You should read the following discussion and analysis together with our
financial statements and the notes to those statements included elsewhere in
this Quarterly Report on Form 10-Q and other reports we filed with the
Securities and Exchange Commission. This Quarterly Report on Form 10-Q contains
statements that discuss future events or expectations, projections of results of
operations or financial condition, trends in our business, business prospects
and strategies and other "forward-looking" information. In some cases, you can
identify "forward-looking statements" by words like "may," "will," "should,"
"expects," "plans," "anticipates," "believes," "estimates," "predicts,"
"intends," "potential" or "continue" or the negative of those words and other
comparable words. These statements may relate to, among other things, our
ability to implement and fund our business plan; expectations for our financial
results, revenue, operating expenses and other financial measures in future
periods; and the adequacy of our sources of liquidity to satisfy our working
capital needs, capital expenditures, and other liquidity requirements.
April 2022 Transaction; Recent Developments
On February 28, 2022, Signet International Holdings, Inc. (the "Signet"),?
Estate of Ernest W. Letiziano, Ms. Hope Hillabrand, and Mr. Thomas Donaldson
??(collectively, the "Controlling Shareholders") and Golden Ally Lifetech Group
Co., Ltd., a Delaware corporation ("Golden Ally") entered into a Share Purchase
and Exchange Agreement (the "SPA").
The transactions contemplated by the SPA were consummated on April 6, 2022.
Under the SPA, the Controlling Shareholders agreed to sell to Golden Ally their
capital stock of Signet, consisting of 5,000,000 shares of Series A Convertible
Super Preferred Stock (convertible into 50,000,000 common shares) and 4,474,080
common shares for $375,000? in cash (the "Purchase"). Immediately after the
completion of the Purchase, at the closing (the "Closing") and subject to ?the
terms and conditions of the SPA, Golden Ally caused its shareholders to sell,
assign and transfer to Signet all of the ?Golden Ally shares. The former
stockholders of Golden Ally collectively hold beneficially and of record over
77% of the total issued and outstanding equity securities and voting power of
Signet.
In March 2022 Signet's Board of Directors approved, among other things, an
Amended and Restated Certificate of Incorporation and Amended and Restated
Bylaws, subject to stockholder approval. Stockholder approval was obtained
through written consent. Upon the Amended and Restated Certificate of
Incorporation being filed with the Delaware Secretary of State Signet's name
will be changed from "Signet International Holdings, Inc." to "Golden Ally
Lifetech Group, Inc."
Our Business
As a result of the Transactions, Signet's operations will be conducted through
its subsidiary Golden Ally. Golden Ally is focused on its Aquaporin ("AQP")
Active Water project, which is a derivative of an academic inspiration from the
2003 Nobel Laureates in Chemistry, Dr. Peter Agre and Dr. Roderick MacKinnon
jointly, "for discoveries concerning channels in cell membranes". Golden Ally
has been working closely with experienced field experts and top scientific
research institutions to apply the famous Nobel Prize theory of aquaporins into
its commercialized products, i.e., the AQP Active Water.
AQP Active Water is the product of a unique water filtration technology derived
from raw materials with exclusive access by Golden Ally. The advanced technology
can enhance water filtration for better body cell absorption to improve health.
All AQP Active Water products are expected to be produced through OEM
arrangements and their distribution logistics will also be supported by the OEM
partners.
AQP Active Water is an epoch-making product. Consumption for a prolonged period
is foreseen to possibly extend human body cells' lifespan. Golden Ally has been
running laboratory tests on its products at the David Geffen School of Medicine
at University of California, Los Angeles.
High-income households are Golden Ally's targeted consumers due to a strong
correlation between income level and health spending. The global consumer pool
for AQP Active Water is estimated at 17.61 million households. These households
represent the portion that has an annual household income of over $150,000 USD,
a level that can potentially support annual household spending on healthcare
products.
11
Results of Operations
Overview
Golden Ally is a developmental stage company that is currently implementing its
business plan, which is to be a high-tech start-up focused on a unique product
offering. Our activities to date have focused on the development and exploration
of water filtration technology and consumer products with AQP Active Water. We
have been working with field experts and research institutions to apply and
explore the ability to enhance water filtration for improved body cell
absorption in commercialized water products.
Limited Operating History; Need for Additional Capital
We have had limited operations and have been issued a "going concern" opinion by
our auditor for the year ended December 31, 2021, based on our lack of an
established source of revenues sufficient to cover our operating costs and allow
us to continue as a going concern. We have incurred a cumulative net loss of
$2,019,320. There is no historical financial information about us upon which to
base an evaluation of our performance. We have not generated any revenues from
operations. We cannot guarantee that we will be successful in our business
operations.
Our business is subject to risks inherent in the establishment of a new business
enterprise, including limited capital resources, possible delays in developing
our products and market downturns.
In the first quarter of 2022, Golden Ally received $5,042,060 for stock
subscriptions receivable related to its Class B Common Stock. We expect to
require further investments and have no assurance that future financings will be
available to us on acceptable terms, or at all. If financing is not available on
satisfactory terms, we may be unable to continue, develop or expand our
operations. Equity financing could result in additional dilution to existing
shareholders. If we are unable to raise additional capital to maintain our
operations in the future, we may be unable to carry out our business plans or we
may be forced to cease operations.
Going Concern
Our financial statements have been prepared on a going concern basis which
assumes Golden Ally will be able to realize its assets and discharge its
liabilities in the normal course of business for the foreseeable future. No
revenues have been generated to date and we expect limited revenues.
Results of Operations
During the three months ended March 31, 2022, we did not generate any revenue.
Our operating expenses were $1,961,750, consisting primarily of professional
fees. As a result, we incurred a loss from operations of $1,961,750. During the
three months ended March 31, 2021 we did not have any operations.
Liquidity and Capital Resources
Working Capital and Cash Flows. Golden Ally used cash flows of $4,108,968 for?
operating activities for the quarter ended March 31, 2022. Cash flows used for
operating activities includes $1,777,204 in Goodwill for shares not acquired
under the SPA.
On January 3, 2022, Golden Ally entered into an agreement with a company owned
by a related party, Taucoin Asset Management LLC, to develop and implement
marketing strategies for its products and paid $1,000,000 on January 12, 2022,
per the terms of the agreement for services to be provided and subsequently
another $200,000 was paid.
On January 18, 2022, Golden Alley entered into an agreement for legal services.
In January 2022, Golden Ally paid $500,000 as a retainer to the legal service
provider.
12
Golden Ally has a lease for an office in Texas for one year at $332 per month
and a four-month lease for a property in California with a base rent of $5,970
per month.
Off-Balance Sheet Arrangements
We do not have any 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
Our financial statements and related public financial information are based on
the application of accounting principles generally accepted in the United States
("GAAP"). GAAP requires the use of estimates; assumptions, judgments and
subjective interpretations of accounting principles that affect the reported
amounts of assets and liabilities, revenues and expenses and related disclosures
in our financial statements. We had no critical accounting policies for the year
ended December 31, 2021, or for the quarter ended March 31, 2022.
We have other key accounting policies, which involve the use of estimates,
judgments and assumptions that are significant to understanding our results,
which are summarized in Note 3 to our financial statements. Although we believe
that our estimates, judgments and assumptions are reasonable, they are based
upon information presently available. Actual results may differ from those
estimates.
© Edgar Online, source Glimpses