ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
RMD Entertainment Group, Inc.
Balance Sheets
As of June 30, 2019 and December 31, 2018
|
|
June 30,
2019
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|
|
December 31,
2018
|
|
Assets
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
Prepaid expenses
|
|
$
|
3,333
|
|
|
$
|
833
|
|
Total current assets
|
|
|
3,333
|
|
|
|
833
|
|
Total assets
|
|
$
|
3,333
|
|
|
$
|
833
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders’ Deficit
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses
|
|
$
|
13,655
|
|
|
$
|
–
|
|
Due to shareholders
|
|
|
121,912
|
|
|
|
46,982
|
|
Convertible note payable – shareholder
|
|
|
50,000
|
|
|
|
50,000
|
|
Total current liabilities
|
|
|
185,567
|
|
|
|
96,982
|
|
Total liabilities
|
|
|
185,567
|
|
|
|
96,982
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ deficit
|
|
|
|
|
|
|
|
|
Convertible Preferred stock, $0.001 par value, 1,000,000 share authorized issued and outstanding
|
|
|
1,000
|
|
|
|
1,000
|
|
Common stock, $0.00001 par value; 9,888,000,000 shares authorized; 9,920,254 shares issued and outstanding as of June 30, 2019 and December 31, 2018
|
|
|
99
|
|
|
|
99
|
|
Additional paid-in capital
|
|
|
2,013,242
|
|
|
|
2,013,242
|
|
Accumulated deficit
|
|
|
(2,196,575
|
)
|
|
|
(2,110,490
|
)
|
Total stockholders’ deficit
|
|
|
(182,234
|
)
|
|
|
(96,149
|
)
|
Total liabilities and stockholders’ deficit
|
|
$
|
3,333
|
|
|
$
|
833
|
|
See accompanying notes to financial statements.
RMD Entertainment Group, Inc.
Statements of Operations
For the Three Months and Six Months Ended
June 30, 2019 and 2018
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|
For the
Three months ended
June 30,
|
|
|
For the
Six months ended
June 30,
|
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
Cost of sales
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
Professional fees
|
|
|
17,655
|
|
|
|
–
|
|
|
|
78,853
|
|
|
|
|
|
General and administrative expenses
|
|
|
4,894
|
|
|
|
2,150
|
|
|
|
7,232
|
|
|
|
3,497
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss before income taxes
|
|
|
22,549
|
|
|
|
2,150
|
|
|
|
86,085
|
|
|
|
3,497
|
|
Income taxes
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss and comprehensive loss
|
|
|
(22,549
|
)
|
|
|
(2,150
|
)
|
|
|
(86,085
|
)
|
|
|
(3,497
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per share of common stock
- Basic and diluted
|
|
|
(0.00
|
)
|
|
|
(0.00
|
)
|
|
|
(0.01
|
)
|
|
|
(0.00
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares of common stock
- Basic and diluted
|
|
|
9,920,254
|
|
|
|
9,920,254
|
|
|
|
9,920,254
|
|
|
|
9,920,254
|
|
See accompanying notes to financial statements.
RMD Entertainment Group, Inc.
Statements of Stockholders’ Deficit
For Six Months Ended June 30, 2019
|
|
Preferred
Stock
|
|
|
Common
Stock
|
|
|
Additional
Paid in
|
|
|
Accumulated
|
|
|
Total
Stockholders’
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
Deficit
|
|
|
Deficit
|
|
Balance January
1, 2018
|
|
|
1,000,000
|
|
|
$
|
1,000
|
|
|
|
9,,920,254
|
|
|
$
|
99
|
|
|
$
|
2,013,242
|
|
|
$
|
(2,071,341
|
)
|
|
$
|
(57,000
|
)
|
Stock issuance for services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
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Net income (loss)
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
0
|
|
|
|
(39,149
|
)
|
|
|
(39,149
|
)
|
Balance December 31, 2018
|
|
|
1,000,000
|
|
|
|
1,000
|
|
|
|
9,920,254
|
|
|
|
99
|
|
|
|
2,013,242
|
|
|
|
(2,110,490
|
)
|
|
|
(96,149
|
)
|
Stock issuance for services
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
Net income (loss)
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
(86,085
|
)
|
|
|
(86,085
|
)
|
Balance June 30, 2019
|
|
|
1,000,000
|
|
|
$
|
1,000
|
|
|
|
9,920,254
|
|
|
$
|
99
|
|
|
$
|
2,013,242
|
|
|
$
|
(2,196,575
|
)
|
|
$
|
(182,234
|
)
|
See accompanying notes to financial statements.
