VIDEO RIVER NETWORKS, INC. This report contains certain forward-looking statements and information relating to us that are based on the beliefs and assumptions made by our management as well as information currently available to the management. When used in this document, the words "anticipate," "believe," "estimate," "expect," and similar expressions are intended to identify forward-looking statements. Such statements reflect our current views with respect to future events and are subject to certain risks, uncertainties, and assumptions. If one or more of these risks or uncertainties materialize, or if underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated, or expected.
General
Following the completion of above mentioned transactions, the Company added real estate operations to its business model and started devoting capital to real estate holding operations for specialized assets including, affordable housing, opportunity zones properties, medical real estate investments, industrial and commercial real estate, and other real estate related services.
On
Environmental, Social and Governance ("ESG")
We endeavor to provide a richly diverse work environment that employs the
highest performers, cultivates the best ideas and creates the widest possible
platform for success. We are committed to elevating and supporting the core
values of diversity and inclusion, "Total Well-Being" (which brings together
physical, financial, career, social and community well-being into a cohesive
whole), and environmental, social and governance ("ESG"), which includes
sustainability and social responsibility, by actively engaging in these areas.
Each member of the executive team maintains an annual goal related to these core
values, which is evaluated by the Company's
We have a commitment to sustainability and consider the environmental impacts of our business activities. Sustainability and social responsibility are key drivers of our focus on creating the best properties for tenants operate, work and play. We have a dedicated in-house team that initiates and applies sustainable practices in all aspects of our business, including investment activities, development, property operations and property management activities. With its high density, multifamily housing is, by its nature, an environmentally friendly property type. Our recent acquisition and development activities have been primarily concentrated in pedestrian-friendly urban and close-in suburban locations near public transportation. When developing and renovating our properties, we strive to reduce energy and water consumption by investing in energy saving technology while positively impacting the experience of our tenants and the value of our assets. We continue to implement a combination of irrigation, lighting, HVAC and renewable energy improvements at our properties that will reduce energy and water consumption. For 2020, we continue to have an express company-wide goal for Total Well-Being, which includes enhanced ESG efforts. Employees, including our executives, will have their performance against our various Total Well - Being goals evaluated as part of our annual performance review process.
41
On
Subsequent to the above spinoff, the Company has now returned back to its
original technology-focused businesses of Power Controls, Battery Technology,
Wireless Technology, and Residential utility meters and remote, mission-critical
devices in addition to a primary focus of building a portfolio businesses and
assets and operations that source, design, develop, manufacture and distribute
affordable, high-performance fully electric vehicles in
On
On
Going forward, the Company intends to focus its business model to operate and
manage a portfolio of Electric Vehicles, Artificial Intelligence, Machine
Learning and Robotics ("EV-AI-ML-R") assets, businesses and operations in
addition to its Power Controls, Battery Technology, Wireless Technology, and
Residential utility meters and remote, mission-critical devices businesses in
Basis of Presentation
The following discussion and analysis are based on
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and its subsidiaries, in which the Company has a controlling voting interest and entities consolidated under the variable interest entities ("VIE") provisions of ASC 810, "Consolidation" ("ASC 810"). Inter-company balances and transactions have been eliminated upon consolidation.
ASC 810 requires that the investor with the controlling financial interest
should consolidate the investee/affiliate. ASC 810-10 requires that an equity
interest investor consolidates a VIE when it retains an investment in the
entity, is considered a variable interest investor in the entity, and is the
primary beneficiary of the entity. An investor in a VIE is a "variable interest
beneficiary" when, per an arrangement's governing documents, the investor will
absorb a portion of the VIE's expected losses or will receive a portion of the
entity's "residual returns." The variable interest beneficiary retaining a
controlling financial interest in the VIE is designated as its "primary
beneficiary" and must consolidate the VIE. A variable interest beneficiary
retains a "controlling financial interest" in a VIE when that beneficiary
retains the power to direct the activities of the VIE that have the greatest
influence over the VIE's economic performance and retains an obligation to
absorb the VIE's significant losses or the right to receive benefits from the
VIE that could potentially be significant to the VIE. Based on the ASC 810 test
above,
Because GiveMePower Corporation is 88% controlled by Kid Castle Educational Corporation, the consolidation rule requires that the Revenue, Assets and Liabilities recognized and disclosed on the financial statements of GiveMePower Corporation are also recognized and disclosed on the financial statements of Kid Castle Educational Corporation pursuant to ASC 810.
