Item 2. Management’s Discussion
and Analysis of Financial Condition and Results of Operations
This Management’s Discussion and
Analysis of Financial Condition and Results of Operations contain certain forward-looking statements. Historical results may not
indicate future performance. Our forward-looking statements reflect our current views about future events; are based on assumptions
and are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those contemplated
by these statements. Factors that may cause differences between actual results and those contemplated by forward-looking statements
include, but are not limited to, those discussed above and in “Risk Factors.” We undertake no obligation to publicly
update or revise any forward-looking statements, including any changes that might result from any facts, events, or circumstances
after the date hereof that may bear upon forward-looking statements. Furthermore, we cannot guarantee future results, events, levels
of activity, performance, or achievements
Our financial
statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting
Principles. In this Quarterly Report on Form 10-Q (the “Form 10-Q”), unless otherwise specified, all dollar
amounts are expressed in United States dollars. All references to “common shares” refer to the common shares in our
capital stock.
In this Form
10-Q references to “SmartChase,” the “Company,” “we,” “us” and “our”
refer to SmartChase Corp.
Limited
Operating History
There is limited
historical financial information about our company upon which to base an evaluation of our future performance. We are
a development stage corporation and have generated limited revenues from operations. We cannot guarantee that we will
be successful in our business operations. We are subject to risks inherent in the establishment of a new business enterprise,
including limited capital resources and possible delays in the exploitation of business opportunities. We may fail to adopt
a business model and strategize effectively or fail to revise our business model and strategy should industry conditions and competition
change.
We have limited
resources and there is no assurance that future financing will be available to us on acceptable terms. Additional equity financing
could result in dilution to existing shareholders.
Overview
of Operations
We were incorporated in the State of Nevada
on April 24, 2006, as Political Calls, Inc. We maintain our statutory registered agent's office at 6910
S. Cimarron Rd., Suite 240, Las Vegas, NV, 89113 and our principal executive offices are located at 343
Preston Street, 11th Floor, Ottawa, ON, K1S 1N4. Our telephone number is (514) 290-8863.
The original business
plan of the Company consisted of marketing telephone broadcasting messages for political campaigns. On November 23, 2008,
the Board of Directors and the majority vote of the Company's shareholders voted and approved a name change of the Company from
Political Calls, Inc. to Northern Empire Energy Corp., to signify the Company's business direction in oil and gas exploration.
In December 2009,
we entered into a “Formal Option to Purchase and Sale Agreement of Petroleum and Natural Gas Rights” with an Alberta
Corporation and purchased certain petroleum and natural gas rights within the Province of Alberta for a total purchase price of
$471,524 ($500,000.00 Canadian Dollars). We were unable to secure additional financing to conduct exploration and drill wells
on our oil and gas properties and, consequently, during the year ended December 31, 2010, we became a shell corporation whose sole
purpose at that time until the present has been and is to locate and consummate a merger and/or acquisition with an operating entity.
On December 3,
2014, we amended our Articles of Incorporation to change our name from “Northern Empire Energy Corp.” to “SmartChase
Corp.” (the “Name Change”) to better reflect our new business direction pursuing business opportunities
in the digital media sector, with an initial focus on the development and utilization of mobile apps. We were unsuccessful
in our efforts to locate suitable business opportunities in the digital media sector, and as a result we have been seeking other
viable business opportunities for the Company.
We have no employees
and own no property. We do not intend to perform any further operations until a merger or acquisition candidate is located and
a merger or acquisition consummated. We are a “shell company” whose sole purpose at this time is to locate and consummate
a merger and/or acquisition with an operating entity.
Plan of
Operation
Currently, we
are a development stage corporation. A development stage corporation is one engaged in the search of business opportunities, successful
negotiation and closing of a business acquisition and furthering its business plan.
Our plan of operation
for the next twelve months will be to pursue business opportunities in the Financial Information Technology (“Fintech”)
sector. Our business plan is focused on providing customized technology platforms to small businesses and independent financial
advisors in a way that is tailored to their needs. By combining easy-to-use on-site devices and the power of the cloud we intend
to bring the latest technology directly into to the place of business allowing for small businesses to communicate, manage data,
and improve efficiency.
In the event we
are unable to execute our business plan, we will then (i) consider guidelines of industries in which we may have an interest; (ii)
adopt a business plan regarding engaging in business in any selected industry; and (iii) commence such operations through funding
and/or the acquisition of an operating entity engaged in any industry selected.
Results
of Operations
We did not generate any revenues during
the three-month periods ended September 30, 2016 and 2015 or in the nine-month periods ended September 30, 2016 and 2015, respectively.
During the nine-month periods ended September 30, 2016 and 2015, much of our resources were directed at maintaining the Company
in good standing and identifying new business opportunities. On May 30, 2019, we signed a
binding Memorandum of Understanding (“MOU”) with a related party to acquire 90% of the outstanding shares of
Northern Coast Asset Management Inc. (“NCAM”), a Canadian manufacturer of alternative investment funds. Besides
the MOU, we currently have no definitive agreements or understanding with any prospective business combination candidates.
