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, 2019, as filed with the Securities
and Exchange Commission ("SEC") on March 30, 2020 (the "Annual Report").
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As shown in the financial statements,
the Company had a working capital deficiency of $654,795 and an accumulated
deficit of $5,482,428 at March 31, 2020, and a record of continuing losses.
These factors, among others, raise substantial doubt about the ability of the
Company to continue as a going concern. The financial statements do not include
adjustments relating to the recoverability of assets and classification of
liabilities that might be necessary should the Company be unable to continue in
operation.
General
Management's discussion and analysis of results of operations and financial
condition is intended to assist the reader in the understanding and assessment
of significant changes and trends related to the results of operations and
financial position of the Company together with its subsidiary. This discussion
and analysis should be read in conjunction with the consolidated financial
statements and accompanying financial notes, and with the Critical Accounting
Policies noted below.
Plan of Operation
The Company has three main objectives. Firstly, the Company will continue in its
goal to meet the capital objective of $30,000,000. Currently the company is
exploring various potential investment partners in Japan, as well as China. The
Company cannot predict whether it will be successful with its objective.
Second the Company will continue to support Amanasu Maritek Corporation's
efforts on entering into marine technologies. The Company will assist for
another 2 years in the design, and approval process for the product from at
least two regulatory bodies: the Japanese Government, and the IMO (International
Marine Organization). This approval process requires capital for additional
product testing, documentation, and documentation translations. The Company
believes that Amanasu Maritek Corporation's most significant hurdle will be in
capital raising. The Company has already initiated documentation and application
processes, and is now looking for capital to fund the project. The Company
cannot predict whether it will be successful with its capital raising efforts.
Third, the Company is making plans to enter the reforestation industry in Japan,
through Amanasu Maritek Corporation. The Company must first reach an agreement
with the relevant government agencies in Japan. The Company intends to focus on
the prefectures of Miyagi, Iwate and Niigata and begin operations within two
years. The Company cannot predict whether it will be successful with its
objective.
The Company's operations may be affected by the recent and ongoing outbreak of
the coronavirus disease 2019 (COVID-19) which in March 2020, was declared a
pandemic by the World Health Organization. The ultimate disruption which may be
caused by the outbreak is uncertain; however, it may result in a material
adverse impact on the Company's financial position, operations and cash flows.
Possible areas that may be affected include, but are not limited to, disruption
to the Company's ability to obtain funding and performing further research on
certain projects.
11
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (continued)
Results of Operations
There were no revenues for the three and three months ended March 31, 2020 and
2019.
General and administrative expenses of $21,052 for the three months ended March
31, 2020 modestly decreased as compared to $21,075 for the three months ended
March 31, 2019.
As a result of the above, the Company incurred losses from operations of $21,052
and $21,075 for the three months ended March 31, 2020 and 2019, respectively.
Interest expense for the three months ended March 31, 2020 was $4,955 as
compared to $4,581 for the three months ended March 31, 2019. This increase is
primarily the result of the increase in advances from stockholders and officers.
As a result of the above, the Company incurred net losses of $26,007 and $25,656
for the three months ended March 31, 2020 and 2019, respectively.
LIQUIDITY AND CAPITAL RESOURCES
Total current assets at March 31, 2020 were $19,054 as compared to $18,838 at
December 31, 2019. This increase is the result of the increase in the amount due
from related parties.
Total current liabilities as of March 31, 2020 were $673,849as compared to
$647,340 at December 31, 2019.This increase is primarily due to increases in
accrued expenses and accrued interest to related parties.
The Company's minimum cash requirements for the next twelve months are estimated
to be $60,000, including rent, audit 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 acquire debt or 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 $26,293 to $654,795 at March 31, 2020 as
compared to $628,502 at December 31, 2019 primarily due to increases in and
accrued expenses and accrued interest to related parties.
During the three months ended March 31, 2020, the Company had a net decrease in
cash of $135. The Company's principal sources and uses of funds were as follows:
Cash used in operating activities. For the three months ended March 31, 2020,
the Company used $105 in cash for operations as compared to using $8,052 in cash
for the three months ended March 31, 2019, primarily as a result of the change
in accrued expenses - related parties.
Cash (used in) provided by financing activities.Net cash used financing
activities for the three months ended March 31, 2020 was $30 as compared
providing $5,339 for the three months ended March 31, 2019 primarily as a result
of the decrease in loans from stockholders offset partially by lower payments in
amounts due to related parties.
12
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, 2019, as filed with the SEC on March 30, 2020 (the "Annual
Report"). There have been no changes in our critical accounting policies. Our
significant accounting policies are described in our notes to the 2019
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 condensed consolidated financial statements.
© Edgar Online, source Glimpses