Item 1. Business.
Cautionary Statement Regarding Forward-Looking Information
This Annual Report on Form 10-K (this “Report”)
contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities
Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In some cases, you can
identify forward-looking statements by the following words: “anticipate,” “believe,” “continue,” “could,”
“estimate,” “expect,” “intend,” “may,” “ongoing,” “plan,” “potential,”
“predict,” “project,” “should,” or the negative of these terms or other comparable terminology, although
not all forward-looking statements contain these words. Forward-looking statements are not a guarantee of future performance or results,
and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. We cannot
assure you that the forward-looking statements in this Report will prove to be accurate and therefore prospective investors are encouraged
not to place undue reliance on forward-looking statements. Other than as required by law, we undertake no obligation to update or revise
these forward-looking statements, even though our situation may change in the future.
Where You Can Find Other Information
We file annual, quarterly, and current reports,
proxy statements and other information with the SEC. The SEC maintains an Internet site that contains reports, proxy and information statements,
and other information regarding issuers that file electronically with the SEC like us at http://www.sec.gov. Copies of documents
filed by us with the SEC are also available from us without charge, upon oral or written request to our Secretary, who can be contacted
at the address and telephone number set forth on the cover page of this Report.
Corporate Information
Our principal executive offices are located at
5 Independence Way, Suite 300, Princeton, NJ, U.S.A. 08540; tel. voice: 609-514-5136, fax: 609-514-5104. Our website address is logq-inc.com.
The information on, or that may be accessed through, our website is not incorporated by reference into this Report and should not be considered
a part of this Report.
Introduction
Logicquest Technology, Inc. (the “Company”)
was originally incorporated as Solis Communications, Inc. on July 23, 2001 and adopted a name change to Crescent Communications Inc. upon
completion of a reverse acquisition of Berens Industries, Inc. In 2004, we changed our name to Bluegate Corporation (“Bluegate”).
On March 19, 2015, we changed our name to Logicquest Technology, Inc.
Logicquest is a Nevada corporation that previously
consisted of a networking service (carrier/circuit) business, which provided internet connectivity to corporate clients on a subscription
basis; essentially operating as a value-added provider. During May 2014, the Board of Directors authorized an orderly wind down of the
Company's internet connectivity business which ceased operations effective June 30, 2014.
In this Report, we refer to ourselves as "Logicquest,"
"We," Us," “the Company,” and "Our."
Our growth is dependent on acquiring an operating
business or assets, attaining revenues from acquiring new operations and/or our raising capital through the sale of stock or debt. There
is no assurance that we will be able to locate an operating business, raise any financing or generate any revenues.
Our functional currency is the U.S. dollar. Our
independent registered public accounting firm issued a going concern qualification in their report contained herein regarding substantial
doubt about our ability to continue as a going concern.
Our common stock is currently quoted on the OTC
Pink Market maintained by OTC Markets under the symbol “LOGQ”.
Corporate History
In 1996, Congress passed the Health Insurance
Portability and Accountability Act ("HIPAA"). Two of the many features of HIPAA were a mandate that the healthcare industry
move toward using electronic communication technology to streamline and reduce the cost of healthcare, and a requirement that healthcare
providers treat virtually all healthcare information as confidential, especially when electronically transmitted.
In 2001, Mr. Manfred Sternberg acquired effective
control of the Company and during 2002 and 2003 under his leadership, the company commenced development and completion of the necessary
systems to offer an integrated HIPAA compliant Medical Grade Network® to the health care community, to provide electronic systems
required by increasing U.S. public policy mandates, to accelerate the movement to secure electronic health records.
In 2003, a minority amount of our revenue was
related to our HIPAA business. In 2004, a majority of our revenue was related to our HIPAA business. In 2005, all of our revenues were
related to our health care service model.
In 2004, to accelerate our movement into the electronic
health record business, we sold our Internet Service Provider ("ISP") customer base effective June 21, 2004 to concentrate on
our health care IT solutions model and its Medical Grade Network®.
