FLDI Folkup Development Inc (CE)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

This quarterly report and other reports filed by FOLKUP DEVELOPMENT INC. (“we,” “us,” “our,” or the “Company”), from time to time contain or may contain forward-looking statements and information that are based upon beliefs of, and information currently available to, the Company’s management as well as estimates and assumptions made by Company’s management. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. When used in the filings, the words “anticipate,” “believe,” “estimate,” “expect,” “future,” “intend,” “plan,” or the negative of these terms and similar expressions as they relate to the Company or the Company’s management identify forward-looking statements. Such statements reflect the current view of the Company with respect to future events and are subject to risks, uncertainties, assumptions, and other factors. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned.

Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, levels of activity, performance, or achievements. Except as required by applicable law, including the securities laws of the United States, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results.

Our financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). These accounting principles require us to make certain estimates, judgments, and assumptions. We believe that the estimates, judgments, and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments, and assumptions are made. These estimates, judgments, and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenues and expenses during the periods presented. Our financial statements would be affected to the extent there are material differences between these estimates.

OVERVIEW

The Company was incorporated in the State of Nevada on July 5, 2016, and established a fiscal year end of November 30.

On June 26, 2020, Milena Topolac Tomovic, the then major shareholder, entered into a Stock Purchase Agreement with Benson Wu (“New Majority Shareholder”) wherein Milena Topolac Tomovic sold 3,000,000 shares of the Company’s common stock, representing approximately 78.9% of all issued and outstanding shares to Mr. Wu.

Effective from July 6, 2020, Milena Topolac Tomovic resigned as a director, and from the offices of President, Secretary and Treasurer of, the Company. Immediately prior to such resignation, Ms. Topolac Tomovic, as the sole member of the board of directors at such time, appointed Benson Wu as a director, and as President, Secretary and Treasurer of the Company. Mr. Wu is currently the Company’s sole officer and director.

Giving effect to the transactions under the Stock Purchase Agreement, Mr. Wu is now the beneficial holder of 3,000,000 shares of common stock, or 78.9%, of the issued and outstanding shares of common stock of the Company.

Going Concern

To date the Company has little operations or revenues and consequently has incurred recurring losses from operations. No revenues are anticipated until we complete the financing we endeavor to obtain and implement our initial business plan. The ability of the Company to continue as a going concern is dependent on raising capital to fund our business plan and ultimately to attain profitable operations. Accordingly, these factors raise substantial doubt as to the Company’s ability to continue as a going concern.

The Company plans to raise additional funds through debt or equity offerings. We have no assurance that future financing will materialize. If that financing is not available, we may be unable to continue. Management believes that if we are successful in raising $750,000, we will be able to generate sales revenue within the following twelve months thereof. However, if such public financing is not available, we could fail to satisfy our future cash requirements. We have no assurance that future financing will materialize. If that financing is not available we may be unable to continue. Management believes that if subsequent private placements are successful, we will be able to generate sales revenue within the following twelve months thereof. However, additional equity financing may not be available to us on acceptable terms or at all, and thus we could fail to satisfy our future cash requirements.

If we are unsuccessful in raising the additional proceeds through a private placement offering we will then have to seek additional funds through debt financing, which would be highly difficult for a new development stage company to secure. Therefore, the Company is highly dependent upon the success of the anticipated private placement offering and failure thereof would result in the Company having to seek capital from other sources such as debt financing, which may not even be available to the Company. However, if such financing were available, because we are a development stage company with no operations to date, it would likely have to pay additional costs associated with high risk loans and be subject to an above market interest rate. At such time these funds are required, management would evaluate the terms of such debt financing and determine whether the business could sustain operations and growth and manage the debt load. If we cannot raise additional proceeds via a private placement of its common stock or secure debt financing it would be required to cease business operations. As a result, investors in our common stock would lose all of their investment.

PLAN OF OPERATION

We are a development stage corporation and have not yet generated or realized any revenues from our business. In the next 12 months, we plan to increase our revenues by garnering more customers.  The Company intends to develop a renewable energy service business in Hong Kong.

Insurance

We do not maintain any insurance and do not intend to maintain insurance in the future. Because we do not have any insurance, if we are made a party of a products liability action, we may not have sufficient funds to defend the litigation. If that occurs a judgment could be rendered against us that could cause us to cease operations.

Employees; Identification of Certain Significant Employees.

We are a startup company and currently do not have employees other than Benson Wu, our sole officer and director. We intend to hire employees on an as needed basis.

