CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This document contains "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995, Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All
statements other than statements of historical fact are "forward-looking
statements" for purposes of federal and state securities laws, including, but
not limited to, any projections of earnings, revenue or other financial items;
any statements of the plans, strategies and objectives of management for future
operations; any statements concerning proposed new services or developments; any
statements regarding future economic conditions or performance; any statements
of belief; and any statements of assumptions underlying any of the foregoing.
Forward-looking statements may include the words "may," "could," "will,"
"estimate," "intend," "continue," "believe," "expect", "anticipate", "hope" or
other similar words. These forward-looking statements present our estimates and
assumptions only as of the date of this report. Except for our ongoing
obligation to disclose material information as required by the federal
securities laws, we do not intend, and undertake no obligation, to update any
forward-looking statement.
Although we believe that the expectations reflected in any of our
forward-looking statements are reasonable, actual results could differ
materially from those projected or assumed in any of our forward-looking
statements. Our future financial condition and results of operations, as well as
any forward-looking statements, are subject to change and inherent risks and
uncertainties. Some of the key factors impacting these risks and uncertainties
include, but are not limited to:
? risks related to our ability to identify, pursue and commence a reverse merger
and/or a possible operating business;
? our ability to obtain adequate funding to complete a reverse merger or commence
a possible operating business and meet our operating expenses on a current
basis;
? general economic uncertainty, whether as a result of the COVID-19 pandemic or
otherwise;
? delays in our ability to obtain any necessary business licenses and permits,
and commence business operations, whether as a result of the COVID-19 pandemic
or otherwise; and
? current and longer-term economic and other impacts of the COVID-19
pandemic on our operations, results of operations and financial
condition, including without limitation changes in consumer spending
patterns for non-essential products, resulting from the economic crisis
caused by lockdown, shelter-in-place, stay-at-home or similar orders
instituted as a result of the pandemic, or otherwise.
Overview
On August 1, 2022, the board of directors (the "Board") of the Company
unanimously approved to expand our business in the area of electric vehicle
supply equipment ("EVSE") and will direct the management team to implement its
new business plan in such industry. On August 16, 2022, the Company formally
announced its intention to reposition as EVSE solutions provider, seeking to
grow business in EVSE industry, including building, owning, and operating the
next generation of electric vehicle charging stations in the U.S. The Company
intends to bring convenient, reliable, and accessible charging experience to
electric vehicle drivers, utilizing frictionless technology and carbon-neutral
vehicle-charging infrastructure.
On October 26, 2022, we entered into three Charging Station Site Host Agreements
(the "Agreements") with two institutions (the "Site Hosts"), respectively,
pursuant to which the Site Hosts agree to allow us to install our electric
vehicle charging stations at the locations set forth in the Agreements (the
"Charging Stations"). Under the Agreements, we have agreed to share our revenue
generated by the sales of electricity at the Charging Stations with the Site
Hosts in accordance with the schedules set forth therein.
As of December 31, 2022, the Company has purchased certain electric vehicle
charging equipment. Furthermore, the Company is in the process of obtaining
permits to construct the Charging Stations at the three confirmed sites. As of
December 31, 2022, the Company contracted an architectural firm on providing
designing and engineering services for two sites, and working on technical
issues for the third site.
As of February 13, 2023, the Company has received the finalized site plans and
electrical diagrams from the architectural firm and electrical engineers for 2
sites. The Company has also received permission from the site owners to proceed
with the charging station construction permit applications with the local
municipalities. The Company expects to install up to a total of 10 charging
units for the first 2 sites, and have them operational in April of 2023.
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Hukui Investment
Hukui Biotechnology Corporation ("Hukui") and we entered into a Series C
Preferred Shares Subscription Agreement dated September 23, 2020 (the "Hukui
Agreement"), pursuant to which we agreed to purchase an aggregate 200,000 shares
of Hukui's Series C Preferred Stock (the "Series C Preferred Shares") at $10.00
per share, for an aggregate investment of $2,000,000.
The Hukui Agreement provided that we would purchase the Series C Preferred
Shares in three tranches, through a date on or before June 30, 2022, as follows:
? The first tranche is 80,000 Series C Preferred Shares in the amount of $800,000
(the "First Tranche Investment"), such shares having been purchased by us on
December 15, 2020 (the "First Tranche Closing");
? The second tranche is 60,000 Series C Preferred Shares in the amount of
$600,000 (the "Second Tranche Investment"), such shares having been purchased
by us on June 25, 2021 (the "Second Tranche Closing"); and
? The third tranche is 60,000 Series C Preferred Shares in the amount of
$600,000 (the "Third Tranche Investment"), such shares to have been
purchased on or before June 30, 2022 (the "Third Tranche Closing").
