ITEM 2. MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FORWARD LOOKING STATEMENT
This quarterly report contains forward-looking statements.
These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements
by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”,
“believes”, “estimates”, “predicts”, “potential” or “continue” or the negative
of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties
and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.
Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States,
we do not intend to update any of the forward-looking statements to conform these statements to actual results.
Our unaudited financial statements are stated in United
States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles. All references to “common
shares” refer to the common shares in our capital stock.
The following discussion should be read in conjunction
with our financial statements and the related notes that appear elsewhere in this quarterly report. The following discussion contains
forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed
in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed
below and elsewhere in this quarterly report.
As used in this quarterly report, the terms “we”,
“us”, “our” and “our company” mean Logicquest Technology, Inc., unless otherwise indicated.
General Overview
Our company was formed on July 23, 2001 when Solis
Communications, Inc., a company incorporated in the State of Texas on February 26, 2001, completed the acquisition of Berens Industries,
Inc., a company originally incorporated in the State of Nevada on January 9, 1985. On September 17, 2001, we changed our name to Crescent
Communications Inc. d.b.a Crescent Broadband. On November 15, 2004, we changed our name to Bluegate Corporation. On March 19, 2015, we
changed our name to Logicquest Technology, Inc.
We are a Nevada corporation that previously operated
as a broadband network service provider, providing internet connectivity to corporate clients on a subscription basis. During May 2014
our board of directors authorized an orderly wind-down of our Company's internet connectivity business which ceased effective June 30,
2014.
Our Current 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.
Results of Operations
Three Months Ended March 31, 2022 compared to the Three Months Ended
March 31, 2021
We had a net loss of $99,397 for the three months
period ended March 31, 2022, which was $2,058 more than the net loss of $97,339 for the three months period ended March 31, 2021. The
change in our results over the two periods is a result of a decrease in Selling, general and administrative expenses.
The following table summarizes key items of comparison and their related
increase for the three months periods ended March 31, 2022 and 2021:
|
|
Three Months Ended
March 31, 2022 |
|
|
Three Months Ended
March 31, 2021 |
|
|
Increase
2022 from 2021 |
|
Revenue |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
Selling, general and administrative expenses |
|
|
19,924 |
|
|
|
17,867 |
|
|
|
2,057 |
|
Loss from operations |
|
|
(19,924 |
) |
|
|
(17,867 |
) |
|
|
(2,057 |
) |
Interest expense |
|
|
(79,473 |
) |
|
|
(79,472 |
) |
|
|
(1 |
) |
Net loss |
|
$ |
(99,397 |
) |
|
$ |
(97,339 |
) |
|
$ |
(2,058 |
) |
Revenue
We have not earned any revenues during the quarter of March 31, 2022 and
we do not anticipate earning revenues in the upcoming quarter.
Liquidity and Capital Resources
As of March 31, 2022, we had no cash or cash equivalents, current liabilities
of $6,612,098 and a stockholders’ deficit of $6,611,588.
Working Capital
|
|
At
March 31,
2022 |
|
|
At
December 31,
2021 |
|
Current assets |
|
$ |
510 |
|
|
$ |
1,490 |
|
Current liabilities |
|
|
6,612,098 |
|
|
|
6,513,681 |
|
Working capital |
|
$ |
(6,611,588 |
) |
|
$ |
(6,512,191 |
) |
We anticipate generating losses and, therefore, may be unable to continue
operations further in the future.
Financial Condition
|
|
|
|
|
Increase |
|
|
|
Three Months Ended |
|
|
(Decrease) |
|
|
|
March 31, |
|
|
2022 from |
|
|
|
2022 |
|
|
2021 |
|
|
2021 |
|
Net cash used in operating activities |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
Net cash provided by financing activities |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Net decrease in cash during period |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
Cash balance at end of period |
|
|
— |
|
|
|
— |
|
|
|
|
|
Operating Activities
Net cash used in operating activities during
the three months ended March 31, 2022 and 2021 was nil.
Financing Activities
Cash provided by financing activities during
the three months ended March 31, 2022 and 2021 was nil.
