This 10-Q contains forward-looking statements. Our actual results could differ
materially from those set forth as a result of general economic conditions and
changes in the assumptions used in making such forward-looking statements. The
following discussion and analysis of our financial condition and results of
operations should be read together with the audited consolidated financial
statements and accompanying notes and the other financial information appearing
elsewhere in this report. The analysis set forth below is provided pursuant to
applicable Securities and Exchange Commission regulations and is not intended to
serve as a basis for projections of future events.
Overview
Forge Innovation Development Corp. is a development stage company and was
incorporated in the State of Nevada in January 2016. The Company's primary
objective is commercial and residential land development, including the purchase
and sale of real estate, targeting properties primarily in Southern California.
We also intend to manage properties we own, and properties owned by unaffiliated
third parties. Our activities will include securing acquisition rights to
properties, obtaining zoning and other entitlements for the properties, securing
financing for purchase of the properties, improving the properties'
infrastructure and amenities and selling the properties to homeowner and
commercial owners for restaurants, offices and small businesses. Our first
property acquisition was 29 acres in the city of Desert Hot Springs in Southern
California. Due to problems with permits and adjacent landowners, rather than
getting involved in protracted negotiations, the Company sold the property to an
independent third party for a profit.
On August 17, 2020, the Company established a wholly owned subsidiary, Forge
Network Inc, in the State of California. Forge Network Inc is mainly engaged in
online retail business. As of March 31, 2022, we have not generated any income
from the subsidiary yet which is mainly due to the continuously Covid-19
pandemic impacts. Meanwhile, we are also looking for other business
opportunities which could potentially increase the profits of Company in the
year of 2022.
Results of Operation for the three months ended March 31, 2021 and 2020
During the three months ended March 31, 2022 and 2021, the Company generated
$15,604 and $9,000 of revenues from property management service, respectively.
During the three months ended March 31, 2022 and 2021, the Company incurred
general and administrative expenses of $46,361 and $82,962, respectively. The
decrease was mainly due to the decrease in payroll expense and professional fees
incurred during the three months ended March 31, 2022. For the three months
ended March 31, 2022 and 2021, our net losses were $30,757 and $54,562,
respectively The decrease in net loss was mainly due to the increase of revenue
generated, and the decrease in general administrative expenses, partially offset
by the decrease in government grants in the amount of $19,400 for the three
months ended March 31, 2022.
Equity and Capital Resources
We have incurred losses since inception of our business in 2016 and, as of March
31, 2022, we had an accumulated deficit of $1,562,224. As of March 31, 2022, we
had cash of $11,789 and a negative working capital of $131,360, compared to cash
of $60,364 and a negative working capital of $95,686 as of December 31, 2021.
The decrease in the working capital was primarily due to cash used to pay for
operating expenses.
Going Concern Assessment
The Company demonstrates adverse conditions that raise substantial doubt about
the Company's ability to continue as a going concern. These adverse conditions
are negative financial trends, specifically cash outflow from operating
activities, operating losses, accumulated deficit and other adverse key
financial ratios.
Management's plan to alleviate the substantial doubt about the Company's ability
to continue as a going concern include attempting to improve its business
profitability, its ability to generate sufficient cash flow from its operations
and execute the business plan of the Company in order to meet its operating
needs on a timely basis. However, there can be no assurance that these plans and
arrangements will be sufficient to fund the Company's ongoing capital
expenditures and other requirements.
The consolidated financial statements do not include any adjustments relating to
the recoverability and classification of recorded assets, or the amounts and
classification of liabilities that might be necessary in the event that the
Company cannot continue as a going concern.
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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
The consolidated financial statements of the Company have been prepared in
accordance with accounting principles generally accepted in the United States.
The preparation of these consolidated financial statements requires making
estimates and judgments that affect the reported amounts of assets, liabilities,
revenues and expenses, and related disclosure of contingent assets and
liabilities. The estimates are based on historical experience and on various
other assumptions that are believed to be reasonable under the circumstances,
the results of which form the basis of making judgments about the carrying
values of assets and liabilities that are not readily apparent from other
sources. Actual results may differ from these estimates under different
assumptions or conditions.
The critical accounting policies are discussed in further detail in the notes to
the audited consolidated financial statements appearing elsewhere in this
report. Management believes that the application of these policies on a
consistent basis enables us to provide useful and reliable financial information
about our operating results and financial condition.
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