TCNT Toucan Interactive Corp (CE)

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

GENERAL

Toucan Interactive Corp. was incorporated in the state of Nevada on January 24, 2014 and maintained its official business address at Sabanilla de Montes de Oca, Urbanizacion Carmiol, Casa 254, San Jose, Costa Rica.

From inception until April 2016, the Company’s principal business consisted of developing a website, www.NEEDforCREDIT.com, to provide credit option services to users primarily in Costa Rica, Canada, the United States and South and Central America and to market context advertising services to banks and financial institutions in these countries and regions.

In April 2016, pursuant to the transactions described in the Current Report on Form 8-K filed on April 22, 2016, the Company experienced a change in control (the “Change of Control”) and ceased operations as a provider of credit option services. The Company also changed the address of its principal executive offices to 25 E. Foothill Blvd., Arcadia, California 91006.

The Company currently serves as a vehicle to investigate and, if such investigation warrants, acquire a target company or business seeking the perceived advantages of being a publicly held corporation. Management does not intend to undertake any efforts to cause a market to develop in our securities, either debt or equity, until we have successfully concluded a business combination. The Company will not restrict its potential candidate target companies to any industry, specific business or geographical location and, thus, may acquire any type of business.

The Company does not currently engage in any business activities that generate cash flow. During the next twelve months we anticipate incurring costs related to:

We believe we will be able to meet these costs through use of funds in our treasury and additional amounts, as necessary, to be loaned to or invested in us by our controlling stockholder, management or other investors. As of the date of the period covered by this report, the Company has no cash in its treasury. There are no assurances that the Company will be able to secure any additional funding as needed.

As of the date of this Quarterly Report, the Company has not entered into any definitive agreement with any party, nor have there been any specific discussions with any potential business combination candidate regarding business opportunities for the Company. The Company has unrestricted flexibility in seeking, analyzing and participating in potential business opportunities. The analysis of new business opportunities will be undertaken by or under the supervision of the Company’s officers and directors. In its efforts to analyze potential acquisition targets, the Company will consider the following factors:

(a) Potential for growth, indicated by new technology, anticipated market expansion or new products;

(b) 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;

(c) Strength and diversity of management, either in place or scheduled for recruitment;

(d) Capital requirements and anticipated availability of required funds, to be provided by the Company or from operations, through the sale of additional securities, through joint ventures or similar arrangements or from other sources;

(e) The cost of participation by the Company as compared to the perceived tangible and intangible values and potentials to be acquired;

(f) The extent to which the business opportunity can be advanced.

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. In evaluating a prospective business combination, the Company will conduct as extensive a due diligence review of potential targets as reasonably possible.

We anticipate that the selection of a business combination will be complex and extremely risky. Potentially available business combinations may occur in many different industries and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities difficult and complex. We cannot assure investors that our choice of a business combination will result in profitable operations.

CRITICAL ACCOUNTING POLICIES

There have been no significant changes during the three and six month periods ended August 31, 2016 to the critical accounting policies disclosed in our audited financial statements included in our Annual Report on Form 10-K for the fiscal year ended February 29, 2016.

RESULTS OF OPERATIONS

We are a development stage company and have generated minimal revenue to date. We have incurred recurring losses to date. 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, loans from our controlling stockholder and the sale of equity or debt securities. We have no committed source of financing and we cannot guarantee that we will be able to raise funds as and when we need them.

Three and Six Month Periods Ended August 31, 2016 Compared to Three and Six Month Periods Ended August 31, 2015.

We earned no revenue during the three and six month periods ended August 31, 2016. We earned $4,500 during the three and six month periods ended August 31, 2015. We have earned minimal revenue since the date of inception.

Our net loss for the three month period ended August 31, 2016 was $8,448 compared to a net income of $2,193 for the three month period ended August 31, 2015. Our net loss for the six month period ended August 31, 2016 was $24,990 compared to a net loss of $14,161 for the six month period ended August 31, 2015.

