The accompanying notes are an integral part of these unaudited financial statements.
Notes to the Financial Statements
(Unaudited)
1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
Lotus Bio-Technology Development Corp (“we”, “our”, the “Company”) was formed on March 24, 2011 with planned principal operations as an independent motion picture producer. In 2016, the Company has shifted its focus and began exploring opportunities in the organic growth and farming sector in China.
In May of 2016, the Company has changed its name, president and business direction and entered into the organic bio development space.
On May 7, 2016, The Company also signed a marketing and distribution agreement with Hunan Canshi in China. Lotus Bio-Technology will provide Marketing, Sales and distribution for organic related products produced exclusively by Hunan Canshi. The term of the agreement is 10 years. General terms of the agreement state that Lotus will provide; Marketing, sales and distribution for Hunan Canshi and Hunan Canshi will provide a variety of Organic related products, Both Hunan Canshi and Lotus Bio-Technology intend to collaborate on a variety of business related issues such as promotion of products through social media and corporate website, development of joint marketing materials and training and support for all staff. The agreement also states that subsidiary company is to be created of which Lotus will own 51% in the newly established Hong Kong Entity As of today that process has not completed.
The accompanying unaudited interim financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information required to be included in a complete set of financial statements in accordance with accounting principles generally accepted in the United States of America. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the six months ended September 30, 2016 are not necessarily indicative of the results that may be expected for the fiscal year ending March 31, 2017. The accompanying unaudited financial statements should be read in conjunction with the financial statements and related notes included in the Company's March 31, 2016 Form 10-K.
2. GOING CONCERN
The Company’s interim unaudited financial statements are prepared using generally accepted accounting principles applicable to a going concern which contemplates realization of assets and liquidation of liabilities in the normal course of business. As shown in the accompanying financial statements, the Company has incurred net loss of $4,621 for the six months ended September 30, 2016. The Company has not generated any operating revenues to date, has a working capital deficit and existence is dependent upon management’s ability to develop profitable operations. These conditions raise substantial doubt that the Company will be able to continue as a going concern. These financial statements do not include any adjustments that might result from this uncertainty.
Our activities to date have been supported by equity financing and demand loans from our major shareholder. Management continues to seek funding from its shareholders and other qualified investors to pursue its business plan and new course of action.
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3. DUE TO RELATED PARTY
As at September 30, 2016 the balance due to a majority shareholder was $51,754 .The amount due to the major shareholder is unsecured, non-interest bearing and due on demand.
As at September 30, 2016 the balance due to other related third parties was $9,194.
4. SUBSEQUENT EVENTS
As at September 30, 2016, there is no subsequent events.
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ITEM 2.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION.
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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.” 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. 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.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Lotus Bio-Technology Development Corp was formed under the laws of the State of Nevada. We have not commenced our planned principal operations.
Plan of Operation
All of the information following is based upon estimates. We are a startup company, or in other words, a company with a limited operating history, since our operations have been limited to incorporating Lotus Bio-Technology Development Corp; issuing stock to Zoltan Nagy, our previous officer and director; developing our business plan; began developing our website; Since then we have spent all of the money raised in our public offering.
Lotus Bio-Technology is actively seeking new opportunities in the emerging bio-natural industry in China. Our mandate is to partner with companies that are in the organic growth sector that meet the criteria we have set out in order to grow various plant products under strict organic standards. Products that can be refined into various consumer products which are completely natural and strike a balance between affordability while being produced from an environmentally responsible manner. Products that are void of pesticides, synthetic fertilizers, anti-biotics, growth hormones and any other dangerous chemicals.
In anticipation of the Company's growth strategy, Lotus Bio-Technology intends to establish a corporate office in Yong Zhou City to serve as our China headquarters for its daily business activity. Our local office is currently in Cave Creek Arizona.
Limited operating history; need for additional capital
There is no historical financial information about us upon which to base an evaluation of our performance. We are in a start-up stage operations and have not generated any revenues. We cannot guarantee we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources and possible cost overruns due to price and cost increases in services and products. To become profitable and competitive, we have to sell our products, and execute our business plan. We are not seeking equity financing at the present time.
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We have no assurance that future financing will be available to us on acceptable terms. If financing is not available on satisfactory terms, we may be unable to continue operations. Equity financing could result in additional dilution to existing shareholders.
Results of operations
Results of operations for the three and six months ended September 30, 2016 and September 30, 2015
We have not earned any revenues during the three and six months ended September 30, 2016. We incurred expenses and a net loss in the amount of $3,111 for the three months ended September 30, 2016. Our expenses during the three months ended September 30, 2016 consisted of accounting and legal fees of $3,111. By comparison, we incurred a net loss of $4,019 for the three months ended September 30, 2015. We incurred expenses and a net loss in the amount of $4,621 for the six months ended September 30, 2016. Our expenses during the six months ended September 30, 2016 consisted of accounting and legal fees of $5,426, general and administrative fees of $20, stock transfer management fee of $745, and amortization expense of $546. By comparison, we incurred a net loss of $6,171 for the six months ended September 30, 2015.
Our losses are attributable to operating expenses together with a lack of any revenues.
Liquidity and capital resources
As of the date of this report, we have yet to generate any revenues from our business operations.
As of September 30, 2016, our total current assets were $1 and our total current liabilities were $70,842. Accordingly, we had a working capital deficit of $70,841 as of September 30, 2016.
During the six months ended September 30, 2016, the former sole officer and director of the Company paid no expenses on behalf of the Company. As of September 30, 2016, $60,948 was due to the previous sole officer and director. The amount due was unsecured, non-interest bearing
and due on demand.
Going Concern
As discussed in the notes to our financial statements, we have not established a source of revenue. This has raised substantial doubt to our auditors about our ability to continue as a going concern. Without realization of additional capital, it would be unlikely for us to continue as a going concern.
Our activities to date have been supported by equity financing and demand loans from our major shareholder. Management continues to seek funding from its shareholders and other qualified investors to pursue its business plan and new course of action.
Off Balance Sheet Arrangements
As of September 30, 2016, there were no off balance sheet arrangements.