HAHA GENERATION CORP This Management's Discussion and Analysis of Financial Condition and Results of Operations is intended to provide a reader of our financial statements with a narrative from the perspective of our management on our financial condition, results of operations, liquidity, and certain other factors that may affect our future results. The following discussion and analysis should be read in conjunction with our audited consolidated financial statements and the accompanying notes thereto included in "Item 8. Financial Statements and Supplementary Data."
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Overview
We have yet to commence planned operations to any significant measure. As of the
date of this annual report, we, have had only limited start-up operations and
have not generated revenues. We will not be profitable until we derive
sufficient revenues and cash flows from sales of silicon energy clothing
products. Our administrative office is located at 6F., No.364, Sec. 5,
As of the date of this annual report, we have not sold any silicon energy clothing nor have we generated any revenue from operations.
We are a development stage company located in
We believe that we will be successful in selling high quality silica energy
clothing products at economical prices because we plan to buy the product
directly from Shinin at discounted prices. We plan to enter into agreements with
clothing product suppliers and retailers in
Going Concern
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. The Company had limited operations since its
incorporation. As of
The Company faces all the risks common to companies at development stage, including capitalization and uncertainty of funding sources, high initial expenditure levels, uncertain revenue streams, and difficulties in managing growth. The Company's losses raise substantial doubt about its ability to continue as a going concern. The Company's financial statements do not reflect any adjustments that might result from the outcome of this uncertainty.
The future of the Company is dependent upon its ability to obtain financing and upon future profitable operations from the development of its planned business. The Company plans to seek additional funds through private placements of its equity securities and/or capital contributions and loans from officer and director. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The financial statements included in the registration statement of which this prospectus is a part do not include any adjustments that might occur from this uncertainty.
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Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles in
Classification
Certain classifications have been made to the prior year financial statements to conform to the current year presentation. The reclassification had no impact on previously reported net loss or accumulated deficit.
Cash and Cash Equivalents
Cash and cash equivalents include cash and all highly liquid instruments with original maturities of three months or less.
Beneficial Conversion Feature
From time to time, the Company may issue convertible notes that may contain an imbedded beneficial conversion feature. A beneficial conversion feature exists on the date a convertible note is issued when the fair value of the underlying common stock to which the note is convertible into is in excess of the remaining unallocated proceeds of the note after first considering the allocation of a portion of the note proceeds to the fair value of the warrants, if related warrants have been granted. The intrinsic value of the beneficial conversion feature is recorded as a debt discount with a corresponding amount to additional paid in capital. The debt discount is amortized to interest expense over the life of the note using the effective interest method.
Fair Value Measurements
FASB ASC 820, "Fair Value Measurements" defines fair value for certain financial and nonfinancial assets and liabilities that are recorded at fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. It requires that an entity measure its financial instruments to base fair value on exit price, maximize the use of observable units and minimize the use of unobservable inputs to determine the exit price. It establishes a hierarchy which prioritizes the inputs to valuation techniques used to measure fair value. This hierarchy increases the consistency and comparability of fair value measurements and related disclosures by maximizing the use of observable inputs and minimizing the use of unobservable inputs by requiring that observable inputs be used when available. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the assets or liabilities based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy prioritizes the inputs into three broad levels based on the reliability of the inputs as follows:
• Level 1 - Inputs are quoted prices in active markets for identical assets or
liabilities that the Company has the ability to access at the measurement
date. Valuation of these instruments does not require a high degree of
judgment as the valuations are based on quoted prices in active markets that
are readily and regularly available.
• Level 2 - Inputs other than quoted prices in active markets that are either
directly or indirectly observable as of the measurement date, such as quoted
prices for similar assets or liabilities; quoted prices in markets that are
not active; or other inputs that are observable or can be corroborated by
observable market data for substantially the full term of the assets or
liabilities.
• Level 3 - Valuations based on inputs that are unobservable and not
corroborated by market data. The fair value for such assets and liabilities
is generally determined using pricing models, discounted cash flow
methodologies, or similar techniques that incorporate the assumptions a
market participant would use in pricing the asset or liability.
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The carrying values of certain assets and liabilities of the Company, such as cash and cash equivalents, prepaid expenses, accrued expenses, and due to shareholders, approximate fair value due to their relatively short maturities. The carrying value of the Company's notes payable and accrued interest approximates their fair value as the terms of the borrowing are consistent with current market rates.
Net Income (loss) per Share
Basic income (loss) per share is computed by dividing net income by weighted
average number of shares of common stock outstanding during each period. Diluted
income per share is computed by dividing net loss by the weighted average number
of shares of common stock, common stock equivalents and potentially dilutive
securities outstanding during each period. For the years ended
Income Taxes
The Company accounts for income taxes in accordance with ASC 740, Income Taxes, which requires that the Company recognize deferred tax liabilities and assets based on the differences between the financial statement carrying amounts and the tax basis of assets and liabilities, using enacted tax rates in effect in the years the differences are expected to reverse. Deferred income tax benefit (expense) results from the change in net deferred tax assets or deferred tax liabilities. A valuation allowance is recorded when, in the opinion of management, it is more likely than not that some or all of any deferred tax assets will not be realized.
Recent Accounting Pronouncements
In
In
Results of Operations
The following presents the results of the Company for the year ended
Net Revenues: We did not generate any revenue for the years ended
General and Administrative Expenses: General and administrative expenses
primarily consist of legal, accounting, and professional service fees. General
and administrative expenses was
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Loss from Operations: Loss from operations was
Other Income: Other income was
Net Loss: Net loss was
Liquidity and Capital Resources
As of
Net cash used in operating activities was
We did not have net cash flow provided by (used in) investing and financing
activities during the years ended
Net change in cash and cash equivalents was a decrease of
Inflation
Our opinion is that inflation has not had, and is not expected to have, a material effect on our operations.
Off-Balance Sheet Arrangements
We do not have any 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 investors.
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