In 2004, we contracted with the largest healthcare
system in Texas to provide physicians with Internet bandwidth and managed security services using our Medical Grade Network®.
In March 2005, we acquired substantially all of
the assets and assumed certain ongoing contractual obligations of TEKMedia Communications, Inc., a company that provided traditional IT
consulting services.
In September 2005, we acquired substantially all
of the assets and assumed certain ongoing contractual obligations of Trilliant Corporation, a company that provides assessment, design,
vendor selection, procurement and project management for large technology initiatives, particularly in the healthcare arena.
Effective November 7, 2009, the Company:
1) disposed of certain Medical Grade Network (“MGN”) assets and business and eliminated certain liabilities (consisting primarily
of: a) furniture, computers and related software and peripherals with a $17,889 book value; b) contracts, agreements, lists of telephone
and fax numbers, licenses, permits, intellectual properties, registered mark for MGN, and the business name of Bluegate with a $0 net
book value; c) liabilities of $43,607 principally related to customer product prepays which were assumed by the purchaser) which were
acquired by Sperco, LLC (“Sperco”) (an entity controlled by Mr. Stephen Sperco (“SS”), our former CEO/President/Director)),
for $200,000, with payment made by a combination of $100,000 cash and $100,000 forgiveness of debt owed to SAI Corporation (“SAIC”)
(an entity controlled by SS), plus a net adjustment of $7,100 due to the Company from Sperco resulting from the Company’s collection
of principally accounts receivable totaling $161,900 on behalf of Sperco for the period from November 8, 2009 through December 31, 2009,
offset by Sperco’s payment of $169,000 to the Company for the personnel, facilities, tools, and resources necessary for the Company
to support both the MGN and HIMS (defined below) operations for Sperco for the same period; 2) entered into a Separation Agreement and
Mutual Release in Full of all claims with Mr. Manfred Sternberg (“MS”) (former Director/Corporate Officer), which included
the elimination of $28,499 of accrued director fees and vehicle allowances in exchange for repayment of a loan plus accrued interest totaling
$44,369 to MS; and 3) entered into A Separation Agreement and Mutual Release in Full of all claims with Mr. William Koehler (“WK”)
(former Director/Corporate Officer), which included the elimination of $28,499 of accrued director fees and vehicle allowances in exchange
for repayment of a loan plus accrued interest totaling $44,374 with a direct payment to WK’s American Express account and a $1 payment
to WK; and 4) disposed of certain of Trilliant Technology Group, Inc.’s assets and business (consisting primarily of: a) Computers
and related software and peripherals with a $0 net book value; and b) lists of telephone and fax numbers and intellectual properties with
a $0 net book value) to Trilliant Corporation (an entity controlled by WK) for a cash payment of $5,000; and 5) disposed of certain Bluegate
Healthcare Information Management Systems (“HIMS”) assets and business (consisting primarily of contracts, agreements and
intellectual property with a $0 net book value) to SAIC in exchange for a Mutual Release in Full of certain claims and a $1 payment to
SAIC; and 6) obtained a Fairness Opinion dated November 6, 2009 presented by Convergent Capital Appraisers.
Pursuant to the Nevada Revised Statutes,
which authorizes the taking of action by written consent of the shareholders of a Nevada corporation, without a meeting, a super majority
of the voting power of the shareholders of the Company gave their consent to the above actions.
As a result of the transactions summarized
above, the Company received $105,000 cash; reduced the secured note payable to SAIC by $100,000; paid off unsecured notes payable and
accrued interest of $88,743 to MS and WK; eliminated $56,998 of accrued liabilities owed to MS and WK; recorded $24,234 of expenses (principally
legal and professional); removed the remaining book value of fixed assets of $17,889; eliminated $43,607 of customer liabilities assumed
by Sperco and increased additional paid-in capital by $263,484 since the net effect of the transaction was treated as related party forgiveness
of debt.