42 Overview
General - Electric Vehicles (EV) Business
The Company's Electric Vehicles (EV) business model is a newly created business model created in the 3rd quarter of 2020, for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar Business acquisition with one or more EV manufacturers and related businesses, which we refer to throughout this prospectus as our EV Business acquisition plan. We have not selected any specific EV Business acquisition target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any EV Business acquisition target. We have generated no revenues to date and we do not expect that we will generate operating revenues at the earliest until we consummate our initial EV Business acquisition. While we may pursue an acquisition opportunity in the Electric Vehicles, Artificial Intelligence, Machine Learning and Robotics ("EV-AI-ML-R") industry or sector, we intend to focus on: (1) businesses that source, design, develop, manufacture and distribute high-performance, affordable and fully electric vehicles; and (2) businesses that design, manufacture, install and sell Power Controls, Battery Technology, Wireless Technology, and Residential utility meters and remote, mission-critical devices mostly engineered using Artificial Intelligence, Machine Learning and Robotic technologies.
Our management team is comprised of two business professionals that have a broad
range of experience in executive leadership, strategy development and
implementation, operations management, financial policy and corporate
transactions. Our management team members have worked together in the past, at
We believe that our management team is well positioned to identify acquisition opportunities in the marketplace. Our management team's industry expertise, principal investing transaction experience and business acumen will make us an attractive partner and enhance our ability to complete a successful Business acquisition. Our management believes that its ability to identify and implement value creation initiatives has been an essential driver of past performance and will remain central to its differentiated acquisition strategy.
Although our management team is well positioned and have experience to identify acquisition opportunities in the marketplace, past performance of our management team is not a guarantee either (i) of success with respect to any EV Business acquisition we may consummate or (ii) that we will be able to identify a suitable candidate for our initial EV Business acquisition. You should not rely on the historical performance record of our management team as indicative of our future performance. Additionally, in the course of their respective careers, members of our management team have been involved in businesses and deals that were unsuccessful. Our officers and directors have not had management experience with EV companies in the past.
General - Real Estate Business
Our real estate operations has two lines of business: (1) promote and preserve
affordable housing and economic development across urban neighborhoods in
Our Business Plan
Returning back to its foremost business model of technology focused operations,
43
Our current technology-focused business model was a result of our board
resolution on
Having partially freed itself from the day-to-day operation of the real estate operations, the Company now returns to its technology root with a primary purpose of acquiring Electric Vehicles manufacturer or doing a joint venture (JV) with Electric Vehicles businesses that source, design, develop, manufacture and distribute high-performance, affordable and fully electric vehicles; and design, manufacture, install and sell Power Controls, Battery Technology, Wireless Technology, and Residential utility meters and remote, mission-critical devices mostly engineered using Artificial Intelligence, Machine Learning and Robotic technologies.
Business Strategy and Deal Origination
We have not finalized an acquisition target yet, but making progress in identifying several potential candidates from which we intend to pick those that meet our criteria for acquisition. Our acquisition and value creation strategy will be to identify, acquire and, after our initial EV Business acquisition, build an EV company that source, design, develop, manufacture and distribute high-performance, affordable and fully electric vehicles that suit the experience of our management team and can benefit from their operational expertise. Our Business acquisition strategy will leverage our management team's network of potential transaction sources, where we believe a combination of our relationships, knowledge and experience could effect a positive transformation or augmentation of existing businesses to improve their overall value proposition.
Our management team's objective is to generate attractive returns and create value for our shareholders by applying our disciplined strategy of underwriting intrinsic worth and implementing changes after making an acquisition to unlock value. While our approach is focused on the EV-AI-ML-R industries where we have differentiated insights, we also have successfully driven change through a comprehensive value creation plan framework. We favor opportunities where we can accelerate the target's growth initiatives. As a management team we have successfully applied this approach over approximately 16 years and have deployed capital successfully in a range of market cycles.
