ITEM
2. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
The
following discussion should be read in conjunction with our unaudited financial statements and the notes thereto.
Forward-Looking
Statements
This
quarterly report contains forward-looking statements and information relating to us that are based on the beliefs of our management
as well as assumptions made by, and information currently available to, our management. When used in this report, the words “believe,”
“anticipate,” “expect,” “estimate,” “intend”, “plan” and similar expressions,
as they relate to us or our management, are intended to identify forward-looking statements. These statements reflect management’s
current view of us concerning future events and are subject to certain risks, uncertainties and assumptions, including among many
others: a general economic downturn; a downturn in the securities markets; federal or state laws or regulations having an adverse
effect on proposed transactions that we desire to effect; Securities and Exchange Commission regulations which affect trading
in the securities of “penny stocks”; and other risks and uncertainties. Should any of these risks or uncertainties
materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this
report as anticipated, estimated or expected. The accompanying information contained in this registration statement, including,
without limitation, the information set forth under the heading “Management’s Discussion and Analysis or Plan of Operation
— Risk Factors” identifies important additional factors that could materially adversely affect actual results and
performance. You are urged to carefully consider these factors. All forward-looking statements attributable to us are expressly
qualified in their entirety by the foregoing cautionary statement.
Overview
We
are a presently a shell company (as defined in Rule 12b-2 of the Exchange Act) whose plan of operation over the next twelve months
is to seek and, if possible, acquire an operating business or valuable assets by entering into a business combination. We will
not be restricted in our search for business combination candidates to any particular geographical area, industry or industry
segment, and may enter into a combination with a private business engaged in any line of business, including service, finance,
mining, manufacturing, real estate, oil and gas, distribution, transportation, medical, communications, high technology, biotechnology
or any other. Management’s discretion is, as a practical matter, unlimited in the selection of a combination candidate.
Management will seek combination candidates in the United States and other countries, as available time and resources permit,
through existing associations and by word of mouth. This plan of operation has been adopted in order to attempt to create value
for our shareholders. For further information on our plan of operation and business, see PART I, Item 1 of our Annual Report on
Form 10-K for the year ended 2017.
Plan
of Operation
We
do not intend to do any product research or development. We do not expect to buy or sell any real estate, plant or equipment except
as such a purchase might occur by way of a business combination that is structured as an asset purchase, and no such asset purchase
currently is anticipated. Similarly, we do not expect to add additional employees or any full-time employees except as a result
of completing a business combination, and any such employees likely will be persons already then employed by the company acquired.
The
Company’s business plan consists of exploring potential targets for a business combination through the purchase of assets,
share purchase or exchange, merger or similar type of transaction. We anticipate no operations unless and until we complete a
business combination as described above.
Three
Months Ended March 31, 2018 Compared to March 31, 2017
The
following table summarizes the results of our operations during the three months ended March 31, 2018 and 2017, respectively,
and provides information regarding the dollar and percentage increase or (decrease) from the current 3-month period to the prior
3-month period:
Line
Item
|
|
3/31/2018
(unaudited)
|
|
|
3/31/2017
(unaudited)
|
|
|
Increase/
(Decrease)
|
|
|
Percentage
Increase (Decrease)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Operating
expenses
|
|
|
18,926
|
|
|
|
17,127
|
|
|
|
1,799
|
|
|
|
10.5
|
%
|
Net
loss
|
|
|
(27,571
|
)
|
|
|
(24,862
|
)
|
|
|
2,709
|
|
|
|
10.9
|
%
|
Loss
per share of common stock
|
|
$
|
(0.01
|
)
|
|
$
|
(0.00
|
)
|
|
|
0.01
|
|
|
|
|
|
We
recorded a net loss of $27,571 for the three months ended March 31, 2018 as compared with a net loss of $24,862 for the three
months ended March 31, 2017.
Liquidity
and Capital Resources
We
had $-0- cash on hand at March 31, 2018 and had no other assets to meet ongoing expenses or debts that may accumulate. Since inception,
we have accumulated a deficit of $841,620. As of March 31, 2018 we had total liabilities and a negative working capital of $791,820.
We
have no commitment for any capital expenditure and foresee none. However, we will incur routine fees and expenses incident to
our reporting duties as a public company, and we will incur expenses in finding and investigating possible acquisitions and other
fees and expenses in the event we make an acquisition or attempt but are unable to complete an acquisition. Our cash requirements
for the next twelve months are principally for accounting expenses and other expenses related to making filings required under
the Securities Exchange Act of 1934, which should not exceed $50,000 in the fiscal year ending December 31, 2018. Any travel,
lodging or other expenses which may arise related to finding, investigating and attempting to complete a combination with one
or more potential acquisitions could also amount to thousands of dollars.
