Item
2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This
section and other parts of this Quarterly Report on Form 10-Q (“Form 10-Q”) contain forward-looking statements, within the
meaning of the Private Securities Litigation Reform Act of 1995, that involve risks and uncertainties. Forward-looking statements provide
current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical
or current fact. Forward-looking statements can also be identified by words such as “future,” “anticipates,”
“believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,”
“will,” “would,” “could,” “can,” “may,” and similar terms. Forward-looking
statements are not guarantees of future performance and the Company’s actual results may differ significantly from the results
discussed in the forward-looking statements. Factors that might cause such differences include, but are not limited to, those discussed
in Part II, Item 1A of this Form 10-Q under the heading “Risk Factors,” which are incorporated herein by reference. The following
discussion should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended February 28, 2019 (the
“2019 Form 10-K”) filed with the U.S. Securities and Exchange Commission (the “SEC”) and the condensed financial
statements and notes thereto included in Part I, Item 1 of this Form 10-Q. All information presented herein is based on the Company’s
fiscal calendar. Unless otherwise stated, references to particular years, quarters, months or periods refer to the Company’s fiscal
years ended in February and the associated quarters, months and periods of those fiscal years. Each of the terms the “Company”
and “Toucan” as used herein refers collectively to Toucan Interactive Corp., unless otherwise stated. The Company assumes
no obligation to revise or update any forward-looking statements for any reason, except as required by law.
GENERAL
Toucan
Interactive Corp. was incorporated in the state of Nevada on January 24, 2014 and maintained its official business address at Sabanilla
de Montes de Oca, Urbanizacion Carmiol, Casa 254, San Jose, Costa Rica.
From
inception until April 2016, the Company’s principal business consisted of developing a website, www.NEEDforCREDIT.com, to provide
credit option services to users primarily in Costa Rica, Canada, the United States and South and Central America and to market context
advertising services to banks and financial institutions in these countries and regions.
In
April 2016, pursuant to the transactions described in the Current Report on Form 8-K filed on April 22, 2016, the Company experienced
a change in control (the “Change of Control”) and ceased operations as a provider of credit option services. The Company
also changed the address of its principal executive offices to 25 E. Foothill Blvd., Arcadia, California 91006.
The
Company currently serves as a vehicle to investigate and, if such investigation warrants, acquire a target company or business seeking
the perceived advantages of being a publicly held corporation. Management does not intend to undertake any efforts to cause a market
to develop in our securities, either debt or equity, until we have successfully concluded a business combination. The Company will not
restrict its potential candidate target companies to any industry, specific business or geographical location and, thus, may acquire
any type of business.
The
Company does not currently engage in any business activities that generate cash flow. During the next twelve months we anticipate incurring
costs related to:
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(a)
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filing
Exchange Act reports, and
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(b)
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investigating,
analyzing and consummating a business combination.
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We
believe we will be able to meet these costs through use of funds in our treasury and additional amounts, as necessary, to be loaned to
or invested in us by our controlling stockholder, management or other investors. As of the date of the period covered by this report,
the Company has $6,660 in its bank account. There are no assurances that the Company will be able to secure any additional funding as
needed.
As
of the date of this Quarterly Report, the Company has not entered into any definitive agreement with any party, nor have there been any
specific discussions with any potential business combination candidate regarding business opportunities for the Company. The Company
has unrestricted flexibility in seeking, analyzing and participating in potential business opportunities. The analysis of new business
opportunities will be undertaken by or under the supervision of the Company’s officers and directors. In its efforts to analyze
potential acquisition targets, the Company will consider the following factors:
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(a)
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Potential
for growth, indicated by new technology, anticipated market expansion or new products;
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(b)
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Competitive
position as compared to other firms of similar size and experience within the industry segment as well as within the industry as
a whole;
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(c)
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Strength
and diversity of management, either in place or scheduled for recruitment;
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(d)
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Capital
requirements and anticipated availability of required funds, to be provided by the Company or from operations, through the sale of
additional securities, through joint ventures or similar arrangements or from other sources;
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(e)
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The
cost of participation by the Company as compared to the perceived tangible and intangible values and potentials to be acquired;
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(f)
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The
extent to which the business opportunity can be advanced.
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In
applying the foregoing criteria, no one of which will be controlling, management will attempt to analyze all factors and circumstances
and make a determination based upon reasonable investigative measures and available data. In evaluating a prospective business combination,
the Company will conduct as extensive a due diligence review of potential targets as reasonably possible.
We
anticipate that the selection of a business combination will be complex and extremely risky. Potentially available business combinations
may occur in many different industries and at various stages of development, all of which will make the task of comparative investigation
and analysis of such business opportunities difficult and complex. We cannot assure investors that our choice of a business combination
will result in profitable operations.
CRITICAL
ACCOUNTING POLICIES
There
have been no significant changes during the three and nine month periods ended November 30, 2019 to the critical accounting policies
disclosed in our audited financial statements included in our Annual Report on Form 10-K for the fiscal year ended February 28, 2019.
RESULTS
OF OPERATIONS
We
are a development stage company and have generated minimal revenue since its inception. We have incurred recurring losses to date. Our
financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments
relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable
to continue in operation. We expect we will require additional capital to meet our long-term operating requirements. We expect to raise
additional capital through, among other things, loans from our controlling stockholder and the sale of equity or debt securities. We
have no committed source of financing and we cannot guarantee that we will be able to raise funds as and when we need them.
