This Quarterly Report on Form 10-Q contains forward-looking statements within
the meaning of Rule 175 of the Securities Act of 1933, as amended, and Rule 3b-6
of the Securities Act of 1934, as amended, that involve substantial risks and
uncertainties. These forward-looking statements are not historical facts, but
rather are based on current expectations, estimates and projections about our
industry, our beliefs and our assumptions. Words such as "anticipate,"
"expects," "intends," "plans," "believes," "seeks" and "estimates" and
variations of these words and similar expressions are intended to identify
forward-looking statements. These statements are not guarantees of future
performance and are subject to risks, uncertainties and other factors, some of
which are beyond our control and difficult to predict and could cause actual
results to differ materially from those expressed or forecasted in the
forward-looking statements. You should not place undue reliance on these
forward-looking statements, which apply only as of the date of this Form 10-Q.
Investors should carefully consider all of such risks before making an
investment decision with respect to the Company's stock. The following
discussion and analysis should be read in conjunction with our consolidated
financial statements and summary of selected financial data for Kange Corp. Such
discussion represents only the best present assessment from our Management.
Company Overview
Kange Corp., a Nevada corporation (the "Company," "Kange," "we," and "us"), is a
development stage company that was incorporated in Nevada on August 16, 2013.
The Company is developing and marketing software product as a mobile application
for end users of the current generation iPhone and iPad from Apple, Inc., and
mobile phones using the Android platform. The mobile application's digital
content will be customizable by the owner of the particular device using our
software. We plan to stay on the cutting edge of the constantly changing mobile
application market, and our goal is to create a quality reputation within the
mobile software community and marketplace. We plan to sell our initial
applications through Apple's App Store or through our own online retail website
to small business owners, who desire their own mobile applications and want to
control the content. Apple, App Store, iPhone and iPad are trademarks of Apple
Inc., and Android is a trademark of Alphabet Inc.
On June 8, 2015, the Company entered into a development contract with Idap
Group, LTD, a Ukrainian company ("Software Developer"). Under the terms of the
contract, Software Developer agreed to provide mobile (pda and smartphone)
application ("App") software development to the Company, in exchange for not
more than one hundred thousand U.S. dollars. Delivery of the ready software
shall be performed by placing it in the App Store and Google Play by Software
Developer or transmitted via the Internet. As of the date of this report, the
contract is still in effect.
On November 9, 2015, AMJ Global, LLC ("AMJ Global"), a company beneficially
owned by Dr. Arthur Malone, Jr., the Company's chief executive officer and
director, assigned the rights of AMJ Global pursuant to its agreements with
Blabeey, Inc. ("Blabeey"), a mobile App designer. The irrevocable assignment,
transferred and conveyed in its entirety to the Company in a common control
transaction, all of AMJ Global's rights and obligations that are stipulated and
set forth in every and all agreements between AMJ Global and Blabeey, including,
but not limited to, the agreement between AMJ Global and Blabeey dated October
26, 2015. Blabeey's web site is www.blabeey.com, which is not incorporated in
this filing. The Company issued 5,000,000 shares of common stock to AMJ Global
for the assignment. The Company valued those shares at $471,672, the historical
asset costs of Blabeey. Subsequently, the Company began working with Blabeey on
developing technology for social media regarding Autism, PTSD and other
neurological issues.
In May of 2017, the Company retained Bruce Weitzberg to serve on the Company's
Board of Advisors and advise the Company regarding the intersection of
technology and wholistic health care treatment and healthy living. Mr. Weitzberg
is the CEO of Patient Access Solutions Inc., a Nevada corporation with ticker
symbol "PASO" ("PASO"). PASO is a provider of healthcare and financial
processing solutions for the healthcare and dental industries, and it has also
opened a new center for the treatment of individuals with autism spectrum
disorder and other biomedical conditions.
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Subsequently, the Company retained James Lantiegne, a professional magician and
former COO and CFO of a national software company, to serve on the Company's
Board of Advisors and provide the Company advice on the intersection of
technology and health. In October of 2017, the Company retained Benny Malone,
former NFL running back for the Miami Dolphins and Washington Redskins, and Eric
Metcalf, former NFL running back, wide receiver and three-time Pro-Bowl
selection, to serve on the Company's Board of Advisors and advise the Company
regarding sports health issues and treatments.
