Forward-Looking Statements
This Quarterly Report on Form 10-Q (this "Quarterly Report") contains
forward-looking statements.
We caution that the factors described herein, and other factors could cause our actual results of operations and financial condition to differ materially from those expressed in any forward-looking statements we make and that investors should not place undue reliance on any such forward-looking statements. Further, any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of anticipated or unanticipated events or circumstances. New factors emerge from time to time, and it is not possible for us to predict all of such factors. Further, we cannot assess the impact of each such factor on our results of operations or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.
General Business Overview
Business History
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On
The transaction above was accounted for as a "reverse merger" and
recapitalization amongst
On
The consolidated financial statements of the Company therefore include its
wholly owned subsidiaries of
The Company's principal executive office is located at
The Company, through its three wholly owned subsidiaries,
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† Alpharidge's - Investments in securities, warrants, bonds, or options of public and private companies in various industries but focusing on specialty biopharmaceutical companies through brokerage firm, TD Ameritrade; and
† OZC Real estate operations - Real estate operations would consist
primarily of rental real estate, affordable housing projects, opportunity zones,
other property development and associated HOA activities. OZC development
operations would be primarily through a real estate investment, management and
development subsidiary that focuses primarily on the construction and sale of
single-family and multi-family homes, lots in subdivisions and planned
communities, and raw land for residential development. Alpharidge did not have
any investments in real estate as of and for the years ended
†
Alpharidge Capital, LLC
Biopharmaceutical Investments
Our specialty biopharmaceutical portfolio is focused on building portfolio of
viable biopharmaceutical businesses and operations with interests on
commercializing novel products that address significant patient needs. The
Company invests mainly in research-based biopharmaceutical company, discovers,
develops, and commercializes medicines in the areas of unmet medical needs in
Event-Driven Investments Operations
The Company also engages in opportunistic private equity activities and event-driven investment management operation that invests in equities, warrants, bonds and options of public and private companies in America and across the globe.
Event-Driven Investments: We keep no less than 10% of our total assets in liquid investments portfolio. This portfolio is actively managed by our directors and officers and invest primarily in equity investments on a long and short basis. Our Investments platform is intended to provide us greater levels of liquidity and current income.
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Opportunity Zone Capital LLC
Opportunistic private equity activities:Our private equity primarily focuses on
local businesses and real estate: (1) Private Equity. We intend to pursue
private equity transactions across
We identify and acquire businesses which fit our investment/acquisition criteria, then restructure the businesses or improve their operations and sell them for profit or hold them for cash flow. We intend to acquire and operate small-to-middle market businesses, properties and assets in select industries and communities or "emerging domestic markets" for direct acquisitions or investments in equity or debt. We will seek to acquire controlling interests in businesses that we believe operate in industries with long-term macroeconomic growth opportunities, and that have positive and stable earnings and cash flows, face minimal threats of technological or competitive obsolescence and have strong management teams largely in place. We believe that private company operators and corporate parents looking to sell their businesses will consider us an attractive purchaser of their businesses. We will also seek to acquire under-managed or under-performing businesses that we believe can be improved under the guidance of our management team and the management teams of the businesses that we will acquire in the future. We expect to improve our businesses over the long term through organic growth opportunities, add-on acquisitions and operational improvements.
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We plan to utilize our community-centered and cost-management business process model to grow our capital base and achieve a long-term growth. We intend to operate a multi-stage investment approach with emphasis on running acquired businesses more efficiently, giving employees more conducive and friendly workplace and adding value to shareholders by identifying and reducing excesses and also identifying and executing growth strategies in companies we control. The company intends buy entire or controlling stake in companies with undervalued businesses, restructure the businesses, and sell the same for profit or hold it for cash flow.
The Black-Wealth-Gateway is a financial institution that creates, aggregates,
facilitates, builds, grows, promotes, preserves and redistributes wealth to
black persons. The Black-Wealth-Gateway was founded on 13th day of September,
2014, when certain of the descendants of Cush, the eldest son of Ham, a son of
Noah, resolved to establish a bank, a financial services company to: (1) cater
to black persons banking needs, (2) finance projects that primarily benefit
black persons, (3) capitalize viable ideas by black persons, (4) fund wealth
creation and community economic development visions of black persons, (5) invest
in black entrepreneurs, and (6) empower black men and women across the earth to
pursue worthy dreams and build great communities and cities like Nimrod (Genesis
10:8-12). The premier Black-Wealth-Gateway shall be headquartered in
Rollups Mergers and Acquisitions
In general,
Challenging conditions often mean the need to improve operations from the ground
up; the situations require equal concentration and adeptness between financial
engineering and operational execution.