RMD Entertainment Group, Inc.
Statements of Cash Flow
For the Six Months Ended June 30, 2019 and
2018
|
|
2019
|
|
|
2018
|
|
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
(86,085
|
)
|
|
$
|
(3,497
|
)
|
Debt forgiven
|
|
|
–
|
|
|
|
–
|
|
Stock issuance
|
|
|
–
|
|
|
|
–
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses
|
|
|
13,655
|
|
|
|
–
|
|
Prepaid expenses
|
|
|
(2,500
|
)
|
|
|
(3,333
|
)
|
Due to shareholders
|
|
|
74,930
|
|
|
|
6,830
|
|
Net cash provided by (used in) operating activities
|
|
|
–
|
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) financing activities
|
|
|
–
|
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
Purchase of fixed assets
|
|
|
–
|
|
|
|
–
|
|
Net cash provided by (used in) investing activities
|
|
|
–
|
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
Net change in cash and cash equivalents
|
|
|
–
|
|
|
|
–
|
|
Cash and cash equivalents, beginning of period
|
|
|
–
|
|
|
|
–
|
|
Cash and cash equivalents, end of period
|
|
$
|
–
|
|
|
$
|
–
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of cash flow information
|
|
|
|
|
|
|
|
|
Interest paid
|
|
$
|
–
|
|
|
$
|
–
|
|
See accompanying notes to financial statements.
RMD Entertainment Group, Inc.
Notes to Financial Statements
NOTE 1 - NATURE OF BUSINESS ORGANIZATION
RMD Entertainment Group, Inc. (“RMD”,
or the “Company”) was originally formed on August 22, 2000 as a Nevada corporation. On June 30, 2017, the Company re-domiciled
as a Delaware Corporation. Now a non-operating holding company, historically the company has been involved in investment in gaming
and vending businesses, with a primary focus on the entertainment, travel and leisure industries. Current management acquired control
of the Company through purchase of preferred shares of the Company on October 13, 2017, which gives current management a majority
of the voting power of the outstanding stock of the Company. The Company is in the process of identifying operating businesses
that are potential candidates for acquisition.
NOTE 2 – BASIC PRESENTATION
Interim financial statements
The unaudited interim financial statements
included herein, presented in accordance with United States generally accepted accounting principles and stated in US dollars,
have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”).
Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that
the disclosures are adequate to make the information presented not misleading.
These statements reflect all adjustments,
including normal recurring adjustments, which, in the opinion of management, are necessary for a fair presentation of the information
contained therein. It is suggested that these interim financial statements be read in conjunction with the financial statements
of the Company for the year ended December 31, 2018 and notes thereto included in the Company’s Form 10. The Company follows
the same accounting policies it used in the Company’s Form 10 in the preparation of this interim report. Results of operations
for the interim period are not indicative of annual results.
Recent Accounting Pronouncements
In June 2018, the FASB issued Accounting
Standards Update (“ASU”) ASU 2018-07,
Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment
Accounting
, which simplifies the accounting for share-based payments granted to nonemployees for goods and services, and aligns
most of the guidance on such payments to nonemployees with the requirements for share-based payments granted to employees. ASU
2018-07 is effective on January 1, 2019. Early adoption is permitted. The Company adopted this ASU on January 1, 2019 with no material
impact on the Company’s financial statements.
