(A) PLAN OF OPERATION

The Company made forty-seven investments in the year ended on March 31, 2021. These consisted of twenty-three investments in new portfolio companies totaling $1,784,997 and twenty-four follow-on investments into existing portfolio companies totalling $1,175,003.

The Company expects to continue raising funds to cover operating expenses and to continue new portfolio and follow-on investments in existing portfolio companies on an ongoing basis as it continues efforts to become effective as a "1940 Act" investment company. Once effective, the Company plans to engage an investment banker and list on the NASDAQ exchange.





(B) RESULTS OF OPERATIONS

Revenue: The Company depends on the emergence of liquidity situations to realize its investments in portfolio companies but does not have any ability to influence such events. During the years ended March 31, 2021 and 2020 there were no liquidation transactions and, accordingly the Company did not generate any proceeds from investments. However, the Company does regularly revalue its investments to ensure that they are stated at fair value and for the years ended March 31, 2021 and 2020, recognized unrealized valuation gains and losses of $1,195,908 and $(61,406), respectively.

Banking and professional fees: The Company incurred banking and professional fees of $225,378 and $47,826 for the years ended March 31, 2021 and 2020, respectively. The increase of 371% was largely attributable to increased legal fees in connection with fundraising transactions and the filing of a Form N-2 with the SEC in anticipation of our registration as a Business Development Corporation ("BDC") and future uplisting from the OTC to Nasdaq stock market exchanges.

Other operating expenses: The Company incurred operating expenses of $543,464 and $678,677 in the years ended March 31, 2021 and 2020, respectively. The decrease of 20% reflects a reduction in investor relations expenses during the year ended March 31, 2021.

The Company did not experience any management fees or interest expense in either years.

For the years ended March 31, 2021 and 2020, the Company's net increase or decrease in net assets resulting from operations was $427,066 and $(773,399), respectively.





(C) LIQUIDITY

The accompanying financial statements have been prepared assuming that we will continue as a going concern. We have experienced recurring negative cash flows from operations resulting in a deficit of $33.0 million accumulated from inception through March 31, 2021.

As of the date of this filing, the Company had approximately $400,000 of cash to cover its operating expenses and new investment requirements, and is continuing its efforts to raise additional funding on a recurring monthly basis. If successful, it will have sufficient funding for further investments and ongoing operations. However, there is no assurance that the Company will be able to raise sufficient cash to cover its requirements on attractive terms, if at all, and whether it will be able to continue as a going concern. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Stay at home orders and general economic uncertainties arising out of the current Covid-19 epidemic have created additional delays and uncertainty. To date there has been no disruption to the Company's business operations, although some of its portfolio investment companies report delays in their programs.

At March 31, 2020, management determined that the Company was an investment company for purposes of ASC 946 disclosure, and committed to follow the specialized accounting and reporting guidance contained therein. Accordingly, a new company, Kyto Investments, Inc. ("KI") was incorporated in Delaware in December 2020 in preparation for a restructuring and an N-2 Registration Statement filed in March 2021 for review by the SEC. KI is an internally managed, closed-end investment company that has elected to be regulated as a business development company ("BDC") under the Investment Company Act of 1940, as amended (the "1940 Act"). Immediately upon effectiveness of this N-2 Registration Statement, the Company will merge with KI and the Company will be the surviving entity. As of the completion of the merger, the Company will constitute a "successor issuer" for the purposes of Rule 414 under the Securities Act and may continue the current offering by filing post-effective amendments to the Registration Statements.

As a BDC, the Company will be required to comply with certain regulatory requirements. The Company also intends to elect to be treated for U.S. federal income tax purposes as a regulated investment company ("RIC") under Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"). As a RIC, the Company is required to comply with additional regulatory requirements. The Company has prepared and submitted sequentially two N-2 Registration Statements to the SEC for review but has not yet received final approval of its registration as at the filing date of this report.