To date we have relied on proceeds from the sale
of our shares and on loans from officers and directors, related companies and an independent third party in order to sustain our basic,
minimum operating expenses; however, we cannot guarantee that we will secure any further sales of our shares or that our officers and
directors, related companies or the independent third party will provide us with any future loans. We intend to use debt to cover the
anticipated negative cash flows until we can operate at a break-even cash flow mode. We may seek additional capital to fund potential
costs associated with possible expansion and/or acquisitions. We believe that future funding may be obtained from public or private offerings
of equity securities, debt or convertible debt securities, or other sources. Stockholders should assume that any additional funding will
likely be dilutive.
We are not aware of any known trends, demands,
commitments, events or uncertainties that will result in or that are reasonably likely to result in our liquidity increasing or decreasing
in any material way.
Future Financings
We anticipate continuing to rely on loans from
a related company. We may obtain funding through equity sales of our common stock in order to continue to fund our business operations.
Issuances of additional shares will result in dilution to our existing stockholders. There is no assurance that we will achieve any additional
sales of our equity securities or arrange for debt or other financing to fund our planned business activities.
We presently do not have any arrangements for
additional financing for the expansion of our exploration operations, and no potential lines of credit or sources of financing are currently
available for the purpose of proceeding with our plan of operations.
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, and capital expenditures or capital resources that are material to stockholders.
Critical Accounting Policies
Our discussion and analysis of our financial
condition and results of operations are based upon financial statements which have been prepared in accordance with generally accepted
accounting principles in the United States. The preparation of these financial statements requires us to make estimates and judgments
that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. On
an ongoing basis, we evaluate these estimates. We base our estimates on historical experience and on assumptions that are believed
to be reasonable. These estimates and assumptions provide a basis for making judgments about the carrying values of assets and liabilities
that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions,
and these differences may be material.
We believe that the following critical accounting
policies affect our more significant judgments and estimates used in the preparation of our financial statements.
RELATED PARTY TRANSACTIONS
A related party is generally defined as (i) any
person that holds 10% or more of the Company’s securities and their immediate families, (ii) the Company’s management, (iii)
someone that directly or indirectly controls, is controlled by or is under common control with the Company, or (iv) anyone who can significantly
influence the financial and operating decisions of the Company. A transaction is considered to be a related party transaction when there
is a transfer of resources or obligations between related parties.
FAIR VALUE OF FINANCIAL INSTRUMENTS
For certain of the Company’s financial
instruments, including prepaid expenses and accrued liabilities, the carrying amounts approximate fair values due to their short maturities.
Transactions involving related parties cannot be presumed to be
carried out on an arm’s-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations
about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent
to those that prevail in arm’s-length transactions unless such representations can be substantiated.
It is not, however, practical to determine the fair value of amounts due to related
parties and lease and management arrangement with related parties, if any, due to their related party nature.
INCOME TAXES
The Company uses the liability method of accounting for income
taxes. Under this method, deferred income taxes are recorded to reflect the tax consequences on future years of temporary differences
between the tax basis of assets and liabilities and their financial amounts at year-end. The Company provides a valuation allowance to
reduce deferred tax assets to their net realizable value.
The Company recognizes the tax benefit from an uncertain tax position
only if it is more likely than not the tax position will be sustained on examination by the taxing authorities, based on the technical
merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on the largest
benefit that has a greater than 50% likelihood of being realized upon settlement.
Going Concern
We remain dependent on outside sources of funding
for the continuation of our operations. Our independent registered public accounting firm issued a going concern qualification
in its report dated March 31, 2022 (included in our annual report on Form 10-K for the year ended December 31, 2021), which raises substantial
doubt about our ability to continue as a going concern.
During the three months ended March 31, 2022
and the year ended December 31, 2021, we have been unable to generate cash flows sufficient to support our operations and have been dependent
on debt raised from a related party.
During the three months ended March 31, 2022
and 2021, we experienced negative financial results as follows:
|
|
Three Months Ended
March 31, |
|
|
|
2022 |
|
|
2021 |
|
Net loss |
|
$ |
(99,397 |
) |
|
$ |
(97,339 |
) |
Negative working capital |
|
|
(6,611,588 |
) |
|
|
(6,206,490 |
) |
Stockholders’ deficit |
|
|
(6,611,588 |
) |
|
|
(6,206,490 |
) |
These factors raise substantial doubt about our
ability to continue as a going concern. The financial statements contained herein do not include any adjustments relating to
the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should
we be unable to continue in existence. 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.