ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
This Form 10Q contains "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E the Securities Exchange Act of 1934, as amended and
such forward-looking statements are made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act
of 1995. "Forward-looking statements" describe future expectations,
plans, results, or strategies and are generally preceded by words
such as "may," "future," "plan" or "planned," "will" or "should,"
"expected," "anticipates," "draft," "eventually" or "projected."
You are cautioned that such statements are subject to a multitude
of risks and uncertainties that could cause future circumstances,
events, or results to differ materially from those projected in the
forward-looking statements, including the risks that actual results
may differ materially from those projected in the forward-looking
statements as a result of various factors, and other risks
identified in a companies' annual report on Form 10-K and other
filings made by such company with the United States Securities and
Exchange Commission. You should consider these factors in
evaluating the forward-looking statements included herein, and not
place undue reliance on such statements.
The following discussion should be read in
conjunction with
the financial statements and notes thereto included in the
Company’s Annual Report on Form 10-K for the fiscal year
ended December 31, 2016, as filed with the Securities and Exchange
Commission (“SEC”) on April 17, 2017 (the “Annual
Report”).
Please note that t
he accompanying financial statements have
been prepared assuming that the Company will continue as a going
concern. As shown in the financial statements, the Company had a
material working capital deficiency and an accumulated deficit at
March 31, 2017, and a record of continuing losses. These factors
raise substantial doubt about the ability of the Company to
continue as a going concern. The financial statements do not
include adjustments relating to the recoverability of assets and
classification of liabilities that might be necessary should the
Company be unable to continue in operation.
The
Company's present plans, the realization of which cannot be
assured, to overcome these difficulties include but are not limited
to a continuing effort to investigate business acquisitions and
joint ventures.
General
Management’s discussion and analysis of results of operations
and financial condition is intended to assist the reader in the
understanding and assessment of significant changes and trends
related to the results of operations and financial position of the
Company together with its subsidiary. This discussion and analysis
should be read in conjunction with the consolidated financial
statements and accompanying financial notes, and with the Critical
Accounting Policies noted below.
Plan of Operation
The Company has three main objectives during the fiscal year ending
December 31, 2017. Firstly, the Company will continue in its goal
to meet the capital objective of $30,000,000. Currently the company
is exploring various potential investment partners in Japan, as
well as China. The Company cannot predict whether it will be
successful with its objective.
Second the Company will continue to support Amanasu Maritek
Corporation's efforts on entering into marine technologies. The
Company will assist for another 2 years in the design, and approval
process for the product from at least two regulatory bodies: the
Japanese Government, and the IMO (International Marine
Organization). This approval process requires capital for
additional product testing, documentation, and documentation
translations. The Company believes that Amanasu Maritek
Corporation's most significant hurdle will be in capital raising.
The Company has already initiated documentation and application
processes, and is now looking for capital to fund the project. The
Company cannot predict whether it will be successful with its
capital raising efforts.
Third, the Company is making plans to enter the reforestation
industry in Japan, through Amanasu Maritek Corporation. The Company
must first reach an agreement with the relevant government agencies
in Japan. The Company intends to focus on the prefectures of
Miyagi, Iwate and Niigata and begin operations within two years.
The Company cannot predict whether it will be successful with its
objective.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (continued)
COMPANY OVERVIEW (continued)
Results of Operations
There were no revenues for the three months ended March 31, 2017
and 2016.
General and administrative expenses increased $30,866 (141.6%) to
$52,688 for the three months ended March 31, 2017 as compared to
$21,802 for the three months ended March 31, 2016, primarily as a
result of higher consulting fees.
As a result of the above, the Company incurred losses from
operations of $52,668 and $21,802 for the three months ended March
31, 2017 and 2016, respectively.
Interest expense increased slightly as a result of the increase in
advances from stockholders and officers.
As a result of the above, the Company incurred a net losses of
$55,291 and $24,351 for the three months ended March 31, 2017 and
2016, respectively.
LIQUIDITY AND CAPITAL RESOURCES
Total current assets at March 31, 2017 were $13,138 as compared to
$6,038 at December 31, 2016.
Total current liabilities as of March 31, 2017 were $396,207 as
compared to $333,300 at December 31, 2016.This increase is due to
increases in accrued expenses – related parties and loans and
advances from stockholders.
The Company's minimum cash requirements for the next twelve months
are estimated to be $60,000, including rent, audit and professional
fees. The Company does not have sufficient cash on hand to support
its overhead for the next twelve months and there are no material
commitments for capital at this time other than as described above.
The Company will need to acquire debt or issue and sell shares to
gain capital for operations or arrange for additional stockholder
or related party loans. There is no current commitment
for either of these fund sources.
Our working capital deficit increased $55,807 to $383,069 at March
31, 2017 as compared to $327,262 at December 31, 2016 primarily due
to an increase in accrued expenses – related parties and in
advances from stockholders.
During the third months ended March 31, 2017, the Company had a net
increase in cash of $7,100. The Company’s principal sources
and uses of funds were as follows:
Cash used in operating activities.
For the three months ended March 31, 2017, the
Company used $34,590 in cash for operations as compared to $24,717
in cash for the three months ended March 31, 2016, primarily as a
result of the increase in the Company’s operating
loss.
Cash provided by financing activities.
Net cash provided by financing activities for the
three months ended March 31, 2017 was $42,206 as compared to $5,452
used for financing activities for the three months ended March 31,
2016 primarily as a result of higher advances from stockholders and
officers and an increase amounts due to related
parties.
OFF-BALANCE SHEET ARRANAGEMENTS
The Company has no off-balance sheet arrangements.
CRITICAL ACCOUNTING POLICIES
The
Company prepares its financial statements in accordance with
accounting principles generally accepted in the United States of
America. Preparing financial statements in accordance with
generally accepted accounting principles requires the Company to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosures of contingent assets and
liabilities as of the date of the financial statements and the
reported amounts of revenue and expenses during the reported
period.
Our critical accounting policies are described in the Notes to the
Financial Statements included in our Annual Report on Form 10-K for
the year ended March 31, 2017, as filed with the SEC on April 17,
2017 (the “Annual Report”). There have been no changes
in our critical accounting policies. Our significant accounting
policies are described in our notes to the 2016 consolidated
financial statements included in our Annual Report.
RECENTLY ISSUED ACCOUNTING STANDARDS
No recently issued accounting pronouncements had or are expected to
have a material impact on the Company’s condensed
consolidated financial statements.
