ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
This Form 10Q contains "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E the Securities Exchange Act of 1934, as amended and
such forward-looking statements are made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act
of 1995. "Forward-looking statements" describe future expectations,
plans, results, or strategies and are generally preceded by words
such as "may," "future," "plan" or "planned," "will" or "should,"
"expected," "anticipates," "draft," "eventually" or "projected."
You are cautioned that such statements are subject to a multitude
of risks and uncertainties that could cause future circumstances,
events, or results to differ materially from those projected in the
forward-looking statements, including the risks that actual results
may differ materially from those projected in the forward-looking
statements as a result of various factors, and other risks
identified in a companies' annual report on Form 10-K and other
filings made by such company with the United States Securities and
Exchange Commission. You should consider these factors in
evaluating the forward-looking statements included herein, and not
place undue reliance on such statements.
The following discussion should be read in
conjunction with
the financial statements and notes thereto included in the
Company’s Annual Report on Form 10-K for the fiscal year
ended December 31, 2017, as filed with the Securities and Exchange
Commission (“SEC”) on April 10, 2018 (the “Annual
Report”).
Company Overview
The
Company was incorporated in the State of Nevada on December 1,
1997. Its operations to date have been limited to obtaining the
license to various environmental and other technologies, conducting
preliminary marketing efforts and seeking financing.
The Company's principal offices are at 224 Fifth Avenue, Suite
D144, New York, NY 10022 Telephone: 604-790-8799. The Tokyo branch
is located at Suite 905, 1-6-1 Senzoku Taito-Ku Tokyo Japan.
Telephone: 03-5808-3663.
Plan of Operations
The Company is a development stage corporation. It has not
commenced its planned operations of manufacturing and
marketing. Its operations to date have been limited to
conducting various tests on its technologies and seeking
financing.
The Company will continue to develop and market two technologies,
which the Company believes have great market
potential.
The first technology is an automated personal waste collection and
cleaning machine Haruka (formerly "Heartlet"), developed by Nanomax
Corporation in Japan. The Haruka is a machine used in retirement
homes, hospitals, and even in private residences. The Haruka allows
the patient maximum comfort. The Haruka lowers the burden on the
caretaker with an automated cleaning system. This machine is the
only machine in its class to have a 90% government rebate, which
the company believes makes the technology extremely competitive
even in the current global economic crisis. The company obtained
sales and manufacturing rights to the Haruka brand and is currently
seeking manufacturing partners.
The second technology is Thoughts Routine Mechanism
(“RUNE”) developed by the Company. We plan to develop
this operating software to be used on electronic devices, such as
smart phones, PC’s and gaming machines. We have secured
technology and human resources that extend this technology to other
applications outside the gaming sector. The Company has developed
an alliance with Valhalla Game Studios (“VGS”) to
jointly conduct game development and application development on
“fate diagnosis based statistical theory, and “fate
diagnosis” game service on mobile phones, smart phones, and
tablets. We believe the collaboration between the Company and VGS
may contribute to the future growth of the Company. Currently, Mr.
Maki offers a wide range of advice as a special advisor, and this
business continues to be evaluated and developed. In addition,
cartoons, movies and games play a large role and influence world
views and we believe that this technology be a very effective tool
in this area.
The Company will also be concentrating its efforts on capital
raising efforts to enter into the NASDAQ Global Market. The Company
satisfies all entry requirements, except for investment capital.
The Company's target is to raise $30,000,000 in the near
future.
As stated above, the Company cannot predict whether or not it will
be successful in its capital raising efforts and, thus, be able to
satisfy its cash requirements for the next 12 months. If the
Company is unsuccessful in raising additional capital, it may not
be able to complete its plan of expanding operations as discussed
above.
The company is expecting to gain the capital from issuing and
selling the shares of the Company.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operations
General and administrative expenses increased $1,929 (10.5%) to
$20,362 for the three months ended June 30, 2018 as compared to
$18,433 for the three months ended June 30, 2017. This increase is
attributed to an increase in utility and automobile expenses and
professional fees offset partially by lower entertainment and rent
expenses. General and administrative expenses decreased $1,734
(4.5%) to $37,109 for the six months ended June 30, 2018 as
compared to $38,843 for the six months ended June 30, 2017. This
decrease is attributed to a decrease in professional fees offset
partially by higher utility and automobile expenses.
As a result of the above, the Company incurred a losses from
operations of $20,362 and $37,109 for the three and six months
ended June 30, 2018 as compared to a losses from operations of
$18,433 and $38,843 for the three and six months ended June 30,
2017.
For the three and six months ended June 30, 2018, interest expense
increased $296 and $618 to $3,443 and $6,707, respectively, as
compared to $3,147 and $6,089 for the three and six months ended
June 30, 2017, respectively, as a result of the additional advances
from stockholders
As a result of the above, the Company incurred a net losses of
$23,805 and $43,816 for the three and six months ended June 30,
2018 as compared to net losses of $21,580 and $44,932 for the three
and six months ended June 30, 2017.
LIQUIDITY AND CAPITAL RESOURCES
The Company's minimum cash requirements for the next twelve months
are estimated to be $80,000, including rent, audit fees, office
expenses, interest and professional fees. The Company does not have
sufficient cash on hand to support its overhead for the next twelve
months and there are no material commitments for capital at this
time other than as described above. The Company will need to issue
and sell shares to gain capital for operations or arrange for
additional stockholder or related party loans. There is
no current commitment for either of these fund
sources.
Our working capital deficit increased $43,816 to $525,079 at June
30, 2018 as compared to $481,263 at December 31, 2017 primarily due
to an increase in advances from stockholders and officers, accrued
expenses and due to affiliates.
On June 30, 2018, the Company had a cash balance of $5,003. The
Company’s principal sources and uses of funds were as
follows:
Cash used in operating activities.
For the six months ended June 30, 2018, the
Company used $31,108 in cash for operations as compared to using
$33,843 in cash for operations for the six months ended June 30,
2017, primarily as a result of the increase in accrued expenses
offset partially by the lower operating loss.
Cash provided by financing activities.
Net cash provided by financing activities for the
six months ended June 30, 2018 was $31,097 as compared to $33,943
for the six months ended June 30, 2017 primarily as a result of
lower proceeds from loans from stockholders and
officers.
OFF-BALANCE SHEET ARRANAGEMENTS
The Company has no off-balance sheet arrangements.
CRITICAL ACCOUNTING POLICIES
The
Company prepares its financial statements in accordance with
accounting principles generally accepted in the United States of
America. Preparing financial statements in accordance with
generally accepted accounting principles requires the Company to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosures of contingent assets and
liabilities as of the date of the financial statements and the
reported amounts of revenue and expenses during the reported
period.
Our critical accounting policies are described in the Notes to the
Financial Statements included in our Annual Report on Form 10-K for
the year ended December 31, 2017, as filed with the SEC on April
10, 2018 (the “Annual Report”). There have been no
changes in our critical accounting policies. Our significant
accounting policies are described in our notes to the 2017
consolidated financial statements included in our Annual
Report.
RECENTLY ISSUED ACCOUNTING STANDARDS
No recently issued accounting pronouncements had or are expected to
have a material impact on the Company’s consolidated
financial statements.
