Item
2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking
Statements
Certain
statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives,
and expected operating results, and the assumptions upon which those statements are based, are “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. These forward-looking statements generally are identified by the words “believes,”
“project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,”
“plan,” “may,” “will,” “would,” “will be,” “will continue,” “will
likely result,” and similar expressions. We intend such forward-looking statements to be covered by the safe-harbor provisions
for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and are including this statement for
purposes of complying with those safe-harbor provisions. Forward-looking statements are based on current expectations and assumptions
that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements.
Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a
material adverse effect on our operations and future prospects on a consolidated basis include, but are not limited to: changes in economic
conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles.
These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed
on such statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new
information, future events or otherwise. Further information concerning our business, including additional factors that could materially
affect our financial results, is included herein and in our other filings with the SEC.
Overview
As
of December 31, 2020 we were still a shell company and have not yet begun operations. We have no source of revenue and need additional
cash resources to maintain the operations. Our ability to continue as a going concern is dependent on our ability to raise additional
capital or obtain necessary debt financing. We are presently dependent on our Chief Executive Officer, Mr. Kingrich Lee to either provide
us funding for its daily operation and expenses, including professional fee and fees charged by regulators, although he is under no obligation
to do so, or to spearhead financing efforts with third parties.
We
currently do not have any arrangements in place to complete any financings and there is no assurance that we will be successful in completing
any such financings on terms that will be acceptable.
Our
priority, should we receive such additional funds, is to pay our legal, accounting and other fees associated with our Company and our
filing obligations under United States federal securities laws, as well as to pay our other accounts payable generated in the ordinary
course of our business.
Once
these costs are accounted for, we will focus on the following activities:
●
|
Continue
to work to establish a management team to work on establishing pharmaceutical operations in the Boston area.
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●
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Continue
intellectual property registration work for drug candidates.
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Any
failure to raise money will have the effect of delaying the timeframes in the business plan as set forth above, and we may have to push
back the dates of such activities.
Going
Concern
As
of December 31, 2020, we were a shell company and have not yet begun operations. We have no source of revenue and need additional
cash resources to maintain the operations. Our ability to continue as a going concern is dependent on our ability to raise additional
capital or obtain necessary debt financing. We are presently dependent on our Chief Executive Officer, Mr. Kingrich Lee, to either provide
us funding for its daily operation and expenses, including professional fee and fees charged by regulators, although he is under no obligation
to do so, or to spearhead financing efforts with third parties.
At
December 31, 2020 we had current assets of $13,470, liabilities totaling $1,562,675, have incurred losses since inception of $3,448,723,
and have not yet received any revenue from sales of products or services. These factors raise substantial doubt about our ability
to continue as a going concern for a period of one year after the date that the financial statements are issued. Our ability to continue
as a going concern is dependent on our ability to raise additional capital or obtain necessary debt financing. We are presently dependent
on our controlling shareholder to provide us funding for our daily operation and expenses, including professional fee and fees charged
by regulators, although he is under no obligation to do so.
Any
failure to raise additional funds will have the effect of delaying the timeframes as described in our business plan as set forth above
and elsewhere in this Quarterly Report on Form 10-Q, and we may have to push back the dates or modify the scope of such planned activities.
In
March 2020, the World Health Organization declared the global novel coronavirus disease 2019 (COVID-19) outbreak a pandemic. As we are
still a shell company at December 31, 2020, our operations have not been significantly impacted financially by the COVID-19 outbreak
other than to delay our plans to develop the business and raise required funds. We cannot at this time predict the specific extent, duration,
or full impact that the COVID-19 outbreak will have on our financial condition and ability to raise additional capital to finance future
planned operations.
Management
has been taking steps to improve the financial position of the Company. Subsequent to December 31, 2020, in January 2021, we sold 300,000
shares of our common stock at $0.40 per share for gross proceeds of $120,000. In February 2021, $1.2 million of Company debt that was
owed to Mr. Kingrich Lee was converted into 3,000,000 shares of our common stock at a conversion price of $0.40 per share. In April 2021,
the Company sold 300,000 shares of its common stock at a purchase price of $0.40 per share for total gross proceeds of $120,000. In May
2021, the Company sold 187,500 shares of its common stock at a purchase price of $0.40 per share for total gross proceeds of $75,000.