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Our plan for operation is to reach the point where we are generating sufficient revenue from our acquired businesses to meet our obligations on a timely basis. In the early stages of our operations, we will keep costs to a minimum, and we intend to continue our proprietary trading.
While we are waiting to raise adequate capital to finance our business plan, we intend to continue operating a consulting and advisory services business with plans to acquire small to medium size businesses in a variety of industries. Through our structure, we plan to offer investors an opportunity to participate in the ownership and growth of a portfolio of businesses that traditionally have been owned and managed by private equity firms, private individuals or families, financial institutions or large conglomerates. We believe that our management and acquisition strategies will allow us to achieve our goals of creating sustainable earnings growth for our shareholders and increasing shareholder value over time through investments in assets, projects and businesses build healthy communities where every-day Americans live and work.
We are a small company with limited resources, capital base, and insignificant revenue from operations, minimal assets to generate future revenue. There is no guarantee that we could raise sufficient capital to implement our business plan and achieve profitability.
Size of Our Market Opportunity
Biopharmaceuticals are substances that are produced using living organisms, such
as microorganisms and animal cells, and have a high-therapeutic value. These
large and complex molecular drugs are also known as biologics and biotech drugs.
The global biopharmaceuticals market accounted for
The global biopharmaceuticals market is driven by various factors, such as increase in elderly population, surge in prevalence of chronic diseases such as cancer and diabetes, and increase in adoption of biopharmaceuticals globally. Furthermore, rise in strategic collaborations among biopharmaceuticals companies is also anticipated to supplement the growth of the biopharmaceuticals industry.
High costs associated with drug development and their threat of failure are
factors anticipated to restrain the growth of the global biopharmaceuticals
market. Conversely, emerging economies, such as
The global biopharmaceuticals market is segmented based on type, application,
and region. On the basis of type, the market is divided into monoclonal
antibody, interferon, insulin, growth and coagulation factor, erythropoietin,
vaccine, hormone, and others. By application, it is categorized into oncology,
blood disorder, metabolic disease, infectious disease, cardiovascular disease,
neurological disease, immunology, and others. Region-wise, it is analyzed across
We believe that the financial engineering functionalities and operational management capabilities offered by our management team position us to benefit from this growing market. Further, as we plan to grow our team, we believe that we may have opportunities to capitalize on the short-term failures of several biopharmaceutical businesses to acquire valuable assets on the cheap and then derive value by applying our proprietary financial and operational model.
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Key Benefits of Our lines of businesses
Biopharmaceutical. We want to build a portfolio of viable biopharmaceutical operations that commercialize novel products that address significant patient unmet needs.
Private Equity. Our leveraged buyout acquisitions of companies and assets,
funding of viable start-up businesses in established industries, transactions
involving turnarounds, minority investments, and partnerships and joint-ventures
in viable industries, would not only create new jobs in distressed neighborhoods
of
Real Estate. Our planned real estate operation will have a macro approach, diversified across a variety of sectors and geographic locations. This operation will revitalize dilapidated neighborhoods and profitably redeploy empty warehouses in distressed urban and suburban neighborhood across the land.
Investments. We intend to keep about 10% of our total assets in liquid investments portfolio. This portfolio will be actively managed by our directors and officers and will invest primarily in equity investments on a long and short basis. Our Investments platform is intended to provide us greater levels of liquidity and current income.
Black-Wealth-Gateway. Black-Wealth-Gateway intends to own directly or indirectly, shares of common stock of several active banking and financial services operations in which Black-Wealth-Gateway exercises control.
Our Growth Strategy Strategy
Strategically, the company intends to be a pragmatic acquirer/investor that
acquires companies with high growth/significant profitability prospects and
strong cash flow characteristics but lacked the necessary expertise and
skill-sets to position the company for growth and significant profitability.
