KINH HLDGPAR This Management's Discussion and Analysis of Financial Condition and Results of
Operations discusses the operating results and financial condition of the
Company for the fiscal quarters ended
A NOTE ABOUT FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (including the exhibits hereto) contains certain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (the "Exchange Act"), such as statements relating to our financial condition, results of operations, plans, objectives, future performance or expectations, and business operations. These statements relate to expectations concerning matters that are not historical fact. Accordingly, statements that are based on management's projections, estimates, assumptions, and judgments constitute forward-looking statements. These forward-looking statements are typically identified by words or phrases such as "believe," "expect," "anticipate," "plan," "estimate," "approximately," "intend," "objective," "goal," "project," and other similar words and expressions, or future or conditional verbs such as "will," "should," "would," "could," and "may." These forward-looking statements are based largely on information currently available to our management and on our current expectations, assumptions, plans, estimates, judgments and projections about our business and our industry, and such statements involve inherent risks and uncertainties. Although we believe our expectations are based on reasonable estimates and assumptions, they are not guarantees of performance and there are a number of known and unknown risks, uncertainties, contingencies, and other factors (many of which are outside our control) which may cause actual results, performance, or achievements to differ materially from those expressed or implied by such forward-looking statements. Accordingly, there is no assurance that our expectations will in fact occur or that our estimates or assumptions will be correct, and we caution investors and all others not to place undue reliance on such forward-looking statements.
These potential risks and uncertainties include, but are not limited to, our ability to identify, secure and obtain suitable and sufficient financing to continue as a going concern; our ability to identify, enter into and close an appropriate merger, acquisition, or other combination transaction with a business prospect; economic, political and market conditions; the general scrutiny and limitations placed on "blank check" and "shell" companies under applicable governmental regulatory oversight; interest rate risk; government and industry regulation that might affect future operations; potential change of control transactions resulting from merger, acquisition, or combination with a business prospect; the potential dilution in our equity (both economically and in voting power) that might result from future financing or from merger, acquisition, or combination activities; and other factors.
All written or oral forward-looking statements that are made or attributable to
us are expressly qualified in their entirety by this cautionary notice. The
forward-looking statements included herein are only made as of the date of this
Quarterly Report on Form 10-Q for the fiscal quarter ended
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Overview
Operations.
The primary business of the Company is to seek a suitable private company acquisition or other business combination. The Company has not been engaged in any other business activity during the period covered by the Form 10-Q.
As a preliminary step to seeking such a business combination transaction, during
the fiscal year ended
On
Under the terms of the Merger Agreement, the Company will engage in a 1-for-500
reverse stock split prior to the Merger and, at the effective time of the Merger
("Effective Time"), each outstanding common share, no par value, of Renovo
("Renovo Stock") will be converted into and will represent the right to receive
7,200 shares ("Exchange Ratio") of common stock, par value
Upon execution of the Merger Agreement, Renovo provided the Company with a loan
in principal amount of
Although the parties have executed the Merger Agreement, there is no assurance that the parties will be able to consummate a Merger transaction.
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The foregoing description of the Merger Agreement and Renovo Promissory Note do
not purport to be complete and is qualified in its entirety by reference to the
complete text of the Merger Agreement and Renovo Promissory Note, which are
filed as Exhibits 1.1 and 1.2, respectively, to the Company's Current Report on
Form 8-K filed on
Financial Condition. We did not record revenues from operations during the fiscal quarter covered by our financial statements included in this Form 10-Q and are not currently engaged in any business activities that provide cash flows. We do not expect to generate any revenues during the current fiscal year unless we are able to enter into and complete a business combination, such as the Merger transaction. Our ability to continue as a going concern is dependent upon our ability to develop additional sources of capital, locate and complete a merger with another company, and ultimately, achieve profitable operations.
We have negative working capital, negative shareholders' equity and have not
earned any revenues from operations since the fiscal year ended
In connection with the Merger transaction, the Company, borrowed funds from Renovo pursuant to the Renovo Promissory Note. We anticipate the proceeds from the Renovo Loan will be sufficient to fund our operations through the date on which the Merger is consummated. If we consummate the Merger, we believe that we will generate sufficient revenue from our operations to fund our operations and our debt obligations.
If, however, we are unable to consummate the Merger or the Merger is otherwise
terminated, we will likely need to identify additional sources of financing to
continue funding our business activities and repayment of our debt obligations
under the Renovo Promissory Note until such time as we may consummate a merger
or business contribution, if ever, with another target company or operation.
Under such circumstances, we may need to seek funds through additional sales of
debt or equity securities or by some other means. Although
Since we have no such arrangements or plans currently in effect to raise additional capital in the event that the Merger is not consummated, our limited ability to raise funds to continue operations and to seek an acquisition may have a severely negative impact on our ability to become a viable company. Our historical operating results disclosed in this Form 10-Q are not meaningful to our future results.
Results of Operations
Comparison of Three Months Ended
Revenues. Because we currently do not have any business operations, we have not
had any revenues during the three months ended
Operating Expenses. We had operating expenses of
Other Expenses. We had interest expense of
Net Income (Loss). We recognized a net loss of
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Liquidity and Capital Resources
As of
Other than our anticipated consummation of the Merger, we had no material
commitments for capital expenditures as of
On
The proceeds of the Renovo Loan have been used to provide the funds necessary for the Company to continue operations and consummate the transactions contemplated by the Merger Agreement.
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