Results
of Operations
Three
and Nine Months Ended December 31, 2020 and 2019
General
and Administrative Expenses
As
we are a shell company without operations during the three and nine month periods ended December 31, 2020 and the three and nine month
periods ended December 31, 2019, our expenses were primarily general and administrative related. We recognized general and administrative
expenses of $78,979 and $134,045 for the three months ended December 31, 2020 and 2019, respectively, and $220,207 and
$385,947 for the nine months ended December 31, 2020 and 2019, respectively.
Our
operating expenses for the three months ended December 31, 2020 consisted primarily of officer compensation of $63,730 and professional
fees of $13,172. Our operating expenses for the three months ended December 31, 2019 consisted mainly of officer compensation of $73,046,
professional fees of $49,658, and travel expenses of $8,013 Operating expenses decreased during the three months ended December
31, 2020 from the comparable prior year period primarily due to delaying our annual audit and quarterly reviews along with certain
other professional services and decreased officer benefits incurred. Also, due to COVID-19, there was no business travel during
the three months ended December 31, 2020.
Our
operating expenses for the nine months ended December 31, 2020 consisted primarily of officer compensation of $187,038 and professional
fees of $25,806. Our operating expenses for the nine months ended December 31, 2019 consisted primarily of officer compensation of $213,261,
professional fees of $134,064, and travel expenses of $27,145. Generally, operating expenses decreased during the nine months ended December
31, 2020 compared to the same period in 2019 as we delayed our annual audit and quarterly reviews along with certain other professional
services and decreased officer benefits incurred. Also, due to COVID-19, there was significantly reduced business travel and related
expenses during the nine months ended December 31, 2020.
We
anticipate our operating expenses will increase significantly as we proceed to implement our business plan described above and become
operational.
Net
Loss
We
incurred a net loss of $79,244 and $134,045 for the three months ended December 31, 2020 and 2019, respectively, and a net loss
of $220,950 and $385,946 for the nine months ended December 31, 2020 and 2019, respectively.
Liquidity
and Capital Resources
At
December 31, 2020, we had $13,470 in current assets, consisting of $3,119 in cash and $10,351 in prepaid expense and other current assets,
and current liabilities in the amount of $1,562,675, consisting of accrued liabilities of $62,332, a note payable of $15,000,
accrued interest of $742, accrued officer compensation of $295,500, and $1,189,101 due to an officer. We had a net working capital
deficit of $1,549,205 as of December 31, 2020.
The
table below sets forth selected cash flow data for the periods presented:
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Nine
Months Ended
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|
|
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December
31
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|
|
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2020
|
|
|
2019
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Net cash used
in operating activities
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|
$
|
(41,925
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)
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$
|
(250,438
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)
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Net
cash provided by financing activities
|
|
|
45,000
|
|
|
|
258,600
|
|
Net
increase in cash
|
|
$
|
3,075
|
|
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$
|
8,162
|
|
Our
positive operating cash flows were mainly a result of operating expenses offset by cash provided by officer loans and a note payable
(see Result of Operations). Our positive financing cash flows were a result of proceeds from officer loans and a note payable.
On
November 1, 2018, we entered into a one-year employment agreement with Mr. Lee to continue his employment as our Chief Executive Officer,
continuing on a year-to-year basis thereafter unless terminated by either party on not less than thirty (30) days’ notice prior
to the expiration of the one-year extension anniversary (current agreement is through October 31, 2021). His salary is $180,000 a year.
Additionally, he shall be entitled to an education allowance for his children who are attending full-time local education from kindergarten
to senior secondary levels in any type of school and a housing allowance of $3,000 a month. Upon termination of Mr. Lee’s employment,
except for termination for cause or termination by Mr. Lee, he shall be entitled to a payment equal to two (2) months’ salary ($30,000
at December 31, 2020) and shall also be eligible to retain his other benefits for a period of six (6) months.
We
have insufficient cash to operate our business at the current level for the next 12 months from the issuance date of this report and
insufficient cash to achieve our business goals. The success of our business plan beyond the next 12 months from the issuance date of
this report is contingent upon us obtaining additional financing. We intend to fund operations through debt and/or equity financing arrangements,
which may be insufficient to fund our capital expenditures, working capital, or other cash requirements. We do not have any formal commitments
or arrangements for the sale of stock or the advancement of loans of funds at this time. There can be no assurance that such additional
financing will be available to us on acceptable terms, or at all.
Off-Balance
Sheet Arrangements
We
have no off-balance sheet arrangements.