Three
and Nine Month Periods Ended November 30, 2019 Compared to Three and Nine Month Periods Ended November 30, 2018.
We
earned no revenue during the three and nine month periods ended November 30, 2019 and 2019. We have earned minimal revenue since the
date of inception.
Our
net loss for the three month period ended November 30, 2019 was $1,570 compared to a net loss of $9,953 for the three month period ended
November 30, 2018. Our net loss for the nine month period ended November 30, 2019 was $12,537 compared to a net loss of $13,383 for the
nine month period ended November 30, 2018.
During
the three month period ended November 30, 2019, we incurred general and administrative expenses of $1,570 as compared to $9,953 incurred
for the three month period ended November 30, 2018. During the nine month period ended November 30, 2019, we incurred general and administrative
expenses of $12,537 as compared to $13,383 incurred for the nine month period ended November 30, 2018. General and administrative expenses
incurred during the three and nine month periods ended November 30, 2019 and 2018 were generally related to corporate overhead and administrative
contracted services.
LIQUIDITY
AND CAPITAL RESOURCES
Nine
Month Period Ended November 30, 2010
As
of November 30, 2019, we had cash of $6,660, prepaid expenses of $4,265, liabilities of $78,603, and an accumulated deficit of $112,356.
As of February 28, 2019, we had cash of $17,662, prepaid expenses of $4,235, liabilities of $77,038, and an accumulated deficit of $99,819.
We expect to incur continued losses until we acquire a company with operations and those operations are profitable.
Cash
Flows from Operating Activities
For
the nine month periods ended November 30, 2019 and 2018, net cash used in operating activities amounted to $11,002 and $5,760, respectively.
Cash
Flows from Investing Activities
For
the nine month periods ended November 30, 2019 and 2018, the Company has not generated any cash flows from investing activities.
Cash
Flows from Financing Activities
We
have financed our operations primarily from either loans or the issuance of equity. For the nine month periods ended November 30, 2019
and 2018, net cash provided by financing activities amounted to $0 and $1,665, respectively.
We
have generated minimal revenues from operations to date. It is not likely that we will generate any further revenues until a business
combination has been consummated. Even following a business combination, there is no guarantee that any revenues will be generated, that
any revenues will be sufficient to meet our expenses or that we will ever become profitable. We may consider a business combination with
a target company which itself has recently commenced operations, is a developing company in need of additional funds for expansion into
new products or markets, is seeking to develop one or more new products or services, or is an established business which may be experiencing
financial or operating difficulties and is in need of additional capital.
Moreover,
any target business that is selected may be financially unstable or in the early stages of development or growth, including businesses
without established records of sales or earnings. In that event, we will be subject to numerous risks inherent in the business and operations
of financially unstable and early stage or potential emerging growth companies. In addition, we may effect a business combination with
a target company in an industry characterized by a high level of risk, and although our management will endeavor to evaluate the risks
inherent in a particular target company, there can be no assurance that we will properly ascertain or assess all significant risks.
The
foregoing considerations raise substantial doubt about our ability to continue as a going concern. We are currently planning on devoting
the vast majority of our efforts to identifying, investigating and conducting due diligence on target companies; and negotiating, structuring,
documenting and consummating a business combination. Our long-term ability to continue as a going concern is dependent upon our ability
to complete a business combination and, thereafter, achieve profitable operations.
We
believe that we will be able to meet these costs through cash on hand and additional amounts, as may be necessary, to be loaned by or
invested in us by our controlling stockholder, management and/or others. Currently, however, our ability to continue as a going concern
is dependent upon our ability to generate future profitable operations and/or to obtain the necessary financing to meet our obligations
and repay our liabilities arising from normal business operations when they come due. Our ability to continue as a going concern is also
dependent on our ability to find a suitable target company and enter into a business combination. Management’s plan includes obtaining
additional funds through a combination of sales of our equity securities before, contemporaneously with, or following, the consummation
of a business combination and borrowings, although we do not believe that we will be eligible to borrow funds from a bank until at least
a business combination is consummated. However, there is no assurance that any additional funding will be available on terms that are
favorable to us or at all.
On
April 22, 2016, all the loans made by the Company’s then sole director were repaid in full. Since the Change of Control in April
2016, we rely on loans from our controlling stockholder to meet our expenses. There is no guarantee that our controlling stockholder
will continue to lend us funds to meet our expense in the future. Currently, we do not have any other arrangements for financing. During
the three and nine month periods ended November 30, 2019, the controlling stockholder loaned $1,665 and $1,665, respectively, to the
Company for working capital.
We
have no assurance that future financing will be available to us on acceptable terms, or at all. If financing is not available to us on
satisfactory terms or at all, we may be unable to develop operations or meet our expenses. Additionally, any equity financing in which
we might engage would result in dilution to our existing stockholders.
GOING
CONCERN
The
independent auditors’ audit report accompanying our financial statements dated February 28, 2018 contained an explanatory paragraph
expressing substantial doubt about our ability to continue as a going concern. In June 2020 and May 2021, the controlling stockholder,
through a related entity, advanced $15,000 and $30,000 respectively to the Company to demonstrate its continued support to finance the
Company’s ongoing operation. The financial statements have been prepared assuming that we will continue as a going concern, which
contemplates that we will realize our assets and satisfy our liabilities and commitments in the ordinary course of business.
OFF-BALANCE
SHEET ARRANGEMENTS
As
of the date of this Quarterly Report, 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 are material to investors.