On December 27, 2010
our then 100% owned subsidiary, Trilliant Technology Group, Inc. was dissolved.
On September 11, 2014, SAIC, the Company’s
then majority shareholder, sold to Mr. Ang Woon Han, 24,070,250 shares of common stock (1,203,513 shares post-Reverse Stock Split discussed
below), 48 shares of Series C Convertible preferred stock and 10 shares of Series D Convertible preferred stock. As a result, Mr.
Ang owns 52% of our shares of common stock without taking into account the super voting power of the Preferred stock, and 78% when taking
into account the super voting power of the Preferred Stock.
On January 2, 2015, the Company filed an
Information Statement on Schedule 14C for restructuring the Company. Actions taken included:
· |
To change the name of the Company from “Bluegate Corporation” to “Logicquest Technology, Inc.” |
· |
To increase the number of authorized shares of Common Stock, par value $0.001 from fifty million (50,000,000) to two hundred million (200,000,000) (the “Authorized Increase”); and |
· |
To affect a reverse stock split of the Company’s issued and outstanding shares of Common Stock at a ratio of one post-split share per twenty pre-split shares (the “Reverse Stock Split”). |
The above actions were effective on March 19,
2015.
Our Business Subsequent To the November 7,
2009 Disposition Of Certain Assets And Business
We are currently a company with no operations.
To sustain our company’s operation, our Board is currently seeking investment opportunities.
At this stage, we can provide no assurance that
we will be able to locate compatible business opportunities, what additional financing we will require to complete a business opportunity,
or whether the opportunity's operations will be profitable.
If we are unable to secure adequate capital to
continue our business, our shareholders will lose some or all of their investment and our business will likely fail.
Development Plan
Our intended business purpose is to seek the acquisition
of, or merger with, an existing company. The acquisition of a business opportunity may be made by purchase, merger, exchange of stock,
or otherwise, and may encompass assets or a business entity, such as a corporation, limited liability company, joint venture, or partnership.
We have very limited capital, and it is unlikely that we will be able to take advantage of more than one such business opportunity. We
will not restrict potential candidate target companies to any specific business, industry or geographical location and, thus, may acquire
any type of business. As of the date hereof, we have made only limited efforts to identify a possible business combination and are not
currently subject to a letter of intent with respect to any target business or any definitive agreement with respect to any target business.
Based on our proposed business activities, we
are a “blank check” company. The U.S. Securities and Exchange Commission (the “SEC”) defines “blank check”
companies as, any development stage company that is issuing a penny stock, within the meaning of Section 3(a)(51) of the Exchange Act,
and that has no specific business plan or purpose, or has indicated that its business plan is to merge with an unidentified company or
companies.
We also qualify as a “shell company,”
as defined under Rule 12b-2 adopted by the SEC pursuant to the Exchange Act, because we have no or nominal assets (other than cash) and
no or nominal operations. Many states have enacted statutes, rules and regulations limiting the sale of securities of blank check companies
in their respective jurisdictions.
We have a nominal amount of capital and will depend
on our management to provide us with the necessary funds to implement our business plan. We intend to seek opportunities demonstrating
the potential of long-term growth as opposed to short-term earnings. However, at the present time, we have not identified any business
opportunity that we plan to pursue, nor have we reached any agreement or definitive understanding with any person concerning an acquisition
or merger. The analysis of new business opportunities will be undertaken by or under the supervision of our sole officer and director.
