MDWERKS, INC. Management's Discussion and Analysis
AtSeptember 30, 2022 , the Company was not engaged in continued business.MDwerks, Inc. , aDelaware corporation ("MDwerks", the "Company, "we", "us" or "our") is a public shell company seeking to create value for its shareholders by merging with another entity with experienced management and opportunities for growth in return for shares of our common stock.
No potential merger candidate has been identified at this time.
We do not propose to restrict our search for a business opportunity to any industry or geographical area and may, therefore, engage in essentially any business in any industry. We have unrestricted discretion in seeking and participating in a business opportunity, subject to the availability of such opportunities, economic conditions, and other factors.
The selection of a business opportunity in which to participate is complex and risky. Additionally, we have only limited resources and may find it difficult to locate good opportunities. There can be no assurance that we will be able to identify and acquire any business opportunity which will ultimately prove to be beneficial to us and our shareholders. We will select any potential business opportunity based on our management's best business judgment.
Capital Resources and Liquidity
We believe that if we do not raise additional capital in the foreseeable future, we may be required to suspend or cease the implementation of our business plans. If we are unable to raise additional funds, there is substantial doubt as to our ability to continue as a going concern.
We had no assets as of
We had liabilities aggregating$50,000 and$231,000 as ofSeptember 30, 2022 andDecember 31, 2021 , respectively. We anticipate that our current cash and cash equivalents and cash generated from financing activities will be insufficient to satisfy our liquidity requirements for the next 12 months. To date, the Company has incurred an accumulated deficit of$352,000 . The Company requires additional funding to meet its ongoing obligations and to fund anticipated operating losses. We believe that there is substantial doubt about our ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on raising capital to fund its initial business plan and ultimately to attain profitable operations. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might result from this uncertainty. We expect to incur marketing, professional, and administrative expenses as well expenses associated with maintaining our filings with the Commission. We will require additional funds during this time and will seek to raise the necessary additional capital. If we are unable to obtain additional financing, we may be required to reduce the scope of our business development activities, which could harm our business plans, financial condition and operating results. Additional funding may not be available on favorable terms, if at all. The Company intends to continue to fund its business by way of equity or debt financing and advances from related parties. Any inability to raise capital as needed would have a material adverse effect on our business, financial condition and results of operations. If we cannot raise additional funds, we will have to cease business operations. As a result, investors in the Company's common stock would lose all of their investment. 11 Results of Operations Unaudited Operating Results For the Three Months Ended For the Nine Months Ended Increase/ Increase/ Increase/ Increase/ September 30, September 30, (Decrease) Decrease September 30, September 30, (Decrease) Decrease 2022 2021 $ % 2022 2021 $ % Operating expenses General and administrative 49,652 10,913 38,739 NM 58,298 18,676 39,622 212 % Total operating expenses 49,652 10,913 38,739 NM 58,298 18,676 39,622 212 % Net loss from operations (49,652 ) (10,913 ) (38,739 ) NM (58,298 ) (18,676 ) 39,622 212 % Other income Gain on forgiveness of debt - -
- NM - 65,599 (65,599 ) -100 %
Total other income - - - NM - 65,599 (65,599 ) -100 %
Net income (loss) (49,652 ) (10,913 ) (38,739 ) NM (58,298 ) 46,923 (25,977 ) NM
(NM): not meaningful
At September 30, 2022 , the Company was not engaged in continued business. There
is minimal historical operational information about us on which to base an
evaluation of our performance. Due to a lack of funding, we have not implemented
our business operations. We cannot guarantee we will be successful in our
business operations. Our business is subject to risks inherent in the
establishment of a new business enterprise, including limited capital resources,
and possible delays in our planned product development.
Our general and administrative expenses generally consists of professional fees.
The increase in general and administrative expenses during the three and
nine-month period ended
During the nine-month period endedSeptember 30, 2021 , we recognized a gain on forgiveness of debt resulting from an agreement with one of our vendors. There were no similar agreements during the nine-month period endedSeptember 30, 2022 .
