Forward-Looking Statements
This Quarterly Report on Form 10-Q and the documents incorporated herein by
reference contain forward-looking statements. Such forward-looking statements
are based on current expectations, estimates, and projections about our
industry, management beliefs, and certain assumptions made by our management.
Words such as "anticipates," "expects," "intends," "plans," "believes," "seeks,"
"estimates," variations of such words, and similar expressions are intended to
identify such forward-looking statements. These statements are not guaranteeing
of future performance and are subject to certain risks, uncertainties, and
assumptions that are difficult to predict; therefore, actual results may differ
materially from those expressed or forecasted in any such forward-looking
statements. Unless required by law, we undertake no obligation to update
publicly any forward-looking statements, whether as a result of new information,
future events, or otherwise. However, readers should carefully review the risk
factors set forth in other reports and documents that we file from time to time
with the
The following discussion of our financial condition and results of operations should be read in conjunction with, and is qualified in its entirety by, the unaudited consolidated financial statements and notes thereto included in Item 1 of this Quarterly Report on Form 10-Q.
Overview
Since
The Company's products capitalize the large volume of the 24-hour Forex markets to achieve capital appreciation over a medium- to long-term basis, combined with the usage of a good wealth vehicle designed to control risk, profit from both bull or bear markets, and maximize liquidity and economic resilience.
Our proprietary trading models were developed by a team of professional engineers in communications, electronic circuitry design and financial engineering. This diverse team is the key factor in our successful development of non-traditional and innovative trading models. Our systems were designed to take intelligent positions as the market moves/changes and, upon development, our systems were to bring a rigorously tested track-record.
The Company's systems were designed to adapt themselves and to take intelligent positions as the market moves/changes. The models were subjected to rigorous testing akin to the volatile trading environment of major financial events/crises that have happened in recent history. These models were also programmed to have the ability to learn and adapt new manners of trading, effectively translating the human behavioral of trading into a predictive science. The Company's quantitative strategies and proprietary algorithmic trading system were developed to generate risk adjustable returns for its licensees and their clients.
Since 2016, the Company's focus has been to license its algorithm to licensees, regulated funds and banks to capitalize on the large volume of the 24-hour Forex markets to achieve capital appreciation over a medium- to long- term basis, combined with the usage of a good wealth vehicle designed to control risk, profit from both bull or bear markets, and maximize liquidity and economic resilience.
On
On
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on
The algorithms were placed into commercial operation in
In conjunction with the expansion into the regulated fund and bank model, NAML
decided to ask its clients to redeem the AUM and as of
The Company initiated its focus on the regulated bank and fund model in 2017
with the launch of the Feuris Fund A with AUM of approximately
The MQL License Agreement remains in place.
While the Company continues to improve its algorithm products, there are no guarantees that such product improvements will translate to improved financial performance. The Company, in its efforts to expand its business, is currently involved in the development of new business opportunities, including the following:
·The Global e-Commerce revenue has exceeded more than
·A global digital payment system that would allow users to gain access to the existing global merchant base in multiple countries and regions and earn attractive rewards and cashback benefits. We expect that access to the existing global merchant base would be established through proven payment merchant networks.
The Company continues to improve its products and has been working to create new products. The Company is doing its best to provide the basis for improved performance in the coming quarters, however, there is no guarantee that such new products and product improvements will translate to improved financial performance.
The Company did not generate any revenue during the six months period ended
In
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As disclosed in the Company's definitive information statement on Schedule 14C,
as filed with the
The Company has decided not to pursue the change in the Company's name at this time.
COVID-19
In
Because COVID-19 infections have been reported worldwide, certain national, state and local governmental authorities have issued stay-at-home orders, proclamations and/or directives aimed at minimizing the spread of COVID-19. Additional, more restrictive proclamations and/or directives may be issued in the future. As a result, certain Company internal operations communications and accounting operations have been disrupted by these stay-at-home orders, which have affected the timing of certain new business development activities (the Company had previously liquidated the Feuris Fund A AUM during the third quarter of 2019).
The ultimate impact of the COVID-19 pandemic on the Company's operations is unknown and will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the COVID-19 outbreak, new information which may emerge concerning the severity of the COVID-19 pandemic, and any additional preventative and protective actions that governments, or the Company, may direct, which may result in an extended period of continued business disruption and reduced operations. Any resulting financial impact cannot be reasonably estimated at this time but could be anticipated to have a material adverse impact on our business, financial condition and results of operations.
The measures taken to date have impacted the Company's business during the first half of 2020 and will impact the Company's business for the second half of 2020 and potentially beyond. The significance of the impact of the COVID-19 outbreak on the Company's business and the duration for which it may have an impact cannot be determined at this time.
The COVID-19 outbreak is a widespread health crisis that could adversely affect the economies and financial markets of many countries, resulting in an economic downturn that could materially impact our operating results.
