ITEM
2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Executive
Overview
We are
a development stage company and have not recorded revenues for the past two fiscal years. We are dependent upon financing to continue
basic operations. Management intends to rely upon advances or loans from management, significant stockholders or third parties
to meet our cash requirements, but we have not entered into written agreements guaranteeing funds and, therefore, no one is obligated
to provide funds to us in the future. These factors raise doubt as to our ability to continue as a going concern. Our plan is
to combine with an operating company to generate revenue.
As of
the date of this report, our management has not had any discussions with any representative of any other entity regarding a business
combination with us. Any target business that is selected may be a financially unstable company or an entity in its early stages
of development or growth, including entities without established records of sales or earnings. In that event, we will be subject
to numerous risks inherent in the business and operations of financially unstable and early stage or potential emerging growth
companies. In addition, we may effect a business combination with an entity in an industry characterized by a high level of risk,
and, although our management will endeavor to evaluate the risks inherent in a particular target business, there can be no assurance
that we will properly ascertain or assess all significant risks. In addition, a
ny business combination
or transaction will likely result in a significant issuance of shares and substantial dilution to present stockholders of the
Company.
We anticipate
that the selection of a business opportunity will be complex and extremely risky. Because of general economic conditions, rapid
technological advances being made in some industries and shortages of available capital, our management believes that there are
numerous firms seeking the perceived benefits of becoming a publicly traded corporation. Such perceived benefits of becoming a
publicly traded corporation include, among other things, facilitating or improving the terms on which additional equity financing
may be obtained, providing liquidity for the principals of and investors in a business, creating a means for providing incentive
stock options or similar benefits to key employees, and offering greater flexibility in structuring acquisitions, joint ventures
and the like through the issuance of securities. Potentially available business combinations may occur in many different industries
and at various stages of development, all of which will make the task of comparative investigation and analysis of such business
opportunities extremely difficult and complex.
Management
anticipates that the struggling global economy will restrict the number of business opportunities available to us and will restrict
the cash available for such transactions. There can be no assurance in the current economy that we will be able to acquire an
interest in an operating company.
If we
obtain a business opportunity, then it may be necessary to raise additional capital. We anticipate that we will sell our common
stock to raise this additional capital. We expect that we would issue such stock pursuant to exemptions to the registration requirements
provided by federal and state securities laws. The purchasers and manner of issuance will be determined according to our financial
needs and the available exemptions to the registration requirements of the Securities Act of 1933. We do not currently intend
to make a public offering of our stock. We also note that if we issue more shares of our common stock, then our stockholders may
experience dilution in the value per share of their common stock.
Liquidity
and Capital Resources
We have
not recorded revenues from operations since inception and we have not established an ongoing source of revenue sufficient to cover
our operating costs. We have relied primarily upon related parties to provide and pay for professional and operational expenses.
At March 31, 2014 we had $7,686 cash compared to $3,387 at December 31, 2013 and this increase is primarily related to cash advances
from third parties. At March 31, 2014 total liabilities increased to $152,848 compared to $139,989 at December 31, 2013. This
increase primarily represents an increase in loans payable, with accrued interest, for cash advances, consulting services and
professional services provided by or paid for by a stockholder and third parties.
We intend
to obtain capital from management, significant stockholders and/or third parties to cover minimal operations; however, there is
no assurance that additional funding will be available. Our ability to continue as a going concern during the long term is dependent
upon our ability to find a suitable business opportunity and acquire or enter into a merger with such company. The type of business
opportunity with which we acquire or merge will affect our profitability for the long term.
During
the next 12 months we anticipate incurring additional costs related to the filing of Exchange Act reports. We believe we will
be able to meet these costs through funds provided by management, significant stockholders and/or third parties. We may also rely
on the issuance of our common stock in lieu of cash to convert debt or pay for expenses.
Results
of Operations
We did
not record revenues in either 2013 or 2014. General and administrative expense decreased from $9,340 for the quarterly period
ended March 31, 2013 (“2013 first quarter”) to $6,300 for the quarterly period ended March 31, 2014 (“2014 first
quarter”). The decrease in general and administrative expense in the 2014 first quarter primarily reflects reduced consulting
services relied upon for our operations.
Total
other expense increased from the 2013 first quarter to the 2014 first quarter and represents accrued interest related to notes
payable.
Our net
loss decreased from $10,960 for the 2013 first quarter to $8,559 for the 2014 first quarter. Management expects net losses to
continue until we acquire or merge with a business opportunity.
Commitments
and Obligations
At March
31, 2014 we recorded notes payable totaling $117,550 representing services received, as well as cash advances received from related
and third parties. All of the notes payable are non-collateralized, carry interest at 8% and are due on demand.
Off-Balance
Sheet Arrangements
We have
not entered into 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 and would be considered material to investors.
Critical Accounting Policies
We qualify
as an “emerging growth company” under the recently enacted Jumpstart Our Business Startups Act of 2012 (the “JOBS
Act”). As a result, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements. For so
long as we are an emerging growth company, among other things, we will not be required to:
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Have
an auditor report on our internal controls over financial reporting
pursuant to Section 404(b) of the Sarbanes-Oxley Act;
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Submit
certain executive compensation matters to shareholder advisory votes,
such as “say-on-pay” and “say-on-frequency”
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Obtain
shareholder approval of any golden parachute payments not previously
approved; and
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Disclose
certain executive compensation related items such as the correlation
between executive compensation and performance and comparisons of
the Chief Executives compensation to median employee compensation.
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In addition,
Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period
provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an
emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to
private companies. We have elected to take advantage of the benefits of this extended transition period. Our financial statements
may therefore not be comparable to those of companies that comply with such new or revised accounting standards.
We will
remain an “emerging growth company” for up to five years, or until the earliest of (i) the last day of the first fiscal
year in which our total annual gross revenues exceed $1 billion; (ii) the date that we become a “large accelerated filer”
as defined in Rule 12b-2 under the Securities Exchange Act of 1934, which would occur if the market value of our ordinary shares
that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter
or (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three-year period.