Offices

Our business address is at Unit 17-18, 23/F, Metropole Square, 2 On Yiu Street, Sha Tin, New Territories, Hong Kong. We do not pay any lease and there is no agreement to pay any lease in the future. Our telephone number is (852) 3487 6330.

Government Regulation

We will be required to comply with all regulations, rules, and directives of governmental authorities and agencies applicable to our business in any jurisdiction which we would conduct activities. We do not believe that regulation will have a material impact on the way we conduct our business.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations for the three and nine months ended August 31, 2020 and 2019:

Revenue and cost of goods sold

For the three month period ended August 31, 2020, the Company generated no revenue from selling or leasing means of ecological urban transportation.

For the three month period ended August 31, 2019, the Company generated no revenue from selling or leasing means of ecological urban transportation.

For the nine month period ended August 31, 2020, the Company generated no revenue from selling or leasing means of ecological urban transportation.

For the nine month period ended August 31, 2019, the Company generated no revenue from selling or leasing means of ecological urban transportation.

Operating expenses

Total operating expenses for the three month ended August 31, 2020 were $2,998. The operating expenses included review fees of $2,500; professional fees of $498; bank service fees of $0.

Total operating expenses for the three month period ended August 31, 2019 were $21,067. The operating expenses included review fees of $2,000; consulting service fees of $18,000; professional fees of $1,067.

Total operating expenses for the nine month period ended August 31, 2020 were $15,793. The operating expenses included audit-related fees of $13,000; professional fees of $2,642; bank service fees of $151.

Total operating expenses for the nine month period ended August 31, 2019 were $30,041. The operating expenses included retired property of $720; depreciation of $60; audit-related fees of $9,600; consulting service fees of $18,000; professional fees of $1,661.

Net Loss

The net income for the three months ended August 31, 2020 was $34,651 and net loss for the three months ended August 31, 2019 was $21,067.

The net income for the nine months ended August 31, 2020 was $21,856 and the net loss for the nine months ended August 31, 2019 was $30,041.

Liquidity and Capital Resources and Cash Requirements

At August 31, 2020, the Company had cash of $0 ($5,101 as of November 30, 2019). Furthermore, the Company had a working deficit of $2,998 ($24,854 as of November 30, 2019).

During the nine months ended August 31, 2020, the Company used $12,795 of cash in operating activities due to the related party loans of $37,649 forfeited during the period and offset by its net income of $21,856 and increase in other payables and accrued expenses of $2,998.  

During the nine months ended August 31, 2020, the Company used no cash in investing activities.

During the nine months ended August 31, 2020, the Company generated $7,694 of cash in financing activities.

During the nine months ended August 31, 2019, the Company used $31,241 of cash in operating activities due to its net loss of $30,041, decrease in accounts receivable of $2,415; decrease in accounts payable of $4,395; disposal of equipment of $720 and depreciation of $60.  

During the nine months ended August 31, 2019, the Company used no cash in investing activities.

During the nine months ended August 31, 2019, the Company generated $11,995 of cash in financing activities on accounts of director’s loans.

We are attempting to raise funds to proceed with our plan of operations. We will have to utilize funds from Benson Wu, our sole officer and director, who has verbally agreed to loan the Company funds to complete the registration process if offering proceeds are less than registration costs. However, Mr. Benson Wu has no formal commitment, arrangement or legal obligation to advance or loan funds to the Company. Mr. Benson Wu’s verbal agreement to provide us loans for registration costs is non-binding and discretionary. If we are successful, any money raised will be applied to the items set forth in the Use of Proceeds section of this prospectus. We will attempt to raise at least the minimum funds necessary to proceed with our plan of operations. In the long term we may need additional financing. We do not currently have any arrangements for additional financing. Obtaining additional funding will be subject to a number of factors, including general market conditions, investor acceptance of our business plan and initial results from our business operations. These factors may impact the timing, amount, terms or conditions of additional financing available to us. There is no assurance that any additional financing will be available or if available, on terms that will be acceptable to us.

No substantial revenues are anticipated until we have completed the financing from this offering and implemented our plan of operations. We must raise cash to implement our strategy and stay in business. The amount of the offering will likely allow us to operate for at least one year and have the capital resources required to cover the material costs with becoming a publicly reporting.

The Company will have to meet all the financial disclosure and reporting requirements associated with being a publicly reporting company. The Company’s management will have to spend additional time on policies and procedures to ensure it is compliant with various regulatory requirements, especially that of Section 404 of the Sarbanes-Oxley Act of 2002. This additional corporate governance time required of management could limit the amount of time management has to implement is business plan and impede the speed of its operations.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.