We plan to utilize the network and Finance industry experience of our Chief Executive Officer and our management team in seeking an initial EV Business acquisition and employing our Business acquisition strategy described below. Our CEO is a top financial professional with designations that include, CPA, CMA, and CFM. He's very knowledgeable in the fields of corporate law, real estate, lending, turnarounds and restructuring. Over the course of their careers, the members of our management team have developed a broad network of contacts and corporate relationships that we believe will serve as a useful source of EV acquisition opportunities. This network has been developed through our management team's extensive experience:
? investing in and operating a wide range of businesses;
? growing brands through repositioning, increasing household penetration and
geographic expansion; expanding into new distribution channels, such as
e-Commerce, in an increasingly omni-channel world;
? identifying lessons learned and applying solutions across product portfolios
and channels;
? sourcing, structuring, acquiring, operating, developing, growing, financing
and selling businesses;
? developing relationships with sellers, financing providers, advisors and
target management teams; and
? executing transformational transactions in a wide range of businesses under
varying economic and financial market conditions.
44
In addition, drawing on their extensive investing and operating experience, our management team anticipates tapping four major sources of deal flow:
? directly identifying potentially attractive undervalued situations through
primary research into EV industries and companies;
? receiving information from our management team's global contacts about a
potentially attractive situation;
? leads from investment bankers and advisors regarding businesses seeking a
combination or added value that matches our strengths; and
? inbound opportunities from a company or existing stakeholders seeking a
combination, including corporate divestitures.
We expect this network will provide our management team with a robust flow of EV acquisition opportunities. In addition, we anticipate that target EV Business candidates will be brought to our attention by various unaffiliated sources, which may include investment market participants, private equity groups, investment banking firms, consultants, accounting firms and large business enterprises. Upon completion of this offering, members of our management team will communicate with their network of relationships to articulate the parameters for our search for a target company and a potential Business acquisition and begin the process of pursuing and reviewing potential leads.
Acquisition/Business acquisition Criteria
Consistent with this strategy, we have identified the following general criteria and guidelines that we believe are important in evaluating prospective target EV businesses. We will use these criteria and guidelines in evaluating acquisition opportunities. While we intend to acquire EV companies that we believe exhibit one or more of the following characteristics, we may decide to enter into our initial EV Business acquisition with a target EV business that does not meet these criteria and guidelines. We intend to acquire EV companies that source, design, develop, manufacture and distribute high-performance, affordable and fully electric vehicles:
? have potential for significant growth, or can act as an attractive EV
acquisition platform, following our initial EV Business acquisition;
? have demonstrated market segment, category and/or cost leadership and would
benefit from our extensive network and insights;
? provide operational platform and/or infrastructure for variety of EV models
and/or services, with the potential for revenue, market share, footprint and/or
distribution improvements;
? are at the forefront of EV evolution around changing consumer trends;
? offer marketing, pricing and product mix optimization opportunities across
distribution channels;
? are fundamentally sound companies that could be underperforming their potential
and/or offer compelling value;
? offer the opportunity for our management team to partner with established
target management teams or business owners to achieve long-term strategic and
operational excellence, or, in some cases, where our access to accomplished
executives and the skills of the management of identified targets warrants
replacing or supplementing existing management;
? exhibit unrecognized value or other characteristics, desirable returns on
capital and a need for capital to achieve the company's growth strategy, that
we believe have been misevaluated by the marketplace based on our analysis and
due diligence review; and
? will offer an attractive risk-adjusted return for our shareholders.
These criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial EV Business acquisition may be based, to the extent relevant, on these general guidelines as well as other considerations, factors and criteria that our management may deem relevant. In the event that we decide to enter into our initial EV Business acquisition with a target EV Business that does not meet the above criteria and guidelines, we will disclose that the target EV Business does not meet the above criteria in our shareholder communications related to our initial EV Business acquisition.
45
Acquisition/Business acquisition Process
In evaluating a prospective target EV business, we expect to conduct a thorough due diligence review that will encompass, among other things, meetings with incumbent management and employees, document reviews, inspection of EV manufacturing facilities, as well as a review of financial and other information. We will also utilize our operational and capital allocation experience.
