Item 2.
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Management's Discussion and Analysis of
Financial Condition and Results of Operations
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FORWARD-LOOKING STATEMENTS
This quarterly report contains forward-looking statements.
These statements relate to future events or our future financial performance. In
some cases, you can identify forward-looking statements by terminology such as
may, should, expects, plans, anticipates, believes, estimates,
predicts, potential or continue or the negative of these terms or other
comparable terminology. These statements are only predictions and involve known
and unknown risks, uncertainties and other factors that may cause our or our
industry's actual results, levels of activity, performance or achievements to be
materially different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking statements. Although
we believe that the expectations reflected in the forward- looking statements
are reasonable, we cannot guarantee future results, levels of activity,
performance or achievements. Except as required by applicable law, including the
securities laws of the United States, we do not intend to update any of the
forward-looking statements to conform these statements to actual results.
Our unaudited financial statements are stated in United States
Dollars (US$) and are prepared in accordance with United States Generally
Accepted Accounting Principles. The following discussion should be read in
conjunction with our financial statements and the related notes that appear
elsewhere in this quarterly report. The following discussion contains
forward-looking statements that reflect our plans, estimates and beliefs. Our
actual results could differ materially from those discussed in the
forward-looking statements. Factors that could cause or contribute to such
differences include, but are not limited to, those discussed below and elsewhere
in this quarterly report.
Unless otherwise specified in this quarterly report, all dollar
amounts are expressed in United States dollars and all references to common
stock refer to shares of our common stock.
As used in this quarterly report, the terms we, us, our
and our company mean Asian Development Frontier Inc., unless otherwise
indicated. We have no subsidiaries.
Corporate Overview
We were incorporated in the State of Nevada on February 2,
2005. Our original business plan was to develop fuel cell technology and produce
fuel cells in China for indoor forklifts, scooters, underwater equipment (e.g.
shallow underwater sightseeing submarines) that require a small size, longevity
of use and silent operation. During fiscal 2008 we suspended the development of
our products and business plan until we were able to raise sufficient additional
financing.
Since the suspension of our original business plan, our
management has been analyzing various alternatives available to our company to
ensure our survival and to preserve our shareholders' investment in our common
shares.
On July 31, 2012, we filed Articles of Merger with the Nevada
Secretary of State to change the name of the company from Intervia Inc. to
Blue Sky Petroleum Inc., by way of a merger with our wholly-owned subsidiary
Blue Sky Petroleum Inc., which was created solely for the name change.
Also on July 31, 2012, we filed a Certificate of Change with
the Nevada Secretary of State to give effect to a forward split of our
authorized and issued and outstanding shares of common stock on a 3 new for 1
old basis and, consequently, our authorized capital increased from 75,000,000 to
225,000,000 shares and correspondingly, our issued and outstanding shares of
common stock increased from 15,740,000 to 47,220,000 shares of common stock, all
with a par value of $0.001. These amendments became effective on August 7, 2012
upon approval from the Financial Industry Regulatory Authority (FINRA).
5
Effective September 19, 2012, our stock symbol changed from
ITVA to BSKY to better reflect the new name of our company. The symbol
change became effective with the OTC Markets at the opening of trading on
September 19, 2012.
On June 10, 2015, our board of directors approved an agreement
and plan of merger to merge with our wholly-owned subsidiary Asian Development
Frontier Inc., a Nevada corporation, to effect a name change from Blue Sky
Petroleum Inc. to Asian Development Frontier Inc. Asian Development Frontier
Inc. was formed solely for the change of name.
Articles of Merger to effect the merger and change of name were
filed and became effective with the Nevada Secretary of State on July 9, 2015.
The name change became effective with the OTC Markets at the opening of trading
on July 9, 2015 under the symbol "ADFI". Our CUSIP number is 04521W101.
On September 21, 2017, Unifunds Limited, a Hong Kong
corporation, acquired an aggregate of 55,000,000 issued and outstanding common
shares of the Company. The shares were acquired in private transactions, in
equal part from each of Jin Han Alvin Lee, our former president, secretary,
chief executive officer, chief financial officer, treasurer and director, and
Kok Seong Lim, our former director. The purchase price, which was paid with
personal funds of the purchaser, was $0.06218 per share or $3,420,000 in the
aggregate.
The 55,000,000 common shares constitute approximately 57.7% of
our issued and outstanding voting securities as at the date of this report.
Shirley Van Kerkhove has sole voting and dispositive control over securities
held by UniFunds Limited. There are no arrangements or understandings among
UniFunds Limited, Jin Han Alvin Lee, or Kok Seong Lim or their respective
associates with respect to the election of directors or other matters pertaining
to the Company.
