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 audited 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. Forge Network Inc is engaged in online
retail under the website: http://www.ez2go.us. We are still building up the
website at present, and we plan to formally launch it in the month of November
2020.
Results of Operation for the three months ended September 30, 2020 and 2019
During the three months ended September 30, 2020 and 2019, the Company generated
$9,000 and $9,000 of revenues, respectively; the revenue was generated from
property management service. The corresponding cost of revenue was $0. During
the three months ended September 30, 2020 and 2019, the Company incurred general
and administrative expenses of $94,933 and $78,191, respectively. The increase
was mainly due to the increase in salary expense. For the three months ended
September 30, 2020 and 2019, our net loss was $86,733 and $68,641, respectively.
The increase in net loss was mainly due to the increase in general and
administrative expense for the three months ended September 30, 2020, compared
to the same period in last year.
Results of Operation for the nine months ended September 30, 2020 and 2019
During the nine months ended September 30, 2020 and 2019, the Company generated
$27,000 and $27,000 of revenues, respectively; the revenue was generated from
property management service. The corresponding cost of revenue was $0. During
the nine months ended September 30, 2020 and 2019, the Company incurred general
and administrative expenses of $266,307 and $235,074, respectively. The increase
in general and administrative expenses was mainly due to the increase in salary
expense. For the nine months ended September 30, 2020 and 2019, our net loss was
$240,107 and $207,224, respectively. The increase in net loss was mainly due to
the increase in general and administrative expenses for the nine months ended
September 30, 2020, compared to the same period in last year.
Equity and Capital Resources
We have incurred losses since inception of our business in 2016 and, as of
September 30, 2020, we had an accumulated deficit of $1,189,011. As of September
30, 2020, we had cash of $287,337 and a working capital of $196,921, compared to
cash of $366,270 and a working capital of $420,183 at December 31, 2019. The
decrease in the working capital was primarily due to cash used to pay for
operating expenses.
As of September 30, 2020, the Company's principal sources of liquidity consisted
of approximately $287,000 of cash, and future cash generated from operations.
The Company believes its current cash balances coupled with anticipated cash
flow from operating activities will be sufficient to meet its working capital
requirements for at least one year from the date of the issuance of the
accompanying financial statements. The Company continues to control its cash
expenses. The Company cannot give assurance that it can increase its cash
balances or limit its cash consumption and thus maintain sufficient cash
balances for its planned operations or future acquisitions. Future business
demands may lead to cash utilization at levels greater than recently
experienced. The Company may need to raise additional capital in the future.
However, the Company cannot assure that it will be able to raise additional
capital on acceptable terms, or at all. Subject to the foregoing, management
believes that the Company has sufficient capital and liquidity to fund its
operations for at least one year from the date of issuance of the accompanying
financial statements.
11
Off-Balance Sheet Arrangements
Under SEC regulations, we are required to disclose off-balance sheet
arrangements that have or are reasonably likely to have a current or future
effect on our financial condition, such as changes in financial condition,
revenues or expenses, results of operations, liquidity, capital expenditures or
capital resources that are material to investors. An off-balance sheet
arrangement means a transaction, agreement or contractual arrangement to which
any entity that is not consolidated with us is a party, under which we have:
? Any obligation under certain guarantee contracts,
? Any retained or contingent interest in assets transferred to an unconsolidated
entity or similar arrangement that serves as credit, liquidity or market risk
support to that entity for such assets,
? Any obligation under a contract that would be accounted for as a derivative
instrument, except that it is both indexed to our stock and classified in
shareholder equity in our statement of financial position, and
? Any obligation arising out of a material variable interest held by us in an
unconsolidated entity that provides financing, liquidity, market risk or
credit risk support to us, or engages in leasing, hedging or research and
development services with us.
We do not have any off-balance sheet arrangements that we are required to
disclose pursuant to these regulations. In the ordinary course of business, we
enter into operating lease commitments, and other contractual obligations. These
transactions are recognized in our financial statements in accordance with
generally accepted accounting principles in the United States.
Critical Accounting Policies
The financial statements of the Company have been prepared in accordance with
accounting principles generally accepted in the United States. The preparation
of these 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 unaudited financial statements appearing elsewhere in this prospectus.
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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