Item 2. Management's Discussion and Analysis of Financial Condition and Plan of Operations
Forward-Looking Statements
This Quarterly Report contains forward-looking statements about our business, financial condition and prospects that reflect management’s assumptions and beliefs based on information currently available. We can give no assurance that the expectations indicated by such forward-looking statements will be realized. If any of our management’s assumptions should prove incorrect, or if any of the risks and uncertainties underlying such expectations should materialize, our actual results may differ materially from those indicated by the forward-looking statements.
The key factors that are not within our control and that may have a direct bearing on operating results include, but are not limited to, acceptance of our services, our ability to expand our customer base, managements’ ability to raise capital in the future, the retention of key employees and changes in the regulation of our industry.
There may be other risks and circumstances that management may be unable to predict. When used in this Quarterly Report, words such as,
"believes,"
"expects," "intends,"
"plans,"
"anticipates,"
"estimates"
and similar expressions are intended to identify forward-looking statements, although there may be certain forward-looking statements not accompanied by such expressions.
Overview
We were incorporated in Delaware on May 11, 2011. We currently have no business operations or significant assets. We are a development stage company and plan to identify and acquire a business.
Recent Corporate Developments
The following corporate developments have occurred during the three months ended March 31, 2014, and up to the date of the filing of this report:
1. On March 15, 2014, we signed a letter of intent with Boomchat Inc. (“Boomchat”) to acquire all issued and outstanding shares of the common stock of Boomchat in exchange for 36,000,000 shares of our common stock. As of the date of this Quarterly Report, we did not enter into a definitive agreement with Boomchat.
2. On March 27, 2014, we appointed Robert Fedun our treasurer to replace outgoing treasurer Caludio Ferrer. As a result of this change, Robert Fedun is now our President, Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer and sole director.
3. On April 11, 2014, Yan Ming Lui, our former executive officer and former director, entered into a share purchase agreement, with Robert Fedun, our sole executive officer and director. Pursuant to the terms of the Share Purchase Agreement, Mr. Yan Ming Lui sold 36,000,000 shares of our common stock to Mr. Fedun in consideration of the payment of $3,600. As a result of the closing of the Share Purchase Agreement, Mr. Fedun now owns approximately 54.54% of our common stock and Mr. Yan Ming Lui no longer owns any shares of our common stock. As a result, there has been a change in control of the Company.
4. On April 10, 2014, we received a subscription to 66,666 shares of our common stock for a gross proceeds of $50,000. As of the date of this report these shares have not been issued.
Results of Operations
Summary of Financial Condition
Table 1 summarizes and compares our financial condition at March 31, 2014, to the year-ended December 31, 2013.
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Table 1: Comparison of financial condition
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|
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March 31,
2014
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December 31,
2013
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Working capital deficit
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$(36,471)
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$ (20,675)
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|
Current assets
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$ 2,403
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$ -
|
|
Total liabilities
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$ 38,874
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$ 20,675
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|
Common stock and additional paid in capital
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$ 87,930
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$ 87,930
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|
Deficit
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$124,401
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$ 108,605
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Selected Financial Results
Three Months Ended March 31, 2014 and 2013
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|
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| |
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Three Months Ended
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Percentage
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|
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March 31,
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Increase /
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|
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2014
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2013
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(Decrease)
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|
Operating expenses
|
|
|
|
|
Filing fees
|
$ 5,162
|
$ -
|
n/a
|
|
General and administrative
|
6,782
|
732
|
826.5%
|
|
Professional fees
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3,616
|
3,500
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3.3%
|
|
Net operating expenses
|
15,560
|
4,232
|
267.7%
|
|
Foreign exchange
|
236
|
-
|
n/a
|
|
Net loss
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$15,796
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$ 4,232
|
273.3%
|
Revenues
We have not generated any revenues since our inception on May 11, 2011, and there can be no assurance that we will be able to generate or grow revenues in future periods.
Operating Expenses
During the three months ended March 31, 2014, our expenses increased by $11,328 or 267.7% from $4,232 for the three months ended March 31, 2013 to $15,560 for the three months ended March 31, 2014. The increase was associated with our ongoing efforts to identify and acquire a business, which resulted in the Letter of Intent we signed with BoomChat Inc.
Net Loss
We have experienced net losses in all periods since our inception. Our net loss for the three months ended March 31, 2014 increased by $11,564 from $4,232 we incurred during the three months ended March 31, 2013 to $15,796 we incurred during the three months ended March 31, 2014. Our net loss since the date of our inception through March 31, 2014 was $124,401. We anticipate incurring ongoing operating losses and cannot predict when, if at all, we may expect these losses to plateau or narrow.
Liquidity and Capital Resources
Cash Flows
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|
| |
|
|
Three Months Ended
March 31, 2014
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Three Months Ended
March 31, 2013
|
|
Cash used in operating activities
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$ 8,322
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$ -
|
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Cash provided by financing activities
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10,496
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-
|
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Net increase in cash during the period
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$ 2,174
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$ -
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During the three months ended March 31, 2014, we used $8,322 in our day-to-day operating activities. We used $15,796 to cover our net loss, prepay $229 in our future expenses and lower our accrued liabilities by $1,345. These uses of cash were offset by an increase in our accounts payable of $9,048.
Our operations during the three months period ended March 31, 2014 were fully supported by CAD$11,500 ($10,405) loan from our sole officer and director.
In the comparable period ended March 31, 2013, we reduced our accounts payable and accrued liabilities by $500 and covered our net loss of $4,232 by $4,732 in the form of donated capital, not expected to be repaid.
As of March 31, 2014, we had $2,174 in cash and did not have any other cash equivalents. Subsequent to March 31, 2014, we received a subscription for 66,666 shares of our common stock for total proceeds of $50,000. We have not issued the shares as of the date of this filing.
We do not have sufficient funds to maintain our operations for the next twelve months, as such, we continue with our ongoing efforts to raise additional capital by conducting additional issuances of our equity and debt securities for cash. The sale of additional equity securities will result in dilution to our stockholders. The incurrence of indebtedness will result in increased debt service obligations and could require us to agree to operating and financial covenants that could restrict our operations or modify our plans to grow the business. Financing may not be available in amounts or on terms acceptable to us, if at all. Any failure by us to raise additional funds on terms favorable to us, or at all, will limit our ability to expand our business operations and could harm our overall business prospects. We cannot assure you that any financing can be obtained or, if obtained, that it will be on reasonable terms. As such, our principal accountants have expressed doubt about our ability to continue as a going concern because we have limited operations and have not fully commenced planned principal operations.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements.
Plant and Equipment
We currently do not own any significant plant or equipment that we would seek to sell in the near future.
Related Party Transactions
During the three months ended March 31, 2014 we borrowed CAD$11,500 ($10,405) from our sole director and officer. We have not paid for expenses on behalf of any of our directors. Our officers and directors work for us on a part-time basis, and are prepared to devote additional time, as necessary.
Going Concern Consideration
Our auditors have issued an opinion on our annual financial statements which includes a statement describing our going concern status. This means that there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay our bills and meet our other financial obligations. This is because we have not generated any revenues and no revenues are anticipated in the near future. Accordingly, we must raise capital from sources other than the actual sale of the product. We must raise capital to implement our project and stay in business.