In August 2018, the SEC issued Release
No. 33-10532 that amends and clarifies certain financial reporting requirements. The principal change to our financial reporting
will be the application of the disclosure requirement of changes in stockholders’ equity in Rule 3-04 of Regulation S-X to
interim periods. The Company adopted this new rule beginning its financial reporting for the quarter ended March 31, 2019. Upon
the adoption of this rule, the Company has included the Statements of Stockholders’ Deficit with each interim reporting.
NOTE 3 – CONVERTIBLE NOTE PAYABLE – Related Party
The convertible note payable as of June
30, 2019 and December 31, 2018 consisted of one non-interest bearing note payable due on demand and convertible at the option of
the holder into common shares at the conversion price of $0.001 per share. The note, originally dated February 24, 2014 and amended
on October 1, 2017 was initially held by a third-party creditor of the Company. Under the original February 24, 2014 Note, the
principal amount of indebtedness was $115,000. On October 1, 2017, the third-party creditor agreed to forgive $65,000 in indebtedness
and the balance of the Convertible Note became $50,000 as a result. On October 11, 2017, the note was sold to Mr. Seng Yeap Kok
for a purchase price of $5,000. As of the issuance of these financial statements, no amount of the principal has been repaid and
the balance of the Convertible Note remains $50,000.
NOTE 4 - EQUITY
The Company is authorized to issue 5,000,000
shares of convertible preferred stock with a par value of $0.0001. As of December 31, 2018 and 2017, the number of issued and
outstanding shares of Series A preferred stock was 1,000,000. The 1,000,000 shares of Series A preferred stock are convertible
at a rate of 1:15 into common stock, and each outstanding share of the Series A preferred stock has the right to one vote for
each share of common stock into which such preferred stock could then be converted. The holders of Series A preferred stock have
no preemptive rights to purchase, subscribe for, or otherwise acquire stock of any class of the Company.
During 2017, the Company issued 120,000,000
shares of common stock, which were valued at $1,200, as compensation for the Company’s CEO at the time.
On
January 28, 2019, the Board approved and filed the amendment for a reverse common stock split at a ratio of 1,000:1. The par value
of the common shares remains at $0.00001 per share.
The Company is authorized to issue 9,888,000,000
shares common stock with a par value of $0.00001 per share. As of June 30, 2019 and December 31, 2018, the number of issued and
outstanding shares of common stock was 9,920,254.
NOTE 5 – PRIOR PERIOD ADJUSTMENTS
As indicated in Note 4,
On
January 28, 2019, the Board approved and filed the amendment for a reverse common stock split at a ratio of 1,000:1. The par value
of the common shares remains at $0.00001 per share. For comparative financial statements, we have adjusted the prior period presentation
in equity section on the balance sheet and statement of shareholders’ deficits. The following illustrates the presentations
before and after the adjustments:
|
|
Before
|
|
|
Adjustments
|
|
|
Adjusted
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued and outstanding
|
|
|
9,885,028,189
|
|
|
|
1,000 : 1 split
|
|
|
|
9,920,254
|
|
Common stock
|
|
|
98,850
|
|
|
|
(98,751
|
)
|
|
|
99
|
|
Additional paid-in capital
|
|
|
1,914,491
|
|
|
|
98,751
|
|
|
|
2,013,242
|
|
NOTE 6 – RELATED PARTIES TRANSACTIONS
During the normal course of business, the
Company has some transactions with its related parties. During the three months ended June 30, 2019 and 2018, the majority shareholder
paid $66,842 and $900; and during the six months ended June 30, 2019 and 2018, the majority shareholder paid $74,930 and $6,830,
for the Company’s expenses, respectively. As of June 30, 2019 and December 31, 2018, the balances due to shareholder were
121,912 and 46,982, respectively.
