The following discussion should be read in conjunction with our consolidated
financial statements and notes thereto included elsewhere in this Quarterly
Report on Form 10-
historical information and which relate to future operations, strategies,
financial results or other developments. Forward-looking statements are based
upon estimates, forecasts, and assumptions that are inherently subject to
significant business, economic and competitive uncertainties and contingencies,
many of which are beyond our control and many of which, with respect to future
business decisions, are subject to change. These uncertainties and contingencies
can affect actual results and could cause actual results to differ materially
from those expressed in any forward-looking statements made by us, or on our
behalf. We disclaim any obligation to update forward-looking statements.
Overview
We were incorporated in the
Corporation
authorized us to issue up to 75,000,000 shares of common stock, par value
and majority stockholders on
Articles of Incorporation with the
effective date of
common stock from 75,000,000 shares to 200,000,000 shares. In connection with
the amendment and restatement of our Articles of Incorporation, our Board of
Directors and majority stockholders also approved and adopted the Amended and
Restated Bylaws of the Company on
pursuant to our Amended and Restated Articles of Incorporation and upon
completion of processing by the
(“FINRA”), we changed the name of our Company from “
“
business plan and direction. Also effective
forward stock split of all our issued and outstanding common stock, which
increased the number of issued and outstanding shares of common stock from
1,400,000 to 21,000,000.
We are a development-stage company with limited revenues and less than
million dollars
limited start-up operations have consisted of the formation of our Company,
development of our business plan, efforts to raise capital and maintaining our
public company reporting requirements. In October of 2018 we completed a reverse
merger with
company engaged in the business of mining crypto assets. In addition to its
mining operation, Vortex is developing a variety of applications in the
cryptocurrency space, in both the software and hardware spheres, including cloud
mining, blockchain hardware and software development, and a cryptocurrency
wallet and exchange.
Share Exchange Agreement
On
“Exchange Agreement”) with Vortex and the Selling Members. Pursuant to the terms
and conditions of the Exchange Agreement, the Selling Members agreed to
voluntarily exchange all of the outstanding membership interests of Vortex for
65,000,000 shares of common stock of the Registrant. The Exchange Agreement was
approved by the boards of directors or managers of each of the Registrant and
Vortex, and by the Selling Members.
The Exchange Agreement includes customary representations, warranties and
covenants of the Registrant, Vortex and the Selling Members made to each other
as of specific dates. The assertions embodied in those representations and
warranties were made solely for purposes of the Exchange Agreement and are not
intended to provide factual, business, or financial information about the
Registrant, Vortex and the Selling Members. Moreover, some of those
representations and warranties (i) may not be accurate or complete as of any
specified date, (ii) may be subject to a contractual standard of materiality
different from those generally applicable to stockholders or different from what
a stockholder might view as material, (iii) may have been used for purposes of
allocating risk among the Registrant, Vortex and the Selling Members, rather
than establishing matters as facts, or (iv) may have been qualified by certain
disclosures not reflected in the Exchange Agreement that were made to the other
party in connection with the negotiation of the Exchange Agreement and generally
were solely for the benefit of the parties to that agreement. The Exchange
Agreement should not be read alone, but should instead be read in conjunction
with the other information regarding the Registrant and Vortex that has been, is
or will be contained in, or incorporated by reference into, the Forms 10-K,
Forms 10-Q, Forms 8-K, proxy statements and other documents that the Registrant
files with the
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The Exchange Agreement provides for the resignation of
Vasquez
appointment of new officers and directors, effective as of the closing of the
Exchange Transaction (the “Closing”).
Results of Operations
During the three-month period ended
out the Share Exchange with Vortex and satisfying our ongoing obligations as a
public reporting company.
From
earned limited revenues. We expect to continue to incur losses over the next
twelve months, or until we are able to fully develop and carry out our new
business opportunity that enables us to generate sufficient operating revenues.
Comparison of Three Months Ended
Our operations for the three-months ended
2017
During the three months ended
During the three-months ended
operating expenses, compared to
three-months ended
due to an increase in salaries and depreciation.
During the three-months ended
our DPT asset in the amount of
During the three months ended
the amount of
We incurred a net loss of
compared to a net loss of
2017
Our operations for the nine months ended
can be summarized as follows:
During the nine months ended
During the nine months ended
operating expenses, compared to
three-months ended
due to an increase in salaries depreciation and legal expenses related to our
recent name change, stock split, and the proposed Share Exchange with Vortex.
During the nine months ended
DPT asset in the amount of
During the nine months ended
the amount of
We incurred a net loss of
2018
above.
Liquidity and Capital Resources
Balance Sheets
As of
As of
compared to total liabilities in the amount of
The increase in our total liabilities and working capital deficit is due to an
increase in accounts payable and accrued liabilities and amounts due to our
director, as we had limited cash flows to repay outstanding obligations as they
became due.
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As of
accumulated deficit of
Cash Flows
Cash Used in Operating Activities
During the nine months ended
operating activities, compared to
during the period from
Cash Used in Investing Activities
During the nine months ended
activity was
period from
Cash Flows from Financing Activities
During the nine months ended
from financing activities, compared to
activities during the period from
2017
Recent Developments and Future Financing Activities
In order to execute on our business strategy, we will require additional working
capital. We anticipate that we will require a minimum of approximately
operations over the next twelve months. As we had cash and working capital in
the amount of
capital to enable us to carry out our operations for the next twelve months.
We expect to use debt and/or equity financing to fund operations for the
foreseeable future, including, without limitation, the sale of up to
of our capital stock pursuant to a private placement for the purpose of
financing the contemplated ongoing operations of the Company and Vortex, as
previously disclosed on our Current Report on Form 8-K filed with the
Any future sale of additional equity and/or debt securities will result in
dilution to current stockholders. We may also seek additional loans where the
incurrence of indebtedness would result in increased debt service obligations
and could require us to agree to operating and financial covenants that would
restrict our operations. 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, could limit our ability to expand business
operations and could harm our overall business prospects.
Off-Balance Sheet Arrangements
We have no significant off-balance sheet arrangements that have, or are
reasonably likely to have, a current or future effect on our financial
condition, changes in our financial condition, revenues or expenses, results of
operations, liquidity, capital expenditures or capital resources that are
material to our stockholders and investors.
Critical Accounting Policies
Our financial statements are affected by the accounting policies used and the
estimates and assumptions made by management during their preparation. A
complete listing of these policies is included in Note 2 of the notes to our
financial statements for the three-month period ended
believe the accounting policies utilized in preparing our financial statements
conform to the generally accepted accounting principles in
(“US GAAP”).
The preparation of financial statements in conformity with US GAAP requires
management to make estimates and assumptions that affect the amounts of assets
and liabilities and disclosure of contingent assets and liabilities at the date
of the balance sheet and reported amounts of revenues and expenses during the
reporting period. We base our estimates and assumptions on current facts,
historical experience and various other factors that we believe to be reasonable
under the circumstances, the results of which form the basis for making
judgments about the carrying values of assets and liabilities and the accrual of
costs and expenses that are not readily apparent from other sources. By their
nature, these estimates are subject to an inherent degree of uncertainty, and
actual results could differ from
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such estimates. The actual results experienced by our Company may differ
materially and adversely from our Company’s estimates. To the extent there are
material differences between the estimates and the actual results, future
results of operations will be affected.
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