CARO HOLDINGS INC. 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 ofthe 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 prepared in accordance withUnited 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. In this quarterly report, unless otherwise specified, all dollar amounts are expressed inUnited States dollars and all references to "common shares" refer to the common shares in our capital stock.
As used in this quarterly report, the terms "we", "us", "our" and "our company"
mean
General Overview
Our company was incorporated on
We are engaged in the subscription box business with our initial focus on offering sock subscriptions to our customers. Our subscription box will be a package of a pair of socks that will be sent directly to a customer on a recurring basis. For example, a potential subscriber will subscribe to receive a pair of socks once a month for either a period of 6 months or 12 months. Our subscription sock boxes are a marketing strategy and a method of product distribution, allowing us to target a wide range of customers and cater to their variety of specific needs and interests. We are a small early stage company. To date, our company's activities have been limited to the sourcing of our advertising channels, initial branding efforts, and in our formation and the raising of equity capital. We have no revenues for the reporting period and have limited cash on hand. We have sustained losses since inception and have relied upon loans from directors and officers and the sale of our securities for funding. We have never declared bankruptcy, been in receivership, or involved in any kind of legal proceeding. Our business and corporate address is 28thFloor Cityland Pasong Tamo Tower U2807,2210 Chino Roces Avenue (Pasong Tamo ),Makati City, Philippines 1230. Our telephone number is +632 893-0909 and our registered agent for service of process isResident Agents of Nevada Inc. 711 S Carson Street , Suite 4,Carson City, NV , 89701. Our corporate website is http://www.caroholdings.com/.
We do not have any subsidiaries.
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Our Current Business
We are engaged in the subscription box business with our initial focus on
offering sock subscriptions to our customers. Our subscription box will be a
package of a pair of socks that will be sent directly to a customer on a
recurring basis. For example, a potential subscriber will subscribe to receive a
pair of socks once a month for either a period of 6 months or 12 months. Our
subscription sock boxes are a marketing strategy and a method of product
distribution, allowing us to target a wide range of customers and cater to their
variety of specific needs and interests.
A subscription box is a package of retail products sent directly to a customer
on a recurring basis. Subscription boxes are a marketing strategy and a method
of product distribution. Subscription boxes are used by subscription-based
ecommerce businesses, referred to as "subcom" for short, which follow a
subscription business model. The subcom aims to target a wide range of customers
and cater to a variety of specific needs and interests. The subscription box
industry is nascent, so there exists minimal data. It is estimated that there
are 400 to 600 different kinds of subscription boxes in the United States alone
and more overseas.1 Subscriptions vary in both cost and frequency, making them
more accessible to a greater range of customers with different socioeconomic
backgrounds. Subscription boxes tend to range from $10 to $100.2 The use of
subscription boxes is rising in popularity among both consumers and businesses.
Subscription commerce is suitable for a wide range of markets.3 Large scale
retailers like Walmart, Amazon.com, CVS Pharmacy , Freshpair, and Lancôme use
subscription commerce. Small scale, local groups also utilize subscription
boxes. Products are limited only to what can be shipped and downloaded. Despite
this, some products, such as smaller and lighter products, are better suited for
subscription boxes than others.4
We have developed our preliminary website, www.caroholdings.com, and are in the
process of developing a more advanced site where we can provide more detailed
information regarding our products and shopping cart. This will cost us around
$15,000 . We intend to source this work to third party consultants and this
project will be spearheaded by our officer and director. We expect our advanced
site to be ready by the end of March 2022 .
__________
1 Jayakumar, A. (2014,April 7 ). Little-box retailing: Subscription services offer new possibilities to consumers, major outlets. RetrievedNovember 30, 2014 , from http://www.washingtonpost.com/business/economy/tktktktk/2014/04/07/f68135b6-a92b-11e3-8d62-419db477a0e6_story.html 2 Hutt, K. (2014,April 8 ). Subscription Boxes Can Feel Like Christmas, But Are They Worth It? RetrievedNovember 30, 2014 , from http://www.bbb.org/blog/2014/04/subscription-boxes-can-feel-like-christmas-but-are-they-worth-it/
3 Hayes, M. (2014,
4 Alvo, Greg. "5 Steps to a Successful Convenience Commerce Model". Multichannel
Merchant. Access Intelligence. Retrieved
Results of Operations Three Months EndedDecember 31, 2021 Compared to Three Months EndedDecember 31, 2020 Three Months Ended December 31, Change Change 2021 2020 Amount Percentage Operating expenses$ 9,133 $ 7,818 $ 1,315 17 % Loss from operations (9,133 ) (7,818 ) (1,315 ) 17 % Net loss$ (9,133 ) $ (7,818 ) $ (1,315 ) 17 %
During the three months ended
Operating expenses for the three months endedDecember 31, 2021 consisted of consulting fees, audit and accounting fees, transfer agent fees, office rent expense and office general expenses. The increase in operating expenses was primarily as a result of increase in professional fees. 9 Table of Contents Nine Months EndedDecember 31, 2021 Compared to Nine Months EndedDecember 31, 2020 Nine Months Ended December 31, Change Change 2021 2020 Amount Percentage Operating expenses$ 43,412 $ 20,357 23,055 113 % Loss from operations (43,412 ) (20,357 ) (23,055 ) 113 % Net loss$ (43,412 ) $ (20,357 ) $ (23,055 ) 113 %
During the nine months ended
Operating expenses for the nine months endedDecember 31, 2021 consisted of consulting fees, audit and accounting fees, transfer agent fees, office rent expense and office general expenses. The increase in operating expenses was primarily as a result of increase in professional fees including DTC application fees of$18,000 incurred during the nine months endedDecember 31, 2021 .