We believe that business
opportunities may come to our attention from various sources, including, professional advisors such as attorneys, and accountants, securities
broker-dealers, venture capitalists, members of the financial community and others who may present unsolicited proposals. We have no plan,
understanding, agreements, or commitments with any individual for such person to act as a finder of opportunities for us. We can give
no assurances that we will be successful in finding or acquiring a desirable business opportunity, given the limited funds that are expected
to be available to us for implementation of our business plan. Furthermore, we can give no assurances that any acquisition, if it occurs,
will be on terms that are favorable to us or our current stockholders. In our effort to analyze potential acquisition targets, we will
consider the following kinds of factors:
|
· |
Potential for growth, anticipated market expansion or new products; |
|
· |
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; |
|
· |
Strength and diversity of management, either in place or scheduled for recruitment; |
|
· |
Capital requirements and anticipated availability of required funds; |
|
· |
The cost of participation by us as compared to the perceived tangible and intangible risks of participation; |
|
· |
The extent to which the business opportunity can be advanced; |
|
· |
The accessibility of required management expertise, personnel, raw materials, services, professional assistance, and other required items; and |
|
· |
Other relevant factors. |
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. Potentially available business opportunities may occur in many different industries, and at
various stages of development, all of which may make the task of comparative investigation and analysis of such business opportunities
difficult and complex. Due to our limited capital available for investigation, we may not discover or be able to fully investigate potential
adverse factors concerning the opportunity to be acquired.
There is no relationship between our particular
name and our intended business plan. If successful in completing a merger or acquisition, we expect that our name would change to reflect
the marketing goals of the business combination.
We are unable to predict the time as to when,
and if we will ever engage in identifying potential merger or acquisition candidates.
In addition, certain conflicts of interest exist
or may develop between us and our sole officer and director and majority stockholder.
The time and costs required to select and evaluate
a target business and to structure and complete a business combination cannot presently be ascertained with any degree of certainty. Any
costs incurred with respect to the indemnification and evaluation of a prospective business combination that is not ultimately completed
will result in a loss to us. Also, substantial fees are often paid in connection with the completion of all types of acquisitions, reorganizations
or mergers.
Form of Acquisition
The manner in which we participate in an opportunity
will depend upon the nature of the opportunity, the respective needs and desires of us and the promoters of the opportunity, and our relative
negotiating strength. It is likely that we will acquire our participation in a business opportunity through the issuance of our common
stock or other securities. Although the terms of any such transaction cannot be predicted, it should be noted that in certain circumstances
the criteria for determining whether or not an acquisition is a so-called “tax free” reorganization under Section 368(a)(1)
of the Internal Revenue Code of 1986, as amended (the “Code”), depends upon whether the owners of the acquired business own
80% or more of the voting stock of the surviving entity. If a transaction were structured to take advantage of these provisions rather
than other tax-free transaction provisions under the Code, all prior stockholders would retain 20% or less of the total issued and outstanding
shares of the surviving entity. Under other circumstances, depending upon the relative negotiating strength of the parties, prior stockholders
may retain substantially less than 20% of the total issued and outstanding shares of the surviving entity. This could result in substantial
additional dilution to the equity of those who are stockholders prior to the acquisition. Our present stockholders will likely not have
control of our majority voting securities following an acquisition transaction. However, our present stockholders will benefit from such
a transaction by retaining an equity interest in the surviving company, a cash payment in exchange for outstanding shares, or a combination
of both cash and equity. As part of such a transaction, our present sole officer and director may resign and one or more new directors
or officers may be appointed in connection with the transaction.
In the case of an acquisition,
the transaction may be accomplished upon the sole determination of management without any vote or approval by stockholders or only with
the vote of our majority stockholders who already control the vote on all stockholder matters. It is anticipated that the investigation
of specific business opportunities and the negotiation, drafting and execution of relevant agreements, disclosure documents and other
instruments will require management time and attention and substantial cost for accountants, attorneys and others. If a decision is made
not to participate in a specific business opportunity, the costs theretofore incurred in the related investigation might not be recoverable.
Furthermore, even if an agreement is reached for the participation in a specific business opportunity, the failure to consummate that
transaction may result in the loss to us of the related costs incurred.
Employees
As a result of the cessation of the internet connectivity
business, we currently have no employees.