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The Company expects to continue raising funds to cover operating expenses and to continue new portfolio and follow-on investments in existing portfolio companies on an ongoing basis as it continues efforts to become effective as a "40 Act" investment company. Once effective, the Company plans to engage an investment banker and list on the NASDAQ exchange. To continue to fund operations, we will need to raise additional capital. We may obtain additional financing in the future through the issuance of our common stock, through other equity or debt financings, or other means. We may not be able to raise such additional capital on terms acceptable to us, if at all, and if there were any failure to raise capital when needed, or on attractive terms, we could be forced to reduce, delay or eliminate our investment activities or make reductions in spending, extend payment terms with suppliers, or liquidate or grant rights to our assets where possible. Any of these activities could materially harm our business, results of operations, or future prospects. There is no assurance that we can ever be profitable or generate sufficient cash flow from investment activities.

Cash from operating activities:

The Company's net cash outflow from operations for the years ended March 31, 2021 and 2020 was $2,470,600 and $1,929,879 respectively, of which $2,960,000 and $1,228,497, respectively, resulted from the purchase of investments.

Cash from investing activities:

The Company did not have any cash flow from investing activities for the years ended March 31, 2021 and 2020.

Cash from financing activities:

The Company's net cash inflow from financing activities for the years ended March 31, 2021 and 2020 was $3,874,712 and $1,870,001, respectively. During the year ended March 31, 2021, the Company raised from accredited investors $2,302,500 from private placements of Series B Preferred stock, and $1,572,212 from the sale of common stock in connection with the exercise of warrants and options. During the year ended March 31, 2020, the Company raised from accredited investors $1,270,001 from the sale of Series A Preferred stock and $600,000 from private placements of Series B Preferred stock.

(D ) SIGNIFICANT ACCOUNTING POLICIES





BASIS OF PRESENTATION

The Company's financial statements are prepared in accordance with U.S. generally accepted accounting principles (GAAP), which requires the use of estimates, assumptions and the exercise of subjective judgment as to future uncertainties. Actual results could differ from those estimates, assumptions, and judgments.

The Company's financial statements are prepared using the specialized accounting principles of Accounting Standards Codification Topic 946, Financial Services-Investment Companies (ASC Topic 946). In accordance with this specialized accounting guidance, the Company recognizes and carries all of its investments at fair value with changes in fair value recognized in earnings. Additionally, the Company will not apply consolidation or equity method of accounting to its investments. The Company carries its liabilities at amounts payable, net of unamortized premiums or discounts. The Company does not currently plan to elect to carry its liabilities at fair value. Net assets are calculated as the carrying amounts of assets, including the fair value of investments, less the carrying amounts of its liabilities.

The financial information associated with the March 31, 2021 and 2020 financial statements contains all adjustments and eliminations, consisting of only normal recurring adjustments, necessary for a fair presentation in accordance with GAAP.





REVENUE RECOGNITION

The Company generates realized gains or losses in its net assets from the sale of complete or partial investments following a mergers or acquisitions ("M&A") transaction or restructuring or from the revaluation of portfolio company investments to recognize changes in their value, either upwards or downwards. As a minority, early-stage investor, the Company does not have the ability to manage the timing or acceptance of liquidity events that will realize its investments, nor the ability to predict when they may happen, although as a general guideline, it would expect such events to occur approximately four years after its investments are made. Realized gains or losses on the sale of investments, or upon the determination that an investment balance, or portion thereof, is not recoverable, are calculated using the specific identification method. The Company measures realized gains or losses by calculating the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment. Net change in unrealized appreciation or depreciation reflects the change in the fair values of the Company's portfolio investments during the reporting period, including any reversal of previously recorded unrealized appreciation or depreciation when gains or losses are realized. The Company is in regular contact with the management of its portfolio investment companies to provide a basis for valuation changes or impairment reviews.


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USE OF ESTIMATES

In preparing financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and revenues and expenses during the period presented. Actual results may differ from these estimates.