In order to execute our business strategy, we intend to:
Assemble a team of EV industry and financial experts: For each potential transaction, we intend to assemble a team of EV industry and financial experts to supplement our management's efforts to identify and resolve key issues facing a target EV Business. We intend to construct an operating and financial plan that optimizes the potential to grow shareholder value. With extensive experience investing in both healthy and underperforming businesses, we expect that our management will be able to demonstrate to the target EV business and its stakeholders that we have the resources and expertise to lead the combined company through complex and potentially turbulent market conditions and provide the strategic and operational direction necessary to grow the business in order to maximize cash flows and improve the overall strategic prospects for the company.
Conduct rigorous research and analysis: Performing disciplined, fundamental research and analysis is core to our strategy, and we intend to conduct extensive due diligence to evaluate the impact that a transaction may have on a target EV Business.
Business acquisition driven by trend analysis: We intend to understand the underlying purchase and industry behaviors that would enhance a potential transaction's attractiveness. We have extensive experience in identifying and analyzing evolving industry and consumer trends, and we expect to perform macro as well as bottoms-up analysis on consumer and industry trends.
Acquire the target company at an attractive price relative to our view of intrinsic value: Combining rigorous analysis as well as input from industry and financial experts, our management team intends to develop its view of the intrinsic value of a potential Business acquisition. In doing so, our management team will evaluate future cash flow potential, relative industry valuation metrics and precedent transactions to inform its view of intrinsic value, with the intention of creating a Business acquisition at an attractive price relative to its view of intrinsic value.
Implement operational and financial structuring opportunities: Our management team has the ability to structure and execute a Business acquisition that will establish a capital structure that will support the growth in shareholder value and give it the flexibility to grow organically and/or through strategic acquisitions. We intend to also develop and implement strategies and initiatives to improve the business' operational and financial performance and create a platform for growth.
Seek strategic acquisitions and divestitures to further grow shareholder value: Our management team intends to analyze the strategic direction of the company, including evaluating potential non-core asset sales to create financial and/or operational flexibility for the company to engage in organic and/or inorganic growth. Our management team intends to evaluate strategic opportunities and chart a clear path to take the EV business to the next level after the Business acquisition.
46
After the initial EV Business acquisition, our management team intends to apply a rigorous approach to enhancing shareholder value, including evaluating the experience and expertise of incumbent management and making changes where appropriate, examining opportunities for revenue enhancement, cost savings, operating efficiencies and strategic acquisitions and divestitures and developing and implementing corporate strategies and initiatives to improve profitability and long-term value. In doing so, our management team anticipates evaluating corporate governance, opportunistically accessing capital markets and other opportunities to enhance liquidity, identifying acquisition and divestiture opportunities and properly aligning management and board incentives with growing shareholder value. Our management team intends to pursue post-merger initiatives through participation on the board of directors, through direct involvement with company operations and/or calling upon a stable of former managers and advisors when necessary.
Strategic Approach to Management. We intend to approach the management of a company as strategy consultants would. This means that we approach business with performance-based metrics based on strategic and operational goals, both at the overall company level and for specific divisions and functions.
Corporate Governance and Oversight. Active participation as board members can include many activities ranging from conducting monthly or quarterly board meetings to chairing standing (compensation, audit or investment committees) or special committees, replacing or supplementing company management teams when necessary, adding outside directors with industry expertise which may or may not include members of our own board of directors, providing guidance on strategic and operational issues including revenue enhancement opportunities, cost savings, brand repositioning, operating efficiencies, reviewing and testing annual budgets, reviewing acquisitions and divestitures and assisting in the accessing of capital markets to further optimize financing costs and fund expansion.
Direct Operational Involvement. Our management team members, through ongoing board service, intend to actively engage with company management. These activities may include: (i) establishing an agenda for management and instilling a sense of accountability and urgency; (ii) aligning the interest of management with growing shareholder value; (iii) providing strategic planning and management consulting assistance, particularly in regards to re-invested capital and growth capital in order to grow revenues, achieve more optimal operating scale or eliminate costs; (iv) establishing measurable key performance metrics; and (v) complementing product lines and brands while growing market share in attractive market categories. These skill sets will be integral to shareholder value creation.
