ITEM 1. FINANCIAL STATEMENTS
LOGICQUEST TECHNOLOGY, INC.
BALANCE SHEETS
| |
September 30, | | |
December 31, | |
| |
2022 | | |
2021 | |
| |
(Unaudited) | | |
| |
ASSETS | |
| | | |
| | |
| |
| | | |
| | |
Current assets: | |
| | | |
| | |
Prepaid expenses and other current assets | |
$ | 711 | | |
$ | 1,490 | |
Total current assets | |
| 711 | | |
| 1,490 | |
Total assets | |
$ | 711 | | |
$ | 1,490 | |
| |
| | | |
| | |
LIABILITIES AND STOCKHOLDERS' DEFICIT | |
| | | |
| | |
| |
| | | |
| | |
Current liabilities: | |
| | | |
| | |
Accrued liabilities | |
$ | 13,994 | | |
$ | 4,126,002 | |
Due to a related party | |
| — | | |
| 1,050,079 | |
Note payable | |
| — | | |
| 1,337,600 | |
Total current liabilities | |
| 13,994 | | |
| 6,513,681 | |
| |
| | | |
| | |
Stockholders' deficit: | |
| | | |
| | |
Undesignated preferred stock, $.001 par value, 9,999,942 shares authorized, none issued and outstanding | |
| — | | |
| — | |
Series C Convertible Non-Redeemable preferred stock, $.001
par value, 48
shares authorized, issued and outstanding at September 30, 2022 and December 31, 2021; $12,500
per share liquidation preference ($600,000
aggregate liquidation preference at September 30, 2022) | |
| — | | |
| — | |
Series D Convertible Non-Redeemable preferred stock, $.001
par value, 10
shares authorized, issued and outstanding at September 30, 2022 and December 31, 2021; $8,725
per share liquidation preference ($87,250
aggregate liquidation preference at September 30, 2022) | |
| — | | |
| — | |
Common stock, $0.001
par value, 200,000,000
shares authorized, 2,301,968
shares issued and outstanding at September 30, 2022 and December 31, 2021 | |
| 2,302 | | |
| 2,302 | |
Additional paid-in capital | |
| 29,179,647 | | |
| 22,487,937 | |
Accumulated deficit | |
| (29,195,232 | ) | |
| (29,002,430 | ) |
Total stockholders' deficit | |
| (13,283 | ) | |
| (6,512,191 | ) |
Total liabilities and stockholders' deficit | |
$ | 711 | | |
$ | 1,490 | |
See accompanying notes to unaudited financial statements
LOGICQUEST TECHNOLOGY,
INC.
STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021
UNAUDITED
| |
| | |
| | |
| | |
| |
| |
Three Months Ended | | |
Nine Months Ended | |
| |
September 30, | | |
September 30, | |
| |
2022 | | |
2021 | | |
2022 | | |
2021 | |
| |
| | |
| | |
| | |
| |
Operating expenses | |
| | | |
| | | |
| | | |
| | |
Selling, general and administrative expenses | |
$ | 18,982 | | |
$ | 18,736 | | |
$ | 59,798 | | |
$ | 56,229 | |
Loss from operations | |
| (18,982 | ) | |
| (18,736 | ) | |
| (59,798 | ) | |
| (56,229 | ) |
| |
| | | |
| | | |
| | | |
| | |
Interest expense | |
| — | | |
| (80,572 | ) | |
| (133,004 | ) | |
| (240,067 | ) |
| |
| | | |
| | | |
| | | |
| | |
Net loss | |
$ | (18,982 | ) | |
$ | (99,308 | ) | |
$ | (192,802 | ) | |
$ | (296,296 | ) |
| |
| | | |
| | | |
| | | |
| | |
Net loss per share | |
| | | |
| | | |
| | | |
| | |
Basic | |
$ | (0.01 | ) | |
$ | (0.04 | ) | |
$ | (0.08 | ) | |
$ | (0.13 | ) |
Diluted | |
$ | (0.01 | ) | |
$ | (0.04 | ) | |
$ | (0.08 | ) | |
$ | (0.13 | ) |
| |
| | | |
| | | |
| | | |
| | |
Weighted average shares outstanding | |
| | | |
| | | |
| | | |
| | |
Basic | |
| 2,301,968 | | |
| 2,301,968 | | |
| 2,301,968 | | |
| 2,301,968 | |
Diluted | |
| 2,301,968 | | |
| 2,301,968 | | |
| 2,301,968 | | |
| 2,301,968 | |
See accompanying notes to unaudited financial statements
LOGICQUEST TECHNOLOGY,
INC.
STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2022
UNAUDITED
| |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
| |
| | |
| | |
PREFERRED STOCK | | |
ADDITIONAL | | |
| | |
| |
| |
COMMON STOCK | | |
SERIES C | | |
SERIES D | | |
PAID-IN | | |
ACCUMULATED | | |
| |
| |
SHARES | | |
CAPITAL | | |
SHARES | | |
CAPITAL | | |
SHARES | | |
CAPITAL | | |
CAPITAL | | |
DEFICIT | | |
TOTAL | |
Balance at June 30, 2022 | |
| 2,301,968 | | |
$ | 2,302 | | |
| 48 | | |
$ | — | | |
| 10 | | |
$ | — | | |
$ | 28,065,874 | | |
$ | (29,176,250 | ) | |
$ | (1,108,074 | ) |
Net loss | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| (18,982 | ) | |
| (18,982 | ) |
Settlement of liabilities with a related party | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 1,113,773 | | |
| — | | |
| 1,113,773 | |
Balance at September 30, 2022 | |
| 2,301,968 | | |
$ | 2,302 | | |
| 48 | | |
$ | — | | |
| 10 | | |
$ | — | | |
$ | 29,179,647 | | |
$ | (29,195,232 | ) | |
$ | (13,283 | ) |
| |
| | |
| | |
PREFERRED STOCK | | |
ADDITIONAL | | |
| | |
| |
| |
COMMON STOCK | | |
SERIES C | | |
SERIES D | | |
PAID-IN | | |
ACCUMULATED | | |
| |
| |
SHARES | | |
CAPITAL | | |
SHARES | | |
CAPITAL | | |
SHARES | | |
CAPITAL | | |
CAPITAL | | |
DEFICIT | | |
TOTAL | |
Balance at December 31, 2021 | |
| 2,301,968 | | |
$ | 2,302 | | |
| 48 | | |
$ | — | | |
| 10 | | |
$ | — | | |
$ | 22,487,937 | | |
$ | (29,002,430 | ) | |
$ | (6,512,191 | ) |
Net loss | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| (192,802 | ) | |
| (192,802 | ) |
Settlement of liabilities with a related party | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 6,691,710 | | |
| — | | |
| 6,691,710 | |
Balance at September 30, 2022 | |
| 2,301,968 | | |
$ | 2,302 | | |
| 48 | | |
$ | — | | |
| 10 | | |
$ | — | | |
$ | 29,179,647 | | |
$ | (29,195,232 | ) | |
$ | (13,283 | ) |
See accompanying notes to unaudited financial statements
LOGICQUEST TECHNOLOGY, INC.
STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2021
UNAUDITED
| |
| | |
| | |
PREFERRED STOCK | | |
ADDITIONAL | | |
| | |
| |
| |
COMMON STOCK | | |
SERIES C | | |
SERIES D | | |
PAID-IN | | |
ACCUMULATED | | |
| |
| |
SHARES | | |
CAPITAL | | |
SHARES | | |
CAPITAL | | |
SHARES | | |
CAPITAL | | |
CAPITAL | | |
DEFICIT | | |
TOTAL | |
Balance at June 30, 2021 | |
| 2,301,968 | | |
$ | 2,302 | | |
| 48 | | |
$ | — | | |
| 10 | | |
$ | — | | |
$ | 22,487,937 | | |
$ | (28,796,378 | ) | |
$ | (6,306,139 | ) |
Net loss | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| (99,308 | ) | |
| (99,308 | ) |
Balance at September 30, 2021 | |
| 2,301,968 | | |
$ | 2,302 | | |
| 48 | | |
$ | — | | |
| 10 | | |
$ | — | | |
$ | 22,487,937 | | |
$ | (28,895,686 | ) | |
$ | (6,405,447 | ) |
| |
| | |
| | |
PREFERRED STOCK | | |
ADDITIONAL | | |
| | |
| |
| |
COMMON STOCK | | |
SERIES C | | |
SERIES D | | |
PAID-IN | | |
ACCUMULATED | | |
| |
| |
SHARES | | |
CAPITAL | | |
SHARES | | |
CAPITAL | | |
SHARES | | |
CAPITAL | | |
CAPITAL | | |
DEFICIT | | |
TOTAL | |
Balance at December 31,
2020 | |
| 2,301,968 | | |
$ | 2,302 | | |
| 48 | | |
$ | — | | |
| 10 | | |
$ | — | | |
$ | 22,487,937 | | |
$ | (28,599,390 | ) | |
$ | (6,109,151 | ) |
Net loss | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| (296,296 | ) | |
| (296,296 | ) |
Balance at September 30, 2021 | |
| 2,301,968 | | |
$ | 2,302 | | |
| 48 | | |
$ | — | | |
| 10 | | |
$ | — | | |
$ | 22,487,937 | | |
$ | (28,895,686 | ) | |
$ | (6,405,447 | ) |
See accompanying notes to unaudited financial statements
LOGICQUEST TECHNOLOGY, INC.