Item 1A. Risk Factors.
We May Be Unable To Find a Suitable Entity
with Which to Enter Into a Business Combination Transaction.
We are in a highly competitive market for a small
number of business opportunities which could reduce the likelihood of consummating a successful business combination. We will be an insignificant
participant in the business of seeking mergers with, joint ventures with and acquisitions of small private and public entities. A large
number of established and well-financed entities, including small public companies and venture capital firms, are active in mergers and
acquisitions of companies that may be desirable target candidates for us. Nearly all these entities have significantly greater financial
resources, technical expertise and managerial capabilities than we do; consequently, we will be at a competitive disadvantage in identifying
possible business opportunities and successfully completing a business combination. These competitive factors may reduce the likelihood
of us identifying and consummating a successful business combination. We may not find a suitable entity with which to enter into a business
combination transaction and even if we do identify a suitable entity for such transaction, we may not be able to into a transaction.
The Terms of a Potential Business Combination
Transaction May Not Be Favorable to Us.
Even if we find a suitable entity for a business
combination transaction and that entity is willing to enter into such a transaction, we may not be able to complete that transaction on
terms which would be favorable to us. Private companies seeking to become public have many options other than a business combination with
a blank check company, such as initial public offerings, direct public offerings, Regulation A offerings, and public offerings on foreign
exchanges, and many companies have many other options for access to capital other than becoming public, such as private offerings, Regulation
S offerings, venture capital, and private equity transactions. In addition, there are a large number of blank check companies seeking
to engage in business combination transactions, and the availability of such companies may result in private companies being able to require
favorable terms from any particular blank check company in a business combination transaction, which may reduce the potential benefit
to us of such a business combination transaction.
Our Future Success Is Highly Dependent on
the Ability of Management to Locate and Attract a Suitable Acquisition Candidate.
The nature of our operations is highly speculative.
The success of our intended plan of operation will depend to a great extent on the operations, financial condition and management of the
identified business opportunity. While management intends to seek business combination(s) with entities having established operating histories,
we may not be successful in locating candidates meeting that criterion. In the event we complete a business combination, the success of
our operations may be dependent upon management of the successor firm or venture partner firm and numerous other factors beyond our control.
We Have No Existing Agreement for a Business
Combination or Other Transaction and There Is No Guarantee That We Will Be Able to Negotiate a Transaction That Will Benefit Our Stockholders.
We have no arrangement, agreement or understanding
with respect to engaging in a merger with, joint venture with or acquisition of, a private or public entity. No assurances can be given
that we will successfully identify and evaluate suitable business opportunities or that we will conclude a business combination. Management
has not identified any particular industry or specific business within an industry for evaluation. We may be unable to negotiate a business
combination on favorable terms, and there is consequently a risk that funds allocated to the purchase of our shares will not be invested
in a company with active business operations.
There is Substantial
Doubt About Our Ability to Continue as a Going Concern.
We remain dependent on outside sources of funding
for continuation of our operations. Our independent registered public accounting firm issued a going concern qualification in their report
contained herein regarding substantial doubt about our ability to continue as a going concern. During the years ended December 31, 2021
and 2020, we have been unable to generate cash flows sufficient to support our operations and have been dependent on debt raised from
related parties and independent third parties. We experienced negative financial results as follows:
|
|
2021 |
|
|
2020 |
|
Net loss |
|
$ |
(403,040 |
) |
|
$ |
(409,639 |
) |
Negative working capital |
|
|
(6,512,191 |
) |
|
|
(6,109,151 |
) |
Stockholders’ deficit |
|
|
(6,512,191 |
) |
|
|
(6,109,151 |
) |
These factors raise substantial doubt about our
ability to continue as a going concern. Our ability to continue as a going concern is dependent upon our ability to generate sufficient
cash flows to meet our obligations on a timely basis, to obtain additional financing as may be required, and ultimately to attain profitable
operations. However, there is no assurance that profitable operations or sufficient cash flows will occur in the future.