M&A Expertise and Add-On Acquisitions. Our management team has expertise in identifying, acquiring and integrating synergistic, margin-enhancing and transformational businesses. We intend to, wherever possible, utilize M&A as a strategic tool to strengthen the financial profile of an EV business we acquire, as well as its competitive positioning. We would seek to enter into accretive Business acquisitions where our management team or an acquired company's management team can seamlessly transition to working together as one organization and team.
Access to Portfolio Company Managers and Advisors. Through their combined 32+ year history of investing in and controlling businesses, our management team members have developed strong professional relationships with former company managers and advisors. When appropriate, we intend to bring in outside directors, managers or consultants to assist in corporate governance and operational turnaround activities. The use of supplemental advisors should provide additional resources to management to address time intensive issues that may be delaying an organization from realizing its full potential shareholder returns.
Our acquisition criteria, due diligence processes and value creation methods are
not intended to be exhaustive. Any evaluation relating to the merits of a
particular initial EV Business acquisition may be based, to the extent relevant,
on these general guidelines as well as other considerations, factors and
criteria that our management may deem relevant. In the event that we decide to
enter into our initial EV Business acquisition with a target EV Business that
does not meet the above criteria and guidelines, we will disclose that the
target EV Business does not meet the above criteria in our shareholder
communications related to our initial EV Business acquisition, which, as
discussed in this prospectus, would be in the form of tender offer documents or
proxy solicitation materials that we would file with the
47
Sourcing of Potential Business acquisition Targets
We believe that the operational and transactional experience of our management team and their respective affiliates, and the relationships they have developed as a result of such experience, will provide us with a substantial number of potential Business acquisition targets. These individuals and entities have developed a broad network of contacts and corporate relationships around the world. This network has grown through sourcing, acquiring and financing businesses and maintaining relationships with sellers, financing sources and target management teams. Our management team members have significant experience in executing transactions under varying economic and financial market conditions. We believe that these networks of contacts and relationships and this experience will provide us with important sources of investment opportunities. In addition, we anticipate that target EV Business candidates may be brought to our attention from various unaffiliated sources, including investment market participants, private equity funds and large business enterprises seeking to divest noncore assets or divisions.
Other Acquisition Considerations
We are not prohibited from pursuing an initial EV Business acquisition with a company that is affiliated with our sponsor, officers or directors. In the event we seek to complete our initial EV Business acquisition with a company that is affiliated with our officers or directors, we, or a committee of independent directors, will obtain an opinion from an independent investment banking firm or another independent firm that commonly renders valuation opinions for the type of company we are seeking to acquire or an independent accounting firm that our initial EV Business acquisition is fair to our company from a financial point of view.
Unless we complete our initial EV Business acquisition with an affiliated entity, or our Board of Directors cannot independently determine the fair market value of the target EV Business or businesses, we are not required to obtain an opinion from an independent investment banking firm, another independent firm that commonly renders valuation opinions for the type of company we are seeking to acquire or from an independent accounting firm that the price we are paying for a target is fair to our company from a financial point of view. If no opinion is obtained, our shareholders will be relying on the business judgment of our Board of Directors, which will have significant discretion in choosing the standard used to establish the fair market value of the target or targets, and different methods of valuation may vary greatly in outcome from one another. Such standards used will be disclosed in our tender offer documents or proxy solicitation materials, as applicable, related to our initial EV Business acquisition.
Members of our management team may directly or indirectly own our ordinary shares and/or private placement warrants following this offering, and, accordingly, may have a conflict of interest in determining whether a particular target EV Business is an appropriate business with which to effectuate our initial EV Business acquisition. Further, each of our officers and directors may have a conflict of interest with respect to evaluating a particular Business acquisition if the retention or resignation of any such officers and directors was included by a target EV Business as a condition to any agreement with respect to our initial EV Business acquisition.