For the three
months ended September 30, 2016 and 2015
We had a net loss
of $(28,515) during the three months ended September 30, 2016 compared to a net loss of $(7,554) during the same period ended September
30, 2015. The change is explained below.
Operating expenses
for the three months ended September 30, 2016 totaled $1,908 (2015- $9,449) consisting of $33 in general and administrative expenses
(2015 - $6,704), $1,875 in transfer agent and filing fees (2015 - $1,245) and professional fees of $0 (2015 - $1,500). Operating
expenses were lower during the three months ended September 30, 2016 primarily as a result of less general and administrative expenses.
During the three
months ended September 30, 2016, we incurred financing and interest expenses of $(26,607) compared to $0 during the same period
ended September 30, 2015, owing to the amortization of, and interest on, the Convertible Note Payable.
For the nine
months ended September 30, 2016 and 2015
We had a net loss
of $(39,289) during the nine months ended September 30, 2016 compared to a net loss of $(28,670) during the same period ended September
30, 2015. The change is explained below.
Operating expenses
for the nine months ended September 30, 2016 totaled $39,289 (2015- $28,670) consisting of $24,507 in general and administrative
expenses (2015 - $16,833), $10,132 in transfer agent and filing fees (2015 - $5,088) and professional fees of $4,650 (2015 - $6,750).
Operating expenses were greater during the nine months ended September 30, 2016 primarily as a result of additional administrative
and filing fees as the Company initiated certain changes in its management and business direction in anticipation of pursuing new
business opportunities in the Fintech sector.
During the nine
months ended September 30, 2016, we incurred financing and interest expenses of $(79,821) compared to $0 during the same period
ended September 30, 2015, owing to the amortization of, and interest on, the Convertible Note Payable.
We are subject
to risks inherent in the establishment of a new business enterprise. We may fail to adopt a business model and strategize effectively
or fail to revise our business model and strategy should industry conditions and competition change. We have limited resources
and there is no assurance that future financing will be available to us on acceptable terms. These conditions could further impact
our business and have an adverse effect on our financial position, results of operations and/or cash flows.
Liquidity
and Capital Resources
At September 30,
2016, we had current assets of $10,600 and current liabilities of $(2,637) resulting in working capital of $13,237 compared to
$129,243 in current assets and total current liabilities of $76,718 for the year ended December 31, 2015.
Net cash from
(used in) operating activities was $(95,083) and $(24,035) for the nine months ended September 30, 2016 and 2015, respectively.
Cash from financing activities was $(19,935) and $24,228 for the nine months ended September 30, 2016 and 2015, respectively.
Cash from financing activities during the nine months ended September 30, 2016 was due to working capital advances from our previous
President during the period. During the nine months ended September 30, 2016, $73,507 was repaid to our previous President towards
the balance of the working capital loan and as at September 30, 2016, our President has been repaid in full.
We generated no
revenue during the nine months ended September 30, 2016. We do not anticipate generating any revenues for the foreseeable future.
Since inception, we have used our common stock to raise money to fund our business operations, for corporate expenses and to repay
outstanding indebtedness. We did not receive any cash from the sale of shares during the nine-month period ended September 30,
2016.
We do not have
enough money to meet our cash requirements for the next twelve months, as we have yet to commence operations, have not generated
any revenues and there can be no assurance that we can generate significant revenues from operations. During the next twelve months,
we expect to incur indebtedness for administrative and professional charges associated with preparing, reviewing, auditing and
filing our financial statements and our periodic and other disclosure documents to maintain the Company in good standing.
Our management
is exploring a variety of options to meet our cash requirements and future capital requirements, including the possibility of equity
offerings, debt financing and business combinations. There can be no assurance that we will be able to raise additional capital,
and if we are unable to raise additional capital, we will unlikely be able to continue as a going concern.
Going Concern
As of the date
of this Form 10-Q, there is substantial doubt regarding our ability to continue as a going concern as we have not generated sufficient
cash flow to fund our business operations. The financial statements included in this Form 10-Q have been prepared on the going
concern basis, which assumes that we will be able to realize our assets and discharge our obligations in the normal course of business.
If we are not to continue as a going concern, we would likely not be able to realize our assets at values comparable to the carrying
value or the fair value estimates reflected in the balances set out in the preparation of the financial statements.
Our future success
and viability, therefore, are dependent upon our ability to generate capital financing. The failure to generate sufficient revenues
or raise additional capital may have a material and adverse effect upon us and our shareholders.
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 or operations, liquidity, capital expenditures or capital resources
that is material to investors.
Contractual
Obligations
None.
Critical
Accounting Policies
There have been
no material changes in our existing accounting policies and estimates from the disclosures included in our Form 10-K for the year
ended December 31, 2015, except for the newly adopted accounting policies as disclosed in the interim financial statements.