Significant estimates during the fiscal year ended March 31, 2021 and 2020 include the valuation of investments, stock options and warrants.

INVESTMENTS AND VALUATION OF INVESTMENTS AT FAIR VALUE

The Company reviews the performance of its investments based on available information, including management reports, press releases, web site announcements and progress reports, third party equity updates, management interviews and, where accessible, financial reports, to determine their current and future potential value and liquidity. In the event that Management considers the value of an investment to be impaired, the carrying value of the investment will be written down by an impairment charge to reflect Management's estimated valuation. The Company recognized impairment of one of its investments which was written down by $61,046 in September 2019. The Company has not experienced any impairment write-downs in any prior or subsequent periods.

The Company adopted Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 820, "Fair Value Measurements and Disclosures", for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing US GAAP that require the use of fair value measurements which establishes a framework for measuring fair value and expands disclosure about such fair value measurements.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Fair value is an exchange price notion under which fair value is the price in an orderly transaction between market participants to sell an asset or transfer a liability in the market in which the reporting entity would transact for the asset or liability.

The Company has established procedures to estimate the fair value of its investments which the Company's board of directors has reviewed and approved. The Company will use observable market data to estimate the fair value of investments to the extent that market data is available. In the absence of quoted market prices in active markets, or quoted market prices for similar assets or in markets that are not active, the Company will use the valuation methodologies described below with unobservable data based on the best available information in the circumstances, which incorporates the Company's assumptions about the factors that a market participant would use to value the asset.

For investments for which quoted market prices are not available, which will comprise most of our investment portfolio, fair value will be estimated by using the income, market, or back-solve approach. The income approach is based on the assumption that value is created by the expectation of future benefits discounted to a current value and the fair value estimate is the amount an investor would be willing to pay to receive those future benefits. The market approach compares recent comparable transactions to the investment. The back solve method involves comparing available data over a period of time and inferring a new valuation based on changes from a known starting point, for example the cost of an investment. Adjustments are made for any dissimilarity between the comparable transactions and the investments. These valuation methodologies involve a significant degree of judgment on the part of our management and board.

In determining the appropriate fair value of an investment using these approaches, the most significant information and assumption may include, as applicable: available current market data, including relevant and applicable comparable market transactions, applicable market yields and multiples, security covenants, call protection provisions, information rights, the nature and realizable value of any collateral, the investment's ability to make payments, its earnings and discounted cash flows, the markets in which the company does business, comparisons of financial ratios of peer companies that are public, merger and acquisition comparables, the principal market and enterprise values, environmental factors, among other factors.

The estimated fair values will not necessarily represent the amounts that may be ultimately realized due to the occurrence or nonoccurrence of future circumstances that cannot be reasonably determined. Because of the inherent uncertainty of the valuation of the investments, the estimate of fair values may differ significantly from the value that would have been used had a broader market for the investments existed.

The authoritative accounting guidance prioritizes the use of market-based inputs over entity-specific inputs and establishes a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation. The three levels of valuation hierarchy are defined as follows:

Level 1: Observable inputs such as quoted market prices in active markets for identical assets or liabilities

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Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data

Level 3: Unobservable inputs for which there is little or no market data, which require the use of the reporting entity's own assumptions. Most of the Company's investments are Level 3.

Critical accounting policies and practices are the policies that are both most important to the portrayal of our financial condition and results, and require management's most difficult, subjective, or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain. These include estimates of the fair value of our Level 3 investments and other estimates that affect the reported amounts of assets and liabilities as of the date of the consolidated financial statements and the reported amounts of certain revenues and expenses during the reporting period. It is likely that changes in these estimates will occur in the near term. Our estimates are inherently subjective in nature and actual results could differ materially from such estimates. See "Note 1 - Significant Accounting Policies" to our consolidated financial statements as of March 31, 2021 for further detail regarding our critical accounting policies and recently issued or adopted accounting pronouncements.

(E ) OFF-BALANCE SHEET ARRANGEMENT

None.

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