In the future any of our directors and our officers may have additional, fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present acquisition opportunities to such entity. Accordingly, subject to his or her fiduciary duties, if any of our officers or directors becomes aware of an acquisition opportunity which is suitable for an entity to which he or she has then current fiduciary or contractual obligations, he or she will need to honor his or her fiduciary or contractual obligations to present such acquisition opportunity to such entity, and only present it to us if such entity rejects the opportunity. We do not believe, however, that any fiduciary duties or contractual obligations of our directors or officers would materially undermine our ability to complete our Business acquisition.
48 Plan of Operations
While our major focus is to find, acquire and manage an EV business, our real estate portfolio is still alive and must figure in our plan of operation. In the next twelve months, we plan on buying rehabilitating and selling up to six properties and adding the net proceeds obtained from the sales to finance our acquisition business plan.
The Company will continue to evaluate its projected expenditures relative to its available cash and to seek additional means of financing in order to satisfy the Company's working capital and other cash requirements.
Upon completion of the acquisition of an Electric Vehicles manufacturer or doing
a joint venture (JV) with Electric Vehicles businesses that source, design,
develop, manufacture and distribute high-performance, affordable and fully
electric vehicles, our strategy will subsequently include distribution of the
electric vehiclesand related product lines to retailers and consumers across
Critical Accounting Policies, Estimates and New Accounting Pronouncements
Management's discussion and analysis of its financial condition and plan of
operations is based upon our financial statements, which have been prepared in
accordance with accounting principles generally accepted in
Going Concern
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As shown in the accompanying financial
statements, we had zero cash flows from operations for the twelve months ended
Recently Adopted Accounting Standards
Leases
In
Revenue Recognition
The Company recognizes revenue in accordance with the
49
The Company generates revenue primarily from: (1) the sale of homes/properties; (2) commissions and fees charged on each real estate services transaction closed by our lead agents or partner agents; (3) principal transactions from sales of trading securities, less original purchase cost; and (4)Entrepreneurship Development Initiative Revenue. Principal transaction is net trading revenues consisting primarily of revenues from trading securities earned upon completion of trade, net of any trading fees. A trading is completed when earned and recognized at a point in time, on a trade-date basis, as the Company executes trades. The Company records trading revenue on a net basis, trading sales less original purchase cost. Net realized gains and losses from securities transactions are determined for federal income tax and financial reporting purposes on the first-in, first-out method and represent proceeds on disposition of investments less the cost basis of investments. Sale of real estate properties are recognized at the sales price/amount and the total cost (including cost of rehabilitation) associated with the property acquisition and rehabilitation are classified in Cost of Goods Sold (COGS).
Entrepreneurship Development Initiative Revenue:
Income Taxes
The provision for income taxes is computed using the asset and liability method, under which deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating losses and tax credit carry-forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates that apply to taxable income in effect for the years in which those tax assets are expected to be realized or settled. We record a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.
Loss Contingencies
Consistent with ASC 450-20-50-1C, if the Company determines that there is a reasonable possibility that a material loss may have been incurred, or is reasonably estimable, regardless of whether the Company accrued for such a loss (or any portion of that loss), the Company will confer with its legal counsel, consistent with ASC 450. If the material loss is determinable or reasonably estimable, the Company will record it in its accounts and as a liability on the balance sheet. If the Company determines that such an estimate cannot be made, the Company's policy is to disclose a demonstration of its attempt to estimate the loss or range of losses before concluding that an estimate cannot be made, and to disclose it in the notes to the financial statements under Contingent Liabilities.
Net Income (Loss) Per Common Share
Basic net loss per common share ("EPS") is computed by dividing loss available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted earnings per share is computed by dividing net income by the weighted average shares outstanding, assuming all dilutive potential common shares were issued. Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive.
Except for the
50 Related Party Transactions
We follow ASC subtopic 850-10, "Related Party Transactions," for the identification of related parties and disclosure of related party transactions.
Pursuant to ASC 850-10-20, related parties include: a) affiliates of the
Material related party transactions are required to be disclosed in the financial statements, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of or combined financial statements is not required in those statements. The disclosures shall include: a) the nature of the relationship(s) involved; b) a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which statements of operation are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c) the dollar amounts of transactions for each of the periods for which statements of operations are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d) amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.