On November 1, 2017, the Company executed a stock purchase agreement (the "SPA")
with AMJ Global Entertainment, LLC, another related party company controlled by
our CEO and director, Dr. Arthur Malone, Jr., to purchase 1,157,142 shares of
Patient Access Solutions Inc., a Nevada corporation with ticker symbol "PASO"
("PASO"), in consideration of the issuance of 158,824 shares of our common
stock. PASO is a provider of healthcare and financial processing solutions for
the healthcare and dental industries, and it has also opened a new center for
the treatment of individuals with autism spectrum disorder and other biomedical
conditions. The Company is currently advising PASO on formulating a treatment
model to meet the needs of professional athletes that suffer from PTSD and the
early onset of dementia and Alzheimer's. The Company is currently evaluating
wholistic technology-based healthcare treatments, and is evaluating potential
additional operations in the wholistic health industry. On January 13, 2020,
the transaction was rescinded, and the Company will return 1,157,142 shares of
Patient Access Solutions Inc. back to AMJ Global Entertainment, LLC in exchange
for 157,142 shares of the Company.
We have had limited operations and have been issued a "going concern" opinion by
our auditor, based upon our reliance on related party loans and the sale of our
common stock as the sole sources of funds for our operations for the near
future.
Reports to Security Holders
The Company is not required to file reports pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934, and is a "voluntary filer." As a voluntary
filer, the Company intends to furnish its stockholders with annual reports
containing consolidated financial statements audited by its independent
registered public accounting firm and to make available quarterly reports
containing unaudited consolidated financial statements for each of the first
three quarters of each year, but is not obligated to do so. The Company files
Quarterly Reports on Form 10-Q, Annual Reports on Form 10-K and Current Reports
on Form 8-K with the Securities and Exchange Commission. The Company may also
file additional documents with the Commission if those documents become
necessary in the course of its operations.
The public may read and copy any materials that the Company files with the SEC
at the SEC's Public Reference Room at 100 F Street, NE, Washington, D.C. 20549.
The public may obtain information on the operation of the Public Reference Room
by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site that
contains reports, proxy and information statements, and other information
regarding issuers that file electronically with the SEC. The site address is
www.sec.gov.
Available Information
All reports of the Company filed with the SEC are available free of charge
through the SEC's website at www.sec.gov. In addition, the public may read and
copy materials filed by the Company at the SEC's Public Reference Room located
at 100 F Street, N.E., Washington, D.C. 20549. The public may also obtain
additional information on the operation of the Public Reference Room by calling
the Commission at 1-800-SEC-0330.
Results of Operations
The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with the financial statements and notes
thereto for the three months ended February 28, 2018 and 2017, and related
management discussion herein.
Our financial statements are stated in U.S. Dollars and are prepared in
accordance with generally accepted accounting principles of the United States
("GAAP").
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Going Concern Qualification
Several conditions and events cast substantial doubt about the Company's ability
to continue as a going concern. The Company has incurred cumulative net losses
of $704,797 since its inception and requires capital for its contemplated
operational and marketing activities to take place. The Company's ability to
raise additional capital through debt or future issuances of capital stock is
unknown. The obtainment of additional financing, the successful development of
the Company's contemplated plan of operations, and its transition, ultimately,
to the attainment of profitable operations are necessary for the Company to
continue operations. The ability to successfully resolve these factors raise
substantial doubt about the Company's ability to continue as a going concern.
For the Three Months Ended February 28, 2018 and 2017:
Our operating results for the three months ended February 28, 2018 and 2017, and
the changes between those periods for the respective items are summarized as
follows:
Three Months Ended
February 28, Change
2018 2017 Amount
Operating loss $ 29,400 $ 8,009 $ 21,391
Other income (expense) 32,863 (3,177 ) 36,040
Net income (loss) $ 3,463 $ (11,186 ) $ 14,649
Revenues
We did not earn any revenues during the three months ending February 28, 2018 or
2017.