Our process involves the identification, performance of due diligence, negotiation and consummation of acquisitions. After acquiring a company we will attempt to grow the company both organically and through add-on or bolt-on acquisitions. Add-on or bolt-on acquisitions are acquisitions by a company of other companies in the same industry. Following the acquisition of companies, we will seek to grow the earnings and cash flow of acquired companies and, in turn, grow distributions to our shareholders and to increase shareholder value. We believe we can increase the cash flows of our businesses by applying our intellectual capital to continually improve and grow our future businesses.
We will seek to acquire and manage small to middle market businesses, which we
generally characterize as those that generate annual cash flow of up to
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Our Management Strategy
Our edge is the ability to leverage the expertise of our key managers in cost
control, process improvement, and synergetic collaboration across businesses and
industries to create value, improve margins, and optimize overall performance of
acquired companies.
We will build a team talented in synchronizing optimized business processes across industries and disciplines from target identification, due diligence, through portfolio company restructuring, resulting in better resources allocation and cash-flow, higher significant profitability, and superior returns to shareholders and investors. In general, our officers will oversee and support the management team of our acquired businesses by, among other things:
º recruiting and retaining talented managers to operate our future businesses by using structured incentive compensation programs, including minority equity ownership, tailored to each business; º regularly monitoring financial and operational performance, instilling consistent financial discipline, and supporting management in the development and implementation of information systems to effectively achieve these goals; º assisting management of our businesses in their analysis and pursuit of prudent organic growth strategies; º identifying and working with management to execute on attractive external growth and acquisition opportunities; º identifying and executing operational improvements and integration opportunities that will lead to lower operating costs and operational optimization; º providing the management teams of our future businesses the opportunity to leverage our experience and expertise to develop and implement business and operational strategies; and º forming strong subsidiary level boards of directors to supplement management in their development and implementation of strategic goals and objectives.
We believe that our long-term perspective provides us with certain additional advantages, including the ability to:
º recruit and develop talented management teams for our future businesses that are familiar with the industries in which our future businesses operate and will generally seek to manage and operate our future businesses with a long-term focus, rather than a short-term investment objective; º focus on developing and implementing business and operational strategies to build and sustain shareholder value over the long term; º create sector-specific businesses enabling us to take advantage of vertical and horizontal acquisition opportunities within a given sector; º achieve exposure in certain industries in order to create opportunities for future acquisitions; and º develop and maintain long-term collaborative relationships with customers and suppliers.
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We intend to continually increase our intellectual capital as we operate our businesses and acquire new businesses and as our management team identify and recruit qualified employees for our businesses.
Acquisition Strategy
In general,
We use conservative approach to acquisitions and investment. We consider companies that sell at close or below their book values. Our acquisition strategies involve the acquisition of businesses in various industries that we expect will produce positive and stable earnings and cash flow, as well as achieve attractive returns on our investment. In so doing, we expect to benefit from our management team's ability to identify diverse acquisition opportunities in a variety of industries, perform diligence on and value such target businesses, and negotiate the ultimate acquisition of those businesses. We believe our Chief Executive Officer has relevant experience in managing small to middle market businesses. We also believe that based on his experience and qualifications, our Chief Executive Officer will be able both to access a wide network of sources of potential acquisition opportunities and to successfully navigate a variety of complex situations surrounding acquisitions, including corporate spin-offs, transitions of family-owned businesses, management buy-outs and reorganizations. In addition, we intend to pursue acquisitions of under-managed or under-performing businesses that, we believe, can be improved pursuant to our management strategy.
We believe that the merger and acquisition market for small to middle market
businesses is highly fragmented and provides opportunities to purchase
businesses at attractive prices relative to larger market transactions. We
intend to generate sustainable returns to our investors on investments while at
the same time helping to rebuild communities across
In addition to acquiring businesses, we expect to also sell businesses that we own from time to time when attractive opportunities arise. Our decision to sell a business will be based on our belief that the return on the investment to our shareholders that would be realized by means of such a sale is more favorable than the returns that may be realized through continued ownership. Our acquisition and disposition of businesses will be consistent with the guidelines to be established by our company's board of directors from time to time.