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021
UNAUDITED
| |
| | |
| |
| |
Nine Months Ended | |
| |
September 30, | |
| |
2022 | | |
2021 | |
Cash flows from operating activities: | |
| | | |
| | |
Net loss | |
$ | (192,802 | ) | |
$ | (296,296 | ) |
Adjustments to reconcile net loss to net cash used in operating activities: | |
| | | |
| | |
Changes in operating assets and liabilities: | |
| | | |
| | |
Prepaid expenses and other current assets | |
| 779 | | |
| (519 | ) |
Accrued liabilities | |
| 192,023 | | |
| 296,815 | |
Net cash used in operating activities | |
| — | | |
| — | |
| |
| | | |
| | |
Net decrease in cash and cash equivalents | |
| — | | |
| — | |
Cash and cash equivalents at beginning of period | |
| — | | |
| — | |
Cash and cash equivalents at end of period | |
$ | — | | |
$ | — | |
| |
| | | |
| | |
Supplemental information: | |
| | | |
| | |
Cash paid for interest | |
$ | — | | |
$ | — | |
Cash paid for income taxes | |
$ | — | | |
$ | — | |
| |
| | | |
| | |
Non-cash transactions: | |
| | | |
| | |
Assignment of third-party liabilities to a related party | |
$ | 5,577,937 | | |
$ | — | |
Settlement of liabilities with a related party | |
$ | 6,691,710 | | |
$ | — | |
Operating expenses directly paid by a related party | |
$ | 63,694 | | |
$ | 66,152 | |
See accompanying notes to unaudited financial statements
LOGICQUEST TECHNOLOGY,
INC.
NOTES TO FINANCIAL STATEMENTS
UNAUDITED
1. BASIS OF PRESENTATION
Basis
of Presentation
The accompanying unaudited interim financial statements
of Logicquest Technology, Inc. (“we”, “our”, “Logicquest” or the “Company”), have been
prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and
Exchange Commission, and should be read in conjunction with the audited financial statements and notes thereto contained in Logicquest's
Annual Report filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring
adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have
been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected
for the full year. Notes to the financial statements which substantially duplicate the disclosure contained in the audited
financial statements for the year ended December 31, 2021 as reported in the Form 10-K have been omitted.
2. GOING CONCERN CONSIDERATIONS
During the nine months ended September 30, 2022,
Logicquest has been unable to generate cash flows sufficient to support its operations and has been dependent on debt raised from a
related party. In addition to negative cash flow from operations, Logicquest has experienced recurring net losses, and has a
negative working capital and stockholders’ deficit.
These factors raise substantial doubt about the Company’s ability
to continue as a going concern. The financial statements do not include any adjustments that might be necessary if Logicquest is unable
to continue as a going concern.
3.
DUE TO A RELATED PARTY
The due to a related party is summarized below:
Schedule of Amounts Due To A Related Party |
|
|
|
|
|
|
|
|
At
September 30,
2022 |
|
|
At
December 31,
2021 |
|
Expenses paid by Logicquest Technology Limited, a company controlled by the Company’s Chief Financial Officer, Cheng Yew Siong, on behalf of the Company |
|
$ |
— |
|
|
$ |
1,050,079 |
|
During the nine months ended September 30, 2022,
Logicquest Technology Limited paid operating expenses of $63,694
on behalf of the Company. The amount of due to a related party is unsecured, does not bear interest and is due on demand.
Schedule Liabilities Assigned And Settled | |
| | |
| |
| |
Nine
Months Ended
September 30,
2022 | | |
Nine
Months Ended September 30,
2021 | |
Liabilities assigned to Logicquest Technology Limited on June 26, 2022 | |
$ | 5,577,937 | | |
$ | — | |
Liabilities settled with Logicquest Technology Limited on June 29, 2022 | |
$ | (5,577,937 | ) | |
$ | — | |
Liabilities settled with Logicquest Technology Limited on September 29, 2022 | |
$ | (1,113,773 | ) | |
$ | — | |
In June 2022, Tang Chuan Choon signed an agreement with Logicquest Technology
Limited, pursuant to which Tang Chuan Choon assigned his receivable from the Company, included in the Company’s balance sheet as
note payable and accrued liabilities balances, in the aggregate amount of $5,577,937, to Logicquest Technology Limited, who then signed
an agreement with the Company and settled the balances for $1. The transaction was closed as of June 30, 2022. The settlement was account
for as a transaction under common control and the difference between amount paid and amount settled was recorded in equity.