Recent Developments
OnJuly 21, 2022 , the Company in connection with the change of control and composition of the Board of Directors of the Company (the "Board") entered into a Stock Purchase Agreement (the "SPA") with (i)Tradition Reserve I LLC , aNew York limited liability company ("Buyer"); and (ii)Ronin Equity Partners, Inc. , aTexas corporation ("Seller"). 12 Pursuant to the SPA, the Seller agreed to sell, assign, transfer and deliver to the Buyer, onJuly 21, 2022 (the "Closing Date") free and clear of all Liens, ten million (10,000,000) shares of Series A Convertible Preferred Stock, par value$0.001 ("Preferred Stock") of the Company, held by the Seller (the "Shares"), representing 100% of the authorized and issued Preferred Stock, as of the Closing. In exchange for the sale, assignment, transfer and delivery of the Shares to Buyer, Buyer shall pay to the Seller a total purchase price of five hundred and twenty thousand ($520,000) Dollars (the "Purchase Price").
On
Further, at the closing of the transactions contemplated within the SPA (which include, but are not limited to, the purchases and sales of the Shares described above) (the "Closing"), the parties agreed that as of the Closing:
a) The Forgiven Debt (as defined hereinafter) was forgiven, as well as the
Note (as defined hereinafter), and any other loan agreements between the
Company and
Parties acknowledge and agreed that the Company was indebted to APP, an
affiliate of the Seller, in the amount of approximately
(i) the principal amount and accrued interest pursuant to a convertible
promissory note dated
issued by the Company to
28th, 2020 (the "Asia Note"), and (ii) various cash advances for a total of
Advances" and, together with any and all amounts that may have been due and
payable pursuant to the Asia Note, the "Forgiven Debt");
b) The Company's Board of Directors was required to undertake such actions as
required to:
(i) Expand the Company Board to be a number of persons as determined by
Buyer, and to name such persons as selected by Buyer as directors on
the Company Board;
(ii)
the positions as determined by Buyer; and
(iii) Following (i) and (ii), all of the directors and officers of the
Company, other than those named in or pursuant to (i) and (ii) shall
resign from all such positions with the Company.
The Closing was subject to certain customary closing conditions, including, but not limited to, the accuracy of the representations and warranties made by the parties, all necessary consents having been obtained to effect the transactions, and the receipt of any necessary government approvals in order to effect the transactions contemplated in the SPA. 13 The foregoing description of the SPA and the transactions contemplated pursuant to that SPA is qualified in its entirety by reference to the SPA, included as Exhibit 10.1 to the Current Report on Form 8-K filed onJuly 27, 2022 ("Current Report"). Prior to the Closing of the SPA, voting control of the Company was held by the Seller, of whichJacob D. Cohen was the primary shareholder, and held voting and dispositive control over the Shares. On the Closing Date, Buyer purchased the Shares, which both pre- and post-conversion represented approximately 98.23% of the Company's outstanding voting securities as of the date of the Current Report, resulting in a change in control of the Company. The Company designated the Preferred Stock so that each share shall hold with it conversion rights of one hundred (100) shares of common stock for every share of Preferred stock held, and that each share of Preferred stock will also hold with it the same number of common share votes prior to conversion as it would if fully converted to be used in voting on any company matter requiring a vote of shareholders. At Closing Date, there were 18,010,208 shares of common stock issued and outstanding.Kerry Cassidy is the majority membership unit holder and Managing Member of the Buyer, and therefore is deemed to have voting and dispositive power over the Company's Shares held by the Buyer. As a result of the Closing, the Company was no longer a company controlled by the Seller. Prior to the Closing, the Company was a shell company, and following the Closing, the Company continues to be a shell company. There has been no change in the Company's shell company status or the Company's operations as a result of the Closing.
Off Balance Sheet Arrangements
The Company has no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect or change on the company's financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors. The term "off-balance sheet arrangement" generally means any transaction, agreement, or other contractual arrangement to which an entity unconsolidated with the company is a party, under which the company has (i) any obligation arising under a guaranteed contract, derivative instrument or variable interest; or (ii) a retained or contingent interest in assets transferred to such entity or similar arrangement that serves as credit, liquidity or market risk support for such assets.
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