KGNR Kange Corporation (PK)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

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 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 an early-stage company that was incorporated in Nevada on August 16, 2013.

The Company has historically focused on developing and marketing software product as mobile applications for end users of iPhone and iPad from Apple, Inc., and mobile phones using the Android platform. Since 2017, the Company has been focusing on the intersection of technology and wholistic technology-based health treatments, with the intention to provide services to formulate 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 operations in the wholistic health industry.

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. Since the Company’s transaction with AMJ Global was between entities under common control, the amount of the historical cost of the assets, $471,672, was recorded as an expense in 2015 as there was no fixed and determinable future value, and the expense was recorded as a loss on the acquisition of contractual rights. Subsequently, the Company began working with Blabeey on developing technology for social media regarding Autism, PTSD and other neurological issues, and the Company is still consulting with Blabeey regarding software development opportunities in connection with the wholistic health industry.

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.

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 on our November 30, 2017 audited financial statements, 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 financial statements audited by its independent registered public accounting firm and to make available quarterly reports containing unaudited 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.

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 and nine months ended August 31, 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”).

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 $1,294,913 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 raises substantial doubt about the Company’s ability to continue as a going concern.

For the Three Months Ended August 31, 2018 and 2017:

Our operating results for the three months ended August 31, 2018 and 2017, and the changes between those periods for the respective items, are summarized as follows:

During the three months ending August 31, 2018 the Company had an operating loss of $15,399 and recognized an unrealized loss on marketable securities of $28,929 due to revaluation of marketable securities. For the same period in the prior fiscal year, the Company recorded an operating loss of $78,049 and interest expense of $1,642. The decrease in operating loss during the three months ended August 31, 2018, is primarily due to incurred consulting expenses of $76,000 during the three months ended August 31, 2017.

For the Nine Months Ended August 31, 2018 and 2017:

Our operating results for the nine months ended August 31, 2018 and 2017, and the changes between those periods for the respective items, are summarized as follows:

Revenues

We did not earn any revenues during the nine months ending August 31, 2018 or 2017.

Operating Loss

Our loss from operations decreased to $69,475 during the nine months ending August 31, 2018, from an operating loss of $92,629 in the comparative period ending August 31, 2017. The following table presents operating expenses for the nine-month periods ending August 31, 2018 and 2017:

The Company recorded $53,392 in consulting fees during the nine months ended August 31, 2018, as compared to $76,000 for the same period in the prior fiscal year, due to signed advisory board agreements. We realized a decrease of $546 in general and administrative expenses during the nine months ended August 31, 2018, as compared to the same period in the prior fiscal year.

During the nine months ending August 31, 2018 the Company recognized loss on debt settlement of $452,378 due to shares issued for debt to related party. During the nine months ending August 31, 2018 the Company recognized an unrealized loss on marketable securities of $64,800 due to revaluation of marketable securities. For the same period in the prior fiscal year, the Company recorded interest expense of $4,896, and amortization of debt discount of $2,170.

Net Loss

The Company incurred a $586,653 net loss during the nine months ended August 31, 2018, compared to net loss of $99,695 in the same period in the prior fiscal year. This is primarily due to loss on settlement of debt, and unrealized loss 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.

The change in working capital during the nine months ended August 31, 2018, was primarily due to a decrease in current assets of $118,269 and a decrease in current liabilities of $16,145. Current assets decreased primarily due to revaluation of investment in marketable securities and amortization of prepaid consulting expense. Current liabilities decreased primarily due to debt settlement to related party of $32,151. Cash reduced as of August 31, 2018, by $77 to $0.

Cash Flow

We fund our operations with cash received from advances from officers and related parties and issuances of equity.

The following tables presents our cash flow for the nine months ended August 31, 2018 and 2017:

Cash Flows from Operating Activities

We did not generate positive cash flows from operating activities for the nine months ended August 31, 2018 or 2017.

For the nine months ended August 31, 2018, net cash flows used in operating activities consisted of a net loss of $586,653, reduced by unrealized loss on marketable securities of $64,800, loss on settlement of debt of $452,378 and by a net increase in change of operating assets and liabilities of $68,148.

For the nine months ended August 31, 2017, net cash flows used in operating activities consisted of a net loss of $99,695, reduced by amortization of debt discount of $2,170, issuance of common stock for consulting services valued at $76,000 and net change in operating assets and liabilities of $9,778.

Cash Flows from Investing Activities

For the nine months ended August 31, 2018 and 2017, no cashflows were provided by or used in investing activities.

Cash Flows from Financing Activities

For the nine months ended August 31, 2018 and 2017, we received $1,250 and $11,669, respectively, in advances from related parties, which were used to fund operations and business activities.

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.