In September 2022, Logicquest Technology Limited signed an agreement with
the Company and settled the remaining balances of liabilities of $1,113,773 for $1. The transaction was closed as of September 30, 2022.
The settlement was account for as a transaction under common control and the difference between amount paid and amount settled was recorded
in equity.
ITEM 2. MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FORWARD LOOKING STATEMENT
This quarterly report contains forward-looking statements.
These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements
by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”,
“believes”, “estimates”, “predicts”, “potential” or “continue” or the negative
of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties
and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.
Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States,
we do not intend to update any of the forward-looking statements to conform these statements to actual results.
Our unaudited financial statements are stated in United
States Dollars (US$) 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 September
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 and Nine Months Ended September 30, 2022
compared to the Three and Nine Months Ended September 30, 2021
We had a net loss of $18,982 for the three months
ended September 30, 2022, which was $80,326 less than the net loss of $99,308 for the three months ended September 30, 2021. The change
in our results over the three periods is a result of a decrease in interest expenses.
We had a net loss of $192,802 for the nine months
ended September 30, 2022, which was $103,494 less than the net loss of $296,296 for the nine months ended September 30, 2021. The change
in our results over the three periods is a result of a decrease in interest expenses.
The following table summarizes key items of comparison
and their related increase and decrease for the three and nine months ended September 30, 2022 and 2021:
| |
Three Months Ended September 30, 2022 | | |
Three Months Ended September 30, 2021 | | |
Three Months Increase/ (Decrease) 2022 from 2021 | | |
Nine Months Ended September 30, 2022 | | |
Nine Months Ended September 30, 2021 | | |
Nine Months Increase/ (Decrease) 2022 from 2021 | |
Selling, general and administrative expenses | |
$ | 18,982 | | |
$ | 18,736 | | |
$ | 246 | | |
$ | 59,798 | | |
$ | 56,229 | | |
$ | 3,569 | |
Loss from operations | |
| (18,982 | ) | |
| (18,736 | ) | |
| 246 | | |
| (59,798 | ) | |
| (56,229 | ) | |
| 3,569 | |
Interest expense | |
| — | | |
| (80,572 | ) | |
| (80,572 | ) | |
| (133,004 | ) | |
| (240,067 | ) | |
| (107,063 | ) |
Net loss | |
$ | (18,982 | ) | |
$ | (99,308 | ) | |
$ | (80,326 | ) | |
$ | (192,802 | ) | |
$ | (296,296 | ) | |
$ | (103,494 | ) |
Revenue
We have not earned any revenues during the quarter
of September 30, 2022 and we do not anticipate earning revenues in the upcoming quarter.
Liquidity and Capital Resources
As of September 30, 2022, we had no cash or cash equivalents,
current liabilities of $13,994 and a stockholders’ deficit of $13,283.
Working Capital
| |
At September 30, 2022 | | |
At December 31, 2021 | |
Current assets | |
$ | 711 | | |
$ | 1,490 | |
Current liabilities | |
| 13,994 | | |
| 6,513,681 | |
Working capital | |
$ | (13,283 | ) | |
$ | (6,512,191 | ) |
We anticipate generating losses and, therefore, may be unable to continue
operations further in the future.
Financial Condition
| |
| | | |
| | | |
| Increase | |
| |
| Nine Months Ended | | |
| (Decrease) | |
| |
| September 30, | | |
| 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 nine months ended September 30, 2022 and 2021 was nil.
Financing Activities
Cash provided by financing activities during
the nine months ended September 30, 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 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 April 15, 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 nine months ended September 30, 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 nine months ended September 30, 2022
and 2021, we experienced negative financial results as follows:
| |
Nine Months Ended September 30, | |
| |
2022 | | |
2021 | |
Net loss | |
$ | (192,802 | ) | |
$ | (296,296 | ) |
Negative working capital | |
| (13,283 | ) | |
| (6,405,447 | ) |
Stockholders’ deficit | |
| (13,283 | ) | |
| (6,405,447 | ) |
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.