NOTE 7 - SUBSEQUENT EVENTS
Management has evaluated subsequent events
through the date of the filing the financial statements with the Securities and Exchange Commission, the date the financial statements
were available to be issued. Management is not aware of any significant events that occurred subsequent to the balance sheet date
that would have a material effect on the financial statements and would require adjustment or disclosure thereto.
Item 2. Management’s Discussion and Analysis of Financial
Condition and Results of Operations
You
should read this discussion together with the Financial Statements, related Notes and other financial information included
elsewhere in this Form 10-Q. The following discussion contains assumptions, estimates and other forward-looking statements
that involve a number of risks and uncertainties, including those discussed under “Risk Factors,” and elsewhere
in this Form 10-Q. These risks could cause our actual results to differ materially from those anticipated in these
forward-looking statements.
This discussion is intended to further
the reader’s understanding of the Company’s financial condition and results of operations and should be read in conjunction
with the Company’s financial statements and related notes included elsewhere herein. This discussion also contains forward-looking
statements. The Company’s actual results could differ materially from those anticipated in these forward-looking statements
as a result of the risks and uncertainties set forth elsewhere in this Annual Report and in the Company’s other SEC filings.
Readers are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date hereof. The
Company is not party to any transactions that would be considered “off balance sheet” pursuant to disclosure requirements
under Item 303(c) of Regulation S-K.
Overview
The Company is a non-operating holding
company. Historically, the Company has been involved and invested in gaming and vending businesses, the focus of which was on the
entertainment, travel and leisure industries. Current management acquired control of the Company through purchase of preferred
shares on October 13, 2017 and is in the process of identifying operating businesses that are potential candidates for acquisition.
Critical Accounting Policies
The relevant accounting policies are listed
below.
Basis of Accounting
The basis is United States generally accepted
accounting principles.
Cash and Cash Equivalents
The Company considers all short-term investments
with a maturity of three months or less at the date of purchase to be cash and cash equivalents.
Use of Estimates
In preparing financial statements in conformity
with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported
amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements
and revenues and expenses during the reported period. Actual results could differ from those estimates.
Advertising
Advertising costs are expensed when incurred.
The Company incurred $0 of sales and marketing expenses, including advertising, for the three months and six months ended
June 30, 2019 and 2018.
Comprehensive Income (Loss)
Net income (loss) is equal to comprehensive
income (loss).
Income Taxes
The Company maintains deferred tax assets
that reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes. These deferred tax assets consist of net operating loss carry
forwards. The net deferred tax asset has been fully offset by a valuation allowance because of the Company’s history of losses.
Utilization of operating losses and credits may be subject to substantial annual limitation due to ownership change provisions
of the Internal Revenue Code of 1986, as amended, and similar state provisions. The annual limitation may result in the expiration
of net operating losses and credits before utilization.
Due to our lack of revenues, we have not
incurred any tax obligations for the three months and six months ended June 30, 2019, and 2018. However, we would anticipate that
income tax obligations will arise as we begin to generate significant revenue in the future.
The Company did not identify any material
uncertain tax positions. The Company did not recognize any interest or penalties for unrecognized tax benefits.
The federal income tax returns of the Company
are subject to examination by the IRS generally for three years after they file.
Year end
The Company’s fiscal year-end is
December 31.
Recent Accounting Pronouncements
We have reviewed all the recently issued,
but not yet effective, accounting pronouncements and we do not believe any of these pronouncements will have a material impact
on the Company.
In August 2018, the SEC issued Release
No. 33-10532 that amends and clarifies certain financial reporting requirements. The principal change to our financial reporting
will be the inclusion of the annual disclosure requirement of changes in stockholders’ equity in Rule 3-04 of Regulation
S-X to interim periods. We adopted this new rule beginning with its financial reporting for the quarter ending March 31, 2019.