We
will only be able to pay our future obligations and meet operating expenses by raising additional funds, acquiring a profitable
company or otherwise generating positive cash flow. As a practical matter, we are unlikely to generate positive cash flow by any
means other than acquiring a company with such cash flow. We believe that management members or shareholders will loan funds to
us as needed for operations prior to completion of an acquisition. Management and the shareholders are not obligated to provide
funds to us, however, and it is not certain they will always want or be financially able to do so. Our shareholders and management
members who advance money to us to cover operating expenses will expect to be reimbursed, either by us or by the company acquired,
prior to or at the time of completing a combination. We have no intention of borrowing money to reimburse or pay salaries to any
of our officers, directors or shareholders or their affiliates. There currently are no plans to sell additional securities to
raise capital, although sales of securities may be necessary to obtain needed funds. Our current management has agreed to continue
their services to us and to accrue sums owed them for services and expenses and expect payment reimbursement only.
Should
existing management or shareholders refuse to advance needed funds, however, we would be forced to turn to outside parties to
either loan money to us or buy our securities. There is no assurance whatever that we will be able at need to raise necessary
funds from outside sources. Such a lack of funds could result in severe consequences to us, including among others:
●
|
failure
to make timely filings with the SEC as required by the Exchange Act, which also probably would result in suspension of trading
or quotation in our stock and could result in fines and penalties to us under the Exchange Act;
|
●
|
curtailing
or eliminating our ability to locate and perform suitable investigations of potential acquisitions; or
|
●
|
inability
to complete a desirable acquisition due to lack of funds to pay legal and accounting fees and acquisition-related expenses.
|
We
hope to require potential candidate companies to deposit funds with us that we can use to defray professional fees and travel,
lodging and other due diligence expenses incurred by our management related to finding and investigating a candidate company and
negotiating and consummating a business combination. There is no assurance that any potential candidate will agree to make such
a deposit.
G
oing
Concern
Our
independent auditors have added an explanatory paragraph to their audit issued in connection with the financial statements for
the period ended December 31, 2017, relative to our ability to continue as a going concern. We had $791,820 negative working capital
as of March 31, 2018; we had an accumulated deficit of $841,620 incurred through March 31, 2018 and recorded a loss of $27,571
for the first quarter of 2018 and a loss of $89,825 from operations for the fiscal year ended December 31, 2017. The going concern
opinion issued by our auditors means that there is substantial doubt that we can continue as an ongoing business for 12-month
period ending December 31, 2018 and thereafter. The financial statements do not include any adjustments that might result from
the uncertainty about our ability to continue our business. Given the Company’s limited resources and limited access to
capital, there is little the Company can do to address this issue until it identifies and completes a transaction with a third
party. There is no guarantee that such a transaction can be completed, and if one is completed, that it will be on terms which
are beneficial to shareholders or alleviate the substantial doubt about the Company’s ability to continue as a going concern
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 is material to investors.
ITEM
4. CONTROLS AND PROCEDURES
Evaluation
of Disclosure Controls and Procedures
Under
the supervision and with the participation of our management, including our principal executive officer and principal financial
officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and
Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (Exchange Act), as of March 31, 2017. Based on
this evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and
procedures are not effective to ensure that information required to be disclosed by us in the reports we file or submit under
the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange
Commission’s rules and forms and that our disclosure and controls are not designed to ensure that information required to
be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management,
including our principal executive officer and principal financial officer, or persons performing similar functions, as appropriate
to allow timely decisions regarding required disclosure.
The
matters involving internal controls and procedures that our management considered to be material weaknesses under the standards
of the Public Company Accounting Oversight Board were: (1) lack of a functioning audit committee, resulting in ineffective oversight
in the establishment and monitoring of required internal controls and procedures; (2) inadequate segregation of duties consistent
with control objectives; and (3) ineffective controls over period end financial disclosure and reporting processes.
Management
believes that the material weaknesses set forth in items (2) and (3) above did not have an effect on our financial results. However,
management believes that the lack of a functioning audit committee and the lack of a majority of outside directors on our board
of directors results in ineffective oversight in the establishment and monitoring of required internal controls and procedures,
which could result in a material misstatement in our financial statements in future periods.
Changes
in Internal Control Over Financial Reporting
There
were no changes (including corrective actions with regard to significant deficiencies or material weaknesses) in our internal
controls over financial reporting that occurred during the third quarter of fiscal 2015 that has materially affected, or is reasonably
likely to materially affect, our internal control over financial reporting.