During the three month period ended August 31, 2016, we incurred general and administrative expenses of $8,448 as compared to $2,307 incurred for the three month period ended August 31, 2015. During the six month period ended August 31, 2016, we incurred general and administrative expenses of $24,990 as compared to $18,681 incurred for the six month period ended August 31, 2015. General and administrative expenses incurred during the three and six month periods ended August 31, 2016 and 2015 were generally related to corporate overhead and administrative contracted services.

LIQUIDITY AND CAPITAL RESOURCES

Six Month Period Ended August 31, 2016

As of August 31, 2016, we had cash of $0, prepaid expenses of $5,000, liabilities of $13,233, and a working capital deficit of $8,233. As of February 29, 2016, we had cash of $3,757, liabilities of $4,678, and a working capital deficit of $921. We expect to incur continued losses until we acquire a company with operations and those operations are profitable.

Cash Flows from Operating Activities

For the six months ended August 31, 2016 and 2015, net cash used in operating activities amounted to $25,100 and $14,161, respectively.

Cash Flows from Investing Activities

For the six month period ended August 31, 2016 and 2015, the Company has not generated any cash flows from investing activities.

Cash Flows from Financing Activities

We have financed our operations primarily from either loans or the issuance of equity. For the six months ended August 31, 2016 and 2015, net cash provided by financing activities amounted to $21,343 and $(180), respectively.

We have generated minimal revenues from operations to date. It is not likely that we will generate any further revenues until a business combination has been consummated. Even following a business combination, there is no guarantee that any revenues will be generated, that any revenues will be sufficient to meet our expenses or that we will ever become profitable. We may consider a business combination with a target company which itself has recently commenced operations, is a developing company in need of additional funds for expansion into new products or markets, is seeking to develop one or more new products or services, or is an established business which may be experiencing financial or operating difficulties and is in need of additional capital.

Moreover, any target business that is selected may be financially unstable or in the early stages of development or growth, including businesses without established records of sales or earnings. In that event, we will be subject to numerous risks inherent in the business and operations of financially unstable and early stage or potential emerging growth companies. In addition, we may effect a business combination with a target company in an industry characterized by a high level of risk, and although our management will endeavor to evaluate the risks inherent in a particular target company, there can be no assurance that we will properly ascertain or assess all significant risks.

The foregoing considerations raise substantial doubt about our ability to continue as a going concern.  We are currently planning on devoting the vast majority of our efforts to identifying, investigating and conducting due diligence on target companies; and negotiating, structuring, documenting and consummating a business combination. Our long-term ability to continue as a going concern is dependent upon our ability to complete a business combination and, thereafter, achieve profitable operations.

We believe that we will be able to meet these costs through cash on hand and additional amounts, as may be necessary, to be loaned by or invested in us by our controlling stockholder, management and/or others. Currently, however, our ability to continue as a going concern is dependent upon our ability to generate future profitable operations and/or to obtain the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they come due. Our ability to continue as a going concern is also dependent on our ability to find a suitable target company and enter into a business combination. Management’s plan includes obtaining additional funds through a combination of sales of our equity securities before, contemporaneously with, or following, the consummation of a business combination and borrowings, although we do not believe that we will be eligible to borrow funds from a bank until at least a business combination is consummated. However, there is no assurance that any additional funding will be available on terms that are favorable to us or at all.

On April 22, 2016, all the loans made by the Company’s then sole director were repaid in full. Since the Change of Control in April 2016, we rely on loans from our controlling stockholder to meet our expenses. There is no guarantee that our controlling stockholder will continue to lend us funds to meet our expense in the future. Currently, we do not have any other arrangements for financing. During the three and six month periods ended August 31, 2016, the controlling stockholder loaned $7,911 and $8,343, respectively, to the Company for working capital.

We have no assurance that future financing will be available to us on acceptable terms, or at all. If financing is not available to us on satisfactory terms or at all, we may be unable to develop operations or meet our expenses. Additionally, any equity financing in which we might engage would result in dilution to our existing stockholders.

GOING CONCERN

The independent auditors’ audit report accompanying our financial statements dated February 29, 2016 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.

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.