Upon adoption, the Company will include its Statements of Stockholders’ Deficit with each interim reporting.
In June 2018, the FASB issued Accounting
Standards Update (“ASU”) ASU 2018-07,
Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment
Accounting
, which simplifies the accounting for share-based payments granted to nonemployees for goods and services and aligns
most of the guidance on such payments to nonemployees with the requirements for share-based payments granted to employees. ASU
2018-07 is effective on January 1, 2019. Early adoption is permitted. Adoption of this ASU does not have material impact
on the Company’s financial statements.
In March 2016, the Financial Accounting
Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-09, Compensation – Stock
Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. This guidance changes how companies account
for certain aspects of share-based payments to employees. Among other things, under the new guidance, companies will no longer
record excess tax benefits and certain tax deficiencies in additional paid-in-capital (“APIC”), but will instead record
such items as income tax expense or benefit in the income statement, and APIC pools will be eliminated. Companies will apply this
guidance prospectively. Another component of the new guidance allows companies to make an accounting policy election for the impact
of forfeitures on the recognition of expense for share-based payment awards, whereby forfeitures can be estimated, as required
today, or recognized when they occur. If elected, the change to recognize forfeitures when they occur needs to be adopted using
a modified retrospective approach. All of the guidance was effective for the Company in the fiscal year beginning October 1, 2017.
Early adoption is permitted. Adoption of this ASU does not have material impact on the Company’s financial statements.
In February 2016, the FASB issued ASU 2016-02,
Leases (Topic 842), which issued new guidance related to leases that outlines a comprehensive lease accounting model and supersedes
the current lease guidance. The new guidance requires lessees to recognize lease liabilities and corresponding right-of-use assets
for all leases with lease terms of more than 12 months. It also changes the definition of a lease and expands the disclosure requirements
of lease arrangements. The new guidance must be adopted using the modified retrospective approach and will be effective for the
Company in the fiscal year beginning October 1, 2019.
Early adoption is permitted. The Company
is currently evaluating the impact of this guidance, if any, on its financial statements and related disclosures.
In July 2015, the FASB issued ASU No.
2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory. The guidance requires an entity to measure
inventory at the lower of cost or net realizable value, which is the estimated selling prices in the ordinary course of
business, less reasonably predictable costs of completion, disposal, and transportation, rather than the lower of cost or
market in the previous guidance. This amendment applies to inventory that is measured using first-in, first-out (FIFO). This
amendment is effective for public entities for fiscal years beginning after December 15, 2016, including interim periods
within those years. A reporting entity should apply the amendments prospectively with earlier application permitted as of the
beginning of an interim or annual reporting period. There is no material impact to adopt this ASU.
In May 2014, the FASB issued ASU No. 2014-09,
Revenue from Contracts with Customers (“ASU 2014- 09”), which requires an entity to recognize the amount of revenue
to which it expects to be entitled for the transfer of promised goods or services to customers. ASU 2014-09 will replace most existing
revenue recognition guidance in U.S. generally accepted accounting principles when it becomes effective. In July 2015, the FASB
deferred the effective date of the standard by an additional year; however, it provided companies the option to adopt one year
earlier, commensurate with the original effective date. Accordingly, the standard will be effective for the Company in the fiscal
year beginning October 1, 2018, with an option to adopt the standard for the fiscal year beginning October 1, 2017. The adoption
of this ASU does not have material impact on the company’s financial statements and disclosures.
Results of Operations
Capitalization
The following table sets forth, as of June
30, 2019, the capitalization of RMD on an actual basis. This table should be read in conjunction with the more detailed financial
statements and notes thereto included elsewhere herein.