Operating Income (Loss)
Our loss from operations increased to $29,400 during the three months ending
February 28, 2018, from an operating loss of $8,009 in the comparative period
ending February 28, 2017. The following table presents operating expenses for
the three-month periods ending February 28, 2018 and 2017:
Three Months Ended
February 28, Change
2018 2017 Amount Percentage
Consulting Fees 20,712 - 20,712 -
General and administrative expenses 8,688 8,009 679 8 %
Total Operating Expenses $ 29,400 $ 8,009 $ 21,391 267 %
The Company recorded $20,712 in consulting fees during the three months ended
February 28, 2018, as compared to $0 for the same period in the prior fiscal
year, due to signed advisory board agreements. We realized an increase of $679
in general and administrative expenses during the three months ended February
28, 2018, as compared to the same period in the prior fiscal year.
Other Income (Expense)
The following table presents other income and expenses for the three months
ended February 28, 2018 and 2017:
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Three Months Ended
February 28,
2018 2017
Unrealized Gain on investment 32,863 -
Interest expense - (1,627 )
Amortization of debt discounts - (1,550 )
Total other income (expense) $ 32,863 $ (3,177 )During the three months ending February 28, 2018 the Company recognized an
unrealized gain on investment of $32,863 due to revaluation of marketable
securities. For the same period in the prior fiscal year, the Company recorded
interest expense of $1,627, and amortization of debt discounts of $1,550.
Net Income (Loss)
of the Company realized $3,463 in net income during the three months ended
February 28, 2018, compare to net loss of $11,186 in the same period in the
prior fiscal year. This is due to the net effect of the consulting fees and
unrealized gain on marketable securities recognized during the 2018 period.
Liquidity and Capital Resources
Based upon our current financial condition, we do not have sufficient cash to
operate our business at the current level for the next twelve months. We intend
to fund operations through debt and/or equity financing arrangements, which may
be insufficient to fund expenditures or other cash requirements. We plan to seek
additional financing in a private equity offering to secure funding for
operations. There can be no assurance that we will be successful in raising
additional funding. If we are not able to secure additional funding, the
implementation of our business plan will be impaired. There can be no assurance
that such additional financing will be available to us on acceptable terms or at
all.
Working Capital
The following table presents our working capital position as of February 28,
2018 and November 30, 2017:
As of As of
February November 30,
28, Change
2018 2017 Amount Percentage
Cash $ - $ 77 $ (77 ) -
Marketable securities 113,863 81,000 32,863 41 %
Prepaid expenses 45,600 66,312 (20,712 ) (31% )
Current Assets 159,463 147,389 12,074 8 %
Current Liabilities 41,762 33,151 8,611 26 %
Working Capital $ 117,701 $ 114,238 $ 3,463 3 %
The change in working capital during the three months ended February 28, 2018,
was primarily due to an increase in current assets of $12,074 and an increase in
current liabilities of $8,611. Current assets increased primarily due to
revaluation of investment in marketable securities. Current liabilities
increased due to an increase in advances from related parties of $1,250,
increase in accounts payable of $4,361, and increase in accrued expenses due to
related party of $3,000. Cash reduced as of February 28, 2018, by $77 to $0,
caused by bank charges during the three months ending February 28, 2018.
Cash Flow
We fund our operations with cash received from advances from officers and
related parties and issuances of equity.
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The following tables presents our cash flow for the three months ended February
28, 2018 and 2017:
Three Months Ended
February 28,
2018 2017
Cash (used in) operating activities $ (1,327 ) $ (90 )
Cash provided by financing activities 1,250 -
Net Change in Cash for the period $ (77 ) $ (90 )
Cash Flows from Operating Activities
We did not generate positive cash flows from operating activities for the three
months ended February 28, 2018 or 2017.
For the three months ended February 28, 2018, net cash flows used in operating
activities consisted of a net income of $3,463, reduced by unrealized gain on
marketable securities of $32,863, and increased by a net increase in change of
operating assets and liabilities of $28,073.
For the three months ended February 28, 2017, net cash flows used in operating
activities consisted of a net loss of $11,186, increased by amortization of debt
discounts of $1,550 and net change in operating assets and liabilities of
$9,546.
Cash Flows from Investing Activities
For the three months ended February 28, 2018 and 2017, no cashflows were used in
investing activities.
Cash Flows from Financing Activities
For the three months ended February 28, 2018, we received $1,250 advance from
related parties, which used to fund operations and business activities. We
didn't engage in financing activities during the three months ended February 28,
2017.
Off-Balance Sheet Arrangements
The Company does not have any off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on the Company's financial
condition, changes in financial condition, revenues or expenses, results of
operations, liquidity, capital expenditures or capital resources that are
material to investors.
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