On October 17, 2017, our board of directors approved an
agreement and plan of merger to merge with our wholly-owned subsidiary Unifunds
Limited (a Nevada corporation, incorporated on October 19, 2017), for the sole
purpose of effecting a name change from Asian Development Frontier Inc. to
Unifunds Limited. Our company remained the surviving company. Completion of the
merger and name change became effective on March 23, 2018 following approval of
the Financial Industry Regulatory Authority. On March 23, 2018 we adopted the
new trading symbol UIFD, and new CUSIP number 90775A101
The address of our principal executive office is 65/10-12 Floor
1, Chamnan Phenjati Business Center Building. Rama IX Rd, Huai Khwang, Bangkok,
Thailand. Our telephone number is 852-2626 9975.
Our Current Business
During our last two fiscal years, we have been a company with
no operations.
Research and Development
We do not currently have a formal research and development
effort. We did not spend any funds on research and development during the last
two fiscal years.
Purchase of Significant Equipment
We do not intend to purchase any significant equipment over the
twelve months ending July 31, 2019.
6
Competition
Currently our company has no operations. We are engaged in the
evaluation of potential opportunities to develop our business through merger,
acquisition or joint venture, with a view to increasing shareholder value. In
that regard we may compete with other private or public companies for business
opportunities and financing. Many of the companies with whom we may compete have
greater financial and technical resources than those available to us.
Accordingly, these competitors may be able to spend greater amounts on the
identification, evaluation, acquisitions and development of assets or
opportunities of merit. In addition, they may be able to afford management and
other expertise greater than our own. This competition could adversely impact on
our ability to re-establish operation, and to achieve the financing necessary
for us to develop any assets or interests we may acquire.
Compliance with Government Regulation
We are committed to complying with and are, to our knowledge,
in compliance with, all governmental and environmental regulations applicable to
our company and any future properties. Permits from a variety of regulatory
authorities are required for many aspects of mine operation and reclamation. We
cannot predict the extent to which these requirements will affect our company or
any future properties if we identify the existence of minerals in commercially
exploitable quantities. In addition, future legislation and regulation could
cause additional expense, capital expenditure, restrictions and delays in the
exploration of any future properties.
Subsidiaries
We do not have any subsidiaries.
Employees
Currently, we do not have any employees. Additionally, we have
not entered into any consulting or employment agreements with our president,
chief executive officer, treasurer, secretary or chief financial officer. Our
directors, executive officers and certain contracted individuals play an
important role in the running of our company. We do not expect any material
changes in the number of employees over the next 12 month period. We do and
will continue to outsource contract employment as needed.
We engage contractors from time to time to consult with us on
specific corporate affairs or to perform specific tasks in connection with our
programs.
Plan of Operation
You should read the following discussion of our financial
condition and results of operations together with our unaudited financial
statements and the notes to those unaudited financial statements included
elsewhere in this filing prepared in accordance with accounting principles
generally accepted in the United States. This discussion contains
forward-looking statements that reflect our plans, estimates and beliefs. Our
actual results could differ materially from those anticipated in these
forward-looking statements.
Anticipated Cash Requirements
Based on our net loss of $17,662 incurred during the three
months period ended July 31, 2018, our monthly usage rate is approximately
$3,800. We estimate our operating expenses and working capital requirements for
the twelve month period beginning May 1, 2018 to be as follows:
Estimated Expenses For the Twelve Month Period ending
July 31, 2019
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Professional fees
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$
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60,000
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General and administrative
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$
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150,000
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Total
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$
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210,000
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We had $Nil in cash as of July 31, 2018, and a working capital
deficit of $389,558. Until we complete another transaction, acquisition or
business combination, our cash requirements will be in regards to maintaining
our corporate existence, and ensuring compliance with our Securities and
Exchange Commission continuous disclosure obligations, including our financial
reporting requirements. In addition, we will require additional capital in order
to investigate and conclude any future transaction, acquisition or business
combination. In order to improve our liquidity, we plan to pursue additional
equity financing from private investors or possibly a registered public
offering. We do not currently have any definitive arrangements in place for the
completion of any further private placement financings and there is no assurance
that we will be successful in completing any further private placement
financings. If we are unable to achieve the necessary additional financing, then
we plan to reduce the amounts that we spend on our business activities and
administrative expenses in order to be within the amount of capital resources
that are available to us.
Results of Operations
Three and six months ended July 31, 2018 compared to three
and six months ended July 31, 2017.