A related party is generally defined as (i) any person that holds 10% or more of our membership interests including such person's immediate families, (ii) our management, (iii) someone that directly or indirectly controls, is controlled by or is under common control with us, or (iv) anyone who can significantly influence our financial and operating decisions. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties.
Results of Operations
Comparison of Fiscal Years 2022 and 2021
Our financial statements are prepared using accounting principles generally
accepted in
Revenues - We are generating substantially all our revenue from entrepreneurship
development initiative, principal transactions in proprietary trading operation,
and interest accrual on EDI Notes. For the year ended
Operating Expenses - Operating expense was
Net Income (Loss) - Net Income for the year ended
Accumulated Deficit - As at
51
Liquidity and Capital Resources
Cash and Cash Equivalent - As at
Other Current Assets - Inventory and Receivables - As at
Related parties liabilities - As at
Liquidity and Capital Resources
As of
Since 2019, all of our operations have been financed through advances from a
company controlled by our president and CEO. As of
We will now be obligated to file annual, quarterly and current reports with the
Management has determined that additional capital will be required in the form of equity or debt securities. There is no assurance that management will be able to raise capital on terms acceptable to the Company. If we are unable to obtain sufficient amounts of additional capital, we may have to cease filing the required reports and cease operations completely. If we obtain additional funds by selling any of our equity securities or by issuing common stock to pay current or future obligations, the percentage ownership of our shareholders will be reduced, shareholders may experience additional dilution, or the equity securities may have rights preferences or privileges senior to the common stock.
Off-Balance Sheet Arrangements
As of
Contractual Obligations Not applicable. 52
Plan of Operation for the Next Twelve (12) Months
While our major focus is to find, acquire and manage an EV business, our real estate portfolio is still alive and must figure in our plan of operation. In the next twelve months, we plan on buying rehabilitating and selling four to six properties and adding the net proceeds obtained from the sales to the to finance our electric vehicles business plan.
The Company will continue to evaluate its projected expenditures relative to its available cash and to seek additional means of financing in order to satisfy the Company's working capital and other cash requirements.
Upon completion of the acquisition of an Electric Vehicles manufacturer or doing
a joint venture (JV) with Electric Vehicles businesses that source, design,
develop, manufacture and distribute high-performance, affordable and fully
electric vehicles, our strategy will subsequently include distribution of the
electric vehiclesand related product lines to retailers and consumers across
NIHK currently own zero real property in
Using the real properties as collateral, we believe that we could always obtain the capital needed to complete the rehabilitation of these three properties. Although there is no assurance that we would be able to put the three properties to good use such as renting them our to tenants. 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 these specialized 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 specialized real properties.
Our operations will be conducted on five platforms comprising of: (1) specialized real properties; and (2) affordable housing real estate operation. Within the next twelve months, we intend to use income generated from our three properties to hire employees that would help us to raise capital to build our company.
We intend to implement the following tasks within the next twelve months:
1. Month 1-3: Phase 1 (1-3 months in duration; purchase and rehabilitation of
three properties and put them to good use)
a. Identify 3 properties to acquire
b. Sign purchase agreement with the sellers of the 3 properties identified above;
c. Acquire and consolidate the revenue from those 3 properties.
2. Month 3-6 Phase 2 (1-3 months in duration; cost control, process improvements,
admin & mngt.).
a. Integrate acquired properties into NIHK's model - consolidate the management
of the properties including integration of their accounting and finance
systems, synchronization of their operating systems, and harmonization of
their human resources functions.
b. Complete and file quarterly reports and other required filings for the quarter
3. Month 6-9: Phase 3 (1-3 months in duration;
receipt)
a. Identify and acquire 4 specialized 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 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 six months through
other operating expenses of
b. For the six months through
general and other operating expenses of
53
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 capital through the sale of shares offered for sale in this Filing we believe that the Company will have sufficient cash resources to fund its plan of operations for the next twelve months. If we are unable to do so, our ability to continue as a going concern will be in jeopardy, likely causing us to curtail and possibly cease operations.
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.
Even if we raise additional capital in the near future, if our current business plan is not successfully executed, our ability to fund our biopharmaceutical research and development, or our financial product deployment and services efforts would likely be seriously impaired.
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.
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