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 2020.
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 September 30, 2021 Compared to September 30, 2020
The
following table summarizes the results of our operations during the three months ended September 30, 2021 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
|
|
9/30/2021
(unaudited)
|
|
|
9/30/2020
(unaudited)
|
|
|
Increase/
(Decrease)
|
|
|
Percentage
Increase (Decrease)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Operating
expenses
|
|
|
4,221
|
|
|
|
15,226
|
|
|
|
(11,005
|
)
|
|
|
(72,28
|
)%
|
|
Net
loss
|
|
|
(15,883
|
)
|
|
|
(26,080
|
)
|
|
|
(10,197
|
)
|
|
|
(39,10
|
)%
|
|
Loss
per share of common stock
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
|
0.00
|
|
|
|
n/a
|
|
We
recorded a net loss of $15,883 for the three months ended September 30, 2021 as compared with a net loss of $26,080 for the three months
ended September 30, 2020. The principal reason for the reduction in loss was the elimination of the Fountainhead Capital Management Limited
advisory fee effective as of June 30, 2021.
Nine
Months Ended September 30, 2021 Compared to September 30, 2020
The
following table summarizes the results of our operations during the nine months ended September 30, 2021 and provides information regarding
the dollar and percentage increase or (decrease) from the current 9-month period to the prior 9-month period:
|
Line
Item
|
|
9/30/2021
(unaudited)
|
|
9/30/2020
(unaudited)
|
|
Increase/
(Decrease)
|
|
Percentage
Increase (Decrease)
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Operating
expenses
|
|
|
32,133
|
|
|
|
42,995
|
|
|
|
(10,862
|
)
|
|
|
(25.26
|
)%
|
|
Net
loss
|
|
|
(66,367
|
)
|
|
|
(74,817
|
)
|
|
|
(8,450
|
)
|
|
|
(11.29
|
)%
|
|
Loss
per share of common stock
|
|
$
|
(0.01
|
)
|
|
$
|
(0.01
|
)
|
|
|
0.00
|
|
|
|
n/a.
|
|
We
recorded a net loss of $66,367 for the nine months ended September 30, 2021 as compared with a net loss of $74,817 for the nine months
ended September 30, 2020. The principal reason for the reduction in loss was the elimination of the Fountainhead Capital Management Limited
advisory fee effective as of June 30, 2021.
Liquidity
and Capital Resources
We
had $-0- cash on hand at September 30, 2021 and had no other assets to meet ongoing expenses or debts that may accumulate. Since inception,
we have accumulated a deficit of $1,184,862. As of September 30, 2021, we had total liabilities and a negative working capital of $1,135,062.
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, 2021. 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.
Going
Concern
The
accompanying financial statements have been prepared assuming that the Company will continue as a going concern. We had $1,135,062 negative
working capital as of September 30, 2021; we had an accumulated deficit of $1,184,862 incurred through September 30, 2021 and recorded
a loss of $66,367 for the first nine months of 2021 and a loss of $110,120 from operations for the fiscal year ended December 31, 2020.
These factors, among others, raise substantial doubt regarding the Company’s ability to continue as a going concern. The continuation
of the Company as a going concern is dependent upon the continued financial support from its shareholders or the ability of the Company
to obtain necessary equity financing to continue operations. 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. The Company’s plan to alleviate
the going concern issue is to continue to seek out a merger partner which has the financial resources to address the going concern issue.
In
December 2019, an outbreak of a novel strain of coronavirus (COVID-19) originated in Wuhan, China, and has since spread to a number of
other countries, including the United States. On March 11, 2020, the World Health Organization characterized COVID-19 as a pandemic.
In addition, as of the time of the filing of this Quarterly Report on Form 10-Q, several states in the United States and elsewhere have
declared states of emergency, and several countries around the world, including the United States, have taken steps to restrict travel.
While the Company presently has no ongoing operations or employees, this situation could limit the market for a merger partner for a
strategic business combination. Any of these uncertainties could have a material adverse effect on the business, financial condition
or results of operations.
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 September 30, 2021. 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 2021 that has materially affected, or is reasonably likely
to materially affect, our internal control over financial reporting.