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Three months
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Three months
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Six months
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Six months
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ended
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ended
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ended
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ended
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July 31, 2018
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July 31, 2017
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July 31, 2018
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July 31, 2017
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Revenue
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Nil
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Nil
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Nil
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Nil
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Operating Expenses
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$
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17,662
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$
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29,179
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$
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28,872
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$
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39,374
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Net Loss
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$
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(17,662
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)
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$
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(29,179
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)
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$
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(28,872
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)
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$
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(39,374
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)
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7
Expenses
Our operating expenses for the three and six month periods
ended July 31, 2018 and July 31, 2017 are outlined in the table below:
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Three months
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Three months
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Six months
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Six months
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ended
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ended
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ended
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ended
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July 31,
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July 31,
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July 31,
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July 31,
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2018
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2017
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2018
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2017
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Professional fees
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$
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13,102
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$
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11,871
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$
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17,402
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$
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13,735
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General and administrative
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$
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4,560
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$
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17,308
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$
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11,470
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$
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25,639
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Operating expenses for the three months ended July 31, 2018
decreased by 39.5% as compared to the comparative period for July 31, 2017
primarily as a result of a decrease in general and administrative expenses.
Operating expenses for the six months ended July 31, 2018 decreased by 26.7% as
compared to the comparative period for July 31, 2017 primarily as a result of a
decrease in general and administrative expenses.
8
Revenue
We have not had any revenues from operations since inception
(February 2, 2005). We do not anticipate that we will earn any revenues from
operations unless and until we acquire and operate a profitable business. This
might never happen and we can offer no assurance that even if we acquire a
business that we will ever be profitable.
Liquidity and Capital Resources
Working Capital
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As at
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As at
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Percentage
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July 31,
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January 31,
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Increase/
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2018
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2018
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(Decrease)
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Current Assets
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$
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1,666
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$
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6,666
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(75.00%
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)
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Current Liabilities
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$
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391,224
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$
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362,100
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8.04%
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Working Capital (deficiency)
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$
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(389,558
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)
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$
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(360,686
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)
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8.00%
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Cash Flows
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Six months Ended
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Six months Ended
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July 31,
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July 31,
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2018
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2017
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Net cash used in operating
activities
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$
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Nil
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$
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Nil
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Net cash provided by financing activities
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$
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Nil
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$
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Nil
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Net cash used in investing
activities
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$
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Nil
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$
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Nil
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Net increase (decrease) in cash
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$
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Nil
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$
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Nil
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Operating Activities
We did not use any cash for operating activities for the three
months ended July 31, 2018 or for the three months ended July 31, 2017.
Financing Activities
We did not receive any cash from financing activities for the
three months ended July 31, 2018 or for the three months ended July 31, 2017.
We have suffered recurring losses from operations. The
continuation of our company is dependent upon our company attaining and
maintaining profitable operations and raising additional capital as needed.
Future Financings
We will require additional funds to implement our growth
strategy in our new business. These funds may be raised through equity
financing, debt financing, or other sources, which may result in further
dilution in the equity ownership of our shares.
There can be no assurance that additional financing will be
available to us when needed or, if available, that it can be obtained on
commercially reasonable terms. If we are not able to obtain the additional
financing on a timely basis should it be required, or generate significant
material revenues from operations, we will not be able to meet our other
obligations as they become due and we will be forced to scale down or perhaps
even cease our operations.
9
Off-Balance Sheet Arrangements
We have no 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
stockholders.
Critical Accounting Policies
The discussion and analysis of our financial condition and
results of operations are based upon our financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States of America. Preparing financial statements requires management to
make estimates and assumptions that affect the reported amounts of assets,
liabilities, revenue, and expenses. These estimates and assumptions are affected
by managements application of accounting policies. We believe that
understanding the basis and nature of the estimates and assumptions involved
with the following aspects of our financial statements is critical to an
understanding of our financial statements.
The accompanying unaudited interim financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and the rules and regulations of the Securities
and Exchange Commission. They do not include all information and footnotes
required by United States generally accepted accounting principles for complete
financial statements. However, except as disclosed herein, there have been no
material changes in the information disclosed in the notes to the financial
statements for the year ended January 31, 2018 included in our companys Form
10-K filed with the Securities and Exchange Commission. The unaudited interim
financial statements should be read in conjunction with those financial
statements included in the Form 10-K. In the opinion of management, all
adjustments considered necessary for a fair presentation, consisting solely of
normal recurring adjustments, have been made. Operating results for the three
and six months ended July 31, 2018 are not necessarily indicative of the results
that may be expected for the full year.