. The preparation of these consolidated financial statements requires us
to make estimates and judgments that affect the reported amounts of assets,
liabilities, revenues and expenses, and related disclosure of contingent assets
and liabilities. We continually evaluate our estimates, including those related
to income taxes, and the valuation of equity transactions. We base our estimates
on historical experience and on various other assumptions that we believed to be
reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources. Any future changes to these estimates
and assumptions could cause a material change to our reported amounts of
revenues, expenses, assets and liabilities. Actual results may differ from these
estimates under different assumptions or conditions. For the years ended
September 30, 2022 and 2021, no significant estimates and assumptions have been
made in the consolidated financial statements. The following are some of the
critical accounting policies in relation to the preparation of the consolidated
financial statements. For a full summary of our critical accounting policies,
please refer to Note 2 to the Consolidated Financial Statements.
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.
Recent accounting pronouncements
We do not expect that the adoption of recently issued accounting pronouncements
will have a material impact on our financial position, results of operations, or
cash flows. For a full summary of recent accounting pronouncements, please refer
to Note 2 to the 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.
11
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
Singapore subsidiary, which are prepared using the SGD, are translated into the
Company's reporting currency, USD. Assets and liabilities are translated using
the exchange rate on the balance sheet date, which was 0.6970 and 0.7368 as of
September 30, 2022 and 2021, respectively. Revenue and expenses are translated
using average exchange rates prevailing during each reporting period. The 0.7293
and 0.7458 average exchange rates were used to translate revenues and expenses
for the years ended September 30, 2022 and 2021, respectively. Stockholders'
equity is translated at historical exchange rates. Adjustments resulting from
the translation are recorded as a separate component of accumulated other
comprehensive loss in stockholders' deficit.
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