An individual and resident of the Republic of China (the "Purchaser"), Hukui and
we entered into a Stock Purchase Agreement dated as of November 17, 2021 (the
"Stock Purchase Agreement"), pursuant to which we agreed to sell the 140,000
shares of Hukui's Series C Preferred Stock that we had purchased in the First
Tranche Closing and the Second Tranche Closing (the "Hukui Shares") to the
Purchaser for $350,000 in cash, or $2.50 per share. The sale of the Hukui Shares
closed on November 19, 2021.
On December 17, 2021, Hukui and we entered into an Agreement (the "Termination
Agreement"), pursuant to which our obligation to make the Third Tranche
Investment was terminated and the Hukui Agreement was terminated. As a result,
we have no continuing contractual obligation to make any investment in Hukui.
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Results of Operations
Three Months Ended December 31, 2022 compared to the Three Months Ended December
31, 2021
Revenues
We did not generate any revenues during the three months ended December 31, 2022
and 2021.
Operating Expenses
We incurred total operating expenses of $205,245 and $103,340 for the three
months ended December 31, 2022 and 2021, respectively. Our operating expenses
consist of legal fees, other professional fees, payroll expenses, stock-based
compensation, rent, bank charges, and transfer agent fees. The increase in
operating expenses for the three months ended December 31, 2022 compared to the
same period in 2021 was primarily due to the increase in payroll expenses, and
stock-based compensation.
Other expense
During the three months ended December 31, 2022, we incurred $793 other expenses
mainly due to interest incurred for unpaid penalty from IRS. During the three
months ended December 31, 2021, we incurred $747 other expenses mainly due to
interest incurred for unpaid penalty from IRS.
Net Loss
As a result of the above, our net loss increased from $104,087 in the three
months ended December 31, 2021 to $206,038 in the same period ended in 2022.
Effect of the COVID-19 Pandemic on our Business
While our liquidity and capital resources are severely limited and present
serious obstacles to starting a business, these limitations are unrelated to the
COVID-19 pandemic and resulting global economic crisis.
Our personnel are in Taiwan, which has been relatively less affected by the
pandemic compared to many other countries in Asia, Europe and the United States.
However, even before an increase in the number of cases of COVID-19 in Taiwan,
we experienced delays in obtaining business licenses and permits, and any other
governmental approvals that might have been required for businesses that we
previously considered commencing, since government offices have been working
with reduced staff during the pandemic. We expect this situation to continue and
possibly become more challenging depending upon the duration of the pandemic.
Depending upon the extent and duration of the pandemic and the resulting global
economic crisis, these conditions may have an adverse impact on our ability to
raise capital and commence any business we may pursue.
Liquidity and Capital Resources
Working Capital
December 31, September 30,
2022 2022
Current Assets $ 53,183 $ 150,893
Current Liabilities 252,684 205,016
Working Capital Deficit $ (199,501 ) $ (54,123 )
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As of December 31, 2022, we had current assets of $53,183 and a working deficit
of $199,501. In comparison, as of September 30, 2022, we had current assets of
$150,893 and a working capital deficit of $54,123.
As of December 31, 2022, we had total assets of $68,188, compared with total
assets of $150,893 at September 30, 2022. The decrease in total assets was
primarily due to cash spent in operating expenses.
We had $252,684 in total current liabilities as of December 31, 2022, consisting
of $118,471 in accounts payable and $134,213 due to related parties. This is
compared to total current liabilities of $205,016 as of September 30, 2022,
consisting of $102,185 in accounts payable and $102,831 due to related parties.
The increase in due to related parties was primarily due to unpaid compensation
to officers and directors.
We had total stockholders' deficit of $214,472 and an accumulated deficit of
$10,128,993 as of December 31, 2022. In comparison, we had a total stockholders'
deficit of $83,349 and an accumulated deficit of $9,922,955 as of September 30,
2022.
Cash Flows
Three Three
Months Months
Ended Ended
December December
31, 31,
2022 2021
Cash flows used in operating activities $ (74,869 ) $ (71,538 )
Cash flows used in investing activities (15,005 ) 350,000
Cash flows provided by financing activities - -
Effect of exchange rate changes on cash - -
Net increase (decrease) in cash during period $ (89,874 ) $ 278,462
During the three months ended December 31, 2022, we used $74,869 of cash in
operating activities which was attributable primarily to our net loss of
$206,038 offset by stock-based compensation and change in operating assets and
liabilities of $131,169. In comparison, during the three months ended December
31, 2021, we used $71,538 of cash in operating activities which was attributable
primarily to our net loss of $104,087 offset by change in operating assets and
liabilities of $32,549.
