We have limited operations and are not currently generating any revenues from
our business operations. Our independent registered public accounting firm has
issued a going concern opinion for the year ended December 31, 2020. This means
that our auditors believe there is substantial doubt that we can continue as an
on-going business for the next 12 months. We do not anticipate generating
significant revenues until we acquire a business, are acquired by an existing
business or develop a business organically. Accordingly, we must raise
additional cash from sources other than operations.
We presently are exploring other such sources of funding, including raising
funds through a public offering, a private placement of securities, debt or a
combination of the foregoing. If we are unable to raise additional capital, we
will either have to suspend operations until we do raise the cash or cease
operations entirely.
The following discussion should be read in conjunction with our Financial
Statements and the notes thereto and the other information included in this
Annual Report as filed with the SEC on Form 10-K.
Overview
Our original business plan was to become a commercial FM radio broadcaster.
Subsequently, following a change in control, we changed our business plan and
intended to become a medical and spa company with a focus on Asia. However,
after consultation with our professional and business advisors in the United
States and the People's Republic of China, management decided during the third
quarter of 2014 that this would no longer be our plan of operations. Our plan of
operations is to evaluate various industries, and geographic and market
opportunities. This may take the form of acquiring a business, being acquired by
an existing business or developing a business organically. Any such efforts may
require significant capital, which we currently lack. There is no assurance that
any such opportunity will become available. There is also no assurance that, if
any opportunity becomes available, we will have the financial and other
resources available to take advantage of such opportunity, since we have
extremely limited liquidity. Through June 30, 2021, we had no revenues or
operations.
Results of Operations
The Three and Six Months Ended June 30, 2021 Versus Three and Six Months Ended
June 30, 2020
Revenues. As of June 30, 2021, we had not generated any revenues.
Operating Expenses. For the three months ended June 30, 2021, total operating
expenses amounted to $9,669 as compared to $7,600 for the three months ended
June 30, 2020, an increase of $2,069 or 27.2%. For the six months ended June 30,
2021, total operating expenses amounted to $20,998 as compared to $18,951 for
the six months ended June 30, 2020, an increase of $2,047 or 10.8%. Since
inception, our operating expenses primarily consisted of fees and expenses
related to complying with our ongoing SEC reporting requirements, which have
consisted of accounting fees, transfer agent fees, and filing fees etc.
Other expenses. During the three months ended June 30, 2021 and 2020, we
recorded $6,009 and $5,300, respectively, in imputed interest expenses related
to advances outstanding to related party. During the six months ended June 30,
2021 and 2020, we recorded $11,484 and $10,739, respectively, in imputed
interest expenses related to advances outstanding to related party. These
imputed interests were recorded in our financial statements under additional
paid-in capital.
Net Loss. During the three months ended June 30, 2021 and 2020, we had a net
loss of $15,678 and $12,900, respectively. During the six months ended June 30,
2021 and 2020, we had a net loss of $32,482 and $29,690, respectively.
Liquidity and Capital Resources
As of June 30, 2021, we had $28,350 in cash, while, we had liabilities of
$320,018, and had a working capital deficit of $279,501. We expect to incur
continued losses during 2021, possibly even longer.
For the six months ended June 30, 2021 and 2020, net cash used in operating
activities amounted to $27,854 and $25,059, respectively. We expect to require
working capital of approximately $50,000 over the next 12 months to meet our
financial obligations.
For the six months ended June 30, 2021 and 2020, net cash provided by financing
activities amounted to $50,262 and $25,059, respectively. For the six months
ended June 30, 2021, we received proceeds from loans from officer of $32,013 and
received proceeds from sale of common stock of $24,000, offset by repayment made
for loans from officer of $5,751. For the six months ended June 30, 2020, we
received proceeds from loans from officer of $25,059, and received proceeds from
sale of common stock of $29,411, offset by repayment made for loans from officer
of $29,411.
