Forward Looking Statements
This report and other reports filed by our Company from time to time with the
United States Securities and Exchange Commission (collectively the "Filings")
contain or may contain forward-looking statements and information that are based
upon beliefs of, and information currently available to, our management as well
as estimates and assumptions made by our management. Readers are cautioned not
to place undue reliance on these forward-looking statements, which are only
predictions and speak only as of the date hereof. When used in the filings, the
words "anticipate," "believe," "estimate," "expect," "future," "intend," "plan,"
or the negative of these terms and similar expressions as they relate to us or
our management identify forward-looking statements. Such statements reflect our
current view with respect to future events and are subject to risks,
uncertainties, assumptions, and other factors, including those set forth in the
Risk Factors on page 7. Should one or more of these risks or uncertainties
materialize, or should the underlying assumptions prove incorrect, actual
results may differ significantly from those anticipated, believed, estimated,
expected, intended, or planned.
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 financial statements are prepared in accordance with accounting principles
generally accepted in the United States ("GAAP"). These accounting principles
require us to make certain estimates, judgments and assumptions. We believe that
the estimates, judgments and assumptions upon which we rely are reasonable based
upon information available to us at the time that these estimates, judgments and
assumptions are made. These estimates, judgments and assumptions can affect the
reported amounts of assets and liabilities as of the date of the financial
statements as well as the reported amounts of revenues and expenses during the
periods presented. Our financial statements would be affected to the extent
there are material differences between these estimates and actual results. In
many cases, the accounting treatment of a particular transaction is specifically
dictated by GAAP and does not require management's judgment in its application.
There are also areas in which management's judgment in selecting any available
alternative would not produce a materially different result. The following
discussion should be read in conjunction with our consolidated financial
statements and notes thereto appearing elsewhere in this report.
Please note the consolidated financial statements for the fiscal years ending
December 31, 2019 and 2018 have been prepared assuming that the Company will
continue as a going concern. As shown in the consolidated financial statements
the Company had a working capital deficiency of $662,360 as well as an
accumulated deficit of $2,248,142. These factors, among other things discussed
in Note 2 to the consolidated financial statements, raise substantial doubt
about its ability to continue as a going concern. The consolidated financial
statements do not include any adjustments relating to the recoverability and
classification of recorded asset amounts or the amounts or classification of
liabilities that might be necessary should the Company be unable to continue in
operation.
Company Overview
The Company was organized on December 1, 1997. Its operations to date have been
limited to obtaining the license to various environmental and other
technologies, conducting preliminary marketing efforts and seeking financing.
9
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (continued)
Plan of Operations
The Company is a development stage corporation. It has not commenced its planned
operations of manufacturing and marketing. Its operations to date have been
limited to conducting various tests on its technologies and seeking financing.
The Company will continue to investigate and develop technologies, which the
Company believes have great market potential. The first technology is an
automated personal waste collection and cleaning machine Haruka (formerly
"Heartlet"), developed by Nanomax Corporation in Japan. The Haruka is a machine
used in retirement homes, hospitals, and even in private residences. The Haruka
allows the patient maximum comfort. The Haruka lowers the burden on the
caretaker with an automated cleaning system. This machine is the only machine in
its class to have a 90% government rebate, which the company believes makes the
technology, extremely competitive even in the current global economic crisis.
The company obtained sales and manufacturing rights to the Haruka brand and is
now seeking, manufacturing partners.
The second technology is Thoughts Routine Mechanism ("RUNE") developed by the
Company. We plan to develop this operating software to be used on electronic
devices, such as smart phones, PC's and gaming machines. We have secured
technology and human resources that extend this technology to other applications
outside the gaming sector. The Company has developed an alliance with Valhalla
Game Studios ("VGS") to jointly conduct game development and application
development on "fate diagnosis based statistical theory, and "fate diagnosis"
game service on mobile phones, smart phones, and tablets. We believe the
collaboration between the Company and VGS may contribute to the future growth of
the Company. Currently, Mr. Maki offers a wide range of advice as a special
advisor, and this business continues to be evaluated and developed. In addition,
cartoons, movies and games play a large role and influence world views and we
believe that this technology be a very effective tool in this area.
The Company will also be concentrating its efforts on capital raising efforts to
fund the development and marketing of these technologies.
As stated above, the Company cannot predict whether or not it will be successful
in its capital raising efforts and, thus, be able to satisfy its cash
requirements for the next 12 months. If the Company is unsuccessful in raising
at least $150,000, it may not be able to complete its plan of expanding
operations as discussed above.
The company is expecting to gain the capital from issuing and selling the shares
of the Company. The Company has been able to fund its existing operations from
the proceeds of loans from a shareholder.
Results of Operations
General and administrative expenses decreased $5,370 (7.5%) for the year ended
December 31, 2019 to $66,293 as compared to $71,663 for the year ended December
31, 2018 primarily as a result of lower travel and automobile expenses as well
as lower professional fees.
Interest expense increased $1,490 (10.8%) to $15,283 for the year ended December
31, 2019 as compared to $13,793 for the year ended December 31, 2018.
As a result of the above, the Company incurred a net loss of $81,576 for the
year ended December 31, 2019 as compared to a net loss of $85,456 for the year
ended December 31, 2018.
10
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (continued)
Liquidity and Capital Resources
Total assets as of December 31, 2019 were $33,299, compared to $1,544 as of
December 31, 2018. Total liabilities as of December 31, 2019 were $681,594
compared to $568,263 at December 31, 2018. The increase is primarily due to
operating lease liabilities, advances from stockholders and officers, accrued
interest and accrued expenses due to stockholders and officers of the Company.
The Company intends to raise additional funds in the near future through private
placements of its common stock. The Company received $50,000 for stock sales in
2013. During 2015, the Company received $61,030 for a deposit for the purchase
of common stock, this amount is classified as a current liability in the
accompanying balance sheets as of December 31, 2019 and 2018. The proceeds from
such private placements were allocated for administrative salaries, office
expenses and travel, product development and testing.
The Company's minimum cash requirements for the next twelve months are estimated
to be $50,000. This amount is primarily for rent, interest and professional
fees. The Company does not have sufficient cash on hand to support its overhead
for the next twelve months and there are no material commitments for capital at
this time other than as described above. The Company will need to issue and sell
shares to gain capital for operations or arrange for additional shareholder or
related party loans. There is no current commitment for either of these fund
sources.
During the year ended December 31, 2019, the Company had a net increase in cash
of $6,671. The Company's principal sources and uses of funds were as follows:
Cash used in operating activities. For the year ended December 31, 2019, the
Company used $62,571 in cash for operations as compared to $47,288 in cash for
the year ended December 31, 2018. This increase in cash used in operations is
primarily attributed to the change in accrued expenses.
Cash provided by financing activities. Net cash provided by financing activities
for the year ended December 31, 2019 was $69,242 as compared to $43,818 for the
year ended December 31, 2018. This increase is primarily the result of the
increase in advances from stockholders.
Off-Balance Sheet Arrangements
The Company has no off-balance sheet arrangements.
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