Our current operations are primarily funded by
Logicquest Technology Limited, a company controlled by the Company’s Chief Financial Officer, Mr. Cheng Yew Siong.
These steps have provided us with the cash flows
to continue our business, but have not resulted in significant improvement in our financial position. We are considering alternatives
to address our cash flow situation that include:
· |
Raising capital through additional sale of our common stock and/or debt securities. |
· |
Reducing cash operating expenses to levels that are in line with current revenues. |
These alternatives could result in substantial
dilution of existing stockholders. There can be no assurance that our current financial position can be improved, that we can raise additional
working capital or that we can achieve positive cash flows from operations. Our long-term viability as a going concern is dependent upon
the following:
· |
Our ability to locate sources of debt or equity funding to meet current commitments and near-term future requirements. |
· |
Our ability to achieve profitability and ultimately generate sufficient cash flow from operations to sustain our continuing operations. |
Management Intends to Devote Only a Limited
Amount of Time to Seeking a Target Company Which May Adversely Impact Our Ability to Identify a Suitable Acquisition Candidate.
While seeking a business combination, management
anticipates devoting very limited time to our affairs. Our officers and directors have not entered into written employment agreements
with us and are not expected to do so in the foreseeable future. This limited commitment may adversely impact our ability to identify
and consummate a successful business combination.
There May Be Conflicts of Interest Between
Our Management and Our Non-Management Stockholders.
Conflicts of interest create the risk that management
may have an incentive to act adversely to the interests of other stockholders. A conflict of interest may arise between our management’s
personal pecuniary interests and their fiduciary duty to our stockholders. Further, our management’s own pecuniary interest may
at some point compromise their fiduciary duty to our stockholders.
As a Blank Check Company Under Rule 419 of the Securities Act
of 1933, We Will Have to Comply with Rule 419 in Any Subsequent Offerings.
At present, we are a blank check company with
no revenues and no specific business plan or purpose other than we intend to seek new business opportunities or to engage in a merger
or acquisition with an unidentified company. As a blank check company, if we publicly offer any securities as a condition to the closing
of any acquisition or business combination or otherwise, we will have to fully comply with Rule 419 under the Securities Act, the provisions
of which apply to every registration statement filed under the Securities Act by a blank check company. Among other things, Rule 419 requires
that the blank check company filing such registration statement deposit the securities being offered and proceeds of the offering into
an escrow or trust account pending the execution of an agreement for an acquisition or merger. In addition, the registrant is required
to file a post-effective amendment to the registration statement containing the same information as found in a Form 10 registration statement,
upon the execution of an agreement for such acquisition or merger. Rule 419 also provides for procedures for the release of the offering
funds in conjunction with the post effective acquisition or merger. We have no current plans to engage in any such offerings.
A Business Combination
Will Result in a Change of Control and a Change of Management.
In conjunction with completion of a business acquisition,
it is anticipated that we will issue an amount of our authorized but unissued common stock or preferred stock or that our majority stockholder
will transfer an amount of outstanding common stock or preferred stock which represents the majority of the voting power and equity of
our voting shares, which will result in stockholders of a target company obtaining a controlling interest in us. As a condition of the
business combination agreement, our current stockholders may agree to sell or transfer all or a portion of our common stock as to provide
the target company with all or majority control. The resulting change in control will result in removal of our present officers and directors
and a corresponding reduction in or elimination of their participation in any future affairs.
Our Directors Have the Right to Authorize the Issuance of Preferred
Stock.