Provided we can raise additional funds, in the future, we intend to expand the
geographic footprint of our business to include states outside
Competition
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Our business is highly competitive. We are in direct competition with more established private equity firms, private investors and management companies. Many management companies offer similar products and services for business rollups and consolidations. We may be at a substantial disadvantage to our competitors who have more capital than we do to carry out acquisition, operations and restructuring efforts. These competitors may have competitive advantages, such as greater name recognition, larger capital-base, marketing, research and acquisition resources, access to larger customer bases and channel partners, a longer operating history and lower labor and development costs, which may enable them to respond more quickly to new or emerging opportunities and changes in customer requirements or devote greater resources to the development, acquisition and promotion.
Increased competition could result in us failing to attract significant capital or maintaining them. If we are unable to compete successfully against current and future competitors, our business and financial condition may be harmed.
We hope to maintain our competitive advantage by keeping abreast of market dynamism that is face by our industry, and by utilizing the experience, knowledge, and expertise of our management team. Moreover, we believe that we distinguish ourselves in the ways our model envisaged transformation of businesses.
Government Regulation
Our activities currently are subject to no particular regulation by governmental agencies other than that routinely imposed on corporate businesses. However, we may be subject to the rules governing acquisition and disposition of businesses, real estates and personal properties in each of the state where we have our operations. We may also be subject to various state laws designed to protect buyers and sellers of businesses. We cannot predict the impact of future regulations on either us or our business model.
Intellectual Property
We currently have no patents, trademarks or other registered intellectual property. We do not consider the grant of patents, trademarks or other registered intellectual property essential to the success of our business.
Employees
We do not have a W-2 employee at the present.
The Company has no written employment contract or agreement with any person. Currently, we are not actively seeking additional employees or engaging any consultants through a formal written agreement or contract. Services are provided on an as-needed basis to date. This may change in the event that we are able to secure financing through equity or loans to the Company. As our company grows, we expect to hire more full-time employees.
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Plan of Operation for the Next Twelve (12) Months
As GMPW moves ahead to implement its business plan, the Company begins to
identify, acquire and complimentary businesses and internally-manage real estate
holdings focused on affordable housing, Opportunity Zone and urban
revitalization across
We plan to conduct our affordable housing business through a traditional
umbrella partnership real estate holding company, in which our properties are
owned by our
GMPW through
There is no assurance that we would be able to put the property to good use such as renting it to eligible low-income family / tenant. If we are unable to put them to productive use, we would be forced to sell them and use the money generated from the sales to pay off the loans used to acquire them.
To effectively fund our business plan, we must raise additional capital. But there can be no assurance that we will be able to raise the capital necessary to acquire, own or hold profitable businesses and real properties. Moreover, there can be no assurance that we will be able to raise the capital necessary to execute our business plan and also to acquire, own or hold complimentary businesses and real properties.
Within the next twelve months, we intend to use income generated from our operations to hire employees that would help us to raise capital to build our company. There is no assurance that we would be able to generate income from our operations in the near future.
We intend to implement the following tasks within the next twelve months:
1. Month 1-3: Phase 1 (1-3 months in duration; complete rehabilitation of the opportunity zone located property and put it to good use) a. Identify 4 other properties to acquire b. Identify 2 profitable businesses to acquire c. Sign purchase agreement with the sellers of the 2 profitable businesses and 4 properties identified above; d. Acquire and consolidate the revenue from those six acquisitions. 2. Month 3-6 Phase 2 (1-3 months in duration; cost control, process improvements, admin & mngt.). a. Integrate acquisitions into GMPW's model - consolidate the management of the acquired businesses and properties including integration of their accounting and finance systems, synchronization of their operating systems, and harmonization of their human resources functions. b. Start Crowdfund Raise of$50 million for Opportunity Zone acquisitions and use the proceeds to effectuate our business plan. c. Complete and file quarterly reports and other required filings for the quarter 3. Month 6-9: Phase 3 (1-3 months in duration;$5 million in estimated fund receipt) a. Identify and acquire 2 profitable businesses and 4 properties that are complementary/similar properties or assets in the target market 4. Month 9-12: Phase 4 (1-3 months duration; use acquired businesses' free cash flow for more acquisitions) a. Run the businesses efficiently, giving employees a conducive and friendly workplace and add value to investors and shareholders by identifying and reducing excesses and also identifying and executing growth strategies b. Acquire 2 profitable businesses and 4 more properties especially in regions where RE is at or below their book-value. 5. Operating expenses during the twelve months would be as follows: a. For the nine months throughApril 30 , we anticipate to incur general and other operating expenses of$338,000 . b. For the nine months throughOctober 31, 2021 we anticipate to incur additional general and other operating expenses of$382,000 .