Results of Operations
Three Months Ended
Revenues
We had no revenue during the three months ended
Operating Expenses
Operating expenses were
Net Loss
As a result of the foregoing, we had a net loss of
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We expect to incur net losses through 2020 because we expect to continue to incur expenses, but do not expect to generate significant, or any, revenues. We cannot guarantee that we will be successful in generating sufficient revenues or other funds in the future to cover our expenses. We expect to cover such shortfall in operating margins through advances from our principal shareholder and other fundraising measures, as the Company deems appropriate. There is no assurance that our principal shareholder will continue to advance funds to us or that we will be successful in any other fundraising measures.
Six Months Ended
We had no revenue during the three months ended
Operating expenses were
We expect to incur operating losses through the balance of this year because we will be incurring expenses and may not generate sufficient revenues. We cannot guarantee that we will be successful in generating sufficient revenues or other funds in the future to cover these operating costs. We expect to cover such shortfall in operating margins through advances from our principal shareholder and other fundraising measures that the Company deems appropriate.
Liquidity and Capital Resources
We had cash in the amount of
We do not have sufficient capital to sustain our operations for the next 12 months. We expect to continue to rely on advances from NAHL, as well as from other sources of financing, including private placements of our common shares in order to continue to fund our business operations. Issuances of additional shares will result in dilution to existing stockholders. There is no assurance that we will achieve any additional sales of equity securities or that we will be able to arrange for debt or other financing to fund our operations and other activities. We do not have any oral or written agreements with NAHL which would require NAHL to fund our operations.
During the six-month period ended
Through
•All funds that have been advanced to the Company by NAHL up to
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•Following
•In the event that NAHL determines not to fund any Additional Advances, then
conversion price for any Prior Advances made prior to
•The conversion prices as set forth above are subject to customary adjustments
for stock splits, stock dividends, recapitalizations and other customary events
which occur following
We expect to incur losses and negative operating cash flows for the foreseeable future, and we may never become profitable. We also expect to continue to incur significant operating and capital expenditures for the next several years and anticipate that our expenses will increase substantially in the foreseeable future. We also expect to experience negative cash flow for the foreseeable future as we fund our operating losses and capital expenditures.
As a result, we will need to generate significant revenues in order to achieve and maintain profitability. We may not be able to generate these revenues or achieve profitability in the future. Our failure to achieve or maintain profitability could negatively impact the value of our common stock.
We have no agreements to obtain funds through bank loans, lines of credit or any other traditional sources. Since we have no financing committed, our inability to realize financing to maintain operations and grow our business would materially restrict our business operations. Future financing may not be available upon acceptable terms, or at all. Should we be successful in securing future financing, new issuances of equity or convertible debt (i) would dilute our current shareholders, possibly significantly, (ii) might require a significant increase to our authorized stock, and (iii) might have rights, preferences, or privileges senior to our common or preferred stock. If financing is not available to us on favorable terms, such severe limitation might cause us to consider another consolidation of existing common equity at any time as a means to attract financing and maintain our business.
Due to the uncertainty of our ability to meet our current operating and capital
expenses and the fact that we have suffered recurring losses from operations and
have a net capital deficiency, in their report on our audited annual financial
statements as of and for the years ended
Cash and Cash Equivalents
The following table summarizes the sources and uses of cash for the periods stated. The Company held no cash equivalents for any of the periods presented.
For the Six Months Ended June 30, 2020 June 30, 2019 Cash, beginning of period$ 23,874 $ 28,617 Net cash used in operating activities (62,796) (92,398) Net cash provided by investing activities - - Net cash provided by financing activities 70,000 94,913 Effect of exchange rate on cash (575) (96) Cash, end of period$ 30,503 $ 31,036
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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 are material to stockholders.
Critical Accounting Policies
Our financial statements and related public financial information are based on
the application of accounting principles generally accepted in
Our significant accounting policies are summarized in Note 1 in the Annual Report on Form 10-K for the most recent fiscal year. While all these significant accounting policies impact our financial condition and results of operations, we view certain of these policies as critical. Policies determined to be critical are those policies that have the most significant impact on our financial statements and require management to use a greater degree of judgment and estimates. Actual results may differ from those estimates. Our management believes that given current facts and circumstances, it is unlikely that applying any other reasonable judgments or estimate methodologies would cause effect on our results of operations, financial position or liquidity for the periods presented in this report.
Related Parties
The Company follows the
Leases
In
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
The extent to which the COVID-19 pandemic may directly or indirectly impact our
business, financial condition, and results of operations is highly uncertain and
subject to change. We considered the potential impact of the COVID-19 pandemic
on our estimates and assumptions and there was not a material impact to our
consolidated financial statements as of and for the six months ended
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