Our directors, without further action by our stockholders,
have the authority to issue shares of preferred stock from time to time in one or more series and to fix the number of shares, the relative
rights, conversion rights, voting rights, terms of redemption, liquidation preferences and any other preferences, special rights and qualifications
of any such series. Any issuance of preferred stock could adversely affect the rights of holders of common stock in that such preferred
stock could have priority over the common stock with respect to voting, dividend or liquidation rights, similar to our currently outstanding
preferred stock. For example, each share of Series C Convertible Preferred Stock is convertible into 1,250 shares of common stock (after
adjusting for our prior 1-for-20 reverse stock split) and has 15 times the number of votes its conversion-equivalent number of shares
of common stock, or 18,750 votes per share of Series C Preferred Stock and each share of Series D Preferred Stock may be converted, at
the option of the shareholder, into 1,250 shares of common stock (after adjusting for our prior 1-for-20 reverse stock split) and has
150 times the number of votes its conversion-equivalent number of shares of common stock, or 187,500 votes per share of Series D Preferred
Stock. The Series C Convertible Preferred Stock and Series D Convertible Preferred Stock vote along with the common stock on all matters
requiring a vote of shareholders and are not redeemable by us. Additionally, the currently outstanding preferred stock or any future issuance
of preferred stock may have the effect of delaying, deferring, or preventing a change in control of the Company without further action
by the stockholders and may adversely affect the voting and other rights of the holders of common stock.
Any Potential Acquisition or Merger with
a Foreign Company May Subject Us to Additional Risks.
If we enter into a business combination with a
foreign company, we will be subject to risks inherent in business operations outside of the United States. These risks include, for example,
currency fluctuations, regulatory problems, punitive tariffs, unstable local tax policies, trade embargoes, risks related to shipment
of raw materials and finished goods across national borders and cultural and language differences. Foreign economies may differ favorably
or unfavorably from the United States economy in growth of gross national product, rate of inflation, market development, rate of savings,
and capital investment, resource self-sufficiency and balance of payments positions, and in other respects.
There Is Currently A Limited Trading Market
for Our Common Stock.
Our common stock is currently quoted on the OTC
Pink Market maintained by OTC Markets under the symbol “LOGQ”, however, we currently have a volatile, sporadic and
illiquid market for our common stock, which is subject to wide fluctuations in response to several factors, including, but not limited
to:
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actual or anticipated variations in our results of operations; |
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our ability or inability to generate new revenues; |
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increased competition; and |
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conditions and trends in the market for our services and products. |
Furthermore, our stock price may be impacted by
factors that are unrelated or disproportionate to our operating performance. These market fluctuations, as well as general economic, political
and market conditions, such as recessions, global epidemics or pandemics, interest rates or international currency fluctuations may adversely
affect the market price and liquidity of our common stock.
Rule 144 Is Not
Generally Available to Holders of Our Common Stock Which Makes It Difficult to Resell Shares in the Future.
With limited exceptions related to certain shares
acquired before we became a “shell company” (as defined in Rule 405 of the Securities Act, all of our presently outstanding
shares of common stock are “restricted securities” as defined under Rule 144 promulgated under the Securities Act (“Rule
144”) and may only be resold pursuant to an effective registration statement or an exemption from registration. Rule 144 generally
provides a safe harbor exemption for the resale of restricted securities, provided, however, restricted securities that we issued either
while we were a “shell company” or at any time thereafter, can only be resold in reliance on Rule 144 if the following conditions
are met:
|
(1) |
we have ceased to be a “shell company”; |
|
(2) |
we are subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); |
|
(3) |
we filed all reports and material required to be filed under Section 13 or 15(d) of the Exchange Act, as applicable, during the preceding twelve months, other than Form 8-K reports; and |
|
(4) |
at least one year has elapsed from the time we filed the Form 10 type information with the SEC reflecting our status as an entity that is not a “shell company.” |
We may never meet these conditions and holders
of our shares of Common Stock may never be entitled to rely on Rule 144 for the resale of their shares. This could have a materially adverse
effect on the trading market for our shares, if a trading market develops, of which there is no assurance.
Our Business Will Have No Revenue Unless
and Until We Merge with or Acquire an Operating Business.