Liquidity and Financial Condition
Working Capital (Deficiency)
December 31, March 31,
2021 2021
Current Assets $ 1,438 $ 3,929
Current Liabilities 141,132 100,211
Working Capital (Deficiency) $ (139,694 ) $ (96,282 ) Our total current assets as of
Our total current liabilities as ofDecember 31, 2021 were$141,132 as compared to total current liabilities of$100,211 as ofMarch 31, 2021 . The increase was attributed by an increase in due to related party and accounts payable and accrued liabilities.
Working capital deficiency increased from
The report of our auditors on our audited financial statements for the fiscal year endedMarch 31, 2021 , contains a going concern qualification as we have suffered losses since our inception. We have minimal assets and have achieved limited operating revenues since our inception. We have been dependent on sales of equity securities to conduct operations. Unless and until we commence material operations and achieve material revenues, we will remain dependent on financings to continue our operations. Cash Flows Nine Months EndedDecember 31, 2021 2020
Cash used in Operating Activities
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Operating Activities
For the nine months ended
For the nine months ended
Investing Activities
We did not use any funds for investing activities for the nine months ended
Financing Activities
For the nine months ended
Cash Requirements We will require additional cash as we expand our business. Initially, to carry out our business plan, we will need to raise additional capital. There can be no assurance that we will be able to raise additional capital or, if we are able to raise additional capital, the terms we be acceptable to us. Currently we do not have any inventory. These conditions indicate a material uncertainty that casts significant doubt about our ability to continue as a going concern. We require additional debt or equity financing to have the necessary funding to continue operations and meet our obligations. We have continued to adopt the going concern basis of accounting in preparing our financial statements. We will require additional financing in order to enable us to proceed with our plan of operations. There is no assurance that any party will advance additional funds to us in order to continue our future plans for operations. We anticipate continuing to rely on equity sales of our common stock in order to continue to fund our business operations. Issuances of additional shares will result in dilution to our existing stockholders. There is no assurance that we will achieve any additional sales of our equity securities or arrange for debt or other financing to fund our planned business activities.
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 is material to stockholders. Critical Accounting Policies Basis of Presentation
The financial statements are prepared in accordance with generally accepted
accounting principles used in
Use of Estimates
In preparing financial statements in conformity with US GAAP, management makes
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosures of contingent assets and liabilities at the dates of
the financial statements, as well as the reported amounts of revenues and
expenses during the reporting periods. Management makes these estimates using
the best information available at the time the estimates are made. However,
actual results could differ materially from those estimates.
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Cash and Cash Equivalents
Cash and cash equivalents consist of cash on hand and highly liquid short-term deposits which are unrestricted as to withdrawal and use, and which have maturities of three months or less when purchased.
Fair Value of Financial Instruments
ASC 820, "Fair Value Measurements and Disclosures", defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The three levels are defined as follows:
Level 1 - inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
Level 2 - inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.
Level 3 - inputs to the valuation methodology are unobservable and significant to the fair value.
Our Company's financial instruments include cash and cash equivalents, prepaid
expenses, accounts payable and accrued liabilities. It is management's opinion
that the carrying values are a reasonable estimate of fair value because of the
short period of time between the origination of such instruments and their
expected realization and if applicable, their stated interest rate approximates
current rates available.
Management believes it is not practical to determine the fair value of accounts
payable and accrued liabilities, and note payable to related parties and lease
and management arrangement with related parties, if any, because the
transactions cannot be assumed to have been consummated at arm's length, the
terms are not deemed to be market terms, there are no quoted values available
for these instruments, and an independent valuation would not be practical due
to the lack of data regarding similar instruments, if any, and the associated
potential costs.
Transactions involving related parties cannot be presumed to be carried out on
an arm's-length basis, as the requisite conditions of competitive, free-market
dealings may not exist. Representations about transactions with related parties,
if made, shall not imply that the related party transactions were consummated on
terms equivalent to those that prevail in arm's-length transactions unless such
representations can be substantiated.
Net Income (Loss) per Share
Basic net income (loss) per share is computed by dividing net income (loss)
available to common shareholders by the weighted-average number of common shares
outstanding during the period. Diluted net income per share is computed similar
to basic net income (loss) per share except that the denominator is increased to
include the number of additional common shares that would have been outstanding
if the potential common shares had been issued and if the additional common
shares were dilutive. If applicable, diluted net income per share assumes the
conversion, exercise or issuance of all common stock instruments, such as
convertible notes, unless the effect is to reduce a loss or increase earnings
per share.
Income Taxes
Income tax expense is based on reported income before income taxes. Our company
accounts for income taxes using the asset and liability method. Deferred tax
assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases. Deferred tax
assets and liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are expected to
be recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized as income in the period that includes the
enactment date. A valuation allowance is provided for the amount of deferred tax
assets that, based on available evidence, are not expected to be realized.
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Recently Issued Accounting Pronouncements
Management has considered all recent accounting pronouncements issued. Our company's management believes that these recent pronouncements will not have a material effect on our company's financial statements.
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