FORWARD LOOKING STATEMENTS
Statements made in this Form 10-Q that are not historical or current facts are "forward-looking statements" made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 (the "Act") and Section 21E of the Securities Exchange Act of 1934. These statements often can be identified by the use of terms such as "may," "will," "expect," "believe," "anticipate," "estimate," "approximate" or "continue," or the negative thereof. We intend that such forward-looking statements be subject to the safe harbors for such statements. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statements represent management's best judgment as to what may occur in the future. However, forward-looking statements are subject to risks, uncertainties and important factors beyond our control that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
GENERAL
Agro Capital Management Corp. (“Agro Capital” or the “Company”) formerly known as Guate Tourism Inc., was incorporated in the State of Nevada on November 12, 2013. Until September 11, 2015, the Company operated an online tourist guide company in Guatemala helping public from all over the world to find the best accommodation/restaurant/tour/city/program etc. depending on their budget and interests. On September 11, 2015, the Company underwent a change of control, which was the result of the Company’s largest shareholder, Ms. Blanca Bamaca, resigning as an officer and director and selling in a private transaction 6 million shares of the Company’s common stock, which represented 82.8% of the Company’s issued and outstanding shares of common stock.
Subsequently, we have abandoned our prior business plan and have entered into a new business enterprise. On December 31, 2015, the Company entered into a Share Exchange Agreement whereby it agreed to issue 30 million shares of its common stock in exchange for all of the issued and outstanding shares of Agro Capital Management Berhad, a Malaysian corporation (the “Agro Malay”). The Company closed its acquisition of the Agro Malay on April 30, 2016. The business of Agro Capital is to now manage, expand, develop and own Agro Malay.
Agro Malay is principally engaged in aquaculture development in Malaysia. Its core business is in the trading, exporting and production of aquaculture related products. Agro Malaysia has also been appointed as the management partner of several joint venture projects with the Ministry of Agriculture (MOA), Malaysia, to operate existing aquaculture infrastructure projects in Malaysia.
In October 2015, Agro Malay was awarded with a 40.47-hectare (ha) farmland in Sungai Miang, Pekan for a concessionary aquaculture project in Pahang. The land, which is part a 108.46-ha aquaculture project in the area, was awarded by Rumpun Timur Sdn Bhd, a subsidiary of the Pahang State Development Corporation. The award was an addition to the existing 20.23-ha Agro Malay has within the same aquaculture project area, bringing the company’s total land size in Pekan to 60.7-ha.
We anticipate commercially farming marine shrimp for export and distribution to local retailers. Aquaculture is increasingly becoming a way to produce marine fish and shellfish in through sustainable methods for consumption and export, without causing additional strain to natural seafood populations. We recognize the need to help meet increasing market demands for seafood, and hence, will continue our efforts to develop sustainable methods of cultivation in a cost-effective manner.
We intend to expand Agro Malay into a fully-integrated aquaculture company in the future by developing our own research and development, hatcheries, aquaculture feeds, grow-out operations, processing plant operations, seafood sales and marketing.
EMPLOYEES AND EMPLOYMENT AGREEMENTS
At present, we have no employees other than our officer and director. We presently do not have pension, health, annuity, insurance, stock options, profit sharing or similar benefit plans; however, we may adopt such plans in the future. There are presently no personal benefits available to any officers, directors or employees.
Results of Operation
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, the sale of equity or debt securities.
Three Month Periods Ended March 31, 2016 and 2015
Our net loss for the three-month period ended March 31, 2016 was $15,025. During the three-month period ended March 31, 2015 was $7,718.
During the three-month period ended March 31, 2016, our operating expenses were $15,025, which consisted of $10,025 in professional fees and $5,000 in administrative expenses, compared to $3,523 and $4,195, respectively for the same period from the prior year. Our professional fees increased due to the legal work associated with the acquisition of Agro Capital Management Berhad, a Malaysian corporation. The weighted average number of shares outstanding was 72,500,000 for the three months period ended March 31, 2016.
Liquidity and Capital Resources
Three Month Period Ended March 31, 2016
As at March 31, 2016, our total assets were $11,135. As at March 31, 2016, our current liabilities were $61,318. Stockholders
’
equity (deficit) was $(50,183) as of March 31, 2016.
Cash Flows from Operating Activities
We have not generated positive cash flows from operating activities. For the three month periods ended March 31, 2016 and 2015, net cash flows used in operating activities was $(26,264) and $(9,093), respectively.
Cash Flows from Investing Activities
For the period ended March 31, 2016 and March 31, 2015, we do not have any net cash flows used in investing activities.
Cash Flows from Financing Activities
For the three month period ended March 31, 2016, net cash flows received from financing activities was $10,880, which was the result of a shareholders’ loan to the Company.
Plan of Operation and Funding
We expect that working capital requirements will continue to be funded through a combination of our existing funds and further issuances of securities. Our working capital requirements are expected to increase in line with the growth of our business.
Existing working capital, further advances and debt instruments, and anticipated cash flow are expected to be adequate to fund our operations over the next three months. We have no lines of credit or other bank financing arrangements. Generally, we have financed operations to date through the proceeds of the private placement of equity and debt instruments. In connection with our business plan, management anticipates additional increases in operating expenses and capital expenditures relating to: (i) acquisition of inventory; (ii) developmental expenses associated with a start-up business; and (iii) marketing expenses. We intend to finance these expenses with further issuances of securities, and debt issuances. Thereafter, we expect we will need to raise additional capital and generate revenues to meet long-term operating requirements. Additional issuances of equity or convertible debt securities will result in dilution to our current shareholders. Further, such securities might have rights, preferences or privileges senior to our common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, we may not be able to take advantage of prospective new business endeavors or opportunities, which could significantly and materially restrict our business operations. We will have to raise additional funds in the next twelve months in order to sustain and expand our operations. We currently do not have a specific plan of how we will obtain such funding; however, we anticipate that additional funding will be in the form of equity financing from the sale of our common stock. We have and will continue to seek to obtain short-term loans from our directors, although no future arrangement for additional loans has been made. We do not have any agreements with our directors concerning these loans. We do not have any arrangements in place for any future equity financing.
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.
Going Concern
The independent auditors' review report accompanying our December 30, 2014 financial statements contained an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. 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.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
No report required.