We have had no recent operating history nor any
revenues or earnings. We will not realize any revenue unless and until we successfully merge with or acquire an operating business.
We Intend to Issue More Shares in a Merger
or Acquisition, Which Will Result in Substantial Dilution.
Our Articles of Incorporation authorize the issuance
of a maximum of 200,000,000 shares of common stock and a maximum of 10,000,000 shares of preferred stock. Any merger or acquisition effected
by us may result in the issuance of additional securities without stockholder approval and may result in substantial dilution in the percentage
of our common stock held by our then existing stockholders. Moreover, the common stock issued in any such merger or acquisition transaction
may be valued on an arbitrary or non-arm’s-length basis by our management, resulting in an additional reduction in the percentage
of common stock held by our then existing stockholders. Our board of directors has the power to issue any or all of such authorized but
unissued shares without stockholder approval. To the extent that additional shares of common stock or preferred stock are issued in connection
with a business combination or otherwise, dilution to the interests of our stockholders will occur and the rights of the holders of common
stock might be materially adversely affected.
Stockholders may face significant restrictions
on the resale of our common stock due to federal regulations of penny stocks.
Our common stock will be subject to the requirements
of Rule 15g-9, promulgated under the Exchange Act, as long as the price of our common stock is below $5.00 per share. Under such rule,
broker-dealers who recommend low-priced securities to persons other than established customers and accredited investors must satisfy special
sales practice requirements, including a requirement that they make an individualized written suitability determination for the purchaser
and receive the purchaser’s consent prior to the transaction. The Securities Enforcement Remedies and Penny Stock Reform Act of
1990, also requires additional disclosure in connection with any trades involving a stock defined as a penny stock. Generally, the Commission
defines a penny stock as any equity security not traded on an exchange or quoted on NASDAQ that has a market price of less than $5.00
per share. The required penny stock disclosures include the delivery, prior to any transaction, of a disclosure schedule explaining the
penny stock market and the risks associated with it. Such requirements could severely limit the market liquidity of the securities and
the ability of Company stockholders to sell their securities in the secondary market.
Due to the Control
by Our Principal Stockholder of a Majority of Our Voting Shares, Our Minority Stockholders Will Have Little Power to Choose Management
or Impact Operations.
Our principal stockholder, Mr. Ang Woon Han, currently
controls and votes an aggregate of 55.4% of our issued and outstanding common stock and an additional 2,775,000 voting shares, equal to
approximately 54.7% of our voting stock due to his ownership of 48 shares of Series C Convertible Preferred Stock and 10 shares of our
Series D Convertible Preferred Stock. Consequently, our principal stockholder has the ability to influence control of our operations and
will have the ability to influence or control substantially all matters submitted to stockholders for approval, including:
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Election of the board of directors; |
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Removal of directors; |
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Amendment to our articles of incorporation or bylaws; and |
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Approval of a merger, takeover or other business combination. |
As such, other stockholders possess no practical
ability to remove management or effect the operations of our business. Accordingly, this concentration of ownership by itself may have
the effect of impeding a merger, consolidation, takeover or other business consolidation, or discouraging a potential acquirer from making
a tender offer for our common stock.
The Recent Coronavirus (Covid-19) Pandemic
and Its Impact on Debt and Equity Markets Could Have a Material Adverse Effect on Our Financial Condition and Ability to Operate as a
Going Concern.
In December 2021, coronavirus (COVID-19) is continuing
to spread throughout other parts of the world, including the United States. The outbreak of the coronavirus has resulted in a widespread
health crisis and has adversely affected the economies and financial markets worldwide, business operations and the conduct of commerce
generally. In particular, the global capital markets are experiencing and may continue to experience periods of disruption and instability,
which could be prolonged, and which could materially and adversely impact the broader financial and credit markets. Such disruption could
have a material adverse effect on our ability to raise additional funds, which in turn could impact our ability to operate as a going
concern beyond the next twelve months.