During the three months ended December 31, 2022, we used $15,005 of cash in
investing activities for the purchase of equipment. We received $350,000 in
payment for the sale of the 140,000 Hukui Shares during the three months ended
December 31, 2021.
During the three months ended December 31, 2022 and 2021, we did not have any
financing activity.
There is substantial doubt that we can continue as an ongoing business for the
next twelve months unless we obtain additional capital to pay our expenses as
they become due. We do not anticipate any significant additional revenue until
we continue to implement our electric vehicle charging station business
operations and begin to profit from our business operations. There is no
assurance that we will ever reach that stage. The condensed consolidated
financial statements presented herein 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 we
cannot continue as a going concern.
Our ability to continue as a going concern is dependent upon our ability to
successfully execute our business plan and generate profitable operations in the
future, and, until and unless we achieve that, to obtain the necessary financing
to meet our obligations and repay our liabilities arising from normal business
operation as and when they become due. To date, our capital requirements have
primarily been funded by shareholders through the purchase of our Common Stock
in private offerings and short-term borrowings from a former officer and another
shareholder.
The Company sold the 140,000 Hukui Shares for $350,000 cash on November 19,
2021. The proceeds have been used for operation expenses.
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Contractual Obligations
We do not have material contractual obligations and commitments. We only have
one lease that is renewed on a month-to-month basis.
Off-Balance Sheet Arrangements
As of December 31, 2022, we had not entered into any other financial guarantees
or other commitments to guarantee the payment obligations of any third parties.
As of December 31, 2022, we had not entered into any derivative contracts that
are indexed to our shares and classified as shareholder's equity or that are not
reflected in our condensed consolidated financial statements. Furthermore, as of
December 31, 2022, we had not had any retained or contingent interest in assets
transferred to an unconsolidated entity that serves as credit, liquidity or
market risk support to such entity. As of December 31, 2022, we had not had any
variable interest in any unconsolidated entity that provides financing,
liquidity, market risk or credit support to us or engages in leasing, hedging or
research and development services with us.
Critical accounting policies and estimates
Our discussion and analysis of our financial condition and results of operations
are based upon our condensed consolidated financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States. The preparation of these condensed consolidated financial
statements requires us to make estimates and judgments that affect the reported
amounts of assets, liabilities, revenues and expenses, and related disclosure of
contingent assets and liabilities. We continually evaluate our estimates,
including those related to income taxes, and the valuation of equity
transactions. We base our estimates on historical experience and on various
other assumptions that we believed to be reasonable under the circumstances, the
results of which form the basis for making judgments about the carrying values
of assets and liabilities that are not readily apparent from other sources. Any
future changes to these estimates and assumptions could cause a material change
to our reported amounts of revenues, expenses, assets and liabilities. Actual
results may differ from these estimates under different assumptions or
conditions. For the three months ended December 31, 2022 and 2021, no
significant estimates and assumptions have been made in the condensed
consolidated financial statements. The following are some of the critical
accounting policies in relation to the preparation of the condensed consolidated
financial statements. For a full summary of our critical accounting policies,
please refer to Note 2 to the Condensed Consolidated Financial Statements.
Foreign currency translation
The financial statements of our subsidiary denominated in currencies other than
the USD are translated into USD using the closing rate method. The balance sheet
items are translated into USD using the exchange rates at the respective balance
sheet dates. The capital and various reserves are translated at historical
exchange rates prevailing at the time of the transactions while income and
expenses items are translated at the average exchange rate for the period. All
exchange differences are recorded in stockholders' equity.
Stock-Based Compensation
We account for stock-based compensation in which we obtain employee services in
share-based payment transactions under FASB ASC Topic 718, Compensation - Stock
Compensation, which requires us to expense the cost of employee services
received in exchange for an award of equity instruments based on the grant date
fair value of such instruments over the vesting period.
Recent accounting pronouncements
We do not expect that the adoption of recently issued accounting pronouncements
will have a material impact on our financial position, results of operations, or
cash flows. For a full summary of recent accounting pronouncements, please refer
to Note 2 to the Condensed Consolidated Financial Statements.
Currency exchange rates
For financial reporting purposes, the financial statements of the Company's
Singapore subsidiary, which are prepared using the SGD, are translated into the
Company's reporting currency, USD. Assets and liabilities are translated using
the exchange rate on the balance sheet date, which was 0.7464 and 0.6970 as of
December 31, and September 30, 2022, respectively. Revenue and expenses are
translated using average exchange rates prevailing during each reporting
period. The 0.7214 and 0.7370 average exchange rates were used to translate
revenues and expenses for the three months ended December 31, 2022 and 2021,
respectively. Stockholders' equity is translated at historical exchange rates.
Adjustments resulting from the translation are recorded as a separate component
of accumulated other comprehensive loss in stockholders' deficit.
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