ACRO BIOMEDICAL CO., LTD. The following discussion and analysis of financial condition and results of operations should be read in conjunction with our financial statements and related notes included elsewhere in this report. This discussion contains forward-looking statements that involve risks, uncertainties and assumptions. See "Note Regarding Forward-Looking Statements." Our actual results could differ materially from those anticipated in the forward-looking statements as a result of certain factors discussed in "Risk Factors" and elsewhere in this report.
Overview
Since
Since the
Although our business plan initially contemplated that we would conduct research and development on our own proprietary products based on cordyceps sinensis, to date we have neither commenced such activities nor take any preliminary steps with respect to such activities. We do not presently have the funds necessary for us to engage in such activities, and we cannot assure you that we will be able to commence any research and development activities or that any such activities that we may undertake will be successful.
We require funds for our operations. At
Results of Operations
Three Months Ended
Our revenue for three months ended
Our operating expenses, consisting of selling, general and administrative
expenses, for the three months ended
The Company imputed interest at the rate of 4% on the advances made to the
Company by stockholders in the amount of
As a result of the foregoing, we had a net loss of
Years ended
Our revenue for the year ended
Our operating expenses, consisting of selling, general and administrative
expenses, for the year ended
The Company imputed interest at the rate of 4% on the advances made to the
Company by stockholders in the amount of
As a result of the foregoing, we had a net loss of
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Liquidity and Capital Resources
The following table sets forth information relating to our working capital at
December 30, September 30,
2019 2019 Change
Current assets $ 879,471 $ 1,069,464 $ (189,993 )
Current liabilities $ 111,541 $ 195,792 $ (84,251 )
Working capital $ 767,930 $ 873,672 $ (105,742 )
The following is a summary of the statements of cash flows for the three months
ended December 31, 2019 and 2018 and the years ended September 30, 2019 and
2018:
Three Months Ended Year Ended
December31, September 30,
2019 2018 2019 2018
Cash provided by (used in) operating
activities $ 34,928 $ 174,329 $ 79,692 $ (140,419 )
Cash provided by investing activities 0 0 0 0
Cash provided by financing activities (35,489 ) (137,870 ) (79,368 ) 104,757 Cash and cash equivalents end of period
911 37,607 1,472 1,148
Cash provided by operating activities for the three months ended
cash provided by operating activities for the year ended
Cash used in financing activities of
Cash used in financing activities reflects advances from elated parties of
We had no cash flow from investing activities for the three months ended
For the three months ended
Going Concern
Our financial statements have been prepared assuming that we will continue as a
going concern, which contemplates the realization of assets and the liquidation
of liabilities in the normal course of business. At
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Critical Accounting Policies and Estimates
Use of Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in
Cash and Cash Equivalents
Cash and cash equivalents include cash in banks, money market funds, and certificates of term deposits with maturities of less than three months from inception, which are readily convertible to known amounts of cash and which, in the opinion of management, are subject to an insignificant risk of loss in value.
Inventories
Inventories consist primarily of finished goods. Inventories are valued at the
lower of cost or net realizable value. We determine cost on the basis of
first-in, first-out methods. We periodically review inventories for obsolescence
and any inventories identified as obsolete are written down or written off.
Although we believe that the assumptions we use to estimate inventory
write-downs are reasonable, future changes in these assumptions could provide a
significantly different result. No inventory markdown was recorded for the three
months ended
Net Income (Loss) Per Share of Common Stock
We adopted ASC Topic 260, "Earnings per Share" which requires presentation of
basic earnings per share on the face of the statements of operations for all
entities with complex capital structures and requires a reconciliation of the
numerator and denominator of the basic earnings per share computation. Basic
loss per share is computed by dividing net loss by the weighted average number
of shares of common stock outstanding during the year. Diluted earnings per
share is computed by dividing net income by the weighted average number of
shares of common stock and potentially dilutive outstanding shares of common
stock during the period to reflect the potential dilution that could occur from
common shares issuable through contingent share arrangements, stock options and
warrants unless the result would be antidilutive. There were no potentially
dilutive shares of common stock outstanding for the three months ended
Concentrations of Credit Risk
Our financial instruments that are exposed to concentrations of credit risk primarily consist of its cash and cash equivalents and related party payables that we will likely incur in the near future. We place our cash and cash equivalents with financial institutions of high credit worthiness. At times, our cash and cash equivalents with a particular financial institution may exceed any applicable government insurance limits.
Stock-Based Compensation
We recognize compensation expense for stock-based compensation in accordance with ASC Topic 718. For employee and non-employee stock-based awards, we calculate the fair value of the award on the date of grant using the option-pricing model for stock options and the quoted price of its common stock for unrestricted shares; the expense is recognized over the service period for awards expected to vest. We consider many factors when estimating expected forfeitures, including types of awards, employee class and historical experience.
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Income Taxes
We use the liability method of accounting for income taxes. Under the liability method, deferred tax assets and liabilities are determined based on differences between financial reporting and the tax basis of assets, liabilities, the carry forward of operating losses and tax credits, and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. An allowance against deferred tax assets is recorded when it is more likely than not that such tax benefits will not be realized.
Related Parties
We follow ASC 850, "Related Party Disclosures," for the identification of related parties and disclosure of related party transactions.
Revenue Recognition
We recognize revenue in accordance with Topic 606, which requires revenues are recognized when control of the promised goods or services are transferred to a customer, in an amount that reflects the consideration that we expect to receive in exchange for those goods or services. We apply the following five steps in order to determine the appropriate amount of revenue to be recognized as we fulfill our obligations under each of its agreements:
• identify the contract with a customer;
• identify the performance obligations in the contract;
• determine the transaction price;
• allocate the transaction price to performance obligations in the contract;
and
• recognize revenue as the performance obligation is satisfied.
We recognize revenue when products are delivered to customers in accordance with the written sales terms.
Recent Accounting Pronouncements
We have reviewed all recently issued, but not yet effective, accounting pronouncements and do not believe the future adoption of any such pronouncements may be expected to cause a material impact on our financial statements.
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