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As noted above, the execution of our current plan of operations requires us to
raise significant additional capital immediately. If we are successful in
raising at least
We continually evaluate our plan of operations discussed above to determine the manner in which we can most effectively utilize our limited cash resources. The timing of completion of any aspect of our plan of operations is highly dependent upon the availability of cash to implement that aspect of the plan and other factors beyond our control. There is no assurance that we will successfully obtain the required capital or revenues, or, if obtained, that the amounts will be sufficient to fund our ongoing operations. The inability to secure additional capital would have a material adverse effect on us, including the possibility that we would have to sell or forego a portion or all of our assets or cease operations. If we discontinue our operations, we will not have sufficient funds to pay any amounts to our stockholders.
Because our working capital requirements depend upon numerous factors there can be no assurance that our current cash resources will be sufficient to fund our operations. At present, we have no committed external sources of capital, and do not expect any significant product revenues for the foreseeable future. Thus, we will require immediate additional financing to fund future operations. There can be no assurance, however, that we will be able to obtain funds on acceptable terms, if at all.
Components of Our Results of Operations
Revenue-We generate revenue primarily from net revenue from trading, commissions and fees charged on each real estate services transaction closed by our lead agents or partner agents, and from the sale of homes.
Properties Revenue-Properties revenue consists of revenue earned when we sell homes that we previously bought directly from homeowners. Properties revenue is recorded at closing on a gross basis, representing the sales price of the home.
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Intercompany Eliminations-Revenue earned from transactions between operating segments are eliminated in consolidating our financial statements. Intercompany transactions primarily consist of services performed from our real estate services segment for our properties segment.
Cost of Revenue and Gross Margin
Cost of revenue consists primarily of home-touring and field expenses, listing expenses, home costs related to our properties segment, office and occupancy expenses, and depreciation and amortization related to fixed assets and acquired intangible assets. Home costs related to our properties segment include home purchase costs, capitalized improvements, selling expenses directly attributable to the transaction, and home maintenance expenses.
Gross profit is revenue less cost of revenue. Gross margin is gross profit expressed as a percentage of revenue. Our gross margin has and will continue to be affected by a number of factors, but the most important are the mix of revenue from our relatively higher-gross-margin real estate services segment and our relatively lower-gross-margin properties segment, real estate services revenue per transaction, agent and support-staff productivity, personnel costs and transaction bonuses, and, for properties, the home purchase costs.
Results of Operations
Three Months ended
Revenue and net gain from sales of investments under trading securities - The
Company recorded
Operating Expenses - Total operating expenses for the three months ended
Net Loss - Net loss for three months ended
Nine Months ended
Revenue and net gain from sales of investments under trading securities - The
Company recorded
Operating Expenses - Total operating expenses for the nine months ended
Net Loss - Net loss for nine months ended
Financial Condition, Liquidity and Capital Resources
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As of
The Company had
For the nine months ended
Total notes payable for related and unrelated parties increased by
As of
As of
Our principal sources of liquidity in the past has been cash generated from loans to us by our major shareholder. In order to be able to achieve our strategic goals, we need to further expand our business and implement our business plan. To continue to develop our business plan and generate sales, significant capital has been and will continue to be required. Management intends to fund future operations through private or public equity and/or debt offerings. We continue to engage in preliminary discussions with potential investors and broker-dealers, but no terms have been agreed upon. There can be no assurances, however, that additional funding will be available on terms acceptable to us, or at all. Any equity financing may be dilutive to existing shareholders. We do not currently have any contractual restrictions on our ability to incur debt and, accordingly we could incur significant amounts of indebtedness to finance operations. Any such indebtedness could contain covenants which would restrict our operations.
Off-Balance Sheet Arrangements
There are 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 investors.
Critical Accounting Policies and Estimates
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The preparation of financial statements in conformity with accounting principles
generally accepted in
Based on this definition, we have identified the critical accounting policies and judgments addressed which are described in Note 2 to our condensed consolidated financial statements included elsewhere in this Quarterly Report. Although we believe that our estimates, assumptions and judgments are reasonable, they are based upon information presently available. Actual results may differ significantly from these estimates under different assumptions, judgments or conditions.
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