We have not generated any revenues from operations to date. It is not likely
that we will generate any revenue until at least a business combination has been
consummated. Even following a business combination, there is no guarantee that
any revenues will be generated or that any revenues will be sufficient to meet
our expenses. We may consider a business combination with a target company which
itself has recently commenced operations, is a developing company in need of
additional funds for expansion into new products or markets, is seeking to
develop one or more new products or services, or is an established business
which may be experiencing financial or operating difficulties and is in need of
additional capital.
9
The foregoing considerations raise substantial doubt about our ability to
continue as a going concern. We are currently planning on devoting the vast
majority of our efforts to identifying, investigating and conducting due
diligence on target companies; and negotiating, structuring, documenting and
consummating a business combination. Our long-term ability to continue as a
going concern is dependent upon our ability to develop additional sources of
capital, complete a business combination and, thereafter, achieve profitable
operations.
We believe that we will be able to meet these costs through cash on hand and
additional amounts, as may be necessary, to be loaned by or invested in us by
our stockholders, management and/or others. Currently, however, our ability to
continue as a going concern is dependent upon our ability to generate future
profitable operations and/or to obtain the necessary financing to meet our
obligations and repay our liabilities arising from normal business operations
when they come due. Our ability to continue as a going concern is also
dependent on our ability to find a suitable target company and enter into a
business combination. Management's plan includes obtaining additional funds
through a combination of sales of our equity securities before,
contemporaneously with, or following, the consummation of a business
combination; and borrowings, although we do not believe that we will be eligible
to borrow funds from a bank until at least a business combination is
consummated. However, there is no assurance that any additional funding will be
available on terms that are favorable to us or at all.
We currently rely on loans from our sole director and officer, Qiuping Lu. There
is no guarantee that Ms. Lu will continue to lend us funds to meet our expenses
in the future. Currently, we do not have any other arrangements for financing.
We have no assurance that future financing will be available to us on
acceptable terms, or at all. If financing is not available to us on satisfactory
terms or at all, we may be unable to develop operations or meet our expenses.
Additionally, any equity financing in which we might engage would result in
dilution to our existing shareholders.
During the six months ended June 30, 2021 and 2020, Ms. Lu, the sole director
and officer of us, advanced an aggregate $32,013 and $25,059, respectively, to
us to pay some of our expenses and for working capital purposes, and we repaid
$5,751 and $29,411, respectively, to Ms. Lu. These advances in the aggregate
amounts of $307,369 and $281,107, respectively, at June 30, 2021 and December
31, 2020, are payable on demand and are reflected as related party loans on the
accompanying balance sheets.
Imputed interest of $6,009 and $5,300 was recorded for the three months ended
June 30, 2021 and 2020, respectively, and the imputed interest was recorded as
interest expense and an increase in additional paid-in capital, respectively.
Imputed interest of $11,484 and $10,739 was recorded for the six months ended
June 30, 2021 and 2020, respectively, and the imputed interest was recorded as
interest expense and an increase in additional paid-in capital, respectively.
Going Concern Consideration
Our independent registered public accounting firm has issued a going concern
opinion in their audit report dated February 17, 2021, which can be found in our
Annual Report on Form 10-K filed with the SEC on February 17, 2021. This means
that our auditors believe there is substantial doubt that we can continue as an
on-going business for the next 12 months. Our financial statements found within
this Quarterly Report on Form 10-Q and the aforementioned Annual Report on Form
10-K contain additional note disclosures describing the circumstances that lead
to this disclosure by our independent auditors.
Contractual Obligations
As of June 30, 2021, we had no contractual obligations.
Off -Balance Sheet Operations
As of June 30, 2021, we had no off-balance sheet activities or operations.
Critical Accounting Policies
Please refer to Note 2 - Summary of Significant Accounting Policies of our
financial statements accompanying this report.
Recently Issued Accounting Pronouncement
For details of applicable new accounting standards, please, refer to Recent
Accounting Pronouncements in Note 2 of our financial statements accompanying
this report.
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