This Management's Discussion and Analysis and other parts of this report contain forward-looking statements that involve risks and uncertainties, as well as current expectations and assumptions. From time to time, the Company may publish forward-looking statements, including those that are contained in this report, relating to such matters as anticipated financial performance, business prospects, technological developments, new products, research and development activities and similar matters. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. In order to comply with the terms of the safe harbor, the Company notes that a variety of factors could cause the Company's actual results and experience to differ materially from the anticipated results or other expectations expressed in the Company's forward-looking statements. The risks and uncertainties that may affect the operations, performance, development and results of the Company's business include, but are not limited to, its ability to maintain sufficient working capital, adverse changes in the economy, the ability to attract and maintain key personnel, its ability to identify or complete an acceptable merger or acquisition, and future results related to acquisition, merger or investment activities. The Company's actual results could differ materially from those anticipated in these forward-looking statements, including those set forth elsewhere in this report. The Company assumes no obligation to update any such forward-looking statements
.
CRITICAL ACCOUNTING POLICIES AND COMMENTS RELATED TO OPERATIONS
This discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted 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, revenues and expenses based on historical experience and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.
There have been no material changes or developments in the Company's evaluation of the accounting estimates and the underlying assumptions or methodologies that it believes to be Critical Accounting Policies and Estimates as disclosed in its Form 10-K for the year ended December 31, 2016.
Management's Discussion included in the Form 10-K for the year ended December 31, 2016 includes discussion of various factors and items related to the Company's results of operations and liquidity. There have been no other significant changes in most of the factors discussed in the Form 10-K and many of the items discussed in the Form 10-K are relevant to 2017 operations; thus the reader of this report should read Management's Discussion included in Form 10-K for the year ended December 31, 2016.
RESULTS OF OPERATIONS
Revenues
Revenues for the three months ended March 31, 2017 and 2016 were zero, since all operations were discontinued as of September 30, 2007.
General and Administrative
General and administrative expenses for the three months ended March 31, 2017
were $3,527 and were $
3,831,
for the comparable period in 2016.
The Company recognized interest expense related to the loans from stockholder and affiliate in the amount of $2,213 and $1,243 during the three months ended March 31, 2017 and March 31, 2016, respectively. Interest expense was previously reported as as a component of general and administrative expenses, but has been reclassified into a separate line item on the accompanying statements of operations. The increase during the three months ended March 31, 2017 is due to the $40,000 note from affiliate issued in August 2016.
LIQUIDITY AND CAPITAL RESOURCES
The Company has undertaken steps to reduce its expenses and improve the Company's liquidity, including the previous sale and discontinuance of all operations.
The accompanying financial statements have been prepared assuming the Company will continue as a going concern. However, the Company currently has no operating activities or source of revenue. There can be no assurances that the Company will be able to successfully complete a merger or acquisition or be able to maintain sufficient liquidity to continue to seek a merger or acquisition, in which case the Company might be forced to liquidate or seek protection under the Federal bankruptcy statutes, or both.
Net cash used by operating activities during the three months ended March 31, 2017
was $10,385 compared to $
9,611
in the comparable period of 2016. The increase was attributable to an increase in net loss and accounts payable and accrued liabilities.
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
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Not applicable.
Item 4.
Risk Controls and Procedures
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(a)
Evaluation of Disclosure Controls and Procedures
. The Principal Executive Officer and Principal Financial Officer evaluated the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, the Principal Executive Officer and Principal Financial Officer concluded that the disclosure controls and procedures as of the end of the period covered by this report were effective such that the information required to be disclosed in reports filed under the Securities Exchange Act of 1934 is (i) recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and (ii) accumulated and communicated to the Principal Executive Officer and Principal Financial Officer to allow timely decisions regarding disclosure. A controls system cannot provide absolute assurance, however, that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.
(b)
Changes in Internal Control over Financial Reporting
. There were no changes in the Company's internal controls over financial reporting, known to the Principal Executive Officer and Principal Financial Officer, that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.