You should read the following discussion of our results of operations and
financial condition with the audited financial statements and related notes
included elsewhere in this report. The following discussion contains
forward-looking statements that reflect our plans, estimates and beliefs, and
that involve numerous risks and uncertainties, including, but not limited to,
those described in the "Risk Factors" section of this report. Actual results may
differ materially from those contained in any forward-looking statements. See
"Cautionary Statement Concerning Forward-Looking Statements."
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Plan of Operation
The Company is focused on new investment opportunities which lie in the real
estate sector with primary focus on distressed real estate assets and/or
alternative real estate developments as well as other technologies in the
biotech sector.
Results of Operations
For the Years Ended September 30, 2019 and 2018
Revenues
The Company had no revenue for the years ended September 30, 2019 and 2018.
Operating Expenses
For the year ended September 30, 2019, general and administrative expenses were
$260,409 compared to $386,000 for the same period in the prior year. The
decrease in the current year was due to lower consulting fee of $99,200 and no
stock-based compensation in the current year compared to $55,250 recorded in the
previous year offset by increased payroll expense of $35,300. Professional fees
for the year ended September 30, 2019 were $82,781 compared to $46,750 for the
same period in the prior year. The increased fees were due to accrued
accounting fees recorded in the amount of $49,281 relative to a legal complaint
filed by Raich Ende Malter & Co. LLP, a former accounting firm.
Other Income (Expense)
For the year ended September 30, 2019 we incurred $43,845 of interest expense
compared to $20,050 for the same period in the prior year. We earned $11,557 of
interest income for the year ended September 30, 2019 compared to $15,539 for
the same period in the prior year. During the year ended September 30, 2018, the
Company recognized a loss of $15,504 due to non-recoverable investments. Our net
loss to our shareholders for the year ended September 30, 2019 was $375,478
compared to $452,765 for the same period in the prior year.
Liquidity and Capital Resources
At September 30, 2019, we had cash of $3,218 and a deficit in working capital of
$847,276 compared to cash of $5,620 and a working capital deficit of $614,216 at
September 30, 2018. We used cash in operating activities of $306,748 and
$121,776 for the years ended September 30, 2019 and 2018, respectively. The
principal elements of cash flow used in operations for the year ended September
30, 2019 included a net loss of $375,478, decrease in accounts payable of
$20,327, increase in accrued expenses of $46,582 and an increase in interest
payable of $36,789. The principal elements of cash flow used in operations for
the year ended September 30, 2018 included a net loss of $452,765, $55,250 of
stock-based compensation, a loss due to uncollectability $15,504, increase in
accounts payable of $221,631.
For the year ended September 30, 2018, the Company received a repayment of
commercial paper in the amount of $100,000.
Cash generated in our financing activities was $304,346 and $17,000 for the
years ended September 30, 2019 and 2018, respectively. Financing activities for
the year ended September 30, 2019 included proceeds of $166,961 from a line of
credit and $137,385 of accounts payable converted to the line of credit.
We do not have sufficient resources to effectuate our business. As of September
30, 2019, we had cash of $3,218.
We will have to raise funds to pay for our expenses. We may have to borrow money
from shareholders or issue debt or equity or enter into a strategic arrangement
with a third party. There can be no assurance that additional capital will be
available to us. We currently have no arrangements or understandings with any
person to obtain funds through bank loans, lines of credit or any other sources.
Since we have no such arrangements or plans currently in effect, our inability
to raise funds for our operations will have a severe negative impact on our
ability to remain a viable company.
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Going Concern
Our independent auditors included an explanatory paragraph in their report on
the accompanying financial statements regarding concerns about our ability to
continue as a going concern. Our financial statements contain additional note
disclosures describing the circumstances that lead to this disclosure by our
independent auditors.
The accompanying financial statements have been prepared on a going concern
basis, which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business. The Company has incurred a net
loss of $375,478 for the year ended September 30, 2019, had an accumulated
deficit of $2,203,543, and has a stockholders' deficit of $984,662 at September
30, 2019. These factors raise substantial doubt about the ability of the Company
to continue as a going concern for a reasonable period of time. The Company is
highly dependent on its ability to continue to obtain investment capital and
loans from an affiliate and shareholder in order to fund the current and planned
operating levels. The financial statements do not include any adjustments
relating to the recoverability and classification of recorded asset amounts or
the amounts and classification of liabilities that might be necessary should the
Company be unable to continue as a going concern. The Company's continuation as
a going concern is dependent upon its ability to bring in income generating
activities and its ability to continue receiving investment capital and loans
from an affiliate and shareholder to sustain its current level of operations. No
assurance can be given that the Company will be successful in these efforts.
Critical Accounting Policies and Estimates
Our significant accounting policies are described in Note 2 of the audited
financial statements included elsewhere in this report. The preparation of the
financial statements in accordance with U.S. GAAP requires management to make
significant judgments and estimates. Some accounting policies have a significant
impact on amounts reported in these financial statements. Our financial position
and results of operations may be materially different when reported under
different conditions or when using different assumptions in the application of
such policies. In the event estimates or assumptions prove to be different from
actual amounts, adjustments are made in subsequent periods to reflect more
current information. Significant accounting policies, including areas of
critical management judgments and estimates, include the following:
Impairment or Disposal of Long-Lived Assets
The Company accounts for the impairment or disposal of long-lived assets
according to the Financial Accounting Standards Board's ("FASB") Accounting
Standards Codification ("ASC") 360 "Property, Plant and Equipment". ASC 360
clarifies the accounting for the impairment of long-lived assets and for
long-lived assets to be disposed of, including the disposal of business segments
and major lines of business. Long-lived assets are reviewed when facts and
circumstances indicate that the carrying value of the asset may not be
recoverable. When necessary, impaired assets are written down to estimated fair
value based on the best information available. Estimated fair value is generally
based on either appraised value or measured by discounting estimated future cash
flows. Considerable management judgment is necessary to estimate discounted
future cash flows. Accordingly, actual results could vary significantly from
such estimates.
Stock Based Compensation
The Company accounts for Stock-Based Compensation under ASC Topic 718-10 ("ASC
718-10"), which addresses the accounting for transactions in which an entity
exchanges its equity instruments for goods or services, with a primary focus on
transactions in which an entity obtains employee services in share-based payment
transactions. ASC 718-10 is a revision to SFAS No. 123, "Accounting for
Stock-Based Compensation," and supersedes Accounting Principles Board ("APB")
Opinion No. 25, "Accounting for Stock Issued to Employees," and its related
implementation guidance. ASC 718-10 requires measurement of the cost of employee
services received in exchange for an award of equity instruments based on the
grant-date fair value of the award (with limited exceptions). Incremental
compensation costs arising from subsequent modifications of awards after the
grant date must be recognized. The Company has not adopted a stock option plan
and has not granted any stock options.
Off-Balance Sheet Arrangements
We currently have no off-balance sheet arrangements that have or are reasonably
likely to have a current or future material effect on our financial condition,
changes in financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources.
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