This 10-Q contains forward-looking statements. Our actual results could differ
materially from those set forth as a result of general economic conditions and
changes in the assumptions used in making such forward-looking statements. The
following discussion and analysis of our financial condition and results of
operations should be read together with the consolidated financial statements
and accompanying notes and the other financial information appearing elsewhere
in this report. The analysis set forth below is provided pursuant to applicable
Securities and Exchange Commission regulations and is not intended to serve as a
basis for projections of future events.
Overview
Forge Innovation Development Corp. is a development stage company and was
incorporated in the State of Nevada in January 2016. The Company's primary
objective is commercial and residential land development, including the purchase
and sale of real estate, targeting properties primarily in Southern California.
We also intend to manage properties we own, and properties owned by unaffiliated
third parties. Our activities will include securing acquisition rights to
properties, obtaining zoning and other entitlements for the properties, securing
financing for purchase of the properties, improving the properties'
infrastructure and amenities and selling the properties to homeowner and
commercial owners for restaurants, offices and small businesses. Our first
property acquisition was 29 acres in the city of Desert Hot Springs in Southern
California. Due to problems with permits and adjacent landowners, rather than
getting involved in protracted negotiations, the Company sold the property to an
independent third party for a profit.
On August 17, 2020, the Company established a wholly owned subsidiary, Forge
Network Inc, in the State of California. As of September 30, 2022, we have not
generated any income from the subsidiary due to our business strategy
adjustment. Meanwhile, we are also looking for other business opportunities
which could potentially increase the profits of Company in the year of 2022.
Results of Operation for the three months ended September 30, 2022 and 2021
For the three months ended September 30, 2022, we had total revenue of $37,000,
as compared to $9,000 for the three months ended September 30, 2021, an increase
of $28,000 or 311%. The increase in total revenue was attributable to the newly
signed Property Management Agreement (the "PMA") with Legend Investment
International, LP ("Legend Investment") on April 2, 2022. Pursuant to the PMA,
the original monthly service charge was $5,000 which was amended to $10,000 per
month in June 2022 due to Legend Investment required additional management
services for their properties. In April 2022, we terminated the property
management services with Bloomage Beverly Hills Investment Inc. due to the sales
of the managed properties. On July 15, 2022, we traded our Mazda auto with Longo
Toyota to exchange a 2022 Toyota Mirai. Along with the transaction, we received
a $15,000 Hydrogen subsidy card to reward for the purchase of new energy
automobile, which will be amortized over the estimated period Hydrogen volume
being consumed.
During the three months ended September 30, 2022 and 2021, the Company incurred
general and administrative expenses of $39,801and $85,261, respectively. The
decrease was mainly due to the decreasing in payroll expense and professional
fees during the three months ended September 30, 2022. For the three months
ended September 30, 2022 and 2021, our net income (loss) were $3,639 and
$(71,261), respectively. The increase in net income was mainly due to the
increasing of revenue generated, along with the decreasing in general
administrative expenses for the three months ended September 30, 2022, compared
to the same period in last year.
Results of Operation for the nine months ended September 30, 2022 and 2021
For the nine months ended September 30, 2022, we had total revenue of $82,863,
as compared to $27,000 for the nine months ended September 30, 2021, an increase
of $55,863 or 207%. The increase in total revenue was attributable to the newly
signed Property Management Agreement (the "PMA") with Legend Investment
International, LP ("Legend Investment") on April 2, 2022. Pursuant to the PMA,
the original monthly service charge was $5,000 which was amended to $10,000 per
month in June due to Legend Investment required additional management services
for their properties. In April 2022, we terminated the property management
services with Bloomage Beverly Hills Investment Inc. due to the sales of the
managed properties.
During the nine months ended September 30, 2022 and 2021, the Company incurred
general and administrative expenses of $128,245 and $256,750, respectively. The
decrease in general and administrative expenses was mainly due to the decreasing
in salary expense and professional expenses. For the nine months ended September
30, 2021 and 2020, our net loss was $36,458 and $206,150, respectively. The
decrease in net loss was mainly due to the increase in revenue and decrease in
general and administrative expenses for the nine months ended September 30,
2022, compared to the same period in last year.
Equity and Capital Resources
We have incurred losses since inception of our business in 2016, except for
current quarter, and as of September 30, 2022, we had an accumulated deficit of
$1,567,925. As of September 30, 2022, we had cash of $3,961 and a negative
working capital of $142,195, compared to cash of $60,364 and a negative working
capital of $95,686 as of December 31, 2021. The decrease in the working capital
was primarily due to cash used to pay for operating expenses.
9
Going Concern Assessment
The Company demonstrates adverse conditions that raise substantial doubt about
the Company's ability to continue as a going concern. These adverse conditions
are negative financial trends, specifically cash outflow from operating
activities, operating losses, accumulated deficit and other adverse key
financial ratios.
Management's plan to alleviate the substantial doubt about the Company's ability
to continue as a going concern include attempting to improve its business
profitability, its ability to generate sufficient cash flow from its operations
and execute the business plan of the Company in order to meet its operating
needs on a timely basis. However, there can be no assurance that these plans and
arrangements will be sufficient to fund the Company's ongoing capital
expenditures and other requirements.
The consolidated financial statements do not include any adjustments relating to
the recoverability and classification of recorded assets, or the amounts and
classification of liabilities that might be necessary in the event that the
Company cannot continue as a going concern.
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 that is material to stockholders.
Critical Accounting Policies
The consolidated financial statements of the Company have been prepared in
accordance with accounting principles generally accepted in the United States.
The preparation of these consolidated financial statements requires making
estimates and judgments that affect the reported amounts of assets, liabilities,
revenues and expenses, and related disclosure of contingent assets and
liabilities. The estimates are based on historical experience and on various
other assumptions that are believed to be reasonable under the circumstances,
the results of which form the basis of making judgments about the carrying
values of assets and liabilities that are not readily apparent from other
sources. Actual results may differ from these estimates under different
assumptions or conditions.
The critical accounting policies are discussed in further detail in the notes to
the audited consolidated financial statements appearing elsewhere in this
report. Management believes that the application of these policies on a
consistent basis enables us to provide useful and reliable financial information
about our operating results and financial condition.
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