In January 2019, the Company made a reverse split of the stock
at 1,000:1 and as of June 30, 2019, the table shows as follows:
Common stock, $0.00001 par value; 9,920,254 shares issued and outstanding at June 30, 2019
|
|
$
|
99
|
|
Additional paid-in capital
|
|
|
2,013,242
|
|
Deficit accumulated during development stage
|
|
|
(2,196,575
|
)
|
|
|
|
|
|
Total stockholders’ equity (deficit)
|
|
$
|
(182,234
|
)
|
Results of Operations for the three
months and six months ended June 30, 2019 and 2018
For the three months and six months ended
June 30, 2019 and 2018, we had no revenue.
Costs of revenue during these above same
periods were $0.
For the three months ended June 30, 2019
and 2018, professional and administrative expenses were $22,549 and $2,150, respectively. For the six months ended June 30, 2019
and 2018, professional and administrative expenses were $86,085 and $3,497, respectively. These costs were primarily the costs
for the daily operations and legal services.
For the three months ended June 30, 2019
and 2018, professional expenses were $17,655 and $0. For the six months ended June 30, 2019 and 2018, professional expenses were
$78,853 and $0. The legal expenses in three months and six months ended June 30, 2019 were mainly due to SEC filing preparations.
For the three months ended June 30, 2019
and 2018, general and administrative expenses were $4,894 and $2,150, respectively. For the six months ended June 30, 2019 and
2018, general and administrative expenses were $7,232 and $3,497, respectively. Costs incurred were primarily SEC filing and other
administrative expenses.
Going Concern
The accompanying financial statements have
been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the
liquidation of liabilities in the normal course of business. The Company currently has no operations and has a stockholders deficit
of $182,234 with an accumulated deficit of $2,196,575. The Company intends to find a merger target in the form of an operating
entity. The Company cannot be certain that it will be successful in this strategy.
These factors, among others, raise substantial
doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Summary of any product research and
development that we will perform for the term of our plan of operation
The Company is a shell company with no
operations and does not have specific products. Our research and development will depend on future merger with an operational company
or companies.
Expected purchase or sale of plant and
significant equipment
We do not anticipate the purchase or sale
of any plant or significant equipment; as such, items are not required by us at this time.
Significant changes in the number of
employees
As of June 30, 2019, we did not have any
paid employees. We are dependent upon our officers and directors for our future business development. As our operations expand,
we anticipate that we need to hire additional employees.
Liquidity and Capital Resources
As of June 30,2019, we had cash of approximately
$0.
A critical component of our operating plan
impacting our continued existence is our ability to obtain additional capital through additional equity and/or debt financing.
We have limited financial resources available,
which has had an adverse impact on our liquidity, activities and operations. These limitations have adversely affected our
ability to obtain certain projects and pursue additional business. Without realization of additional capital, it would be
unlikely for us to continue as a going concern. In order for us to remain a going concern, we will need to obtain additional capital.
Additional working capital may be sought through additional debt or equity private placements, additional notes payable to
banks or related parties (officers, directors or stockholders), from other funding sources at market rates of interest, or a combination
of these. The ability to raise necessary financing will depend on many factors, including the nature and prospects of any
business to be acquired and the economic and market conditions prevailing at the time financing is sought. No assurances can be
given that any necessary financing can be obtained on terms favorable to us, or at all.
As a result of our current cash status,
no officer or director received cash compensation through June 30, 2019.
Future funding could result in potentially
dilutive issuances of equity securities, the incurrence of debt, contingent liabilities and/or amortization expenses related to
goodwill and other intangible assets, which could materially adversely affect our business, results of operations and financial
condition. Any future acquisitions of other businesses, technologies, services or products might require us to obtain additional
equity or debt financing, which might not be available on terms favorable to us, or at all, and such financing, if available, might
be dilutive.
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 are material to investors.
Critical Accounting Policies and
Estimates
Revenue Recognition: We recognize revenue
from product sales when all of the following criteria for revenue recognition have been met: pervasive evidence that an agreement
exists; the services have been rendered; the fee is fixed and determinable and not subject to refund or adjustment; and collection
of the amount due is reasonable assured.